Tuesday, February 24, 2015 11:23:10 AM
I went back through the January business update call and made a few notes.
Looming VERY large among those notes is one about a comment from Paul Middleton regarding a previously disclosed litigation accrual for $3M effecting the Q3 and Q4 results.
In the last 10-Q that was filed there was a $2.4M accrual relating to a lawsuit from Soroof, a Saudi FC distributor wannabe that coughed up a cool million in 2008 to a Plug Power/GE JV shell company just for the rights to sell FC products there.
My understanding is as follows :
-when products were not forthcoming Soroof sued the JV, Plug, and GE and along the way were able to get at least one judgment which pierced the corporate veil of the worthless shell company, which was overturned in a subsequent judgment
-in October of last year Plug came to an out of court settlement of $1M with Soroof, after which
-GE piled on seeking $1M from Plug for legal costs associated with it's defence against Soroof's actions
As of the Q3 report last year the accrual was $2.4 M accounted for in Q3, by January 28th it was $3M and effecting Q3 and Q4 results. My take away is that there is no reasonable basis upon which to expect containment on this issue.
So on the plus side we have some pictures of lumber and running shoes, and on the minus side we have no profit, litigation accruals which seem to be increasing every time someone speaks, a blown off promise date for release of results, reduced revenue projections, no release of the names of the new customers...
Oops, sorry, I forgot one on the plus side - yet again ANOTHER promise of positive EBITDA results yet again ANOTHER year down the road.
There just seems to be no end of smoke to blow up everyone's and anyone's ...
Hoping that today's foolishness does not start another round of litigation - still long with greatly reduced exposure,
canadajim
As always this is just my opinion - I recommend you be diligent in doing your own due diligence before making any investment decision.
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