Plug Power Acquires General Hydrogen

7 May 2007

Plug Power Inc. has acquired General Hydrogen Corporation, a developer of fuel cell power units that provide motive power for electric lift trucks and other mobile industrial equipment.

General Hydrogen, located in British Columbia, Canada, is within close proximity to Cellex Power Products, Inc., another supplier of fuel cell power solutions for electric lift trucks. Plug Power acquired Cellex last month (earlier post) and will integrate the two companies into one operation.

Plug Power paid approximately US$10 million, consisting of approximately US$7 million in cash and the assumption of US$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.

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.

Large lift truck fleet users typically operate at least two of the three electric lift truck classes in their warehouses and therefore normally 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 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.

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. Further, we anticipate that higher volume commercial product manufacturing activities will be established in Plug Power’s Latham, NY facility.

—Dr. Roger Saillant, Plug Power’s President and CEO

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.