ClLron on lug ower March 12, 2014 age 1 of 9

March 12, 2014

|ugg|ng Into Some kea||ty:
Ia|r Va|ue of |ug ower |s S0 Cents

Can someone please brlng me a vodka and some second hand smoke? lf we are golng Lo have
Lo hang around ln a caslno, lets aL leasL have Lhe experlence.

ClLron 8esearch undersLands well Lhe dlfference beLween a culL sLock, dream sLock, and a
caslno sLock:
A cu|t sLock has a devouL followlng people devoLed Lo lLs producLs, Lherefore lL can
be challenglng Lo asslgn a valuaLlon. 1hls could be elLher 1esla or neLfllx. 8oLh
dellver greaL producLs, hence a culL around Lhelr shares.

A dream sLock ls a sLock wlLh llmlLless blue sky. 8egardless of currenL flnanclals,
lnvesLors can always look Lo Lhe fuLure. ln dreamland, we have many bloLechs and
sLocks ln Lhe 3u prlnLlng space.

A cas|no sLock, by conLrasL, ls Lhe lowesL form of speculaLlve moonshoL. A caslno
sLock can Lrade Lwlce lLs ouLsLandlng shares ln a slngle day, whlle Lurnlng over lLs
enLlre floaL on people gambllng LhaL Lhey can flnd a buyer aL a hlgher prlce Who
really cares abouL anyLhlng else, rlghL? 1he recenL volume and share prlce surge ln
lug ower (nASuAC:LuC) demonsLraLes how Wall SLreeL LreaLs Lhls sLock:
noLhlng more Lhan a caslno.

Who ls behlnd LuC, and whaL do Lhey do? 1hls ls slmple: lug ower sells fuel cell-powered
forkllfLs wlLh fuel cells Lhey acqulre from 8allard ower. noLhlng fancy here, folks. Same
buslness model slnce Lhe 2000 crash Well over a decade as a publlc company, durlng whlch
Lhey have losL close Lo $830 mllllon, whlle developlng no l or meanlngful revenue growLh.
roflLablllLy? lorgeL abouL lL!

ClLron wlll now explaln why Lhls sLock ls evenLually headed rlghL back Lo 30 cenLs (a blended
average of all of Lhelr recenL caplLal ralses). Cn 1hursday managemenL wlll lssue earnlngs and
guldance. We warn lnvesLors. CU CANNC1 1kUS1 MANAGLMLN1 GUIDANCL Not Lven a
L|tt|e 8|t. Pere ls a hlsLory of broken promlses and fallure Lo dellver of lug ower over Lhe
years:



ClLron on lug ower March 12, 2014 age 2 of 9


LeL us look aL Lhe promlses over Lhe years -- how Lhey are noL [usL mlsses buL compleLe
fabrlcaLlons. And why ls any of Lhls golng Lo change??? LeL,s sLarL wlLh recenL guldance and
commenLs and look back all Lhe way Lo 2009.
1here was a |ot of ta|k about orders |n 2013.

Actua| Crders

M||||ons, USD Crders kevenue
2010 12 19
2011 46 28
2012 14 26
2013 * (9 mos) 44 26

(Crders ca|cu|ated us|ng year-end back|og revenue -- 2013L number based on managemenL's guldance of 32 mllllon
orders ln Lhe 4Lh quarLer, plus prlor uecember 4Lh buslness updaLe of 12 mllllon orders beLween May Lo CcL 8
Lh
. 8evenue
number ls uslng Cowen's esLlmaLe, so 7 mllllon wouldnt be a surprlse).

kesu|ts: Sh|pments of fue| ce||s dec||ned year-over year. It s|mp|y doesnt appear that
an |ncrease |n orders |s go|ng to resu|t |n an |ncrease |n revenues.



1hls lnvesLor presenLaLlon sllde was made ln !une 2012:




We're also on track to meet our target of shipping $40 million of revenue in 2012.We
see slgnlflcanL plckup wlLh our presenL cusLomer base and are forecasLlng annual orders
to range as expected between US$50 million to US$60 millionWe do expect that both
a ramp ln shlpmenL volumes and an lncrease ln share of shlpmenLs from new producL
plaLforms over Lhe remalnlng quarLers of 2012 wlll boosL gross marglns lnLo poslLlve
territory.
!! #$% &'() *+,-./ 01 2312 45'67,7'47 4+88
uurlng Lhe nlne monLhs ended SepLember 30, 2013 we shlpped 639 fuel cell sysLems Lo
end cusLomers as compared Lo 873 fuel cell sysLems shlpped durlng Lhe nlne monLhs
ended September 30, 2012.
!! #$% &'() *+,-./ 09 2319 45'67,7'47 4+88
ClLron on lug ower March 12, 2014 age 3 of 9






kesu|ts: 2012 actua| revenues were 526.1M. Gross marg|ns were -SS.

2
nd
quarter, 2011:


kesu|ts: 1he company sh|pped 1,024 un|ts |n 2011.



kesu|ts: 2010 revenue of 519.SM and GM of -39.

In line with our path to profitability, I would now like to reiterate Plug Power's 2010
mllesLone. llrsL, lug ower wlll dramaLlcally lncrease unlL shlpmenLs for Lhe year,
shlpplng beLween 2100 and 2300 sysLems conslsLlng of aL leasL 1100 Cenurlve and 1000
CenSys fuel cells. Second, conslsLenL wlLh Lhese shlpmenLs, lug ower wlll generaLe
beLween mld 40 and low $30 mllllon ln revenue. lug ower wlll achleve a gross margln
percenLage ln Lhe mld-Leens.
!! #$% &'() *+,-./ 01 233: 45'67,7'47 4+88
My flrsL quesLlon ls abouL guldance, [usL for clarlflcaLlon. ?our prlor guldance was, l
belleve, 1,600 Lo 2,300 unlLs shlpped ln 2011. Are you changlng guldance now Lo [usL
more Lhan 1,600?...
Well, hll, l Lhlnk based on where we're aL and Lhe addlLlonal orders LhaL we expecL Lo
book aL Lhe end of Lhe quarLer, we expecL Lo shlp sLlll ln LhaL LargeL range buL more
towards the lower end of that range.
!! #$% &'() *+,-./ 02 2311 45'67,7'47 4+88
Crders:
We see significant pickup with our present customer base and are forecasting annual
orders Lo range as expecLed beLween uS$30 mllllon Lo uS$60 mllllon.
!! #$% &'() *+,-./ 02 2312 45'67,7'47 4+88
ClLron on lug ower March 12, 2014 age 4 of 9

We dug back furLher Lhrough Lhe pasL 4 years and beyond theres a consistent string of
broken promlses, and compleLe unaccounLablllLy for managemenL guldance. !usL llke Lhe above
example, Lhe company does noL only mlss earnlngs esLlmaLes, buL are acLlvely and lnLenLlonally
decepLlve ln Lhelr pro[ecLlons.

As far back has ClLron 8esearch can flnd, lug ower has nC1 CnCL dellvered Lhe amounL of
unlLs LhaL lnvesLors were promised. The companys promotional practices have become so
ouLrageous LhaL on Lhelr own webslLe, posLed as company news, Lhey reprlnL an arLlcle from
a Seeklng Alpha posLer:

hLLp://www.plugpower.com/news/Companynews/12-03-12/WP?_LuC_CWL8_CCuLu_uCu8LL.aspx

kesu|ts: 1hey m|ssed th|s pub||shed est|mated by c|ose to S0.

Money 1a|ks 8u||sh|t Wa|ks.

ClLron 8esearch belleves LhaL managemenLs lack of honesLy or convlcLlon abouL Lhe fuLure of
Lhelr company was mosL evldenL lasL year. Whlle operaLlng under a golng concern from Lhelr
audlLor, Lhe company dld a cap|ta| ra|se at .1S cents wlLh a .13 cenL warranL! Cuess how
many shares managemenL boughL? 8elow ls a Lable of Lhe caplLal ralses of company durlng
2013. ManagemenL dld noL parLlclpaLe ln An? of Lhese caplLal ralses. Managements only
parLlclpaLlon was Lo Lake some sLock ln lleu of salary from a preexlsLlng agreemenL whlle Lhe
company was on a Lra[ecLory Lo bankrupLcy.
hLLp://www.sec.gov/Archlves/edgar/daLa/1093691/000100329713000281/xsll343x03/marsh.xml

|ug ower Cap|ta| ka|se Lvents |n 2013:



uaLe
Shares
lssued
(Mllllons) Share rlce
LqulLy 8alse 9/16/13 21.39 0.34
Alr Llqulde ConverLlble 8alse 3/8/13 10.97 0.24
LqulLy 8alse 2/20/13 43.42 0.13

1oLal Shares 8alsed 73.78

Average rlce 0.27

lL should be noLed LhaL Lhe equlLy ralses above all had warranL coverage, whlch made Lhe deals
even sweeLer for Lhe lnvesLors yeL managemenL was noLlceably absenL. ln conLrasL Lo Llon
Musk, who commlLLed nearly hls whole llfe savlng lnLo hls 1esla lnvesLmenL when Lhey were
[usL sLarLing out, management of Plug Power wouldnt even buy Lhe sLock aL .13 cenLs [usL one
year ago.
ClLron on lug ower March 12, 2014 age 3 of 9


lollowlng Lhls span of exLraordlnarlly Lrashy caplLal ralses, managemenL decepLlon has noL
slowed down elLher. ln a lebruary 26, 2014 lnLervlew CLC Marsh says:



hLLp://flnance.yahoo.com/news/excluslve-lnLervlew-andy-marsh-presldenL-183800023.hLml
AlmosL exacLly one week afLer maklng LhaL commenL, Lhe company sold anoLher $22.4 mllllon
worLh of sLock aL 13 dlscounL Lo prlor day closlng prlce ($3.73). Lven Marsh hlmself could noL
ever dream Lhls sLock would ever geL over $3, so Lhe company helped Lhemselves Lo yeL
anoLher helplng of the publics money.

Ck, so whaL has changed ln one year slnce Lhe sLock was .13 cenLs? A8SCLu1LL? nC1PlnC!
ll An?1PlnC 1PL S1C8? PAS CC11Ln WC8SL. All lnvesLors have Lo know ls rlghL ln Lhe publlc
flllngs abouL Lhe pasL year Lrends of Lhe company:

8evenue for Lhe 9 monLhs ended SepLember 30, 2013 was $18.6M, vs $20.2M for Lhe prlor
year. noLhlng more needs Lo be sald.

Cmon C|tron- What about Wa|Mart and IedLx? Doesnt that
mean some great th|ngs ahead?

Anyone close Lo Lhe sLory knows LhaL Wal-MarL and ledex, amongsL a few oLher mulLlnaLlonals,
have been lug ower CusLomers for Lhe pasL few years. 1he maln reason ls noL because LuC
has bullL a beLLer mouseLrap buL raLher Lo Lake advanLage of Lhe 1063 1reasury rogram LhaL
glves Lax credlLs for renewable energy. Wal-MarL, blg user of Lhese credlLs, has gone as far as
Lo lnsLall solar panels on Lhe roofs of many of Lhelr sLores.
hLLp://www.chadbourne.com/flles/upload/kogan-8Ll1S-osL-1603-Solar-llnance.pdf
hLLps://www.solsysLemscompany.com/blog/Lag/renewable-energy/


1he ba|ance sheet's been the best |t's been s|nce I've been w|th the company. As of aL
our announcemenL ln mld-!anuary, afLer ralslng $30 mllllon, we have $46 mllllon on Lhe
balance sheeL. We wlll use abouL $10 mllllon ln operaLlng cash Lhls year, and we wlll
leave Lhls year proflLable, and so we see no need for cash to fund the present bus|ness
p|an.
!! #$% &'() *+,-./ 231; <'=7,><7?
ClLron on lug ower March 12, 2014 age 6 of 9

1hls ls noL ClLron Lalklng, buL raLher a luel Cell lndusLry !ournal:



hLLp://www.fuelcellLoday.com/medla/1889744/fcL_revlew_2013.pdf

8ut A|| of th|s |s About to Lnd

AL Lhe end of 2016, Lhls punchbowl wlll geL Laken away, which can, in the companys words be
Lhelr deaLhblow. ln Lhls 2012 leLLer Lo Lhe Pouse Ways and Means commlLLee, CLC Marsh
descrlbes Lhe need Lo conLlnue lederal lncenLlves Lo make Lhelr buslness work and wlLhouL
Lhem, Lhe Lechnologles are golng Lo go overseas.
hLLp://waysandmeans.house.gov/uploadedflles/plug_power_lnc._fc42612.pdf

1hls ls dlsclosed ln sLark rellef as a rlsk facLor ln Lhelr 10-k:

lrom 10-k for 2012:

Some conditions or contingencies that are out of our
control may include, but are not limited to, government tax
policy, government funding programs, and government
incentive programs.

WhaL ls mosL asLonlshlng is that even with government subsidies and lack of competition,
lug ower sLlll cannoL elLher make a proflL or even grow revenue ln a meanlngful way.
lmaglne how bad Lhls buslness wlll become aL Lhe end of 2016.

Materials handling vehicles (MHV) continue to be an important niche market for
Lhe fuel cell lndusLry. 1hls appllcaLlon was popularlzed ln 2009 Lhanks Lo fundlng
allocaLed from Lhe Amerlcan 8ecovery and 8elnvesLmenL AcL, whlch saw Lhe
subsldlzed sale of fuel cell equlpped forkllfLs deployed aL Lhe warehouses of
many hlgh-prole American brands, including BMW Manufacturing, Coca-Cola,
FedEx and Walmart.
!!@A78#788B5(+)
C'(A-=,) D7><7? 2319
ClLron on lug ower March 12, 2014 age 7 of 9

Damned |f ou Do, Damned |f ou Dont

lf by some chance, fuel cell forkllfLs do flnd Lhemselves a markeL, Lhere are numerous beLLer
flnanced companles walLlng Lo enLer Lhe space whlch has no compeLlLlve moaL whaLsoever
proLecLlng lL. Pere are Lwo such examples of companles wlLh plans esLabllshed lf demand
lncreases.

It seems like Plug Powers only competitive advantage is going to be selling product at negative
gross margln.
If Lhe buslness can every show flnanclal vlablllLy, say hello Lo SLlll and 1oyoLa:

hLLp://www.fuelcellLoday.com/news-evenLs/news-archlve/2013/december/vlessmann-Lo-use-hydrogen-fuel-cell-
forkllfL-Lruck-aL-german-headquarLers

hLLp://www.LoyoLaforkllfL.ca/pages/abouL-us/LoyoLa-phllosophy/envlronmenLal-focus/fuLure-vehlcles.aspx

1he only Lhlng holdlng back Plug Powers better funded competitors is the proof that this
buslness can be susLalned concepL wlLhouL subsldles.

lug ower does have one barrler Lo enLry, Lhough. no one else wanLs Lo lose $800 mllllon
selllng a producL ln which they dont even own the technology.

Iorget About C|tron- What do the Cther rofess|ona|s
nave to Say?

AlLernaLlve Lnergy and Clean 1echnologles are some of Lhe mosL Lhoroughly covered secLors on
all of Wall SLreeL. uesplLe Lhe popularlLy of Lhls secLor, only 1 analysL covers lug ower. And
who ls Lhls analysL? lLs our pal 8ob SLone from Cowen and Company! noL Loo surprlslngly,
Cowen [usL faclllLaLed an offerlng for LuC.

Cowen and Mr. SLone have asslgned a prlce LargeL of $3.30 Lo lug ower, whlch we belleve Lo
be exLremely generous. ClLron 8esearch has had an lnLeresLlng year wlLh Mr. SLone and
Cowen. 1hls ls Lhe same analysL LhaL puL a $46 prlce LargeL on unlplxel ln 2013 Lhe same
monLh ClLron focused lLs commenLary on Lhe company. Citrons take was a single digit stock.

hLLp://onllne.barrons.com/arLlcle/81-CC-20130429-703604.hLml
hLLp://www.clLronresearch.com/unlplxel-sLop-Lhe-presses/

needless Lo say Lhe sLock has gone from $33 Lo $10, whlle Cowen and SLone caplLulaLed and
evenLually lowered Lhelr LargeL Lo $10.

hLLp://onllne.ws[.com/arLlcle/81-CC-20140102-703437.hLml

ClLron 8esearch and Mr. SLone and Cowen meL up agaln ln november as he/Lhey puL a $62
prlce LargeL on voxel!eL.

ClLron on lug ower March 12, 2014 age 8 of 9

hLLp://www.sLreeLlnslder.com/PoL+new+Coverage/Cowen+SLarLs+voxel[eL+AC+(v!L1)+aL+CuLperform/8871436.h
Lml

1he same monLh ClLron publlshed on voxel!eL:
hLLp://www.clLronresearch.com/wp-conLenL/uploads/2013/11/v[eL-C1-commenL-flnal.pdf

In the fo||ow|ng S months the stock has soared from over 560 to 532.

Whlle we would love Lo call Mr. SLone lncompeLenL, we wlll noL. lnsLead we wlll call hlm a
company man who takes one for the team. Cowen raises money and he puts out a buy
recommendaLlon. It shou|d be noted that even w|th h|s most g|ow|ng recommendat|on, he
cou|d on|y get to 5S.S a share on |ug ower(wh|ch |s probab|y 5S too h|gh,)

lnvesLors musL noLe LhaL unllke oLher clean Lech sLock lug ower owns no unlque
Lechnology. As we see ln Lhelr flllngs:

Inte||ectua| roperty: Noth|ng Spec|a|

ln Lhelr own 10-K, they admit they dont have proprietary protection :



hLLp://www.sec.gov/Archlves/edgar/daLa/1093691/000100329713000101/esplugpower10k1.hLm

Remember, Plugs primary source for the power systems in those forklifts comes from Ballard
ower.

Gun to nead: So I nave to Cwn a Iue| Ce|| Company

Whlle we belleve Lhls enLlre space has enLered a speculaLlve frenzy, lnvesLors would be beLLer
sulLed buylng 8allard ower(nASuAC:8Lu), Lhe acLual power and Lechnology provlder Lo
LuC. Also flnanclally, even lgnorlng Lhelr recenL run-up, Lhere ls a gross dlsconnecL ln share
prlce while 8allard has esLabllshed mulLlple revenue sLreams wlLh Lhelr fuel cell Lechnology.

lug ower (LuC):
1rades aL 61x revenues
MarkeL cap, fully dlluLed, (remember Lhe warranLs) currenLly valued $1.6 8llllon

8allard ower (8Lu):
$810M LnLerprlse value
1radlng aL only 13.2x sales (rough calc based on 10M warranLs C/S)

We believe that neither we nor our competitors can achieve a significant proprietary
poslLlon on Lhe baslc Lechnologles currenLly used ln LM fuel cell sysLems.
!!E8AF E5?7, 13!G
ClLron on lug ower March 12, 2014 age 9 of 9


Conc|us|on: |ug ower |n a Nutshe||

no proflLs
no unlque Lechnology
no scalablllLy
no demand
no brand equlLy
no medla hype
no analysL supporL

And Lhls buslness shows no slgns of lmprovemenL, only Lhe loomlng end of governmenL
subsldles.

uoes anyone ever really end up a wlnner aL a caslno???

Caut|ous Invest|ng to A||