Greetings, and welcome to the Plug Power Third Quarter Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Teal Hoyos, Director of Marketing and Communications. Thank you, Teal. You may begin.

Thank you. Welcome to the 2023 third quarter earnings call. This call will include forward-looking statements. These forward-looking statements contain projections of future results of operations or our financial position or other forward-looking information. We intend these forward-looking statements to be covered by the Safe Harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward-looking statements, and such statements should not be read or understood as a guarantee of future performance or results. Such statements are based upon the current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of management and are subject to significant risks and uncertainties that could cause actual results or performance to differ materially from those discussed as a result of various factors, including, but not limited to the risks and uncertainties discussed under Item 1A Risk Factors in our annual report on Form 10-K for the fiscal year ended December 31, 2022, quarterly reports on Form 10-Q for the quarters ending March 31, 2023 and June 30, 2023 and other reports we file from time to time with the SEC. These forward-looking statements speak only as of the date which the statements are made, and we do not undertake or intend to update any forward-looking statements after this call or as a result of new information. At this point, I would like to turn the call over to Plug Power’s CEO, Andy Marsh.

Thank you, Teal, and thank you for joining the third quarter conference call. It's a difficult quarter, driven primarily by the availability of hydrogen. Over the past several months, there have been enormous challenges associated with the availability of hydrogen, primarily due to down plants, including our Tennessee facility and temporary plant outages across the entire hydrogen network. For many days, demand outstripped supply. For example, many of the California fueling stations have been without fuel or had limited fuel on a regular basis over the past several months. Additionally, the price of hydrogen at these stations has been over $30 per kilogram at the pump, about twice the normal price. To service our customers, Plug has been moving hydrogen from the West Coast to the East Coast. This has been a yeoman's effort and has been accomplished while reducing the core cost of hydrogen compared to the second quarter. The good news is the network has now stabilized, and many of these planned outages have subsided, plus additional capacity will be coming online. We expect our Tennessee plant to be back online producing hydrogen by the end of the year. This plant, when fully operational, provides about 20% of our production needs. One of our major suppliers is upgrading one of their facilities to allow the plant to operate at full nameplate capacity in the coming months. The planned output has been producing between 0% to 25% of capacity. We are continuing to see progress at our Georgia plant, and we are finishing the last step in the construction process, commissioning the liquefier. We expect the plant to be online by year-end. A few other points: Plug’s hydrogen network also caused the delay of deployment of some of our North American material handling customers. These sites will be commissioned as the hydrogen issues are resolved. It's just a timing issue. Many of those facilities actually have their fuel cells in the hydrogen plant or fueling structures already available. We believe though that this experience reaffirms the criticality of building our nationwide hydrogen network to support our fuel cell business as well as the financial benefits that this network could accrue to the company for both that business and the additional applications that are beginning to be realized. Furthermore, this experience underscores the wisdom of our business diversification model. In the fourth quarter, we anticipate the revenue from our new ventures will surpass revenue from our traditional business for the first time as our electrolyzers and cryogenic businesses continue to grow. Finally, I'd like to reflect on the conversation I had yesterday morning with a European customer supplier and partner. He pointed out our facilities and reminded me that no one has built hydrogen infrastructure on the scale we have. No one has our product set, no one has the technical talent, no one has our customer relationships, and no one has our real-life experiences. It remains our belief and his that as the market for hydrogen fuel cells grows, no one is in a better position than Plug to take advantage of this opportunity. This is just a bump on the road. Paul, Sanjay, and I are now available for questions.

Great. Thank you. We will now begin the question-and-answer session. Our first question comes from Colin Rusch with Oppenheimer. Please go ahead with your question.

I want to start off with the balance sheet. You've got a fair amount of restricted cash. You offered a fairly reasonable update in the letter on your process with potential funding sources. I guess the real question is around timing and how you see your ability to free up some of that restricted cash and start to bring on some of those closed one or more of those deals that you're talking about in the shareholder letter?

Hi. Sure, Colin. I'm going to let Paul take that question.

Good afternoon, Colin. Thanks for the question. We continue to pursue a number of initiatives. We've had many inbound expressions of interest with different terms, and we continue to work through what we think is the best and most prudent solution. It's not for lack of options. It's really just continuing to be picky around which ones that we've had to act on, and we haven't felt the compulsion to act quickly. To be precise, we're taking our time to be thoughtful about which choices we have. I'll tell you on the DOE process, many people will ask about that. We're progressing very well. We continue to have great effort in collaboration with them. We expect that we will get through the 100-page long-form term sheet they need to get through to submit for contingent approval here by the end of November. We still expect there's a good chance we can announce that program by the end of the year, which will be very meaningful. We continue to pursue a range of other options, so I expect something in the near term.

Okay. And then on the operations side, with the impact around the hydrogen availability, can you talk about the cadence of deployments for material handling and how that's impacting some of the equipment sales that you guys are working through for the balance of the year and into the early part of 2024?

We had seven sites that we couldn't bring online, which could have generated over $50 million in revenue due to network stress. We anticipate a strong quarter for material handling, but it's crucial to ensure our key customers have hydrogen, especially during this holiday season. We've effectively managed hydrogen distribution, and our fleet of over 40 trucks has been instrumental in this effort. I previously mentioned that the timing was an issue. If network improvements continue, we may see a positive outcome this quarter. However, there could be a potential fluctuation of around $50 million in our material handling business. Additionally, some customers we’ve worked with have increased their desired number of material handling sites, and we've also welcomed new customers like Tyson and Rider. Despite the challenges, it's impressive how well we've maintained hydrogen availability for our customers.

Thanks and appreciate it, Andy.

Yes. You’re welcome.

Thank you. Our next question comes from the line of Manav Gupta with UBS. Please proceed with your question.

Hey, guys. So help us understand the path to positive gross margin here. I think that's the number one question we are getting. How do you get to positive gross margin and by when?

Sure. Paul, do you want to take that? I may add on some items afterward.

Yeah. Sure, Andy, and thanks for the question. I would tell you a couple of fundamental things. One, Andy mentioned this quarter, the revenue from these new platforms are going to be greater than our legacy business. Most of those platforms, and really all of them, are equipment platforms. If you’ve seen our new facility up in Vista or Rochester, we’re poised to start scaling all these new platforms for substantial volume leverage. If you look at sales in Q4 and going into next year, really, the bulk of the growth is coming from these equipment platforms. We've shown historically with material handling as we scale that business, that every time we double the installed fleet, we've been able to reduce the cost by 25%, and you're going to see the same trends. As we get volume leverage, you get supply chain leverage, and you drive greater automation. So equipment sales are really key, and that's one thing you're going to see as we move past launching these new platforms and through the pilot programs into scaling them. Second, you'll see the fuel margin improving. You already see some abatement in prices. We expect some additional abatement in Q4, but the real step function change in fuel happens as we turn on our own facilities. Georgia is coming online this quarter. Tennessee will be reinstating and ramping back up. We're looking to turn on the new facility in Louisiana toward the end of Q1. Those will be very accretive events as we start to turn those facilities up and start to be able to source a lot of that hydrogen from ourselves, which is, in many cases, at least 30% cheaper, and in some only 10% when you factor in the PTC credit. Those are the two massive effects that are going to have on margin in the near term, and we expect to start seeing that in Q4, really ramping as we move through 2024. Andy, do you have other comments you want to share?

No. I think you're right, Paul. The equation is really correct. We have to deploy more equipment, and we'll be deploying more in the fourth quarter. We have to get the plants up and operating, which will help significantly. We have a clear plan on service margins, and I think this is the best plan we've ever had. I believe all those factors will come into play.

My quick follow-up here is we are waiting for clarity on the PTC. When do you think we can get something? What do you think would be a reasonable assumption for you in the PTC guidance that does come out?

The administration has shared this week that they will have the PTC announcement after the four-year end. I suspect that that's probably about right. When I think about the PTC, we believe that the key item is how regionalities are defined. If regionalities are defined to be the balancing authorities, where there are 69 in the U.S., most of our future activities would likely occur in Texas. If the regionality comes out to be the ISO regions, we've looked at that. We think that would work for Plug, regardless of where they come out on additionality, we think you probably need three years. More importantly, if you think about time matching, it's clear that treasury has realized that hourly time matching doesn’t work because a direct market for that really doesn’t exist. We believe that will be the final outcome. It won’t be perfect, but a broader regionality between East and West ERCOT would be the best solution for growing the hydrogen industry. We've discussed this with high-level leadership at the DOE and believe they understand that. Thus, we're confident that Plug will be fine when the guidance comes out, and we think the industry will be fine. I hope it’s done in a way that enables all regions of the United States to prosper.

Thank you so much.

You’re welcome.

Thank you. Our next question comes from the line of Bill Peterson with JPMorgan. Please proceed with your question.

Yeah. Hi. Good afternoon, everyone.

Good afternoon, Bill.

So I'd like to dig a little bit deeper into Colin's questions on the cash raise and reinforcing the balance sheet. You talked about corporate debt solutions. Can you provide more color on what kind of options, what kind of facilities you're discussing here? On the DOE loan, you're hoping to announce something later this year, but you talked about conditionality. What is that conditionality based on? When could the dollars actually flow? Can you confirm that this is milestone-based? And finally, for these project finance options, when could these be solidified in order to show the position? How should we think about your ability to shore up your cash position in the near term?

Paul, do you want to take that?

Sure. There are quite a few questions in your inquiry, and I'll do my best to address them. Regarding the Department of Energy, there’s both good and bad news. The requirement for a comprehensive and detailed term sheet, while time-consuming, is very beneficial. The process involves compiling the necessary documentation, and all due diligence reports have now been submitted for final approval. Once approved, we need to finalize the agreements. Since the term sheet is lengthy, the crucial aspects have already been discussed, which should expedite the finalization process. We are currently working on a framework for a $1.5 billion platform aimed at funding our green plants, covering the construction phase and potentially providing up to $0.80 on the dollar. Additionally, we have received interest in asset-based lending facilities and offers for restricted cash advance facilities similar to past arrangements with Generate. Several parties are keen on project equity for some of our initial plans. We are evaluating a variety of solutions and determining which are the most effective based on our objectives. I believe funding from the DOE could be available as soon as late Q1 or, more likely, early Q2. It may also allow us to leverage existing plants like those in Texas and potentially New York. This structure could support general working capital and other project capital needs we have. I hope this provides clarity.

Yeah. No, that's a good additional context. Just how to think about the fourth quarter. At the time of the symposium, you took down your numbers through the bottom end. But presumably, the headwinds you mentioned about hydrogen are impacting your ability to provide fuel cell systems for the fourth quarter. So I guess, walk us through, if you could, revenue assumptions by product type and how we should think about how the fourth quarter could evolve, given the issues with hydrogen?

I'll take that one, Bill. We spent a lot of time thinking about this. So I think, as a base of $1.2 billion, where are the risks? Because of hydrogen, we think there's a risk of about $50 million in our traditional business. When we look at our cryogenics business, which has been strong this year, there's some timing on deals where we think $50 million could shift into the first quarter instead of the fourth quarter; these are the two items we're closely watching. We feel good about our electrolyzer business as well as our trailer business and other activities in our cryo business. That’s the breakdown we see. If you think about it, we think 60% of the business I outlined is for electrolyzers and cryogenic equipment, while 40% is our traditional material handling business. So that’s kind of the give and take from $1.1 billion to $1.2 billion or so, Bill. Does that answer your question?

Yeah. It highlights some of the risks associated with the rest of the year. It sounds like you still feel good about the electrolyzer business, if I can paraphrase.

Yeah. I feel really good about material handling. I just have to ensure that we feel real good about electrolyzers. We feel really good about expansion activities with our cryogenic trailers. We have this liquid refueler for buses and others. They’re sold, and we can’t make enough of them. We feel good about those things. I have the parts built for material handling. It’s just about ensuring that we can bring them online in a way that meets our customers’ needs.

Thanks, Andy.

You’re welcome, Bill.

Thank you. Our next question comes from the line of Chris Dendrinos with RBC Capital Markets. Please proceed with your question.

Yeah. Thank you. I just wanted to discuss the hydrogen availability situation. Obviously, the force majeure events have been recurring throughout the year. Considering that business and your suppliers, is there more you can do to ensure stable supply? Is there an ability to have backup suppliers or anything like that that you can speak to?

So Chris, I think what we're doing; I mentioned three items. There is additional hydrogen available. I was talking to someone today who told me they couldn't get any hydrogen. When I look at it, however, our plants coming online help significantly. Having Tennessee and Georgia provides us 25 tons of hydrogen, combined with St. Gabriel's bringing another 15 tons. That’s 40 tons. I met with a major hydrogen supplier in the industry, their President of American operations, we discussed bringing online 30 tons by putting SMRs in to replace some waste stream stock that we haven’t been receiving. I estimate that by the end of January, there will be an additional 55 tons available. Just to provide context, 55 tons is approximately another 20% to 25% increase in hydrogen availability. We will use more hydrogen next year; we project an increase in hydrogen needs of around 40 tons. Hence, it's crucial to get Texas online as it will support our customers. The good news, Chris, is that this is not going to be an issue on January 1. We just need to work through the final stages here.

Understood. As a follow-up question on equipment sales margin in the quarter, it looks like it was negative. Can you walk us through the dynamics of what's going on there? Was it mix-related? Any additional color on that segment?

Paul, do you want to take that one?

Sure. The key issue driving is scale. When you think about our manufacturing facilities, driving volume leverage is important. That drives some costs associated with launching these new programs, especially some early pilot programs. It’s hard to make money when you build one of something. As we start scaling up to hundreds and thousands, we drive not only volume leverage but also supply chain leverage and improvements in our manufacturing processes. These were the key drivers this quarter, and we expect meaningful improvement in Q4 given the ramp in these equipment sales, and we'll see that ramp even more so through 2024.

Got it. Thank you.

Paul, I think it’d be fair to state that a $50 million material handling revenue impact would have flipped it the other way.

It certainly would have been super helpful in moving that right direction, Andy.

Thank you. Our next question comes from the line of Jordan Levy with Truist Securities. Please proceed with your question.

Good afternoon, all, and I appreciate all the color. Maybe just a high-level strategic question here. If we look out to 2024, and recognizing you're starting to get some of your own volumes online. But if other supply-side issues persist, how will you balance growth in the materials handling side versus timing of your own plants ramping? Does it make sense to throttle back on materials handling as you bring on your own supply?

Thank you for the question, Jordan. That's a good question. As mentioned, we feel we'll be in a much better position come January 1. Recently, I've gone around and spoken to leadership with other big suppliers in the industry. We've discussed making sure there is stable supply, which is public information. We feel that we can continue to grow and expand that business further. I did the math for you: St. Gabriel's, Tennessee, and the combined 25 tons — that will be a total of 40 tons. I mentioned an additional 30 tons from other suppliers. We don’t see the need to throttle back.

Thanks for that, Andy. Then maybe just a follow-up on the stationary side of the business. I know these are bulkier shipments, but it seems like from the shareholder letter that you've made good traction going into the fourth quarter. Just an update there, if we could.

Yeah. So we will be shipping products. Linde was probably the first, and I wasn't aware until the symposium that the first product we deployed was fully operational. This product is much more challenging than our material handling products, but it’s so much simpler once operational. I mention it’s challenging because it’s a complicated system with 1-megawatt of power, managing hydrogen and water. The operational consistency is critical. That first deployment has performed remarkably well. Just two weeks ago, I contacted the customer to check on performance after not hearing anything. This is incredibly unusual in my 40 years of engineering product experience. They’ve reported strong feedback, which has been very encouraging. So we look forward to deploying more, and a significant amount of the extra hydrogen for next year will be linked to that product. We feel positive as the launch has been successful.

I appreciate that. Thanks for all the details.

Yes.

Thank you. Our next question comes from George Gianarikas with Canaccord Genuity. Please proceed with your question.

Hi, everyone. Thank you for taking my question.

Hi, George.

I wanted to ask for an early glimpse into 2024. In '25, just sort of gross margin high level, particularly in light of the updates to your green hydrogen generation. Thank you.

Paul, do you want to take that question?

We will have our January business update likely towards the end of January, where we will provide more specific numbers for 2024 as we finalize our plans and forecast, as we do every year. Directionally, we expect improvement. With the equipment programs starting to scale and the fuel sites' impact, we think next year might not only be positive but could reach low double digits eventually. A significant increase could happen in 2025 when the Texas and New York facilities come online. These two facilities account for 115 tons per day of capacity, which represents substantial revenue and margin growth. That’s the direction we anticipate.

Thank you. As a follow-up, we are awaiting clarity on how PTC will be used. Can you help us break this down further based on different outcomes? How will they impact our numbers? You've given some long-term guidance before. How should we think about that as we hear the final outcomes from Washington?

That's a good question, George. We've always taken a very conservative view of the outcome. We built our models and our plants not based on the PTC being available. We believe the PTC will unlock additional opportunities, but it won't have a major impact on our forecast for 2024. Even with people waiting, it still takes time to reach final investment decisions, especially on electrolyzers. We think our forecast may vary in the '25-'26 time frame with a middle-ground PTC outcome. Sanjay, you've been considering this, too; do you want to add anything?

No. I think, Andy, you summarized it well. I would add that we've been working on multiple large-scale electrolyzer opportunities here in the U.S. As guidance becomes clearer, I think some of these opportunities we've been pursuing are expected to unlock. We have talked about working on three mega deals; we’ve announced a 100-megawatt in Europe, a 280-megawatt in Europe, and we are a preferred supplier for a 550-megawatt opportunity in Australia. With the PTC, we foresee meaningful growth for electrolyzer business, particularly in 2025 and 2026, but there will be substantial growth in 2024 as well because of the business mix, market diversity, and existing backlog.

There are more products needing hydrogen coming online. Companies are turning to green hydrogen to meet their goals regardless of the PTC status. So even a middle-of-the-road PTC decision will be beneficial for Plug. Thanks, George.

Thank you.

Thank you. Our next question comes from Eric Stine with Craig-Hallum. Please proceed with your question.

Thanks for taking the questions.

Hi, Eric.

So I've been jumping around on calls today, so I hope that I don't ask something that's already been asked. I did hear the end of the last one. I'll stick with the IRA just for a second. Hearing some talk of regionality in terms of where power needs to be sourced from, just curious if you could expand on that a little bit? What would you see that doing for your business?

Yeah. If regionality is tight at the balancing authorities, which number 69 in the U.S., I think that would drive business activity into ERCOT. I don't think it's going to end up that way. When we think about a middle-of-the-road solution that would work for Plug and for most in the industry, the ISO regions would be ideal. Those markets are supportive, and the regions are expansive enough that the additionality concern should be minor. Ultimately, phasing in time matching will likely work, promoting successful hydrogen hub deployment. I believe from Plug’s perspective, we’ll prosper wherever we operate and where many of our customers are located. From a nationwide rollout perspective, the more regions there are, the less helpful it becomes. A faster, broader regional deployment would be beneficial for us.

Okay. That's helpful color. We'll stay tuned on that. I guess we'll stay on 2023 provided some color around the prior outlook of $1.2 billion. There’s also the guidance for 2024, where you'd had a $2 billion-plus target in the past. At the symposium, you had 2027 and 2030 guidance. Curious if you addressed that, or is that more for the January update?

Paul explained, Eric, to the people on the January update call. We did not make any changes.

Didn't make changes. Okay. Thank you.

Thank you. Our next question comes from Andrew Percoco with Morgan Stanley. Please proceed with your question.

Good evening. Thanks for taking the question. Hey, Andy. I did want to come back to the balance sheet and financing line of questioning because I do think it's important here. It looks like you burned $400 million of free cash flow in the quarter, which leaves you with about $550 million of unrestricted cash and available-for-sale securities on the balance sheet. Paul, I know you laid out DOE timing late this year, but it sounds like that project milestone-based, and you also announced the Fortescue potential financing at the project level, but it sounds like that's early stages. So I think you might need to do something at the parent level to manage working capital within the next few weeks. One, is that correct? Two, are you still confident that you can do it with debt? Is there a potential need for a convert or equity here? Can you give us a sense for size in terms of what you'll need to manage working capital and the profitability drag over the next few quarters? Thank you.

Paul, do you want to take that?

Sure. We’re in a position where we've spent what we need to for Georgia to turn that on. The remaining balance for Louisiana is not significant. We're managing Texas to align with solutions timing. Given the sales scale this quarter, that’ll aid in cash conversion. We're also focused on reducing inventory levels. We have built up inventory to aid these platform launches, but that offers a significant liquidity channel that will come into effect in Q4 and into Q1. You are correct; we’re laser-focused on a range of solutions, and some near-term options could include an ABL or a restricted cash advance facility similar to our prior arrangements with Generate. We have a range of solutions and flexibility moving through next quarter to see what we do and when based on prudent evaluations.

Yeah, it is helpful. As a follow-up, related to your electrolyzer business, I think you mentioned having a backlog over 2 gigawatts. Can you help us think about how many of those projects have reached FID? We're interested in understanding how to underwrite that 2 gigawatts. We've seen issues across wind, solar, and battery storage as it relates to financing and supply chain, and I'm sure you see similar dynamics for hydrogen. How many of these projects have reached FID?

Sanjay, do you want to take that one?

Yes. So Andrew, it’s a good question. In that backlog, we have a lot of 5-megawatt systems, which have all gone to FID and account for around 30 of those systems. We discussed a significant project in Europe that's received FID, accounting for over 100 megawatts, and we have a preferred supplier deal expected to reach FID by year-end. Additionally, there's another project seeking an offtake for sustainable aviation fuel expected to reach FID next year. Keep in mind; the revenue model for our electrolyzer business involves standard stack sales and project revenue based on completion percentages. This builds our business base for Q4, '24, and '25. Besides, several growing projects we've worked on for six to nine months have funding ready but await clarity from policy announcements. We expect these will move forward by year-end or early next year, contributing significant revenue. Importantly, this trend ensures we are focused on cost reduction and margin expansion across new bookings.

Great. Thank you. I'll take the rest offline.

Thank you.

Thank you. Our next question comes from Ameet Thakkar with BMO Capital Markets. Please proceed with your question.

Hi. Good evening. Thanks for taking my question. I just wanted to follow up, Paul, I guess I'm not as familiar with the restricted cash facility you had before. One, can any of the $1.15 billion restricted cash work into the unrestricted bucket? How does that facility work? I have one follow-up.

As we’ve done over the last 10 years, probably conducting about $2 billion worth of sale-leaseback transactions to monetize tax credits on some of our programs with customers. Some of these customers prefer ownership, while others like leasing. We package and sell it to banks for those tax credits, and they often require collateralization for the investment tax credit. That amount represents the majority of the balance. About 20% gets released to us each year out of that $900 million. So around $200 million gets released, including $50 million in Q1. This will be $50 million this quarter and will continue at that pace.

Okay. In terms of funding, you seem to be working with numerous funding options. I noticed you added some concern language in the 10-Q. Does that narrowing on options or changing them?

Not really. The language we included is driven by accounting standards for evaluation and management. We have a $5 billion unlevered balance sheet with no current debt. We're confident in the range of parties and solutions we’re working with. We’ve been transparent about our liquidity position and our direction. Most understand where that stands. Our growth plans and margins generate solid motivation.

Thank you for your time.

Thank you. Our next question comes from Sherif Elmaghrabi with BTIG. Please proceed with your question.

Hey, everyone. Thanks for taking my question.

Hi, Sherif.

Hey, Andy. I'd like a little more clarity on the service accrual charge. It makes sense hydrogen shortages affect service cost, but how have unplanned outages delayed fleet upgrades?

That’s a long answer, but let me break it down. It does slow upgrades because we have a fleet of 20-plus rolling hydrogen generators. Our service staff operates on-site nearly every day, often connecting and reconnecting, and troubleshooting to get products operational. When hydrogen runs low, it can cause liquid hydrogen pumps to cavitate and require more maintenance. Thus, it's affecting the speed of implementation as staff focuses on current customer needs. In regard to the service accrual, assessing our traditional material handling business, we'd expect an additional service accrual over the next two quarters. However, once we address legacy unit issues, we believe that line could turn positive gross margin in the second half of next year. As for new businesses, monitoring systems remotely allows for easier dispatch for repairs, contributing positively to service margins.

That was very insightful, thanks. On the conversion from 15 tons per day in Georgia from gaseous to liquid, is it merely the addition of a liquefier? Or are there more retooling processes involved?

The gas feeds the liquid, Sherif. We're looking at expanding Georgia, but it’s primarily a liquid plant with a small gaseous plant. The hydrogen produced at Georgia largely becomes liquid via liquefiers.

Makes total sense.

Thank you. Our next question comes from Vikram Bagri with Citi. Please proceed with your question.

Good evening, everyone. To start off, can you provide some risks regarding the Georgia facility startup beyond '23? Are any funding options contingent on Georgia running? With inventory over $1 billion, can it be a source of liquidity next year? Finally, the quarterly filing has cautionary statements regarding funding. Can you quantify the minimum needed if you manage expenses closely next year?

Let me address Georgia. We're at drying stages of the liquefier. Essentially, we heat the liquefier to 400, 450 degrees to ensure no elements impede performance at 25 Kelvin, which is close to absolute zero. We dry eight components but it may take more than 24 hours for all to dry. The liquefier has been tested, but bringing it into the field brings risks. There’s confidence it will operate cleanly, but that’s where risks remain. As for funding parameters, Paul can offer more insight.

Your questions are multi-layered. Our filings detail risk factors driven by regulations. In terms of financing, it's not contingent on Georgia operating; it's more extensive than that. We consider options for minimizing expenses and establishing priorities. The amount needed in 2024 depends on our growth forecast and cash flow conversion. We will clarify this during the January update. We can assure feasible resource sharing will support funding our cash needs.

Thank you! Appreciate the answers.

Thank you. Our next question comes from Martin Malloy with Johnson Rice. Please proceed.

Hello. Thank you for taking my question.

Good evening, Martin.

I was wondering if you could talk about nuclear operators as potential customers for electrolyzers?

Sure. Do you want to take that one, Sanjay?

Again, Martin, it makes sense when we consider clean energy of all types and how some are used to produce green hydrogen. There are ongoing efforts in that direction. We recognize this as part of our electrolyzer business opportunity, whether it's electrolyzer sales or constructing a liquid plant. It's a fair point. We look forward to sharing more with you soon, especially surrounding the PTC guidance which will unlock larger projects across the U.S.

Great. As a follow-up, what's your interest level in monetizing green hydrogen plants as they come online? I saw your news with Fortescue, but I’m interested in your thoughts on that.

Paul, do you want to take that one?

My personal perspective is to avoid selling equity in those plants because it's the most expensive capital. We focus on broad plans, capital needs, and timing. Fortescue’s investment alternatives allow us to co-invest in their platforms, which presents opportunities. We're nurturing these discussions while examining others, aiming for the best solution overall.

It does help. Thank you.

Thank you, everybody. That concludes our call. We appreciate your participation and look forward to speaking in January for our update. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.