Commitment and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies.

Commitments and Contingencies

14. Commitments and Contingencies

Litigation

Legal matters are defended and handled in the ordinary course of business.  We have established accruals for matters for which management considers a loss to be probable and reasonably estimable. It is the opinion of management that facts known at the present time do not indicate that such litigation, after taking into account insurance coverage and the aforementioned accruals, will have a material adverse impact on our results of operations, financial position, or cash flows.

Concentrations of credit risk

Concentrations of credit risk with respect to receivables exist due to the limited number of select customers that the Company has initial commercial sales arrangements with and government agencies. To mitigate credit risk, the Company performs appropriate evaluation of a prospective customer’s financial condition.

At March 31, 2015, four customers comprise approximately 62.2% of the total accounts receivable balance, with each customer individually representing 30.8%, 14.4%, 10.3% and 6.7% of total accounts receivable, respectively.  At December 31, 2014, four customers comprise approximately 69.9% of the total accounts receivable balance, with each customer individually representing 30.2%, 16.0%, 13.4% and 10.3% of total accounts receivable, respectively.

For the three months ended March 31, 2015, contracts with one customer comprised 63.5% of total consolidated revenues.  For the three months ended March 31, 2014, contracts with two customers comprised 31.6% of total consolidated revenues, with each customer individually representing 21.1% and 10.5% of total consolidated revenues, respectively.

Letter of Credit

In September 2011, the Company signed a letter of credit with SVB in the amount of $525,000. The standby letter of credit is required by the agreement negotiated between Air Products and Chemicals, Inc., or Air Products, and us to supply hydrogen infrastructure and hydrogen to Central Grocers at their distribution center. There are no collateral requirements associated with this letter of credit.