Connect power (NASDAQ: PLUG) the stock fell 4.6% at 9:45 AM EST trading on Nasdaq this morning. The decline followed the company’s public announcement that it will expand its partnership with Universal Hydrogen with the goal of accelerating the development of a hydrogen fuel cell aviation engine that can fly over 600 miles without refueling. In addition, it warned slightly less public investors that it will need to postpone the publication of its 10-K financial report.
Plug made the first announcement in a press release and noted that thanks to the recent increase of billion dollars in cash through new share issues, it can now “enable Universal Hydrogen to complete the construction of a subscale power transmission for Q2 2021.” Plug then plans to install the driveline in a “40-60 passenger regional aircraft” and start experimental flights with this aircraft in 2023 and then start flying it commercially in 2025.
Plug did not say which airline will fly the plane or if the company plans to do so enter the aviation business sig.
It also predicted that its green hydrogen products will be competitive with aviation fuel to power aircraft by 2025. To accelerate and then take advantage of this development, Plug says it “plans to build five regional green hydrogen plants in the United States.”
That’s the good news; here it’s bad. Here is the reason why Plug bearings go down today:
While publishing its press release to monitor the above developments, Plug submitted a form to the Securities and Exchange Commission (SEC), reminding the agency that for the fiscal year 2020, it has just become what the SEC calls a “large accelerated file for the first time.” For the first time, the company is now subject to rules that require it to submit its 10-K annual reports within 60 days after the end of a financial year, rather than the 75 days it had. However, Plug had trouble getting its numbers in order to meet the new deadline, and as a result “additional time is required to complete the procedures related to its reporting process at year-end, including the completion of the company’s financial reports and procedures for to management’s assessment of the effectiveness of internal controls. “
Although Plug apparently hoped for the best, it turns out that “the company can therefore not submit Form 10-K by March 1, 2021, the prescribed submission date” – and must request an extension.
Now the company is in a hurry to make sure that it “works diligently to complete the necessary work”, and it expects that its “full-year results for 2020 will be in line with those reported in the company’s press release presented as Appendix 99.1 to the company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 25, 2021. “
But still, the delay, combined with the fact that the Feb. 8 filing saw Plug lose $ 1.12 per share during Q4 – a massive loss and much worse than expected – seems to give investors a case of shaking today, fuel cell-powered aircraft notwithstanding .
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We are motley! Questioning an investment dissertation – even one of our own – helps us all think critically about investments and make decisions that help us become smarter, happier and richer.