Plug Power Inc.’s (Nasdaq: PLUG) accountant said that the alternative energy company could face the threat of liquidation, due to recurring losses and a decline in working capital.
The company provides alternative-energy batteries for the forklift and material handling markets.
Plug Power’s accounting firm, KPMG LLC, raised substantial doubt about the company’s ability to continue as a going concern, Plug Power says in an April 1 filing with the U.S. Securities and Exchange Commission.
Plug Power was formed in 1997 as a joint venture between Edison Development Corp. and Mechanical Technology Inc. In 2007, the company acquired Cellex Power Products Inc. and General Hydrogen Corp., which Plug Power says drove its product development efforts, and allowed it to become the first fuel cell company to offer a complete suite of products, which includes counterbalance trucks, stand-up reach trucks and rider pallet trucks. The company’s primary product, called GenDrive, is a hydrogen fueled battery that provides power to industrial vehicles.
Companies that order for Plug Power include Stihl, Mercedes Benz, Lowe’s Cos. Inc. (NYSE: LOW), Carter’s Inc. (NYSE: CRI), Ace Hardware, Wal-Mart Stores Inc. (NYSE: WMT), Proctor & Gamble Co. (NYSE: PG), Coca-Cola Co. (NYSE: KO), Sysco Corp. (NYSE: SYY), Wegman’s, Kroger Co. (NYSE: KR) and BMW.
From its start through the middle of 2008, Plug Power focused on research and development of fuel cell systems. Towards the end of 2008, the company switched focus and began commercializing those products. Plug Power lacks experience when it comes to mass manufacturing, the company says in SEC filings.
The fuel cell maker’s $15 million loan agreement with Silicon Valley Bank expired on March 29. Plug Power says in SEC filings that it is assessing opportunities to reestablish a credit facility with the bank.
Plug Power has already taken some steps to increase its liquidity, SEC filings show. In December, the company restructured, eliminating 22 full-time positions, which it says in SEC filings will save it between $3 million and $4 million annually. In February, the company was able to raise $2.4 million in operating capital from additional offerings, which it expected to sustain its operations into May. And in March, Plus Power executed a sale-leaseback of its Latham, N.Y. manufacturing facility, selling the property to 968 Albany Shaker Road Associates LLC for $4.5 million.
Before the layoffs, Plug Power received a notice from Nasdaq that it faced delisting because its stock price had consistently been less than $1. On May 7, Plug Power’s stock was trading at about $0.16. The company said in an April 16 statement that it received an additional noncompliance notice from Nasdaq, giving it until Octobgener 7 to comply with the minimum price rule.
Though it has operated at a loss for the past several years, in 2012, Plug Power was able to increase its revenue $1.2 million, about 5.1 percent, to $24.4 million, from $23.2 million for the year ended Dec. 31, 2011.
Losses for 2012 and 2011 were $31.9 million and $27.5 million, respectively, SEC filings show. As of Dec. 31, Plug Power had accumulated a deficit of about $786.1 million.
Plug Power did not return requests for comment.