Plug Power Announces Acquisition of General Hydrogen

Acquisition broadens electric lift truck portfolio following recent

acquisition of Cellex Power

May 07, 2007, 01:00 ET from Plug Power Inc.

    LATHAM, N.Y.; RICHMOND, British Columbia, May 7 /PRNewswire-FirstCall/
 -- Plug Power Inc. (Nasdaq:   PLUG), a leader in providing clean, reliable
 on-site energy products, today announced the acquisition of General
 Hydrogen Corporation, a leader in the development and commercialization of
 fuel cell power units that provide motive power for electric lift trucks
 and other mobile industrial equipment.
     Plug Power paid approximately USD 10 million, consisting of
 approximately USD 7 million in cash and the assumption of USD 3 million in
 senior secured loans previously made by Plug Power to General Hydrogen, for
 all of the outstanding capital stock of General Hydrogen. In addition, the
 shareholders of General Hydrogen received warrants to purchase up to
 571,429 shares of Plug Power Common Stock. The warrants become exercisable
 when Plug Power's Common Stock trades at a volume weighted average price of
 USD 7.00 or more for 10 consecutive trading days. The warrants carry an
 exercise price of USD .01 per share and expire four years from the date of
     General Hydrogen is located in Richmond, British Columbia, Canada,
 within close proximity to Cellex Power Products, Inc., another top supplier
 of fuel cell power solutions for electric lift trucks, which Plug Power
 acquired last month. Plug Power plans to integrate the two companies into
 one operation managed by Chris Reid, Cellex Power's current President.
     "By acquiring both General Hydrogen and Cellex Power, clear leaders in
 their industry, we expect to realize significant technology and operational
 synergies as we pursue high-value applications in the material handling
 market," said Dr. Roger Saillant, Plug Power's President and CEO. "Further,
 we anticipate that higher volume commercial product manufacturing
 activities will be established in Plug Power's Latham, N.Y. facility."
     General Hydrogen's initial product focus has been on the larger class 1
 sit-down lift trucks that are typically used in manufacturing operations.
 Cellex Power has focused its initial product initiatives on class 3 rider
 pallet trucks primarily used to transport and select goods within large
 distribution centers before delivery to retail stores.
     Both companies are developing fuel cell power units for class 2
 stand-up reach trucks, which provide flexibility and maximum floor space
 utilization for large distribution centers. General Hydrogen and Cellex
 Power are targeting the estimated USD 1.5 billion motive power market in
 which lead-acid batteries are the incumbent technology. Fuel cell power
 units allow users to increase productivity and reduce operating costs
 through a quick hydrogen refueling process that eliminates the need to
 change batteries repeatedly throughout the day. They also eliminate the
 environmental and safety issues traditionally associated with lead-acid
     "We intend to leverage Plug Power's existing commercial infrastructure
 and expect to avoid some of the expenditures typically associated with the
 transition from a pre-commercial to commercial enterprise," said Dr.
 Saillant. "Given Plug Power's financial and operational strength and the
 combined fuel cell expertise of the three companies, we expect to
 accelerate product development for all three classes of electric lift
 trucks. This enhanced scale and breadth of applications will increase the
 economic value delivered to our customers while improving our ability to
 realize meaningful sales volumes."
     Large lift truck fleet users typically operate at least two of the
 three electric lift truck classes in their warehouses and therefore require
 a battery handling system and associated maintenance labor to meet their
 throughput requirements. Having all three electric lift truck classes in
 its product portfolio would enable Plug Power to create a much more
 compelling value proposition by allowing customers to convert the motive
 power requirements for their entire fleets to proton exchange membrane
 (PEM) fuel cell technology.
     Coincident with the acquisition of General Hydrogen, Plug Power has
 entered into a two-year agreement with Ballard Power Systems Inc. for the
 purchase of fuel cell stacks for Plug Power's commercial needs with respect
 to electric lift truck applications, replacing the previous agreement
 between General Hydrogen and Ballard. The General Hydrogen and Cellex Power
 products were designed around the Ballard stack and have generated tens of
 thousands of operating hours to validate reliability and performance. Under
 the new agreement, Plug Power and Ballard will work together to drive
 reliable, low- cost solutions that are expected to significantly improve
 the outlook for fuel cell commercialization of material handling
     With the Cellex Power and General Hydrogen acquisitions, Plug Power has
 positioned itself to engage both telecommunications and material handling
 as attractive near-term markets and central components of the Company's
 revenue growth strategy.
     About General Hydrogen Corporation
     General Hydrogen, which was founded in 1999, is headquartered in
 Richmond, British Columbia, near Vancouver, and has a sales and service
 center in Gallatin, Tennessee. It is a private, Delaware-registered company
 that develops and commercializes fuel cell power units and hydrogen fueling
 solutions to address the motive power requirements of a variety of electric
 lift trucks used in material handling applications in indoor manufacturing
 operations and large-scale distribution centers. General Hydrogen uses fuel
 cell stacks made by Ballard Power Systems Inc. as a component of its fuel
 cell power units. For more information, please visit
     About Plug Power
     Plug Power Inc. (Nasdaq:   PLUG), an established leader in the
 development and deployment of clean, reliable, on-site energy products,
 currently integrates fuel cell technology into backup power products for
 telecommunications, utility and uninterruptible power supply applications,
 as well as motive power products for material handling applications. The
 Company is actively engaged with private and public customers in targeted
 markets throughout the world, including North America, Europe, the Middle
 East, Russia, South Africa and South America. For more information about
 how to join Plug Power's energy revolution as an investor, customer,
 supplier or strategic partner, please visit
     Safe Harbor Statement
     This press release contains forward-looking statements within the
 meaning of the Private Securities Litigation Reform Act of 1995, including
 but not limited to the expected benefits of the Cellex Power and General
 Hydrogen acquisitions. We believe that it is important to communicate our
 future expectations to our investors. However, there may be events in the
 future that we are not able to accurately predict or control and that may
 cause our actual results to differ materially from the expectations we
 describe in our forward- looking statements, including, without limitation,
 the risk that the General Hydrogen acquisition is unsuccessful or that the
 anticipated synergies of the Cellex Power and General Hydrogen acquisitions
 are not realized, that unit orders will not ship, be installed and/or
 convert to revenue, in whole or in part; Plug Power's ability to develop
 commercially viable on-site energy products; the cost and timing of
 developing Plug Power's on-site energy products; market acceptance of Plug
 Power's on-site energy products; Plug Power's ability to manufacture
 on-site energy products on a large-scale commercial basis; competitive
 factors, such as price competition and competition from other traditional
 and alternative energy companies; the cost and availability of components
 and parts for Plug Power's on-site energy products; Plug Power's ability to
 establish relationships with third parties with respect to product
 development, manufacturing, distribution and servicing and the supply of
 key product components; Plug Power's ability to protect its intellectual
 property; Plug Power's ability to lower the cost of its on-site energy
 products and demonstrate their reliability; the cost of complying with
 current and future governmental regulations; the impact of deregulation and
 restructuring of the electric utility industry on demand for Plug Power's
 on- site energy products and other risks and uncertainties discussed under
 "Item IA-Risk Factors" in Plug Power's annual report on Form 10-K for the
 fiscal year ended December 31, 2006, filed with the Securities and Exchange
 Commission ("SEC") on March 16, 2007, and the reports Plug Power files from
 time to time with the SEC. Plug Power does not intend to and undertakes no
 duty to update the information contained in this press release.

SOURCE Plug Power Inc.