TWST: Let's begin with a brief history, as well as an overview of Plug Power.

Mr. Marsh: Plug Power (PLUG)was formed in 1997. When I look back at the history, the first seven or eight years of this company was really focused on driving technology development. If you look back in 2001 and 2002, fuel cells were not yet a viable commercial technology. They didn't operate long enough, costs were too high, and since then, our engineers did a great deal of work developing a technology that worked. As a result, we built around that technology a rich patent portfolio of over 150 patents.

When I joined the company in April 2008, my objective was to find a viable commercial market for fuel cell technologies, very much in the same way that other technologies chase a market. Luckily, we did find a market that made sense. I probably spent the first six months of my time here at Plug Power on the road visiting a variety of different customers and with a variety of different applications. One that I found that made sense was the material-handling market, where we replace the lead-acid batteries in forklift trucks with hydrogen fuel cells. Over the past two to three years, we've been focused on customers and market development within this market, as well as developing a full product line to meet the needs of these customers.

As we sit here in early 2012, I have a premier set of customers that include Fortune 500 companies, I have a full suite of products and I have a product that is becoming more and more cost effective. So we've gone from a technology, a laboratory experiment, in 1997 to a full commercial company here in 2012. In some respects, a long path, but one that shows much promise. Last year, the fuel cell industry was probably just a little over $500 million to $600 million, but Pike Research expects this industry to be over $28 billion in 2017. Plug Power expects to be a significant player in that market.

TWST: It's a new year, how did the downturn domestically impact U.S. market interest in 2011 and have you remained unscathed?

Mr. Marsh: I think that we are a little different than some companies. If you're a large company with a large revenue base, when the GDP falls, even a few percent, it has an immediate impact on your revenue. When you're building a company up from essentially a commercial zero base, the impact of the economy, in some ways, is harder to see because you're continuing to double revenue. When I joined the company it had less than $1 million in commercial revenues, and I expect that it will be 50 times more than that in 2012. What I will say is that it's tough to put a percent on it.

I do think it had implications of slowing down the speed of fuel cell adoption. Many of our customers were very much impacted by the macroeconomic conditions, potentially resulting in a longer time frame in making internal decisions. Our technology provides productivity improvements, and in many ways, in bad times, customers are looking for ways to save operating cost and that's a value Plug Power brings to the table. So overall, I think it's been minimum, but I'm sure we've been hurt a little.

TWST: Plug Power recently announced a joint venture with the French gas distribution company, Air Liquide. Please tell us about the deal.

Mr. Marsh: Air Liquide is one of the two large providers of industrial gases in Europe, and has growth goals associated with hydrogen generation. As you know, the fuel that powers our fuel cell is hydrogen. Air Liquide saw this joint venture as an opportunity to promote use of hydrogen in what they viewed as the fastest-growing market for fuel cells. Plug Power views this as an opportunity to enter Europe, a market that's larger than North America, at a low capital cost. Air Liquide has an existing sales channel with many large Fortune 500 companies, as well as access to government funding.

When we take a step back, this JV initially will be 45% owned by Plug Power, 55% owned by Air Liquide. By 2016, Plug Power can have the option to be the majority holder at a low cost. I'm putting no capital in. My partners are providing the funding for this activity for a very low cost to Plug Power investors. Plug Power can become the majority shareholder in 2016. When you have a current market cap of less than $50 million, there is a great deal of capital restraint. This JV is a way to buy an option for the future in a very large market for a very small cost.

TWST: In another announcement, we see Procter & Gamble plans to acquire 200 of Plug Power's GenDrive fuel cell units, joining an impressive list of companies such as Wal-Mart, FedEx, Coca-Cola, Whole Foods, among others. With companies such as these on your client list, would you tell us what other segments are best suited for these fuel cell products?

Mr. Marsh: We view the material-handling market as a large global opportunity that we're just beginning to touch on. When we look at this market, we believe it's a $20 billion opportunity globally. The primary effort for Plug Power in 2012 and 2013 will be expanding the presence of these products within the material-handling industry.

Where I think you may see some opportunities is in horizontal expansion with our present customers. One area we've been looking at is replacing diesel engines in refrigerated trailers with fuel cells. Refrigerated trailers are used by many of our customers like Sysco, Wal-Mart and Kroger. The customers themselves, because of issues with the cost of diesel and with the environmental restraints on carbon emissions, view the opportunity to put fuel cells into refrigerated trucks as an opportunity to reduce their cost and their carbon footprint. So that is an area where we have been spending some time.

TWST: How does one quantify the savings for a large company such as a P&G or a Wal-Mart? How do they define success? How do you define it?

Mr. Marsh: To me success is whether our customers give me an order or not, but the decision with these customers are very much business-case driven. Working jointly with our customers we survey a facility, and with fairly sophisticated models, allow customers to look at comparisons between fuel cells and lead-acid batteries. We look at product cost. We look at energy cost. We look at service cost and at lifetime cost. We develop with the customer the potential IRR associated with purchasing fuel cells. Usually, IRRs will exceed 20%, and in that range, customers get excited about the possibility of converting their facilities to fuel cells.

We don't necessarily sell green. What we sell to our customers are industrial productivity savings and the green aspect is an extra advantage of our products. So we go through this with a business case model like you would do any product purchase within a company and justify based on financial return. That's how our customers look at it, that's how we look at it, plus we have the added benefit of providing up to 75% to 80% reduction in their carbon emissions, which can be a great bonus on top of the financial savings.

TWST: You mentioned you don't sell green, you sell industrial solutions. Are there any other companies doing it this way and what would you consider as your strength and advantages?

Mr. Marsh: Plug Power has 85% market share for material-handling equipment for fuel cell products. There are a number of competitors who compete with us, but we're the only company with a full suite of products to convert a distribution center to fuel cells. Our cost and prices are lower. Our products have demonstrated greater reliability than our competitors. Quite simply, we have invested more. We've invested more because we are focused on this market, and we have a distinct leadership position that we have no intentions of giving up.

TWST: How has the current macroeconomic circumstances influenced corporate attitudes toward your products?

Mr. Marsh: As I mentioned before, when you're growing from a low revenue base like Plug Power's position in 2008 - if you're truly adding value - the company should be able to double their revenue every year. Plug Power has been able to do that.

That said, some companies are slower to make decisions with the difficult macroeconomic conditions. Some customers have been holding back on capital decisions, which most likely slowed our acceptance down a little, but overall, we sell productivity improvement savings. When you are selling cost savings in a downtime, enlightened customers can see that as quite beneficial.

TWST: It's said that in technology, the only constant is change, and that's evidenced by Plug Power's rollout last fall at the International Foodservice Distributors Association's Conference. You rolled out your newest GenDrive unit featuring 30% fewer components. How much effort does the company put into R&D to keep advancing this technology?

Mr. Marsh: Plug Power spends about 35% of our overall budget on R&D, and we will continue to invest at the same level in terms of absolute dollars. The reason we were able to reduce our cost by 30% was design simplification, really due to an integration of functionality. We also looked at ways to extend the use of software control through our products. We now have patents that are pending on software that controls the output of the stack voltage to match the voltage needs of the forklift truck. That patent alone allowed the engineers to reduce the components used in a fuel cell by 20%. So those are the type of innovations that we believe are required to continue to drive down and make our offering more attractive to customers.

TWST: Please give us a sense of the strategic direction for Plug Power. What significant changes are you expecting in the company's markets this year?

Mr. Marsh: Well, since 2008 the path has been clear. We are looking to build the first profitable fuel cell company in the world. Since 2010, we have been exclusively focused on building repeat success and penetration with our current customer base. Our present customers could buy over 50,000 units a year of our products. Success with those customers are critical to the long-term success for our company and our shareholders.

We are also always looking for opportunities to expand our footprint within the distribution center. This ties back to my comments earlier about the opportunity for market growth with refrigerated trailers. Looking beyond 2012 and 2013, forklift trucks represent the first type of fleet vehicles where we've had success, but there are many other types of fleet vehicles, from airport equipment to golf carts, that could also benefit from using fuel cells.

When we tackled this market, one of the continuing challenges for the fuel cell industry is what comes first, the hydrogen infrastructure or the fuel cells? That's been one of the problems that the fuel cell car industry has faced. We've actually believe you have to first deploy product at a size which uses significant hydrogen to then make it attractive to the industrial gas companies to work together on customer solutions. That's what we have done with Air Liquide abroad, and other industrial gas companies here in the U.S.
Our success in forklift truck fleet vehicles, in my view, is what distinguishes Plug Power from our competitors. Additional successes will come as Plug Power builds product offerings to meet customer and market demand.

TWST: You're based in Latham, N.Y., a few hours north of New York City. Where does the manufacturing for the GenDrive take place?

Mr. Marsh: Latham, N.Y.

TWST: Why New York? Why Not China?

Mr. Marsh: When we look at product cost and product reliability, there is no substitute for the skilled work force here at Latham. They allow us to provide the lowest-cost, highest-reliability product to our customers.

TWST: Do you have the balance sheet in place to accomplish all of Plug Power's goals this year?

Mr. Marsh: Our biggest challenge is working capital, which is not surprising for a growing and expanding business. At the moment, we have a line of credit of approximately $7 million for working capital. We will need to expand that during the coming year to meet our growth goals.

TWST: For the investor looking over your shoulder, what should they focus on?

Mr. Marsh: Next to sales, which I think is a given, it's expanding gross margins. With those expanding gross margins, one can see the path to profitability and the ability for the company to self-fund our growth in the future.

TWST: Looking at Plug Power's stock performance over the past year, do you see any factors that may account for the slow general decline?

Mr. Marsh: In May 2011, we were able to raise capital, which was required for the growth of the business, in a very difficult market. The capital that we raised, coupled with the reverse stock split, had a very negative impact on our stock performance. What this company needs to do is to show improved results front and foremost. We have to demonstrate to the investing public that we will achieve our sales goals and that we will improve our gross margins. Investors need to see progress happening quarter over quarter and to be assured that Plug Power will eventually be self-funding. I think with those kind of results, we can interest valuable analysts and shareholders. What investors are expecting from a company that has existed since 1997 and has been public since 1999 is to perform, and that's what we are going to be doing during the coming year.

TWST: In your discussions with the investment community, are there any recurring questions, any misperceptions there? Do they understand the story as well as you like them to?

Mr. Marsh: I think that when we have the opportunity to be in front of people and we tell our story, people show a great deal of interest. I think that the investment community continues to look for results and that's what we plan to give them. It's our responsibility to tell the world our story. That's why we have Reid Hislop as our Vice President of Marketing and Investor Relations. Reid and his team are very active at reaching out to the investment community on a daily basis. But we need to keep telling our story.

As I've watched our sales grow since joining the company in 2008, we are reaching the point where we're doubling and tripling our sales. It has been a slow process. We are conquering one customer at a time. To be successful with investors, we will need to convince one investor at a time. When we reach our goals, the stock price will reflect that messaging.

TWST: Mr. Hislop, in this results-driven environment, what are the key objectives with regard to getting the message out to the investment community?

Mr. Hislop: As Andy said, it's really about creating as much awareness as we can within the investment community - and the media community plays a huge role. There are successful clean-technology publications that feed the investment community as well, so communication goes hand in hand with investor communication. The viability and the profitability potential for Plug Power exists today. Our primary objective is to have the financial market understand where we are today, where we are headed and why.

TWST: What's the agenda that will summarize the next 12 months, what the next 12 months will hold as far as the positive goals for Plug Power?

Mr. Marsh: Positive goals - I'm expecting to double our revenues with healthy margins and double orders, especially orders from some of our large, established customers.

TWST: What are the three or four summary statements that compels an investor to include Plug Power in his or her portfolio today?

Mr. Marsh: This is a large market opportunity. We believe this could be over a $20 billion global market for our products. Plug Power is the early leader with over 85% share. We've demonstrated we can double commercial revenues every year, and we have growing gross margins. That's why I'm an investor and I think that's why this story and the company should be interesting to others.

TWST: Anything else? Anything you'd like to add?

Mr. Marsh: No, I think you touched on all points.

TWST: Thank you. (KL)

Andy Marsh

President & CEO

Reid Hislop

Vice President of Marketing and Investor Relations

Plug Power Inc.

968 Albany Shaker Rd.

Latham, NY 12110

(518) 782-7700

(518) 782-9060 - FAX