Plug Electricity (PLUG) Discloses Non-Reliance on Formerly Issued Financial Statements

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Plug Electrical power (NASDAQ: PLUG) disclosed:

Merchandise 2.06 Material Impairments.

The information and facts contained in Item 4.02(a) of this Present Report on Type 8-K relating to the expected impairment relating to specific extensive-lived assets is integrated herein by reference. Plug Ability Inc. (the “Company”) is not ready to estimate the impairment charges at this time, but the prices are not envisioned to end result in any future income expenses.

Item 4.02 Non-Reliance on Previously Issued Economic Statements or a Associated Audit Report or Done Interim Evaluate.

(a) On March 12, 2021, management and the Audit Committee of the Board of Directors (the “Audit Committee”) of the Organization, in session with KPMG LLP (“KPMG”), the Company’s unbiased registered public accounting business, determined that the Company’s previously issued financial statements as of and for the years finished December 31, 2019 and 2018, and as of and for just about every of the quarterly durations finished March 31, 2020 and 2019, June 30, 2020 and 2019, and September 30, 2020 and 2019 (collectively, the “Prior Interval Monetary Statements”), need to no longer be relied on due to mistakes in accounting largely relating to (i) the claimed reserve benefit of proper of use assets and relevant finance obligations (“ROU Accounting”), (ii) decline accruals for specified services contracts, (iii) the impairment of selected lengthy-lived property, and (iv) the classification of selected costs beforehand involved in investigation and growth prices ((i) by means of (iv) collectively, the “Restatement Items”). In addition, the fourth quarter and full 12 months 2020 economical results and associated dialogue incorporated in the Company’s shareholder letter furnished on the Variety 8-K submitted by the Corporation on February 25, 2021 really should no for a longer period be relied upon.

The Company and the Audit Committee have decided that these accounting improvements will involve a restatement of the Prior Period of time Economic Statements.

The revised accounting for the Restatement Objects will modify how the Corporation accounts for certain transactions and goods, but the revised accounting is not anticipated to impression money and money equivalents or the economics of the Company’s current or potential industrial arrangements. The Organization presently anticipates that the most important affect of the revised accounting on the Prior Period Economic Statements will include things like:

In addition to the over, the Corporation expects to appropriate selected a lot less considerable items in its beforehand issued monetary statements and other financial facts. The Business also expects that its Kind 10-K for the yr finished December 31, 2020 will disclose a substance weakness in its inside controls around fiscal reporting arising from the Restatement Things. As such, KPMG’s report on the Company’s interior command more than money reporting as of December 31, 2019 really should no more time be relied upon. The modifications that will be recorded did not result from a transform in published accounting steering through the appropriate time interval or any override of controls or misconduct, and KPMG has not knowledgeable the Audit Committee of any troubles related to an override of controls or misconduct.

The accounting linked to the Restatement Goods is complicated and technical and will involve considerable judgments in implementing U.S. GAAP, which is compounded by the unparalleled, dynamic, and impressive character of the Company’s small business and its posture in a nascent and speedily establishing industry.

In September 2018, the Organization adopted ASC Topic 842, effective January 1, 2018, relating to the accounting procedure of leases, such as the ROU Accounting. The Corporation identified its ROU Accounting right after important input from exterior accounting advisors as nicely as discussions with KPMG in the audit course of action. Subsequently, KPMG issued unqualified audit opinions on the Company’s economical statements as of and for the several years finished December 31, 2018 and December 31, 2019.

As element of the Company’s usual method, prior to releasing the Company’s preliminary success for the quarter and yr ended December 31, 2020, and prior to completion of the audit, on February 24, 2021 the Organization and the Audit Committee talked about these kinds of outcomes with KPMG, and, at that time, no materials issues were being raised. Soon after the Enterprise claimed its 2020 fourth quarter and yr conclude final results, in the class of finalizing the audit with respect to the Company’s financial statements for the yr finished December 31, 2020, the Organization and KPMG discovered the Restatement Items. The Firm has because reevaluated such accounting and established that it have to correct the prior accounting for the Restatement Products.

The Enterprise expects to restate its fiscal statements as of and for the yrs ended December 31, 2019 and 2018 and for every of the quarterly intervals ended March 31, 2020 and 2019, June 30, 2020 and 2019, September 30, 2020 and 2019, and December 31, 2019, in its Sort 10-K for the year finished December 31, 2020. The Firm will not be equipped to file its Form 10-K for the year finished December 31, 2020 by the March 16, 2021 deadline, but it is functioning diligently to finalize the restated fiscal statements and to file its Type 10-K as soon as practicable.

The Company’s inside review is ongoing and the Business could detect even more glitches. There can be no assurance that the true results of the mistake corrections will be only as explained previously mentioned.

The Audit Committee and Organization management have talked about with KPMG the issues disclosed in this Product 4.02(a).