Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2022 | Sep. 02, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | FUELCELL ENERGY, INC. | |
Entity Central Index Key | 0000886128 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2022 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | FCEL | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity File Number | 1-14204 | |
Entity Tax Identification Number | 06-0853042 | |
Entity Common Stock, Shares Outstanding | 405,562,988 | |
Entity Address, State or Province | CT | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Address, Address Line One | 3 Great Pasture Road | |
Entity Address, City or Town | Danbury | |
Entity Address, Postal Zip Code | 06810 | |
City Area Code | 203 | |
Local Phone Number | 825-6000 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Current assets: | ||
Cash and cash equivalents, unrestricted | $ 456,479 | $ 432,213 |
Restricted cash and cash equivalents - short-term | 5,627 | 11,268 |
Accounts receivable, net | 12,101 | 14,730 |
Unbilled receivables | 10,461 | 8,924 |
Inventories | 80,606 | 67,074 |
Other current assets | 14,259 | 9,177 |
Total current assets | 579,533 | 543,386 |
Restricted cash and cash equivalents - long-term | 17,532 | 16,731 |
Inventories - long-term | 4,586 | 4,586 |
Project assets, net | 246,018 | 223,277 |
Property, plant and equipment, net | 52,868 | 39,416 |
Operating lease right-of-use assets, net | 7,401 | 8,109 |
Goodwill | 4,075 | 4,075 |
Intangible assets, net | 17,697 | 18,670 |
Other assets | 14,712 | 16,998 |
Total assets (1) | 944,422 | 875,248 |
Current liabilities: | ||
Current portion of long-term debt | 9,810 | 10,085 |
Current portion of operating lease liabilities | 798 | 1,032 |
Accounts payable | 26,978 | 19,267 |
Accrued liabilities | 22,535 | 16,099 |
Deferred revenue | 20,393 | 6,287 |
Total current liabilities | 80,514 | 52,770 |
Long-term deferred revenue and customer deposits | 14,342 | 30,427 |
Long-term operating lease liabilities | 7,619 | 8,093 |
Long-term debt and other liabilities | 82,280 | 78,633 |
Total liabilities (1) | 184,755 | 169,923 |
Redeemable noncontrolling interest | 3,030 | 3,030 |
Stockholders' equity: | ||
Common stock ($0.0001 par value); 500,000,000 shares authorized as of July 31, 2022 and October 31, 2021; 394,430,969 and 366,618,693 shares issued and outstanding as of July 31, 2022 and October 31, 2021, respectively | 39 | 37 |
Additional paid-in capital | 2,056,626 | 1,908,471 |
Accumulated deficit | (1,365,506) | (1,265,251) |
Accumulated other comprehensive loss | (1,145) | (819) |
Treasury stock, Common, at cost (119,258 and 73,430 shares as of July 31, 2022 and October 31, 2021, respectively) | (786) | (586) |
Deferred compensation | 786 | 586 |
Total stockholder's equity | 690,014 | 642,438 |
Noncontrolling interest | 6,766 | |
Total equity | 696,780 | 642,438 |
Total liabilities, redeemable noncontrolling interests and stockholders' equity | 944,422 | 875,248 |
Series B Preferred Stock | ||
Current liabilities: | ||
Redeemable Series B preferred stock (liquidation preference of $64,020 as of July 31, 2022 and October 31, 2021) | $ 59,857 | $ 59,857 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 394,430,969 | 366,618,693 |
Common stock, shares outstanding | 394,430,969 | 366,618,693 |
Treasury stock, shares | 119,258 | 73,430 |
Assets | $ 944,422 | $ 875,248 |
Cash | 456,479 | 432,213 |
Accounts receivable, net | 12,101 | 14,730 |
Unbilled receivables | 10,461 | 8,924 |
Operating lease right-of-use assets, net | 7,401 | 8,109 |
Project assets, net | 246,018 | 223,277 |
Current portion of operating lease liabilities | 798 | 1,032 |
Accrued liabilities | 22,535 | 16,099 |
Long-term operating lease liabilities | 7,619 | 8,093 |
Total liabilities | 184,755 | 169,923 |
Variable interest entity ("VIE") | ||
Assets | 105,641 | 54,375 |
Cash | 2,842 | 1,364 |
Unbilled receivables | 1,067 | |
Operating lease right-of-use assets, net | 1,186 | |
Project assets, net | 100,546 | 53,012 |
Current portion of operating lease liabilities | 157 | |
Accrued liabilities | 500 | |
Long-term operating lease liabilities | 1,478 | |
Total liabilities | 0 | |
Series B Preferred Stock | ||
Preferred Stock, Liquidation Preference, Value | $ 64,020 | $ 64,020 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | |
Revenues: | ||||
Revenues | $ 43,104 | $ 26,820 | $ 91,283 | $ 55,650 |
Costs of revenues: | ||||
Costs of revenues | 47,284 | 25,720 | 105,668 | 62,924 |
Gross (loss) profit | (4,180) | 1,100 | (14,385) | (7,274) |
Operating expenses: | ||||
Administrative and selling expenses | 14,158 | 8,662 | 64,357 | 27,264 |
Research and development expenses | 9,659 | 3,023 | 22,316 | 7,810 |
Total costs and expenses | 23,817 | 11,685 | 86,673 | 35,074 |
Loss from operations | (27,997) | (10,585) | (101,058) | (42,348) |
Interest expense | (1,622) | (1,554) | (4,757) | (5,662) |
Loss on extinguishment of debt | (11,156) | |||
Loss on extinguishment of Series 1 preferred share obligation | (934) | |||
Change in fair value of common stock warrant liability | (15,974) | |||
Other income (expense), net | 1,136 | 149 | 1,086 | (797) |
Loss before provision for income taxes | (28,483) | (11,990) | (104,729) | (76,871) |
Provision for income taxes | (494) | (7) | (494) | (3) |
Net loss | (28,977) | (11,997) | (105,223) | (76,874) |
Net income (loss) attributable to noncontrolling interest | 437 | (4,968) | ||
Net loss attributable to FuelCell Energy, Inc. | (29,414) | (11,997) | (100,255) | (76,874) |
Series B preferred stock dividends | (800) | (800) | ||
Net loss attributable to common stockholders | $ (30,214) | $ (12,797) | $ (102,655) | $ (79,274) |
Loss per share basic and diluted: | ||||
Net loss per share attributable to common stockholders, basic | $ (0.08) | $ (0.04) | $ (0.27) | $ (0.24) |
Net loss per share attributable to common stockholders, diluted | $ (0.08) | $ (0.04) | $ (0.27) | $ (0.24) |
Basic weighted average shares outstanding | 387,465,758 | 337,291,562 | 375,638,293 | 323,983,465 |
Diluted weighted average shares outstanding | 387,465,758 | 337,291,562 | 375,638,293 | 323,983,465 |
Net loss | $ (28,977) | $ (11,997) | $ (105,223) | $ (76,874) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (86) | (6) | (326) | (8) |
Total comprehensive loss | (29,063) | (12,003) | (105,549) | (76,882) |
Comprehensive income (loss) attributable to noncontrolling interest | 437 | (4,968) | ||
Comprehensive loss attributable to FuelCell Energy, Inc. | (29,500) | (12,003) | (100,581) | (76,882) |
Series B Preferred Stock | ||||
Operating expenses: | ||||
Series B preferred stock dividends | (800) | (800) | (2,400) | (2,400) |
Product | ||||
Revenues: | ||||
Revenues | 18,000 | 36,000 | ||
Costs of revenues: | ||||
Costs of revenues | 17,919 | 1,903 | 39,159 | 6,190 |
Service | ||||
Revenues: | ||||
Revenues | 9,049 | 14,344 | 13,855 | 19,917 |
Costs of revenues: | ||||
Costs of revenues | 7,718 | 13,026 | 13,123 | 20,992 |
Generation | ||||
Revenues: | ||||
Revenues | 10,877 | 6,230 | 27,423 | 17,306 |
Costs of revenues: | ||||
Costs of revenues | 18,136 | 6,728 | 42,978 | 23,265 |
Advanced Technologies | ||||
Revenues: | ||||
Revenues | 5,178 | 6,246 | 14,005 | 18,427 |
Costs of revenues: | ||||
Costs of revenues | $ 3,511 | $ 4,063 | $ 10,408 | $ 12,477 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total Stockholder's Equity [Member] | Common Stock | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Deferred Compensation [Member] | Noncontrolling Interests [Member] | Series B Preferred Stock | Total |
Beginning Balance at Oct. 31, 2020 | $ 29 | $ 1,359,454 | $ (1,164,196) | $ (739) | $ (432) | $ 432 | $ 194,548 | |||
Beginning Balance at (in shares) at Oct. 31, 2020 | 294,706,758 | |||||||||
Sale of common stock, net of fees | $ 3 | 156,363 | 156,366 | |||||||
Sale of common stock, net of fees (in shares) | 25,000,000 | |||||||||
Orion warrant exercises | 21,824 | 21,824 | ||||||||
Orion warrant exercises (in shares) | 2,700,000 | |||||||||
Common stock issued, non-employee compensation | 45 | 45 | ||||||||
Common stock issued, non-employee compensation (in shares) | 2,734 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards | 8 | 8 | ||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 4,521 | |||||||||
Share based compensation | 1,417 | 1,417 | ||||||||
Preferred dividends - Series B | (800) | (800) | ||||||||
Effect of foreign currency translation | 58 | 58 | ||||||||
Adjustment for deferred compensation | (30) | 30 | ||||||||
Adjustment for deferred compensation (in shares) | (1,669) | |||||||||
Release of a share reserve | (48) | |||||||||
Net Loss | (45,960) | (45,960) | ||||||||
Ending Balance at Jan. 31, 2021 | $ 32 | 1,538,311 | (1,210,156) | (681) | (462) | 462 | 327,506 | |||
Ending Balance at (in shares) at Jan. 31, 2021 | 322,412,296 | |||||||||
Beginning Balance at Oct. 31, 2020 | $ 29 | 1,359,454 | (1,164,196) | (739) | (432) | 432 | 194,548 | |||
Beginning Balance at (in shares) at Oct. 31, 2020 | 294,706,758 | |||||||||
Preferred dividends - Series B | $ (2,400) | |||||||||
Effect of foreign currency translation | (8) | |||||||||
Net Loss | (76,874) | |||||||||
Ending Balance at Jul. 31, 2021 | $ 37 | 1,908,011 | (1,241,070) | (747) | (544) | 544 | 666,231 | |||
Ending Balance at (in shares) at Jul. 31, 2021 | 366,483,758 | |||||||||
Beginning Balance at Jan. 31, 2021 | $ 32 | 1,538,311 | (1,210,156) | (681) | (462) | 462 | 327,506 | |||
Beginning Balance at (in shares) at Jan. 31, 2021 | 322,412,296 | |||||||||
Sale of common stock, net of fees | 5 | 5 | ||||||||
Orion warrant exercises | 269 | 269 | ||||||||
Orion warrant exercises (in shares) | 14,026 | |||||||||
Common stock issued, non-employee compensation | 55 | 55 | ||||||||
Common stock issued, non-employee compensation (in shares) | 5,456 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards | (262) | (262) | ||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 64,782 | |||||||||
Share based compensation | 1,253 | 1,253 | ||||||||
Preferred dividends - Series B | (800) | (800) | ||||||||
Effect of foreign currency translation | (60) | (60) | ||||||||
Adjustment for deferred compensation | (41) | 41 | ||||||||
Adjustment for deferred compensation (in shares) | (3,756) | |||||||||
Net Loss | (18,917) | (18,917) | ||||||||
Ending Balance at Apr. 30, 2021 | $ 32 | 1,538,831 | (1,229,073) | (741) | (503) | 503 | 309,049 | |||
Ending Balance at (in shares) at Apr. 30, 2021 | 322,492,804 | |||||||||
Sale of common stock, net of fees | $ 5 | 368,949 | 368,954 | |||||||
Sale of common stock, net of fees (in shares) | 43,978,999 | |||||||||
Common stock issued, non-employee compensation | 95 | 95 | ||||||||
Common stock issued, non-employee compensation (in shares) | 12,985 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards | 33 | 33 | ||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 4,828 | |||||||||
Share based compensation | 903 | 903 | ||||||||
Preferred dividends - Series B | (800) | (800) | (800) | |||||||
Effect of foreign currency translation | (6) | (6) | ||||||||
Adjustment for deferred compensation | (41) | 41 | ||||||||
Adjustment for deferred compensation (in shares) | (5,858) | |||||||||
Net Loss | (11,997) | (11,997) | ||||||||
Ending Balance at Jul. 31, 2021 | $ 37 | 1,908,011 | (1,241,070) | (747) | (544) | 544 | 666,231 | |||
Ending Balance at (in shares) at Jul. 31, 2021 | 366,483,758 | |||||||||
Beginning Balance at Oct. 31, 2021 | $ 642,438 | $ 37 | 1,908,471 | (1,265,251) | (819) | (586) | 586 | $ 642,438 | ||
Beginning Balance at (in shares) at Oct. 31, 2021 | 366,618,693 | 366,618,693 | ||||||||
Common stock issued, non-employee compensation | 100 | 100 | $ 100 | |||||||
Common stock issued, non-employee compensation (in shares) | 20,673 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards | (260) | (260) | (260) | |||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 60,052 | |||||||||
Share based compensation | 1,470 | 1,470 | 1,470 | |||||||
Preferred dividends - Series B | (800) | (800) | (800) | |||||||
Effect of foreign currency translation | (91) | (91) | (91) | |||||||
Adjustment for deferred compensation | (64) | 64 | ||||||||
Adjustment for deferred compensation (in shares) | (13,232) | |||||||||
Net income (loss) attributable to noncontrolling interest | 5,496 | 5,496 | $ (5,496) | |||||||
Net Loss | (46,120) | (46,120) | (46,120) | |||||||
Ending Balance at Jan. 31, 2022 | 602,233 | $ 37 | 1,908,981 | (1,305,875) | (910) | (650) | 650 | (5,496) | 596,737 | |
Ending Balance at (in shares) at Jan. 31, 2022 | 366,686,186 | |||||||||
Beginning Balance at Oct. 31, 2021 | 642,438 | $ 37 | 1,908,471 | (1,265,251) | (819) | (586) | 586 | $ 642,438 | ||
Beginning Balance at (in shares) at Oct. 31, 2021 | 366,618,693 | 366,618,693 | ||||||||
Preferred dividends - Series B | (2,400) | |||||||||
Effect of foreign currency translation | $ (326) | |||||||||
Net income (loss) attributable to noncontrolling interest | 4,968 | |||||||||
Net Loss | (105,223) | |||||||||
Ending Balance at Jul. 31, 2022 | 690,014 | $ 39 | 2,056,626 | (1,365,506) | (1,145) | (786) | 786 | 6,766 | $ 696,780 | |
Ending Balance at (in shares) at Jul. 31, 2022 | 394,430,969 | 394,430,969 | ||||||||
Beginning Balance at Jan. 31, 2022 | 602,233 | $ 37 | 1,908,981 | (1,305,875) | (910) | (650) | 650 | (5,496) | $ 596,737 | |
Beginning Balance at (in shares) at Jan. 31, 2022 | 366,686,186 | |||||||||
Sale of common stock, net of fees | 118,264 | $ 2 | 118,262 | 118,264 | ||||||
Sale of common stock, net of fees (in shares) | 19,896,904 | |||||||||
Common stock issued, non-employee compensation | 68 | 68 | 68 | |||||||
Common stock issued, non-employee compensation (in shares) | 13,002 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 25,779 | |||||||||
Share based compensation | 1,695 | 1,695 | 1,695 | |||||||
Preferred dividends - Series B | (800) | (800) | (800) | |||||||
Effect of foreign currency translation | (149) | (149) | (149) | |||||||
Adjustment for deferred compensation | (68) | 68 | ||||||||
Adjustment for deferred compensation (in shares) | (13,002) | |||||||||
Reclassification of noncontrolling interest | 12,419 | 12,419 | ||||||||
Return of capital to noncontrolling interest | (496) | (496) | ||||||||
Distribution to noncontrolling interest | (95) | (95) | ||||||||
Net income (loss) attributable to noncontrolling interest | (91) | (91) | 91 | |||||||
Net Loss | (30,126) | (30,126) | (30,126) | |||||||
Ending Balance at Apr. 30, 2022 | 691,094 | $ 39 | 2,028,206 | (1,336,092) | (1,059) | (718) | 718 | 6,423 | 697,517 | |
Ending Balance at (in shares) at Apr. 30, 2022 | 386,608,869 | |||||||||
Sale of common stock, net of fees | 27,173 | 27,173 | 27,173 | |||||||
Sale of common stock, net of fees (in shares) | 7,814,115 | |||||||||
Common stock issued, non-employee compensation | 68 | 68 | 68 | |||||||
Common stock issued, non-employee compensation (in shares) | 19,594 | |||||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards | 18 | 18 | 18 | |||||||
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards (in shares) | 7,985 | |||||||||
Share based compensation | 1,961 | 1,961 | 1,961 | |||||||
Preferred dividends - Series B | (800) | (800) | $ (800) | (800) | ||||||
Effect of foreign currency translation | (86) | (86) | (86) | |||||||
Adjustment for deferred compensation | (68) | 68 | ||||||||
Adjustment for deferred compensation (in shares) | (19,594) | |||||||||
Distribution to noncontrolling interest | (94) | (94) | ||||||||
Net income (loss) attributable to noncontrolling interest | (437) | (437) | 437 | (437) | ||||||
Net Loss | (28,977) | (28,977) | (28,977) | |||||||
Ending Balance at Jul. 31, 2022 | $ 690,014 | $ 39 | $ 2,056,626 | $ (1,365,506) | $ (1,145) | $ (786) | $ 786 | $ 6,766 | $ 696,780 | |
Ending Balance at (in shares) at Jul. 31, 2022 | 394,430,969 | 394,430,969 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2022 | Jul. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (105,223) | $ (76,874) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 5,126 | 3,573 |
Depreciation and amortization | 16,369 | 14,921 |
Change in fair value of common stock warrant liability | 15,974 | |
Non-cash charge for extinguishment of preferred stock obligation of subsidiary | 934 | |
Non-cash interest expense on preferred stock and debt and finance obligations | 3,155 | 3,403 |
Non-cash charge for extinguishment of debt | 7,156 | |
Unrealized gain on derivative contract | (559) | (299) |
Operating lease costs | 1,147 | 1,143 |
Operating lease payments | (1,084) | (902) |
Impairment of property, plant and equipment | 976 | |
Unrealized foreign currency losses | 584 | 911 |
Other non-cash transactions | (147) | 171 |
Decrease (increase) in operating assets: | ||
Accounts receivable | 1,983 | (4,619) |
Unbilled receivables | (190) | (5,419) |
Inventories | (22,783) | (11,014) |
Other assets | (6,187) | (3,281) |
Increase (decrease) in operating liabilities: | ||
Accounts payable | 6,254 | 668 |
Accrued liabilities | 14,470 | (2,554) |
Deferred revenue | (1,979) | (4,477) |
Net cash used in operating activities | (88,088) | (60,585) |
Cash flows from investing activities: | ||
Capital expenditures | (15,790) | (2,907) |
Project asset expenditures | (23,693) | (41,301) |
Net cash used in investing activities | (39,483) | (44,208) |
Cash flows from financing activities: | ||
Repayment of debt | (7,208) | (93,951) |
Common stock issued for stock plans and related expenses | 47 | 18 |
Contributions received from sale of noncontrolling interest, net of return of capital | 11,923 | |
Distribution to noncontrolling interest | (189) | |
Payments for taxes related to net share settlement of equity awards | (287) | |
Repayment of Series 1 Preferred Share Obligation | (21,541) | |
Proceeds from sale of common stock and warrant exercises, net of fees | 145,437 | 524,643 |
Payment of preferred dividends | (2,400) | (2,400) |
Net cash provided by financing activities | 147,323 | 406,769 |
Effects on cash from changes in foreign currency rates | (326) | (8) |
Net increase in cash, cash equivalents and restricted cash | 19,426 | 301,968 |
Cash, cash equivalents and restricted cash-beginning of period | 460,212 | 192,052 |
Cash, cash equivalents and restricted cash-end of period | 479,638 | 494,020 |
Supplemental cash flow disclosures: | ||
Cash interest paid and early prepayment charge | 1,193 | 5,326 |
Noncash financing and investing activity: | ||
Operating lease liabilities | 1,459 | |
Operating lease right-of-use assets | 1,459 | |
Noncash reclassifications from inventory to project assets | 7,699 | 5,972 |
Noncash reclassification from inventory to fixed assets | 1,552 | |
Noncash reclassifications from other assets to project assets | 2,375 | |
Warrant exercises | 21,170 | |
Accrued sale of common stock, cash received in a subsequent period | 1,607 | |
Accrued purchase of fixed assets, cash to be paid in subsequent period | 3,203 | 315 |
Accrued purchase of project assets, cash to be paid in subsequent period | $ 6,498 | $ 875 |
Nature of Business, Basis of Pr
Nature of Business, Basis of Presentation | 9 Months Ended |
Jul. 31, 2022 | |
Nature of Business and Basis of Presentation | |
Nature of Business and Basis of Presentation | Note 1. Nature of Business and Basis of Presentation Headquartered in Danbury, CT, FuelCell Energy, Inc. (together with its subsidiaries, the “Company,” “FuelCell Energy,” “we,” “us,” or “our”) has leveraged five decades of research and development to become a global leader in delivering environmentally responsible distributed baseload power platform solutions through our proprietary fuel cell technology. As an innovator and an American manufacturer of clean fuel cell power platforms, our current commercial technology delivers clean, distributed generation and distributed hydrogen, as well as heat, carbon separation and utilization, and water. We plan to increase our investment in developing and commercializing future technologies expected to deliver hydrogen and long duration hydrogen-based energy storage through our solid oxide technologies, as well as carbon capture solutions. As a leading global manufacturer of proprietary fuel cell technology platforms, we are uniquely positioned to serve customers worldwide with sustainable products and solutions for businesses, utilities, governments, and municipalities. Our solutions are designed to enable a world empowered by clean energy, enhancing the quality of life for people around the globe. We target large-scale power users with our megawatt-class installations globally, and currently offer sub-megawatt solutions for smaller power consumers in Europe. To provide a frame of reference, one megawatt is adequate to continually power approximately 1,000 average sized U.S. homes. Our customer base includes utility companies, municipalities, universities, hospitals, government entities/military bases and a variety of industrial and commercial enterprises. Our leading geographic markets are currently the United States and Korea, and we are pursuing opportunities in other countries around the world. Our product offerings drive our mission to help our customers realize their environmental goals, strengthen resiliency, manage energy and other commodity costs, and deliver valuable goods and services to their customers. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, they do not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all normal and recurring adjustments necessary to fairly present the Company’s financial position and results of operations as of and for the three and nine months ended July 31, 2022 and 2021 have been included. All intercompany accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The balance sheet as of October 31, 2021 has been derived from the audited financial statements at that date, but it does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto for the fiscal year ended October 31, 2021, which are contained in the Company’s Annual Report on Form 10-K previously filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. Principles of Consolidation The unaudited consolidated financial statements reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. We use a qualitative approach in assessing the consolidation requirement for each of our variable interest entities ("VIEs"), which are tax equity partnerships further described in Note 3. “Tax Equity Financings.” This approach focuses on determining whether we have the power to direct those activities of the tax equity partnerships that most significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the tax equity partnerships. For all periods presented, we have determined that we are the primary beneficiary in all of our tax equity partnerships. We evaluate our tax equity partnerships on an ongoing basis to ensure that we continue to be the primary beneficiary. Use of Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Estimates are used in accounting for, among other things, revenue recognition, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, allowance for doubtful accounts, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), lease liabilities and right-of-use (“ROU”) assets, and contingencies. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates. Liquidity Our principal sources of cash have been sales of our common stock through public equity offerings, proceeds from debt, project financing and tax monetization transactions, proceeds from the sale of our products and projects, as well as research and development and service agreements with third parties. We have utilized this cash to develop and construct project assets, perform research and development on Advanced Technologies, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs. As of July 31, 2022, unrestricted cash and cash equivalents totaled $456.5 million compared to $432.2 million as of October 31, 2021. On July 12, 2022, the Company entered into an Open Market Sale Agreement with Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canaccord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC (the “Open Market Sale Agreement”) with respect to an at the market offering program under which the Company may, from time to time, offer and sell up to 95.0 million shares of the Company’s common stock. From the date of the Open Market Sale Agreement through July 31, 2022, the Company sold approximately 18.5 million shares under the Open Market Sale Agreement at an average sale price of $3.63 per share. Of this 18.5 million shares, approximately 7.8 million shares were issued and settled during the period ended July 31, 2022 resulting in gross proceeds of approximately $27.9 million before deducting sales commissions and fees and net proceeds to the Company of approximately $27.2 million after deducting commissions and fees totaling approximately $0.7 million. The balance of approximately 10.7 million shares were settled subsequent to July 31, 2022, resulting in gross proceeds (before deducting sales commissions) of approximately $39.2 million and net proceeds to the Company (received in August 2022) of approximately $38.4 million after deducting commissions totaling approximately $0.8 million. The Company currently intends to use the net proceeds from this offering to accelerate the development and commercialization of its product platforms (including, but not limited to, its solid oxide and carbon capture platforms), for project development, market development, and internal research and development, to invest in capacity expansion for solid oxide and carbonate fuel cell manufacturing, and for project financing, working capital support, and general corporate purposes. The Company may also use the net proceeds from this offering to invest in joint ventures, acquisitions, and strategic growth investments and to acquire, license or invest in products, technologies or businesses that complement its business. See Note 13. “Stockholders’ Equity and Warrant Liabilities” for additional information regarding the Open Market Sale Agreement. On June 11, 2021, the Company entered into an Open Market Sale Agreement with Jefferies LLC and Barclays Capital Inc. (the “2021 Sales Agreement”) with respect to an at the market offering program under which the Company could, from time to time, offer and sell shares of the Company’s common stock having an aggregate offering price of up to $500 million. From the date of the 2021 Sales Agreement through April 30, 2022, approximately 64.0 million shares of the Company’s common stock were sold under the 2021 Sales Agreement, resulting in aggregate gross proceeds of approximately $498.1 million before deducting sales commissions. Commissions of approximately $10.0 million in the aggregate were paid to Jefferies LLC and Barclays Capital Inc. in connection with these sales, resulting in aggregate net proceeds to the Company of approximately $488.1 million. No sales of common stock were made under the 2021 Sales Agreement after April 30, 2022, and no additional sales of common stock can or will be made under the 2021 Sales Agreement, as the Company, Jefferies LLC and Barclays Capital Inc. mutually agreed to terminate the 2021 Sales Agreement as of July 12, 2022. We believe that our unrestricted cash and cash equivalents, expected receipts from our contracted backlog, and release of short-term restricted cash less expected disbursements over the next twelve months will be sufficient to allow the Company to meet its obligations for at least one year from the date of issuance of these financial statements. To date, we have not achieved profitable operations or sustained positive cash flow from operations. The Company’s future liquidity, for the remainder of fiscal year 2022 and in the long-term, will depend on its ability to (i) timely complete current projects in process within budget, (ii) increase cash flows from its generation operating portfolio, including by meeting conditions required to timely commence operation of new projects, operating its generation operating portfolio in compliance with minimum performance guarantees and operating its generation operating portfolio in accordance with revenue expectations, (iii) obtain financing for project construction, (iv) obtain permanent financing for its projects once constructed, (v) increase order and contract volumes, which would lead to additional product sales, service agreements and generation revenues, (vi) obtain funding for and receive payment for research and development under current and future Advanced Technologies contracts, (vii) successfully commercialize its Advanced Technologies platforms, including its solid oxide, hydrogen and carbon capture platforms, (viii) implement the product cost reductions necessary to achieve profitable operations, (ix) manage working capital and the Company’s unrestricted cash balance and (x) access the capital markets to raise funds through the sale of debt and equity securities, convertible notes, and other equity-linked instruments. We are continually assessing different means by which to accelerate the Company’s growth, enter new markets, commercialize new products, and enable capacity expansion. Therefore, from time to time, the Company may consider and enter into agreements for one or more of the following: negotiated financial transactions, minority investments, collaborative ventures, technology sharing, transfer or other technology license arrangements, joint ventures, partnerships, acquisitions or other business transactions for the purpose(s) of geographic or manufacturing expansion and/or new product or technology development and commercialization, including hydrogen production and storage and carbon capture, sequestration and utilization technologies. Our business model requires substantial outside financing arrangements and satisfaction of the conditions of such arrangements to construct and deploy our projects to facilitate the growth of our business. The Company has invested capital raised from sales of its common stock to build out its project portfolio. The Company has also utilized and expects to continue to utilize a combination of long-term debt and tax equity financing (e.g., sale-leaseback and partnership transactions) to finance its project asset portfolio as these projects commence commercial operations. The Company may also seek to undertake private placements of debt securities of a portfolio of assets to finance its project asset portfolio. The proceeds of any such financing, if obtained, may allow the Company to reinvest capital back into the business and to fund other projects. We may also seek to obtain additional financing in both the debt and equity markets in the future. If financing is not available to us on acceptable terms if and when needed, or on terms acceptable to us or our lenders, if we do not satisfy the conditions of our financing arrangements, if we spend more than the financing approved for projects, if project costs exceed an amount that the Company can finance, or if we do not generate sufficient revenues or obtain capital sufficient for our corporate needs, we may be required to reduce or slow planned spending, reduce staffing, sell assets, seek alternative financing and take other measures, any of which could have a material adverse effect on our financial condition and operations. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Jul. 31, 2022 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements Recently Adopted Accounting Guidance There is no recently adopted accounting guidance. Recent Accounting Guidance Not Yet Effective In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met to ease an entity’s financial reporting burden as the market transitions from London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The FASB further issued ASU 2021-01 in January 2021 to clarify the scope of Topic 848. The guidance was effective upon issuance and may be applied through December 31, 2022. Adoption is not expected to have a material impact on the Company’s consolidated financial statements . |
Tax Equity Financings
Tax Equity Financings | 9 Months Ended |
Jul. 31, 2022 | |
Tax Equity Financings | |
Tax Equity Financings | Note 3. Tax Equity Financings Groton Tax Equity Financing Transaction The Company closed on a tax equity financing transaction in August 2021 with East West Bancorp, Inc. (“East West Bank”) for the 7.4 MW fuel cell project (the “Groton Project”) located on the U.S. Navy Submarine Base in Groton, CT, also known as the Submarine Force. East West Bank’s tax equity commitment totals $15 million. This transaction was structured as a “partnership flip”, which is a structure commonly used by tax equity investors in the financing of renewable energy projects. Under this partnership flip structure, a partnership, in this case Groton Station Fuel Cell Holdco, LLC (the “Groton Partnership”), was organized to acquire from FuelCell Energy Finance II, LLC, a wholly-owned subsidiary of the Company, all outstanding equity interests in Groton Station Fuel Cell, LLC (the “Groton Project Company”) which in turn owns the Groton Project and is the party to the power purchase agreement and all project agreements. On July 7, 2022, the Company entered into an amendment to its tax equity financing agreement with East West Bank. Under the terms of this amended agreement, the commercial operations deadline was extended to September 30, 2022. In addition, the terms of East West Bank’s remaining investment commitment of $12.0 million were modified such that East West Bank will now contribute $4.0 million on each of the first, second third Under most partnership flip structures, tax equity investors agree to receive a minimum target rate of return, typically on an after-tax basis. Prior to receiving a contractual rate of return or a date specified in the contractual arrangements, East West Bank will receive substantially all of the non-cash value attributable to the Groton Project, which includes accelerated depreciation and Section 48(a) investment tax credits; however, the Company will receive a majority of the cash distributions (based on the operating income of the Groton Project), which are paid quarterly. After East West Bank receives its contractual rate of return, the Company will receive approximately 95% of the cash and tax allocations. The Company (through a separate wholly owned entity) may enter into a back leverage debt financing transaction and use the cash distributions from the Groton Partnership to service the debt. We have determined we are the primary beneficiary in the Groton Partnership for accounting purposes as a Variable Interest Entity (“VIE”) under GAAP. We have considered the provisions within the financing-related agreements (including the limited liability company agreement for the Groton Partnership) Consolidations assets is considered as a redeemable noncontrolling interest due to the conditional withdrawal right under which, if events outside the control of the Company occur, East West Bank has the ability to force the Company to redeem its interest in the Groton Partnership. The income or loss allocations reflected in our Consolidated Statements of Operations and Comprehensive Loss may create volatility in our reported results of operations, including potentially changing net loss attributable to stockholders to net income attributable to stockholders, or vice versa, from quarter to quarter. Once the Groton Project is operational, we will allocate profits and losses to noncontrolling interests under the hypothetical liquidation at book value ("HLBV") method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the partnership flip structure. There were no amounts allocated to noncontrolling interest for the three months and nine months ended July 31, 2022 for the Groton Partnership. Yaphank Tax Equity Financing Transaction The Company closed on a tax equity financing transaction in November 2021 with Renewable Energy Investors, LLC (“REI”), a subsidiary of Franklin Park Infrastructure, LLC, for the 7.4 MW fuel cell project (the “LIPA Yaphank Project”) located in Yaphank Long Island. REI’s tax equity commitment totaled $12.4 million. This transaction was structured as a “partnership flip,” which is a structure commonly used by tax equity investors in the financing of renewable energy projects. Under this partnership flip structure, a partnership, in this case YTBFC Holdco, LLC (the “Yaphank Partnership”), was organized to acquire from FuelCell Energy Finance II, LLC, a wholly-owned subsidiary of the Company, all outstanding equity interests in Yaphank Fuel Cell Park, LLC which in turn owns the LIPA Yaphank Project and is the party to the power purchase agreement and all project agreements. . The Company determined during the second quarter of fiscal year 2022 that there was an overpayment by REI of the Class A Member Capital Contribution of $0.5 million and as such the Company refunded this amount back to REI reducing the REI tax equity commitment to $11.9 million. During the three and nine months ended July 31, 2022, the Company made priority return distributions to REI of $0.1 million and $0.2 million, respectively, which were calculated at a 2.73% annual interest rate on invested tax equity capital. Under a partnership flip structure, tax equity investors agree to receive a minimum target rate of return, typically on an after-tax basis. Prior to receiving a contractual rate of return or a date specified in the contractual arrangements, REI will receive substantially all of the non-cash value attributable to the LIPA Yaphank Project, which includes accelerated depreciation and Section 48(a) investment tax credits; however, the Company will receive a majority of the cash distributions (based on the operating income of the LIPA Yaphank Project), which are paid quarterly. After REI receives its contractual rate of return, the Company will receive approximately 95% of the cash and tax allocations. The Company may enter into a back leverage debt financing transaction and use the cash distributions from the Yaphank Partnership to service the debt. Under this partnership flip structure, after the fifth anniversary following achievement of commercial operations, we have an option to acquire all of the equity interests that REI holds in the Yaphank Partnership starting after REI receives its contractual rate of return (the anticipated “flip” date) after the LIPA Yaphank Project is operational. If we exercise this option, we will be required to pay the greater of the following: (i) the fair market value of REI's equity interest at the time the option is exercised or (ii) an amount equal to 10.3% of REI’s capital contributions. This option payment is to be grossed up for federal taxes if it exceeds the tax basis of the Yaphank Partnership Class A Units. We are the primary beneficiary in the Yaphank Partnership for accounting purposes as a VIE under GAAP. We have considered the provisions within the financing-related agreements (including the limited liability company agreement for the Yaphank Partnership) which grant us power to manage and make decisions affecting the operations of the Yaphank Partnership. We consider the rights granted to REI under the agreements to be more protective in nature rather than participatory. Therefore, we have determined under the power and benefits criterion of ASC 810, Consolidations are the primary beneficiary of the Yaphank Partnership. As the primary beneficiary, we consolidate the financial position, results of operations and cash flows of the Yaphank Partnership in our consolidated financial statements, and all intercompany balances and transactions between us and the Yaphank Partnership are eliminated. We recognized REI’s share of the net assets of the Yaphank Partnership as noncontrolling interests in our Consolidated Balance Sheets. The income or loss allocations reflected in our Consolidated Statements of Operations and Comprehensive Loss may create volatility in our reported results of operations, including potentially changing net loss attributable to stockholders to net income attributable to stockholders, or vice versa, from quarter to quarter. We allocate profits and losses to REI’s noncontrolling interest under the HLBV method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the partnership flip structure. For the three months and nine months ended July 31, 2022, net income (loss) attributable to noncontrolling interests totaled $0.4 million and $(5.0) million, respectively . During the preparation of the financial statements for the quarterly period ended April 30, 2022, the Company identified a misstatement in the Consolidated Balance Sheet as of January 31, 2022 related to the tax equity financing transaction for the LIPA Yaphank Project. In the financial statements issued for the quarterly period ended January 31, 2022, the REI tax equity commitment was incorrectly categorized as a Redeemable noncontrolling interest which totaled $12.4 million. The amount should have been classified as a Noncontrolling interest within Equity since the conditional withdrawal period expired upon the LIPA Yaphank Project achieving commercial operation in December 2021. The Company evaluated this misstatement based on the guidance provided by the SEC’s Staff Accounting Bulletin 99, Materiality, and determined that its impact was not material to the Company’s previously issued interim financial statements, and accordingly, no prior period financial statements have been restated. The Company corrected the classification prospectively in the Consolidated Balance Sheet as of April 30, 2022 and the Consolidated Statement of Changes in Equity as of April 30, 2022. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Jul. 31, 2022 | |
Revenue Recognition | |
Revenue Recognition | Note 4. Revenue Recognition Contract Balances Contract assets as of July 31, 2022 and October 31, 2021 were $20.7 million and $20.5 million, respectively. The contract assets relate to the Company’s rights to consideration for work performed but not billed. These amounts are included on a separate line item as Unbilled receivables for amounts expected to be billed within one year from the balance sheet date, and balances expected to be billed later than one year from the balance sheet date are included within Other assets on the accompanying Consolidated Balance Sheets. The net change in contract assets represents amounts recognized as revenue offset by customer billings. Contract liabilities as of July 31, 2022 and October 31, 2021 were $34.7 million and $36.7 million, respectively. The contract liabilities relate to the advance billings to customers for services that will be recognized over time and in some instances for deferred revenue relating to license performance obligations that will be recognized at a future point in time. The Company discontinued revenue recognition of the deferred license revenue related to the POSCO Energy License Agreements in July 2020 given the then pending arbitrations. During the first quarter of fiscal year 2022, $22.2 million related to the POSCO Energy License Agreements was recharacterized from deferred revenue to customer deposits within Long-term deferred revenue and customer deposits on the accompanying Consolidated Balance Sheets. The net change in contract liabilities represents customer billings offset by revenue recognized. Contract modification As a result of the settlement reached with POSCO Energy Co., Ltd. (“POSCO Energy”) (see Note 19. “Commitments and Contingencies” for further background), the Company evaluated the license agreements with POSCO Energy as well as all of the terms of the settlement agreement with POSCO Energy, which was effective December 20, 2021 (the “Settlement Agreement”). As part of this analysis, the Company considered the accounting surrounding the execution of the Settlement Agreement, reviewed all elements related to the license agreements with POSCO Energy and the Settlement Agreement and considered any potential contingencies in the license agreements and whether any proceeds were related to the litigation settlement. Under the terms of the Settlement Agreement, the Company agreed that the license agreements are not terminated, but instead are deemed to be amended such that POSCO Energy and its subsidiary, Korea Fuel Cell Co., Ltd. (“KFC”, and with POSCO Energy, collectively, “PE Group”), only have the right (i) to provide maintenance and repair services to PE Group’s existing customers on existing molten carbonate power generation and thermal projects under long-term service agreements currently in force as well as long-term service agreements that have expired and are pending renewal as of the settlement date (collectively, “Existing LTSAs”), (ii) to supply replacement modules purchased from the Company only for their existing customers for existing molten carbonate power generation and thermal projects under Existing LTSAs and (iii) to own, operate and maintain all facilities and factories solely for the purposes set forth in (i) and (ii) above (collectively, the “Right to Service License”) and further agreed to sell modules with a service warranty pursuant to a module sales agreement to be negotiated by the parties after execution of the Settlement Agreement. As such, the Company has considered the execution of the Settlement Agreement to be a contract modification as it results in a change in both the scope and price of a contract with a customer. Therefore, the Company accounted for such modification under the contract modification guidance included within ASC 606 (Revenue from Contracts with Customers). Further, the Company noted that none of the parties to the Settlement Agreement specifically acknowledged any payment of damages or reimbursement of any costs related to the matters settled under the Settlement Agreement, which supports the conclusion that the overall settlement is a form of contract modification. Additionally, the transaction price allocated to the modified contract did not exceed the stand-alone selling prices (“SSP”) of the performance obligations under the modified contract (i.e., there is no indication of a premium that would indicate that a portion of the transaction price relates to something other than the promised goods or services). The Company has identified two revenue elements of the Settlement Agreement related to module sales which include the sale of the module and a performance guarantee. The Company assessed the SSP of the modules utilizing a cost-plus margin approach to arrive at $3.0 million per module which will be recognized upon transfer of control of such modules to KFC via title transfer consistent with the Company’s established revenue recognition policies. The Company is also providing a performance guarantee for up to seven years with each module to cover any annual output penalty that would need to be paid by PE Group to a customer. The Company evaluated this performance guarantee, determined that $0.65 million per module is considered to be an accrued liability and recorded $3.9 million and $7.9 million for the three and nine months ended July 31, 2022, respectively, as variable consideration based upon the sale of six and twelve modules during the three and nine months ended July 31, 2022, respectively. This variable consideration will be recognized as revenue if and when it is determined that there are no amounts due under the performance guarantee. In its analysis, the Company determined that it is probable that KFC will exercise its option to purchase an additional 14 modules (with a performance guarantee) beyond the firm order of 20 modules, to which it is contractually committed. Given that the license rights for which the Company was previously recognizing revenue are no longer in place and the Company now has a new revenue stream from the sale of modules, the $22.2 million of deferred license revenue was recharacterized as a customer deposit, of which $7.9 million was recorded as variable consideration within Long-term debt and other liabilities on the accompanying Consolidated Balance Sheets. The Company will monitor the variable consideration based on the performance of the modules and revise our estimates as necessary EMTEC Joint Development Agreement Effective as of October 31, 2019, the Company entered into a Joint Development Agreement (as amended, the “EMTEC Joint Development Agreement”) with ExxonMobil Technology and Engineering Company (formerly known as ExxonMobil Research and Engineering Company) (“EMTEC”), pursuant to which the Company has engaged in exclusive research and development efforts with EMTEC to evaluate and develop new and/or improved carbonate fuel cells to reduce carbon dioxide emissions from industrial and power sources, in exchange for (i) payment by EMTEC of certain fees and costs (including research costs of up to $45.0 million) as well as certain milestone-based payments, and (ii) certain licenses . In Amendment No. 1 to the EMTEC Joint Development Agreement (“Amendment No. 1”), which was executed on October 29, 2021 and effective as of October 31, 2021, the Company and EMTEC agreed, among other things, to extend the term of the EMTEC Joint Development Agreement for an additional six months ending on April 30, 2022. Amendment No. 1 allowed for the continuation of research intended to enable incorporation of design improvements to Company fuel cell design in order to support a decision to use the improvements in a potential future demonstration of the technology for capturing carbon at ExxonMobil’s Rotterdam refinery in The Netherlands (such demonstration, the “Rotterdam Project”) and provided additional time to achieve the first milestone under the EMTEC Joint Development Agreement. In a related letter agreement between the Company and EMTEC dated as of October 28, 2021 and executed on October 29, 2021 (the “Letter Agreement”), the Company agreed to invest with EMTEC in the Rotterdam Project, should EMTEC move forward with the Rotterdam Project. In the Letter Agreement, the Company agreed that, if (i) the Company achieves the first milestone under the EMTEC Joint Development Agreement (which the Company achieved in the first quarter of fiscal year 2022, resulting in a $5.0 million payment to the Company which the Company received in the second quarter of fiscal year 2022) and (ii) EMTEC and the Company execute a contractual agreement to proceed with the Rotterdam Project (which has not occurred), then at EMTEC’s option, the Company will either make an investment in the amount of $5.0 million in the Rotterdam Project or discount EMTEC’s purchase of the Company’s fuel cell module and detailed engineering design, as agreed to by the parties, required for the Rotterdam Project by said amount. On April 29, 2022, the Company and EMTEC entered into Amendment No. 2 (“Amendment No. 2”) to the EMTEC Joint Development Agreement which was effective as of April 30, 2022 and which increased the maximum amount of research costs to be reimbursed by EMTEC from $45.0 million to $50.0 million and extended the term an additional eight months, ending December 31, 2022 (unless terminated earlier). In Amendment No. 2, the Company and EMTEC also agreed to conduct a joint market study, with a target completion date on or before October 31, 2022, to (a) define application opportunities, commercialization strategies, and development requirements, (b) identify partners for potential pilot/demonstration projects and (c) assess fuel cell/stack/module manufacturing scale-up and cost reduction. During the nine months ended July 31, 2022, the Company achieved the first technical milestone under the EMTEC Joint Development Agreement and received payment of $5.0 million. The Company has not recognized revenue in connection with this milestone achievement as a result of its agreement, in the Letter Agreement described above, to either make a $5.0 million investment in the Rotterdam Project or discount EMTEC’s purchase of the Company’s fuel cell module and detailed engineering design for the Rotterdam Project by $5.0 million, should the Company enter into a contract with EMTEC to proceed with the Rotterdam Project. The Company will continue to evaluate revenue recognition of this milestone achievement as project negotiations with ExxonMobil (or a subsidiary thereof) evolve. Remaining Performance Obligations Remaining performance obligations are the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of July 31, 2022, the Company’s total remaining performance obligations were: $38.3 million for product revenue, $112.2 million for service agreements, and $30.2 million for Advanced Technologies contracts in the aggregate. Service revenue in periods in which there are no module exchanges is expected to be relatively consistent from period to period, whereas module exchanges will result in an increase in revenue when exchanges occur. |
Accounts Receivable, Net and Un
Accounts Receivable, Net and Unbilled Receivables | 9 Months Ended |
Jul. 31, 2022 | |
Accounts Receivable, Net and Unbilled Receivables | |
Accounts Receivable, Net and Unbilled Receivables | Note 5. Accounts Receivable, Net and Unbilled Receivables Accounts receivable, net and Unbilled receivables as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Product, Service and Generation: Amount billed $ 10,032 $ 13,854 Unbilled receivables (1) 8,505 7,175 18,537 21,029 Advanced Technologies (including U.S. government (2) Amount billed 2,069 876 Unbilled receivables 1,956 1,749 4,025 2,625 Accounts receivable, net and unbilled receivables $ 22,562 $ 23,654 (1) Additional long-term unbilled receivables of $10.2 million and $11.6 million are included within “Other assets” as of July 31, 2022 and October 31, 2021, respectively. (2) Total U.S. government accounts receivable, including unbilled receivables, outstanding as of July 31, 2022 and October 31, 2021 were $2.6 million and $2.3 million, respectively. We bill customers for power platform and power platform component sales based on certain contractual milestones being reached. We bill service agreements based on the contract price and billing terms of the contracts. Generally, our Advanced Technologies contracts are billed based on actual revenues recorded, typically in the subsequent month. Some Advanced Technologies contracts are billed based on contractual milestones or costs incurred. Unbilled receivables relate to revenue recognized on customer contracts that have not been billed. The Company had no allowance for doubtful accounts as of July 31, 2022 and October 31, 2021. Uncollectible accounts receivable, including unbilled receivables, are charged against the allowance for doubtful accounts when all collection efforts have failed and it is deemed unlikely that the amount will be recovered or if the Company calculates expected credit loss estimates based upon forward-looking information. |
Inventories
Inventories | 9 Months Ended |
Jul. 31, 2022 | |
Inventories | |
Inventories | Note 6. Inventories Inventories (short and long-term) as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Raw materials $ 31,347 $ 25,968 Work-in-process (1) 53,845 45,692 Inventories 85,192 71,660 Inventories – short-term (80,606) (67,074) Inventories – long-term (2) $ 4,586 $ 4,586 (1) Work-in-process includes the standard components of inventory used to build the typical modules or module components that are intended to be used in future project asset construction or power plant orders or for use under the Company’s service agreements. Included in work-in-process as of July 31, 2022 and October 31, 2021 was $35.3 million and $39.7 million, respectively, of completed standard components and modules. (2) Long-term inventory includes modules that are contractually required to be segregated for use as exchange modules for specific project assets. Raw materials consist mainly of various nickel powders and steels, various other components used in producing cell stacks and purchased components for balance of plant. Work-in-process inventory is comprised of material, labor, and overhead costs incurred to build fuel cell stacks and modules, which are subcomponents of a power platform. The Company incurred costs associated with excess plant capacity and manufacturing variances of $3.0 million and $1.7 million for the three months ended July 31, 2022 and 2021, respectively, and $7.7 million and $5.0 million for the nine months ended July 31, 2022 and 2021, respectively, which were included within product cost of revenues on the Consolidated Statements of Operations and Comprehensive Loss. |
Project Assets
Project Assets | 9 Months Ended |
Jul. 31, 2022 | |
Project Assets | |
Project Assets | Note 7. Project Assets Project assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, Estimated 2022 2021 Useful Life Project Assets – Operating $ 164,725 $ 116,286 4-20 years Accumulated depreciation (28,004) (19,844) Project Assets – Operating, net 136,721 96,442 Project Assets – Construction in progress 109,297 126,835 7-20 years Project Assets, net $ 246,018 $ 223,277 The estimated useful lives of these project assets are 20 years from commencement date for balance of plant (“BOP”) and site construction, and four Project assets as of July 31, 2022 and October 31, 2021 also include installations with carrying values of $109.3 million and $126.8 million, respectively, which are being developed and constructed by the Company in connection with projects for which we have entered into PPAs and which have not yet been placed in service. Included in “Construction in progress” is the 2.3 MW Toyota project. It was determined in the fourth quarter of fiscal year 2021 that a potential source of renewable natural gas (“RNG”) at favorable pricing was no longer sufficiently probable and that market pricing for RNG had significantly increased, resulting in the determination that the carrying value of the project asset was no longer recoverable. Refer to Note 19. “Commitments and Contingencies” for more information regarding fuel risk exposure. While the Company is pursuing alternative sources of RNG, a $2.8 million charge was recorded for the fiscal year ended October 31, 2021 which represents the carrying value of the project asset less the carrying value of inventory components that could be redeployed for alternative use. Charges for the three month and nine month periods ended July 31, 2022 were $6.9 million and $14.0 million, respectively. As this project is being constructed, only inventory components that can be redeployed for alternative use are being capitalized. The balance of costs incurred are being expensed as generation cost of revenues. Project construction costs incurred for long-term project assets are reported as investing activities in the Consolidated Statements of Cash Flows. The proceeds received from the sale and subsequent leaseback of project assets are classified as “Cash flows from financing activities” within the Consolidated Statements of Cash Flows and are classified as a finance obligation within “Current portion of long-term debt” and “Long-term debt and other liabilities” on the Consolidated Balance Sheets (refer to Note 17. “Debt” for more information). |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 8. Goodwill and Intangible Assets As of July 31, 2022 and October 31, 2021, the Company had goodwill of $4.1 million and intangible assets of $17.7 million and $18.7 million, respectively, that were recorded in connection with the Company’s 2012 acquisition of Versa Power Systems, Inc. (“Versa”) and the 2019 Bridgeport Fuel Cell Project acquisition. The Versa acquisition intangible asset represents an indefinite-lived in-process research and development intangible asset (“IPR&D”) for cumulative research and development efforts associated with the development of solid oxide fuel cell stationary power generation. Amortization expense for the Bridgeport Fuel Cell Project-related intangible asset for each of the three months ended July 31, 2022 and 2021 was $0.3 million and for each of the nine months ended July 31, 2022 and 2021 was $0.9 million. The Company completed its annual impairment analysis of goodwill and IPR&D as of July 31, 2022. A qualitative analysis was completed for fiscal year 2022 and the Company determined that there was no impairment of goodwill or IPR&D. The following tables summarize the carrying value of the Company’s intangible assets as of July 31, 2022 and October 31, 2021 (in thousands): As of July 31, 2022 Gross Amount Accumulated Amortization Net Amount In-Process Research and Development $ 9,592 $ — $ 9,592 Bridgeport PPA 12,320 (4,215) 8,105 Total $ 21,912 $ (4,215) $ 17,697 As of October 31, 2021 Gross Amount Accumulated Amortization Net Amount In-Process Research and Development $ 9,592 $ — $ 9,592 Bridgeport PPA 12,320 (3,242) 9,078 Total $ 21,912 $ (3,242) $ 18,670 |
Other Current Assets
Other Current Assets | 9 Months Ended |
Jul. 31, 2022 | |
Other Current Assets | |
Other Current Assets | Note 9. Other Current Assets Other current assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Advance payments to vendors (1) $ 6,671 $ 4,005 Prepaid expenses and other (2) 7,588 5,172 Other current assets $ 14,259 $ 9,177 (1) Advance payments to vendors relate to payments for inventory purchases ahead of receipt. (2) The balance for both periods presented includes prepaid vendor expenses including insurance expense. |
Other Assets
Other Assets | 9 Months Ended |
Jul. 31, 2022 | |
Other Assets | |
Other Assets | Note 10. Other Assets Other assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Long-term stack residual value (1) $ — $ 263 Long-term unbilled receivables (2) 10,233 11,581 Other (3) 4,479 5,154 Other assets $ 14,712 $ 16,998 (1) Relates to estimated residual value for module exchanges performed under the Company’s service agreements where the useful life extends beyond the contractual term of the service agreement and the Company obtains title for the module from the customer upon expiration or non-renewal of the service agreement. If the Company does not obtain rights to title from the customer, the full cost of the module is expensed at the time of the module exchange. (2) Represents unbilled receivables that relate to revenue recognized on customer contracts that will be billed in future periods in excess of 12 months from the balance sheet date. (3) The Company entered into an agreement with one of its customers on June 29, 2016 which included payments for the purchase of the customer’s power platforms by the Company at the end of the term of the agreement. The payments were made in installments over the term of the agreement and the total amount paid as of July 31, 2022 and October 31, 2021 was $2.4 million and $2.2 million, respectively. The $2.4 million paid as of July 31, 2022 was reclassified to project assets during the second quarter of fiscal year 2022. Also included within “Other” are long-term security deposits and prepaid withholding taxes on customer deposits as of July 31, 2022 and October 31, 2021. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Jul. 31, 2022 | |
Accrued Liabilities | |
Accrued Liabilities | Note 11. Accrued Liabilities Accrued liabilities as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Accrued payroll and employee benefits (1) $ 6,737 $ 2,544 Accrued product warranty cost (2) 378 72 Accrued service agreement and PPA costs (3) 10,009 9,112 Accrued legal, taxes, professional and other 5,411 4,371 Accrued liabilities $ 22,535 $ 16,099 (1) The balance in this account represents accrued payroll, payroll taxes and accrued bonus for both periods. The increase in the account relates to an increase in accrued bonus as of July 31, 2022. (2) The increase in accrued product warranty cost reflects the costs associated with the warranties provided under the POSCO Energy Settlement Agreement. Product warranty expense for the three months ended July 31, 2022 and 2021 was $0.2 million and $7 thousand, respectively, and for the nine months ended July 31, 2022 and 2021 was $0.4 million and $19 thousand, respectively. (3) Accrued service agreement costs include loss accruals on service agreements of $6.4 million and $6.5 million as of July 31, 2022 and October 31, 2021, respectively. The accruals for performance guarantees on service agreements and PPAs were $2.5 million and $3.6 million as of October 31, 2021 and July 31, 2022, respectively. |
Leases
Leases | 9 Months Ended |
Jul. 31, 2022 | |
Leases | |
Leases | Note 12. Leases The Company enters into operating and finance lease agreements for the use of real estate, vehicles, information technology equipment, and certain other equipment. We determine if an arrangement contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Operating leases are included in Operating lease right-of-use assets, net, Operating lease liabilities, and Long-term operating lease liabilities in the Company’s Consolidated Balance Sheets. Finance leases are not considered significant to the Company’s Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Loss. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease over the lease term at the commencement date of the lease. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate based on the information available in determining the present value of lease payments and used the implicit rate when readily determinable. The Company determined incremental borrowing rates through market sources for secured borrowings including relevant industry rates. The Company’s operating lease ROU assets also include any lease pre-payments and exclude lease incentives. Certain of the Company’s leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from lease ROU assets and lease liabilities, to the extent not considered in-substance fixed, and instead, expenses variable payments as incurred. Variable lease expense and lease expense for short-term contracts are not material components of lease expense. The Company’s leases generally have remaining lease terms of 1 to 26 years, some of which include options to extend leases. The exercise of lease renewal options is at the Company’s sole discretion and the Company’s lease ROU assets and liabilities reflect only the options the Company is reasonably certain that it will exercise. The Company does not have leases with residual value guarantees or similar covenants. Operating lease expense for each of the three months ended July 31, 2022 and 2021 was $0.4 million, and for each of the nine months ended July 31, 2022 and 2021 was $1.1 million. As of July 31, 2022, the weighted average remaining lease term (in years) was approximately 20 years and the weighted average discount rate was 8.3%. Lease payments made during the three months ended July 31, 2022 and 2021 were $0.4 million and $0.3 million, respectively, and during the nine months ended July 31, 2022 and 2021 were $1.1 million and $0.9 million, respectively. Undiscounted maturities of operating lease and finance lease liabilities as of July 31, 2022 were as follows: Operating Leases Finance Leases Due Year 1 $ 1,251 $ 50 Due Year 2 804 29 Due Year 3 767 — Due Year 4 693 — Due Year 5 719 — Thereafter 12,597 — Total undiscounted lease payments 16,831 79 Less imputed interest (8,414) (12) Total discounted lease payments $ 8,417 $ 67 |
Stockholders' Equity and Warran
Stockholders' Equity and Warrant Liabilities | 9 Months Ended |
Jul. 31, 2022 | |
Stockholders' Equity and Warrant Liabilities | |
Stockholders' Equity and Warrant Liabilities | Note 13. Stockholders’ Equity and Warrant Liabilities 2022 Open Market Sale Agreement On July 12, 2022, the Company entered into an Open Market Sale Agreement with Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canaccord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC (the “Open Market Sale Agreement”) with respect to an at the market offering program under which the Company may, from time to time, offer and sell up to 95.0 million shares of the Company’s common stock. Pursuant to the Open Market Sale Agreement, the Company pays each agent a commission equal to 2.0% of the gross proceeds from each sale of shares made by such agent under the Open Market Sale Agreement. The Company currently intends to use the net proceeds from this offering to accelerate the development and commercialization of its product platforms (including, but not limited to, its solid oxide and carbon capture platforms), for project development, market development, and internal research and development, to invest in capacity expansion for solid oxide and carbonate fuel cell manufacturing, and for project financing, working capital support, and general corporate purposes. The Company may also use the net proceeds from this offering to invest in joint ventures, acquisitions, and strategic growth investments and to acquire, license or invest in products, technologies or businesses that complement its business. As of July 31, 2022, approximately 87.2 million shares were available for issuance under the Open Market Sale Agreement. Taking into account the sales that settled subsequent to July 31, 2022, approximately 76.5 million shares are available for issuance under the Open Market Sale Agreement as of the date of this report. 2021 Open Market Sale Agreement On June 11, 2021, the Company entered into an Open Market Sale Agreement with Jefferies LLC and Barclays Capital Inc. (the “2021 Sales Agreement”) with respect to an at the market offering program under which the Company could, from time to time, offer and sell shares of the Company’s common stock having an aggregate offering price of up to $500 million. Pursuant to the 2021 Sales Agreement, the Company paid the agent making each sale a commission equal to 2.0% of the aggregate gross proceeds it received from such sale by such agent of shares under the 2021 Sales Agreement. From the date of the 2021 Sales Agreement through April 30, 2022, approximately 64.0 million shares of the Company’s common stock were sold under the 2021 Sales Agreement at an average sales price of $7.79 per share, resulting in aggregate gross proceeds of approximately $498.1 million, before deducting sales commissions. Commissions of approximately $10.0 million in the aggregate were paid to Jefferies LLC and Barclays Capital Inc. in connection with these sales, resulting in aggregate net proceeds to the Company of approximately $488.1 million. No sales of common stock were made under the 2021 Sales Agreement after April 30, 2022, and no additional sales of common stock can or will be made under the 2021 Sales Agreement, as the Company, Jefferies LLC and Barclays Capital Inc. mutually agreed to terminate the 2021 Sales Agreement as of July 12, 2022. Outstanding Warrants The following table summarizes outstanding warrant activity during the nine months ended July 31, 2022: Series C Warrants Balance as of October 31, 2021 950,102 Warrants issued — Warrants exercised — Warrants expired (950,102) Balance as of July 31, 2022 — The Series C warrants, which were issued in May 2017, had an exercise price of $19.20 per share and a term of five years. The Series C warrants expired in May 2022. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 9 Months Ended |
Jul. 31, 2022 | |
Redeemable Preferred Stock | |
Redeemable Preferred Stock | Note 14. Redeemable Preferred Stock The Company is authorized to issue up to 250,000 shares of preferred stock, par value $0.01 per share, in one or more series, of which 105,875 shares were designated as 5% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) in March 2005. Series B Preferred Stock As of July 31, 2022, the Company had 105,875 shares of Series B Preferred Stock, with a liquidation preference of $1,000.00 per share, authorized for issuance. As of July 31, 2022 and October 31, 2021, there were 64,020 shares of Series B Preferred Stock issued and outstanding, with a carrying value of $59.9 million. Dividends of $0.8 million were paid in cash during each of the three month periods ended July 31, 2022 and 2021 and dividends of $2.4 million were paid in cash during each of the nine month periods ended July 31, 2022 and 2021. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Jul. 31, 2022 | |
Loss Per Share | |
Loss Per Share | Note 15. Loss Per Share The calculation of basic and diluted loss per share was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2022 2021 2022 2021 Numerator Net loss attributable to FuelCell Energy, Inc. $ (29,414) $ (11,997) $ (100,255) $ (76,874) Series B preferred stock dividends (800) (800) (2,400) (2,400) Net loss attributable to common stockholders $ (30,214) $ (12,797) $ (102,655) $ (79,274) Denominator Weighted average common shares outstanding – basic 387,465,758 337,291,562 375,638,293 323,983,465 Effect of dilutive securities (1) — — — — Weighted average common shares outstanding – diluted 387,465,758 337,291,562 375,638,293 323,983,465 Net loss to common stockholders per share – basic $ (0.08) $ (0.04) $ (0.27) $ (0.24) Net loss to common stockholders per share – diluted (1) $ (0.08) $ (0.04) $ (0.27) $ (0.24) (1) Due to the net loss to common stockholders in each of the periods presented above, diluted loss per share was computed without consideration to potentially dilutive instruments as their inclusion would have been anti-dilutive. As of July 31, 2022 and 2021, potentially dilutive securities excluded from the diluted loss per share calculation are as follows: July 31, July 31, 2022 2021 May 2017 Offering – Series C Warrants - 950,102 Outstanding options to purchase common stock 20,231 22,388 Unvested Restricted Stock Units 3,573,354 2,665,764 5% Series B Cumulative Convertible Preferred Stock 37,837 37,837 Total potentially dilutive securities 3,631,422 3,676,091 |
Restricted Cash
Restricted Cash | 9 Months Ended |
Jul. 31, 2022 | |
Restricted Cash. | |
Restricted Cash | Note 16. Restricted Cash As of July 31, 2022 and October 31, 2021, there was $23.2 million and $28.0 million, respectively, of restricted cash and cash equivalents pledged as performance security, reserved for future debt service requirements, and reserved for letters of credit for certain banking requirements and contracts. The allocation of restricted cash is as follows (in thousands): July 31, October 31, 2022 2021 Cash Restricted for Outstanding Letters of Credit (1) $ 4,824 $ 6,478 Cash Restricted for PNC Sale-Leaseback Transactions (2) 4,599 5,514 Cash Restricted for Crestmark Sale-Leaseback Transactions (3) 2,892 2,887 Bridgeport Fuel Cell Park Project Debt Service and Performance Reserves (4) 9,714 11,937 Other 1,130 1,183 Total Restricted Cash 23,159 27,999 Restricted Cash and Cash Equivalents – Short-Term (5) (5,627) (11,268) Restricted Cash and Cash Equivalents – Long-Term $ 17,532 $ 16,731 (1) Letters of credit outstanding as of July 31, 2022 expire on various dates through August 2028. (2) Long and short-term reserve that is to be used primarily to fund future module exchanges for operating projects falling under the PNC sale leaseback obligations. The decrease in restricted cash at July 31, 2022 compared to October 31, 2021 is a result of the Company’s performance in completing certain module exchanges, which resulted in the restriction being released. (3) Long and short-term reserve that is to be used primarily to fund future module exchanges and other performance obligations. (4) Long and short-term reserves for the Bridgeport Fuel Cell Park Project to fund future module exchanges and other performance requirements. (5) Short-term restricted cash and cash equivalents are amounts expected to be released and categorized as unrestricted cash within twelve months of the balance sheet date. |
Debt
Debt | 9 Months Ended |
Jul. 31, 2022 | |
Debt | |
Debt | Note 17. Debt Debt as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Connecticut Green Bank Loan $ 4,800 $ 4,800 Connecticut Green Bank Loan (Bridgeport Fuel Cell Project) 3,716 4,318 Liberty Bank Term Loan Agreement (Bridgeport Fuel Cell Project) 5,903 7,465 Fifth Third Bank Term Loan Agreement (Bridgeport Fuel Cell Project) 5,903 7,465 Finance obligation for sale-leaseback transactions 56,526 56,492 State of Connecticut Loan 7,987 8,622 Finance lease obligations 67 102 Deferred finance costs (1,245) (1,556) Total debt and financing obligations 83,657 87,708 Current portion of long-term debt and financing obligations (9,810) (10,085) Long-term debt and financing obligations $ 73,847 $ 77,623 |
Benefit Plans
Benefit Plans | 9 Months Ended |
Jul. 31, 2022 | |
Benefit Plans | |
Benefit Plans | Note 18. Benefit Plans We have stockholder approved equity incentive plans, a stockholder approved Employee Stock Purchase Plan and an employee tax-deferred savings plan. During the nine months ended July 31, 2022, the Company’s Board of Directors approved a sub-plan to its 2018 Omnibus Incentive Plan, as amended and restated, which is described in more detail below. 2018 Omnibus Incentive Plan The Company’s 2018 Omnibus Incentive Plan (as amended and restated from time to time, the “2018 Incentive Plan”) authorizes grants of stock options, stock appreciation rights (“SARs”), restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance shares, performance units and incentive awards to employees, directors, consultants and advisors. Stock options, RSAs, RSUs and SARs have restrictions as to transferability. Stock option exercise prices are fixed by the Company’s Board of Directors but shall not be less than the fair market value of our common stock on the date of the grant. SARs may be granted in conjunction with stock options. On December 10, 2021, the Company’s Board of Directors approved a Long Term Incentive Plan (the “FY 2022 LTI Plan”) as a sub-plan consisting of awards made under the 2018 Incentive Plan. The participants in the FY 2022 LTI Plan include members of senior management and the Company’s named executive officers (as identified in the definitive proxy statement filed by the Company on February 22, 2022). The FY 2022 LTI Plan consists of two award components: (1) relative total shareholder return (“TSR”) performance units, and (2) time-vesting restricted stock units. The performance units granted during the nine months ended July 31, 2022 will be earned over the performance period ending on October 31, 2024, but will remain subject to a continued service-based vesting requirement until the third anniversary of the date of grant. The performance measure for the relative TSR performance units is the TSR of the Company relative to the TSR of the Russell 2000 from November 1, 2021 through October 31, 2024. In addition to senior management, the Board of Directors also approved time-based awards to certain salaried employees to promote ownership of the Company’s equity and retention. The time-vesting RSUs granted during the nine months ended July 31, 2022 will vest at a rate of one-third On December 10, 2021, 642,464 time-vesting restricted stock units and 169,026 performance units were awarded under the FY 2022 LTI Plan. Should the Company’s share price achieve the 200% performance level, awardees will receive up to 169,026 additional performance units. The performance units were valued based on a Monte-Carlo Simulation, and the estimated fair value of the 169,026 relative TSR performance units was $11.70 per share. The performance units and time-vesting restricted stock units are expensed over the three-year service period. There are a total of 1,179,960 performance units outstanding as of July 31, 2022, which includes performance units that may be issued upon the achievement of the highest performance level under the Company’s long term incentive plans (including the FY 2022 LTI Plan). Share-based compensation was reflected in the Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months Ended July 31, Nine months Ended July 31, 2022 2021 2022 2021 Cost of revenues $ 175 $ 133 $ 512 $ 449 Administrative and selling expense 1,598 706 4,126 2,941 Research and development expense 135 33 319 97 $ 1,908 $ 872 $ 4,957 $ 3,487 Restricted Stock Awards and Restricted Stock Units Including Performance Based Awards The following table summarizes our RSA and RSU activity for the nine months ended July 31, 2022: Restricted Stock Awards and Units Shares Weighted-Average Fair Value Outstanding as of October 31, 2021 2,543,541 $ 5.08 Granted – performance units 169,026 11.70 Granted – time-vesting restricted stock units 652,597 9.20 Vested (88,388) 3.54 Outstanding as of January 31, 2022 3,276,776 $ 6.27 Granted – time-vesting restricted stock units 85,804 5.52 Vested (25,464) 9.57 Forfeited (21,559) 9.05 Outstanding as of April 30, 2022 3,315,557 6.21 Granted – time-vesting restricted stock units 273,407 5.36 Vested (2,022) 15.06 Forfeited (13,588) 9.20 Outstanding as of July 31, 2022 3,573,354 $ 6.13 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 19. Commitments and Contingencies Service Agreements Under the provisions of its service agreements, the Company provides services to maintain, monitor, and repair customer power plants to meet minimum operating levels. Under the terms of such service agreements, the particular power plant must meet a minimum operating output during defined periods of the term. If minimum output falls below the contract requirement, the Company may be subject to performance penalties and/or may be required to repair or replace the customer’s fuel cell module(s). Power Purchase Agreements Under the terms of the Company’s PPAs, customers agree to purchase power from the Company’s fuel cell power plants at negotiated rates. Electricity rates are generally a function of the customers’ current and estimated future electricity pricing available from the grid. As owner or lessee of the power plants, the Company is responsible for all operating costs necessary to maintain, monitor and repair the power plants. Under certain agreements, the Company is also responsible for procuring fuel, generally natural gas or biogas, to run the power plants. In addition, under the terms of some of the PPAs, the Company may be subject to a performance penalty if the Company does not meet certain performance requirements. Project Fuel Exposure Certain of our PPAs for project assets in our generation operating portfolio and project assets under construction expose us to fluctuating fuel price risks as well as the risk of being unable to procure the required amounts of fuel and the lack of alternative available fuel sources. We seek to mitigate our fuel risk using strategies including: (i) fuel cost reimbursement mechanisms in our PPAs to allow for pass through of fuel costs (full or partial) where possible, which we have done with our 14.9 MW operating project in Bridgeport, CT and our 7.4 MW project under construction in Hartford, CT; (ii) procuring fuel under fixed price physical contracts with investment grade counterparties, which we have done for twenty years for our Tulare BioMAT project and the initial seven years of the eighteen year PPA for our LIPA Yaphank Project; and (iii) potentially entering into future financial hedges with investment grade counterparties to offset potential negative market fluctuations. We currently have three projects in development with fuel sourcing risk, which are the Toyota project, which requires procurement of RNG, and our Derby, CT 14.0 MW and 2.8 MW projects, both of which require natural gas for which there is no pass through mechanism. Fuel sourcing and risk mitigation strategies for all three projects are being assessed and will be implemented as project operational dates become firm. Such strategies may require cash collateral or reserves to secure fuel or related contracts for these three projects. If the Company is unable to secure fuel on favorable economic terms, it may result in impairment charges to the Derby project assets and further impairment charges for the Toyota project asset. While the Company is pursuing alternative sources of RNG for the Toyota project, charges are being recorded to cost of generation revenues for any project expenditure which may be unrecoverable. To date, $16.8 million in charges have been recorded, which includes $2.8 million in charges for the fiscal year ended October 31, 2021 and $14.0 million in charges for the nine months ended July 31, 2022. As of July 31, 2022, the carrying value of the Toyota project on the Consolidated Balance Sheet totaled $21.3 million which represents the carrying value of inventory components that could be redeployed for alternative use. Given the rise in natural gas prices through and as of July 31, 2022, the Company performed a recoverability analysis with respect to the Derby 14.0 MW and 2.8 MW projects and concluded that the assets are recoverable and therefore an impairment has not occurred. Should natural gas prices continue to rise, there could be an impairment in future periods. The Company has risk mitigation strategies that it may implement in an effort to mitigate potential impacts including the ability to extend commercial operations dates. As of July 31, 2022, the carrying value of the 14.0 MW project in Derby, CT totaled $26.2 million and the carrying value of the 2.8 MW project in Derby, CT totaled $0.6 million. Impact of the COVID-19 Pandemic During fiscal year 2020, the Company launched a proactive response to the escalating COVID-19 outbreak and temporarily suspended operations at its Torrington, CT manufacturing facility in March 2020. The Company also commenced remote work protocol for those employees worldwide that were capable of working from home. The Company took these actions to secure the safety of the Company’s employees, our corporate community as a whole, and the communities in which our team members live, and to adhere to Centers for Disease Control and Prevention (“CDC”) recommendations of social distancing and limited public exposure in connection with the COVID-19 pandemic. All employees that were not able to work from home during the manufacturing facility shutdown due to their job function received full wages and benefits during such time. We did not implement any furlough, layoff or shared work program during such time. The Company resumed manufacturing in June 2020 and the Torrington, CT manufacturing facility employees returned to work. We established a phased-in return to work schedule commencing March 15, 2021 for those employees working from home, which was completed in April 2021. In December of 2021, we instructed certain employees to work from home as a result of a rise in cases in the northeastern United States. We lifted this mandate at the end of January 2022. We will continue to evaluate our ability to operate in the event of a resurgence of COVID-19 and the advisability of continuing operations based on federal, state and local guidance, evolving data concerning the pandemic and the best interests of our employees, customers and stockholders. In addition, given the then-elevated number of COVID-19 cases throughout the U.S. as a result of the highly transmissible Delta and Omicron variants, the Company instituted policies to protect its employees and customers, including implementing a mandatory vaccination policy which required all U.S. employees to be fully vaccinated by November 1, 2021 or to seek a qualified religious and/or medical exemption with weekly testing protocols. Our weekly testing protocol for unvaccinated employees has been suspended due to the relatively low incidence of COVID-19 infections. However, we will continue to monitor any COVID-19 related data that affects the interests of the Company and its stakeholders and will take appropriate action as necessary. Other As of July 31, 2022, the Company had unconditional purchase commitments aggregating $75.6 million for materials, supplies and services in the normal course of business. Legal Proceedings POSCO Energy Matters Background and Description of Proceedings From approximately 2007 through 2015, the Company relied on POSCO Energy to develop and grow the Korean and Asian markets for its products and services. The Company received upfront license payments and was entitled to receive royalty income from POSCO Energy pursuant to certain manufacturing and technology transfer agreements, including the Alliance Agreement dated February 7, 2007 (and the amendments thereto), the Technology Transfer, License and Distribution Agreement dated February 7, 2007 (and the amendments thereto), the Stack Technology Transfer and License Agreement dated October 27, 2009 (and the amendments thereto), and the Cell Technology Transfer and License Agreement dated October 31, 2012 (and the amendments thereto) (collectively, the “License Agreements”). The License Agreements provided POSCO Energy with the exclusive technology rights to manufacture, sell, distribute and service the Company’s SureSource 300, SureSource 1500 and SureSource 3000 fuel cell technology in the Korean and broader Asian markets. In November 2019, POSCO Energy spun-off its fuel cell business into a new entity, KFC, without the Company’s consent. As part of the spin-off, POSCO Energy transferred manufacturing and service rights under the License Agreements to KFC, but retained distribution rights and severed its own liability under the License Agreements. The Company formally objected to POSCO Energy’s spin-off, and POSCO Energy posted a bond to secure any liabilities to the Company arising out of the spin-off. In September 2020, the Korean Electricity Regulatory Committee found that POSCO Energy’s spin-off of the fuel cell business to KFC may have been done in violation of Korean law. On February 19, 2020, the Company notified POSCO Energy in writing that it was in material breach of the License Agreements by (i) its actions in connection with the spin-off of the fuel cell business to KFC, (ii) its suspension of performance through its cessation of all sales activities since late 2015 and its abandonment of its fuel cell business in Asia, and (iii) its disclosure of material nonpublic information to third parties and its public pronouncements about the fuel cell business on television and in print media that have caused reputational damage to the fuel cell business, the Company and its products. The Company also notified POSCO Energy that, under the terms of the License Agreements, it had 60 days to fully cure its breaches to the Company’s satisfaction and that failure to so cure would lead to termination of the License Agreements. Further, on March 27, 2020, the Company notified POSCO Energy of additional instances of its material breach of the License Agreements based on POSCO Energy’s failure to pay royalties required to be paid in connection with certain module exchanges. On April 27, 2020, POSCO Energy initiated a series of three arbitration demands against the Company at the International Court of Arbitration of the International Chamber of Commerce seated in Singapore, in which it alleged certain warranty defects in a sub-megawatt conditioning facility at its facility in Pohang, Korea and sought combined damages of approximately $3.3 million. Prior to filing the arbitrations, POSCO Energy obtained provisional attachments from the Seoul Central District Court attaching certain revenues owed to the Company by Korea Southern Power Company (“KOSPO”) as part of such warranty claims, which delayed receipt of certain payments owed to the Company. POSCO Energy subsequently sought additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on unspecified warranty claims in an additional amount of approximately $7 million, and additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on its alleged counterclaims in the license termination arbitration described below in an additional amount of approximately $110 million. POSCO Energy posted a bond in the amount of $46 million to secure any damages to the Company resulting from the attachments. The Company had outstanding accounts receivable due from KOSPO of $11.2 million, which amount was recovered from the Seoul Central District Court during the second quarter of fiscal year 2022 as discussed in additional detail below. On June 28, 2020, the Company terminated the License Agreements with POSCO Energy and filed a demand for arbitration against POSCO Energy and KFC in the International Court of Arbitration of the International Chamber of Commerce based on POSCO Energy’s (i) failure to exercise commercially reasonable efforts to sell the Company’s technology in the Korean and Asian markets, (ii) disclosure of the Company’s proprietary information to third parties, (iii) attack on the Company’s stock price and (iv) spin-off of POSCO Energy’s fuel cell business into KFC without the Company’s consent. The Company requested that the arbitral tribunal (a) confirm through declaration that POSCO Energy’s exclusive license to market the Company’s technology and products in Korea and Asia is null and void as a result of the breaches of the License Agreements and that the Company had the right to pursue direct sales in these markets, (b) order POSCO Energy and KFC to compensate the Company for losses and damages suffered in the amount of more than $200 million, and (c) order POSCO Energy and KFC to pay the Company’s arbitration costs, including counsel fees and expenses. The Company retained outside counsel on a contingency basis to pursue its claims, and outside counsel entered into an agreement with a litigation finance provider to fund the legal fees and expenses of the arbitration. In October 2020, POSCO Energy filed a counterclaim in the arbitration (x) seeking approximately $880 million in damages based on allegations that the Company misrepresented the capabilities of its fuel cell technology to induce POSCO Energy to enter into the License Agreements and failed to turn over know-how sufficient for POSCO Energy to successfully operate its business; (y) seeking a declaration that the License Agreements remained in full force and effect and requesting the arbitral tribunal enjoin the Company from interfering in POSCO Energy’s exclusive rights under the License Agreements and (z) seeking an order that the Company pay POSCO Energy’s arbitration costs, including counsel fees and expenses. The Company discontinued revenue recognition of the deferred license revenue related to the License Agreements in July 2020 given the then-pending arbitrations. On August 28, 2020, POSCO Energy filed a complaint in the Court of Chancery of the State of Delaware (the “Court”) purportedly seeking to enforce its rights as a stockholder of the Company to inspect and make copies and extracts of certain books and records of the Company and/or the Company’s subsidiaries pursuant to Section 220 of the Delaware General Corporation Law and/or Delaware common law. POSCO Energy alleged that it was seeking to inspect these documents for a proper purpose reasonably related to its interests as a stockholder of the Company, including investigating whether the Company’s Board of Directors and its management breached their fiduciary duties of loyalty, due care, and good faith. POSCO Energy sought an order of the Court permitting POSCO Energy to inspect and copy the demanded books and records, awarding POSCO Energy reasonable costs and expenses, including reasonable attorney’s fees incurred in connection with the matter, and granting such other and further relief as the Court deemed just and proper. On July 9, 2021, the Court issued a post-trial ruling denying POSCO Energy’s demand to inspect the Company’s books and records because POSCO Energy lacked a proper purpose. The Court held that the totality of the circumstances, including the fact that this complaint was the seventh legal action POSCO Energy initiated against the Company within the span of nine months, confirmed that POSCO Energy’s purpose in initiating the books and records demand and filing the complaint was not proper. As this dispute was resolved by the Court as described above, it did not require resolution pursuant to, and was not part of, the Settlement Agreement described below. On September 14, 2020, POSCO Energy filed a complaint in the United States District Court for the Southern District of New York (the “SD Court”) alleging that the Company delayed the removal of restrictive legends on certain share certificates held by POSCO Energy in 2018, thus precluding POSCO Energy from selling the shares and resulting in claimed losses in excess of $1 million. On September 16, 2021, the SD Court ruled in the Company’s favor on a motion for summary judgement dismissing all four counts of POSCO Energy’s complaint regarding share certificates held by POSCO Energy in 2018, but granted POSCO Energy leave to file an amended complaint. Settlement Agreement In order to resolve the disputes described above (other than the books and records dispute which was previously resolved by the Court), on December 20, 2021, the Company entered into the Settlement Agreement with PE Group. The Settlement Agreement provides, among other things, that the parties will cooperate in good faith to effect a market transition to the Company of the molten carbonate fuel cell business in Korea in accordance with the terms and conditions of the Settlement Agreement. To that end, the Settlement Agreement provides that any and all past, current, or potential disputes and claims between the Company, on the one hand, and POSCO Energy and KFC, on the other, of any nature whatsoever, whether known or unknown, asserted or not asserted, based on actions or omissions of any party on or before the date of Settlement Agreement are fully and finally settled, including such disputes and claims, directly or indirectly, in connection with the legal disputes (other than the books and records dispute which was previously resolved by the Court) and License Agreements described above, with the exception of (i) an unfiled claim by the Company in the amount of approximately $1.8 million with respect to certain royalties the Company believes are owed by POSCO Energy with respect to replacement modules deployed by POSCO Energy at Gyenonggi Green Energy and other sites for which POSCO Energy has not paid royalties, and (ii) an unfiled claim by POSCO Energy in an unknown amount with respect to a series of purchase orders for materials and components which began in 2014 under a supply chain contract, both of which claims remain unsettled. The Company does not believe the claim by POSCO Energy with respect to purchase orders for materials and components under the supply chain contract has merit and the Company retains the right to file a counterclaim for damages it believes it has incurred with respect to such supply chain contract. With respect to , the Settlement Agreement provides that, within five days of the date of the Settlement Agreement, POSCO Energy would file an application with the Seoul Central District Court to revoke the attachments. The application was filed with the Seoul Central District Court and, during the second quarter of fiscal year 2022, the Company recovered the outstanding KOSPO accounts receivable of approximately Under the Settlement Agreement, the parties also agreed that, within five days of the date thereof, the Company would withdraw its objection to the spin-off of KFC from POSCO Energy, and that the License Agreements are not terminated, but instead are deemed to be amended such that PE Group only has the Right to Service License (as defined above). POSCO Energy and KFC further agreed that, as of the date of the Settlement Agreement, the License Agreements are deemed to be amended such that the Company exclusively enjoys all rights as to its technology in Korea and Asia, other than the Right to Service License. The Settlement Agreement further provides that the License Agreements will terminate automatically upon sixty days prior written notice to PE Group if (i) the Company enters into a business collaboration agreement with a Korean company to construct, assemble, manufacture, market, sell, distribute, import, export, install, commission, service, maintain, or repair products incorporating the Company’s technology, or otherwise conduct the Company’s business, in the Korean market; or (ii) the Company expands the capacity of its existing Korean entity such as to perform such activities itself. In the event of the termination of the License Agreements, the license granted to PE Group under the Right to Service License will continue notwithstanding the termination of the License Agreements, except that PE Group’s right to own, operate, and maintain all facilities and factories for the purpose of servicing any orders or requests made by the Company will terminate. For the avoidance of doubt, pursuant to the terms of the Settlement Agreement, PE Group has no right to manufacture modules or any other product incorporating the Company’s technology under the License Agreements as amended, the Right to Service License or otherwise unless requested and authorized by the Company to do so. The Settlement Agreement further provides that, in order to service its existing customers under the Existing LTSAs, KFC would place a firm, non-cancelable order for twelve SureSource 3000 modules within two weeks after the date of the Settlement Agreement and would place an additional firm, non-cancelable order for eight SureSource 3000 modules on or before June 30, 2022 (which additional order was received from KFC in June 2022), all at a price of $3.0 million per module. In addition, KFC has agreed to use commercially reasonable efforts to order fourteen additional SureSource 3000 modules by December 31, 2022, at a price of $3.0 million per module if ordered by such date. If KFC materially breaches the Settlement Agreement by failing to make timely and full payment for the modules for which KFC is required to place orders under the Settlement Agreement and does not cure such material breach within fifteen days of notice of such breach by the Company, the License Agreements and the Right to Service License granted to PE Group will be terminated. If the Company materially breaches the Settlement Agreement by failing to supply the modules for which KFC is required to place orders under the Settlement Agreement, as long as KFC has made the payment for such modules and has otherwise satisfied its contractual obligations for those modules and such material breach is not cured within sixty days after notice from PE Group, PE Group will have the right to terminate the Settlement Agreement. With respect to any other alleged breach, material or otherwise, of the Settlement Agreement, the parties’ exclusive remedy consists solely of general damages. The Company received a firm, non-cancelable order from KFC for twelve SureSource 3000 modules. Six of these modules were delivered Ex Works from the Company’s facility in Torrington, CT in January 2022 and six of these modules were delivered Ex Works from the Company’s facility in Torrington, CT in June 2022. Pursuant to the Settlement Agreement, with respect to new modules to be supplied by the Company and deployed by PE Group to its existing customers, the Company will provide its standard warranty against module defects until the earlier of eighteen months from the date of shipment or twelve months from the date of installation. As part of the global settlement of the disputes among the parties and subject to the qualifications set forth in the Settlement Agreement, the Company will reimburse PE Group for any annual output penalty amount paid by PE Group to its customers pursuant to Existing LTSAs (whether such Existing LTSA is extended or renewed), caused by a shortfall or defect in the new modules for a period of up to seven years. The maximum annual reimbursement obligation with regard to any PE Group customer for any new module provided by the Company will not exceed an amount equal to 7.5% per year of the module purchase price. The Company will not be required to reimburse PE Group for any penalty paid by PE Group under the Existing LTSAs that is not caused by a shortfall or defect in the modules to be supplied by the Company including, without limitation, any shortfall or defect caused by a site-related problem, a problem with the balance of plant, or other components of the project. Although the Company has the exclusive and unrestricted right under the Settlement Agreement to perform, pursue, and otherwise conduct its business in relation to new fuel cell projects (including new projects with PE Group’s existing customers) in Korea and Asia, the parties have agreed that, except as further provided in the Settlement Agreement with respect to PE Group’s existing customers Noeul Green Energy and Godeok Green Energy, the Company will not engage in discussions with PE Group’s existing customers regarding Existing LTSAs without PE Group’s consent. The parties have further agreed that if PE Group cannot enter into an agreement with its existing customers to extend or renew Existing LTSAs by December 31, 2022, PE Group will cooperate with the Company so that the Company may discuss and, at the Company’s sole discretion, enter into an extension of an Existing LTSA, a new long-term service agreement to replace an Existing LTSA, or a module sales agreement with PE Group’s existing customers; provided that (i) should the Company enter into such an arrangement with a PE Group existing customer, (ii) the Company is required to provide replacement modules to such existing customer under such arrangement, and (iii) PE Group has not already deployed all or some of the modules that PE Group ordered under the Settlement Agreement, the Company will purchase the number of required replacement modules from PE Group at a price of $3.0 million per module (to the extent such modules are available and have not yet been deployed). The purchase of such replacement modules by the Company is contingent upon the modules being in proper condition as determined by inspection process to be agreed to by the parties. Any modules purchased by the Company from PE Group under these terms will be included as part of the firm orders KFC is required to make pursuant to the Settlement Agreement. With respect to operations and maintenance agreements, the Settlement Agreement provides that KFC will have the right of first refusal on providing operation and maintenance services on commercially reasonable terms for new long-term service agreements entered into by the Company in Korea for a period of the first to occur of either twenty-four months after the date of the Settlement Agreement or until such time as the Company engages a third party capable of providing such services in Korea. If KFC and the Company agree that KFC should provide operation and maintenance services pursuant to the right of first refusal, KFC and the Company will enter into one or more operation and maintenance agreements that reflect commercially reasonable terms and conditions as agreed by KFC and the Company at that time. With respect to BOP, KFC currently has eight units of BOP available, and the Settlement Agreement provides that the Company has the option to purchase such units of BOP for any new molten carbonate fuel cell projects within Korea at a price of KRW 2,550,000,000 (or USD $2,116,500 as of July 31, 2022) per unit. The Company will also have a non-exclusive, non-transferrable, non-sublicensable license to use the intellectual property embedded in the BOP units in Korea in consideration for a reasonable license fee to be separately agreed by the parties. Detailed terms and conditions of BOP and related software and firmware supply will be discussed and agreed to in good faith in separate BOP supply agreements in the event the Company exercises its option to purchase any of such BOP. As described above, the Company retained outside counsel on a contingency basis to pursue its claims against POSCO Energy and KFC, and outside counsel entered into an agreement with a litigation finance provider to fund the legal fees and expenses of the arbitration proceedings brought by the Company against POSCO Energy and KFC. Because the Company entered into the Settlement Agreement, it was required to remit fees to its counsel, Wiley Rein, LLP (“Wiley”), subject to the terms of its engagement letter with Wiley. On December 23, 2021, the Company agreed that it would pay Wiley a total of $24.0 million to satisfy all obligations to Wiley under the Company’s engagement letter (which is included in Administrative and selling expenses on the Consolidated Statements of Operations and Comprehensive Loss for the nine months ended July 31, 2022). The total amount of $24.0 million was paid in full during the nine months ended July 31, 2022. Other Legal Proceedings From time to time, the Company is involved in other legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation, arising out of the ordinary course of its business (“Other Legal Proceedings”). Although the Company cannot assure the outcome of such Other Legal Proceedings, management presently believes that the result of such Other Legal Proceedings, either individually, or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements, and no material amounts have been accrued in the Company’s consolidated financial statements with respect to these matters. |
Nature of Business and Basis of
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Jul. 31, 2022 | |
Nature of Business and Basis of Presentation | |
Nature of Business and Basis of Presentation | Headquartered in Danbury, CT, FuelCell Energy, Inc. (together with its subsidiaries, the “Company,” “FuelCell Energy,” “we,” “us,” or “our”) has leveraged five decades of research and development to become a global leader in delivering environmentally responsible distributed baseload power platform solutions through our proprietary fuel cell technology. As an innovator and an American manufacturer of clean fuel cell power platforms, our current commercial technology delivers clean, distributed generation and distributed hydrogen, as well as heat, carbon separation and utilization, and water. We plan to increase our investment in developing and commercializing future technologies expected to deliver hydrogen and long duration hydrogen-based energy storage through our solid oxide technologies, as well as carbon capture solutions. As a leading global manufacturer of proprietary fuel cell technology platforms, we are uniquely positioned to serve customers worldwide with sustainable products and solutions for businesses, utilities, governments, and municipalities. Our solutions are designed to enable a world empowered by clean energy, enhancing the quality of life for people around the globe. We target large-scale power users with our megawatt-class installations globally, and currently offer sub-megawatt solutions for smaller power consumers in Europe. To provide a frame of reference, one megawatt is adequate to continually power approximately 1,000 average sized U.S. homes. Our customer base includes utility companies, municipalities, universities, hospitals, government entities/military bases and a variety of industrial and commercial enterprises. Our leading geographic markets are currently the United States and Korea, and we are pursuing opportunities in other countries around the world. Our product offerings drive our mission to help our customers realize their environmental goals, strengthen resiliency, manage energy and other commodity costs, and deliver valuable goods and services to their customers. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, they do not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all normal and recurring adjustments necessary to fairly present the Company’s financial position and results of operations as of and for the three and nine months ended July 31, 2022 and 2021 have been included. All intercompany accounts and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The balance sheet as of October 31, 2021 has been derived from the audited financial statements at that date, but it does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto for the fiscal year ended October 31, 2021, which are contained in the Company’s Annual Report on Form 10-K previously filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year. |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. We use a qualitative approach in assessing the consolidation requirement for each of our variable interest entities ("VIEs"), which are tax equity partnerships further described in Note 3. “Tax Equity Financings.” This approach focuses on determining whether we have the power to direct those activities of the tax equity partnerships that most significantly affect their economic performance and whether we have the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the tax equity partnerships. For all periods presented, we have determined that we are the primary beneficiary in all of our tax equity partnerships. We evaluate our tax equity partnerships on an ongoing basis to ensure that we continue to be the primary beneficiary. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Estimates are used in accounting for, among other things, revenue recognition, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, allowance for doubtful accounts, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), lease liabilities and right-of-use (“ROU”) assets, and contingencies. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates. |
Liquidity | Liquidity Our principal sources of cash have been sales of our common stock through public equity offerings, proceeds from debt, project financing and tax monetization transactions, proceeds from the sale of our products and projects, as well as research and development and service agreements with third parties. We have utilized this cash to develop and construct project assets, perform research and development on Advanced Technologies, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs. As of July 31, 2022, unrestricted cash and cash equivalents totaled $456.5 million compared to $432.2 million as of October 31, 2021. On July 12, 2022, the Company entered into an Open Market Sale Agreement with Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canaccord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC (the “Open Market Sale Agreement”) with respect to an at the market offering program under which the Company may, from time to time, offer and sell up to 95.0 million shares of the Company’s common stock. From the date of the Open Market Sale Agreement through July 31, 2022, the Company sold approximately 18.5 million shares under the Open Market Sale Agreement at an average sale price of $3.63 per share. Of this 18.5 million shares, approximately 7.8 million shares were issued and settled during the period ended July 31, 2022 resulting in gross proceeds of approximately $27.9 million before deducting sales commissions and fees and net proceeds to the Company of approximately $27.2 million after deducting commissions and fees totaling approximately $0.7 million. The balance of approximately 10.7 million shares were settled subsequent to July 31, 2022, resulting in gross proceeds (before deducting sales commissions) of approximately $39.2 million and net proceeds to the Company (received in August 2022) of approximately $38.4 million after deducting commissions totaling approximately $0.8 million. The Company currently intends to use the net proceeds from this offering to accelerate the development and commercialization of its product platforms (including, but not limited to, its solid oxide and carbon capture platforms), for project development, market development, and internal research and development, to invest in capacity expansion for solid oxide and carbonate fuel cell manufacturing, and for project financing, working capital support, and general corporate purposes. The Company may also use the net proceeds from this offering to invest in joint ventures, acquisitions, and strategic growth investments and to acquire, license or invest in products, technologies or businesses that complement its business. See Note 13. “Stockholders’ Equity and Warrant Liabilities” for additional information regarding the Open Market Sale Agreement. On June 11, 2021, the Company entered into an Open Market Sale Agreement with Jefferies LLC and Barclays Capital Inc. (the “2021 Sales Agreement”) with respect to an at the market offering program under which the Company could, from time to time, offer and sell shares of the Company’s common stock having an aggregate offering price of up to $500 million. From the date of the 2021 Sales Agreement through April 30, 2022, approximately 64.0 million shares of the Company’s common stock were sold under the 2021 Sales Agreement, resulting in aggregate gross proceeds of approximately $498.1 million before deducting sales commissions. Commissions of approximately $10.0 million in the aggregate were paid to Jefferies LLC and Barclays Capital Inc. in connection with these sales, resulting in aggregate net proceeds to the Company of approximately $488.1 million. No sales of common stock were made under the 2021 Sales Agreement after April 30, 2022, and no additional sales of common stock can or will be made under the 2021 Sales Agreement, as the Company, Jefferies LLC and Barclays Capital Inc. mutually agreed to terminate the 2021 Sales Agreement as of July 12, 2022. We believe that our unrestricted cash and cash equivalents, expected receipts from our contracted backlog, and release of short-term restricted cash less expected disbursements over the next twelve months will be sufficient to allow the Company to meet its obligations for at least one year from the date of issuance of these financial statements. To date, we have not achieved profitable operations or sustained positive cash flow from operations. The Company’s future liquidity, for the remainder of fiscal year 2022 and in the long-term, will depend on its ability to (i) timely complete current projects in process within budget, (ii) increase cash flows from its generation operating portfolio, including by meeting conditions required to timely commence operation of new projects, operating its generation operating portfolio in compliance with minimum performance guarantees and operating its generation operating portfolio in accordance with revenue expectations, (iii) obtain financing for project construction, (iv) obtain permanent financing for its projects once constructed, (v) increase order and contract volumes, which would lead to additional product sales, service agreements and generation revenues, (vi) obtain funding for and receive payment for research and development under current and future Advanced Technologies contracts, (vii) successfully commercialize its Advanced Technologies platforms, including its solid oxide, hydrogen and carbon capture platforms, (viii) implement the product cost reductions necessary to achieve profitable operations, (ix) manage working capital and the Company’s unrestricted cash balance and (x) access the capital markets to raise funds through the sale of debt and equity securities, convertible notes, and other equity-linked instruments. We are continually assessing different means by which to accelerate the Company’s growth, enter new markets, commercialize new products, and enable capacity expansion. Therefore, from time to time, the Company may consider and enter into agreements for one or more of the following: negotiated financial transactions, minority investments, collaborative ventures, technology sharing, transfer or other technology license arrangements, joint ventures, partnerships, acquisitions or other business transactions for the purpose(s) of geographic or manufacturing expansion and/or new product or technology development and commercialization, including hydrogen production and storage and carbon capture, sequestration and utilization technologies. Our business model requires substantial outside financing arrangements and satisfaction of the conditions of such arrangements to construct and deploy our projects to facilitate the growth of our business. The Company has invested capital raised from sales of its common stock to build out its project portfolio. The Company has also utilized and expects to continue to utilize a combination of long-term debt and tax equity financing (e.g., sale-leaseback and partnership transactions) to finance its project asset portfolio as these projects commence commercial operations. The Company may also seek to undertake private placements of debt securities of a portfolio of assets to finance its project asset portfolio. The proceeds of any such financing, if obtained, may allow the Company to reinvest capital back into the business and to fund other projects. We may also seek to obtain additional financing in both the debt and equity markets in the future. If financing is not available to us on acceptable terms if and when needed, or on terms acceptable to us or our lenders, if we do not satisfy the conditions of our financing arrangements, if we spend more than the financing approved for projects, if project costs exceed an amount that the Company can finance, or if we do not generate sufficient revenues or obtain capital sufficient for our corporate needs, we may be required to reduce or slow planned spending, reduce staffing, sell assets, seek alternative financing and take other measures, any of which could have a material adverse effect on our financial condition and operations. |
Recently Adopted Accounting Guidance and Recent Accounting Guidance Not Yet Effective | Recently Adopted Accounting Guidance There is no recently adopted accounting guidance. Recent Accounting Guidance Not Yet Effective In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met to ease an entity’s financial reporting burden as the market transitions from London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The FASB further issued ASU 2021-01 in January 2021 to clarify the scope of Topic 848. The guidance was effective upon issuance and may be applied through December 31, 2022. Adoption is not expected to have a material impact on the Company’s consolidated financial statements . |
Accounts Receivable, Net and _2
Accounts Receivable, Net and Unbilled Receivables (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Accounts Receivable, Net and Unbilled Receivables | |
Schedule of Accounts Receivable, Net and Unbilled Receivables | Accounts receivable, net and Unbilled receivables as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Product, Service and Generation: Amount billed $ 10,032 $ 13,854 Unbilled receivables (1) 8,505 7,175 18,537 21,029 Advanced Technologies (including U.S. government (2) Amount billed 2,069 876 Unbilled receivables 1,956 1,749 4,025 2,625 Accounts receivable, net and unbilled receivables $ 22,562 $ 23,654 (1) Additional long-term unbilled receivables of $10.2 million and $11.6 million are included within “Other assets” as of July 31, 2022 and October 31, 2021, respectively. (2) Total U.S. government accounts receivable, including unbilled receivables, outstanding as of July 31, 2022 and October 31, 2021 were $2.6 million and $2.3 million, respectively. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Inventories | |
Components of Inventories | Inventories (short and long-term) as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Raw materials $ 31,347 $ 25,968 Work-in-process (1) 53,845 45,692 Inventories 85,192 71,660 Inventories – short-term (80,606) (67,074) Inventories – long-term (2) $ 4,586 $ 4,586 (1) Work-in-process includes the standard components of inventory used to build the typical modules or module components that are intended to be used in future project asset construction or power plant orders or for use under the Company’s service agreements. Included in work-in-process as of July 31, 2022 and October 31, 2021 was $35.3 million and $39.7 million, respectively, of completed standard components and modules. (2) Long-term inventory includes modules that are contractually required to be segregated for use as exchange modules for specific project assets. |
Project Assets (Tables)
Project Assets (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Project Assets | |
Summary of Project Assets | Project assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, Estimated 2022 2021 Useful Life Project Assets – Operating $ 164,725 $ 116,286 4-20 years Accumulated depreciation (28,004) (19,844) Project Assets – Operating, net 136,721 96,442 Project Assets – Construction in progress 109,297 126,835 7-20 years Project Assets, net $ 246,018 $ 223,277 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Goodwill and Intangible Assets | |
Summary of Intangible Assets | The following tables summarize the carrying value of the Company’s intangible assets as of July 31, 2022 and October 31, 2021 (in thousands): As of July 31, 2022 Gross Amount Accumulated Amortization Net Amount In-Process Research and Development $ 9,592 $ — $ 9,592 Bridgeport PPA 12,320 (4,215) 8,105 Total $ 21,912 $ (4,215) $ 17,697 As of October 31, 2021 Gross Amount Accumulated Amortization Net Amount In-Process Research and Development $ 9,592 $ — $ 9,592 Bridgeport PPA 12,320 (3,242) 9,078 Total $ 21,912 $ (3,242) $ 18,670 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Other Current Assets | |
Schedule of Other Current Assets | Other current assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Advance payments to vendors (1) $ 6,671 $ 4,005 Prepaid expenses and other (2) 7,588 5,172 Other current assets $ 14,259 $ 9,177 (1) Advance payments to vendors relate to payments for inventory purchases ahead of receipt. (2) The balance for both periods presented includes prepaid vendor expenses including insurance expense. |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Other Assets | |
Schedule of Other Assets | Other assets as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Long-term stack residual value (1) $ — $ 263 Long-term unbilled receivables (2) 10,233 11,581 Other (3) 4,479 5,154 Other assets $ 14,712 $ 16,998 (1) Relates to estimated residual value for module exchanges performed under the Company’s service agreements where the useful life extends beyond the contractual term of the service agreement and the Company obtains title for the module from the customer upon expiration or non-renewal of the service agreement. If the Company does not obtain rights to title from the customer, the full cost of the module is expensed at the time of the module exchange. (2) Represents unbilled receivables that relate to revenue recognized on customer contracts that will be billed in future periods in excess of 12 months from the balance sheet date. (3) The Company entered into an agreement with one of its customers on June 29, 2016 which included payments for the purchase of the customer’s power platforms by the Company at the end of the term of the agreement. The payments were made in installments over the term of the agreement and the total amount paid as of July 31, 2022 and October 31, 2021 was $2.4 million and $2.2 million, respectively. The $2.4 million paid as of July 31, 2022 was reclassified to project assets during the second quarter of fiscal year 2022. Also included within “Other” are long-term security deposits and prepaid withholding taxes on customer deposits as of July 31, 2022 and October 31, 2021. |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Accrued Liabilities | |
Schedule of Accrued Liabilities | Accrued liabilities as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Accrued payroll and employee benefits (1) $ 6,737 $ 2,544 Accrued product warranty cost (2) 378 72 Accrued service agreement and PPA costs (3) 10,009 9,112 Accrued legal, taxes, professional and other 5,411 4,371 Accrued liabilities $ 22,535 $ 16,099 (1) The balance in this account represents accrued payroll, payroll taxes and accrued bonus for both periods. The increase in the account relates to an increase in accrued bonus as of July 31, 2022. (2) The increase in accrued product warranty cost reflects the costs associated with the warranties provided under the POSCO Energy Settlement Agreement. Product warranty expense for the three months ended July 31, 2022 and 2021 was $0.2 million and $7 thousand, respectively, and for the nine months ended July 31, 2022 and 2021 was $0.4 million and $19 thousand, respectively. (3) Accrued service agreement costs include loss accruals on service agreements of $6.4 million and $6.5 million as of July 31, 2022 and October 31, 2021, respectively. The accruals for performance guarantees on service agreements and PPAs were $2.5 million and $3.6 million as of October 31, 2021 and July 31, 2022, respectively. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Leases | |
Summary of Undiscounted Maturities of Operating Lease and Finance Lease Liabilities | Undiscounted maturities of operating lease and finance lease liabilities as of July 31, 2022 were as follows: Operating Leases Finance Leases Due Year 1 $ 1,251 $ 50 Due Year 2 804 29 Due Year 3 767 — Due Year 4 693 — Due Year 5 719 — Thereafter 12,597 — Total undiscounted lease payments 16,831 79 Less imputed interest (8,414) (12) Total discounted lease payments $ 8,417 $ 67 |
Stockholders' Equity and Warr_2
Stockholders' Equity and Warrant Liabilities (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Stockholders' Equity and Warrant Liabilities | |
Schedule of Warrant Activity | The following table summarizes outstanding warrant activity during the nine months ended July 31, 2022: Series C Warrants Balance as of October 31, 2021 950,102 Warrants issued — Warrants exercised — Warrants expired (950,102) Balance as of July 31, 2022 — |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Loss Per Share | |
Calculation of Basic and Diluted Loss Per Share | The calculation of basic and diluted loss per share was as follows: Three Months Ended July 31, Nine Months Ended July 31, 2022 2021 2022 2021 Numerator Net loss attributable to FuelCell Energy, Inc. $ (29,414) $ (11,997) $ (100,255) $ (76,874) Series B preferred stock dividends (800) (800) (2,400) (2,400) Net loss attributable to common stockholders $ (30,214) $ (12,797) $ (102,655) $ (79,274) Denominator Weighted average common shares outstanding – basic 387,465,758 337,291,562 375,638,293 323,983,465 Effect of dilutive securities (1) — — — — Weighted average common shares outstanding – diluted 387,465,758 337,291,562 375,638,293 323,983,465 Net loss to common stockholders per share – basic $ (0.08) $ (0.04) $ (0.27) $ (0.24) Net loss to common stockholders per share – diluted (1) $ (0.08) $ (0.04) $ (0.27) $ (0.24) (1) Due to the net loss to common stockholders in each of the periods presented above, diluted loss per share was computed without consideration to potentially dilutive instruments as their inclusion would have been anti-dilutive. As of July 31, 2022 and 2021, potentially dilutive securities excluded from the diluted loss per share calculation are as follows: |
Schedule of Potentially Dilutive Securities Excluded from the Diluted Loss Per Share Calculation | July 31, July 31, 2022 2021 May 2017 Offering – Series C Warrants - 950,102 Outstanding options to purchase common stock 20,231 22,388 Unvested Restricted Stock Units 3,573,354 2,665,764 5% Series B Cumulative Convertible Preferred Stock 37,837 37,837 Total potentially dilutive securities 3,631,422 3,676,091 |
Restricted Cash (Tables)
Restricted Cash (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Restricted Cash. | |
Summary of Allocation of Restricted Cash | The allocation of restricted cash is as follows (in thousands): July 31, October 31, 2022 2021 Cash Restricted for Outstanding Letters of Credit (1) $ 4,824 $ 6,478 Cash Restricted for PNC Sale-Leaseback Transactions (2) 4,599 5,514 Cash Restricted for Crestmark Sale-Leaseback Transactions (3) 2,892 2,887 Bridgeport Fuel Cell Park Project Debt Service and Performance Reserves (4) 9,714 11,937 Other 1,130 1,183 Total Restricted Cash 23,159 27,999 Restricted Cash and Cash Equivalents – Short-Term (5) (5,627) (11,268) Restricted Cash and Cash Equivalents – Long-Term $ 17,532 $ 16,731 (1) Letters of credit outstanding as of July 31, 2022 expire on various dates through August 2028. (2) Long and short-term reserve that is to be used primarily to fund future module exchanges for operating projects falling under the PNC sale leaseback obligations. The decrease in restricted cash at July 31, 2022 compared to October 31, 2021 is a result of the Company’s performance in completing certain module exchanges, which resulted in the restriction being released. (3) Long and short-term reserve that is to be used primarily to fund future module exchanges and other performance obligations. (4) Long and short-term reserves for the Bridgeport Fuel Cell Park Project to fund future module exchanges and other performance requirements. (5) Short-term restricted cash and cash equivalents are amounts expected to be released and categorized as unrestricted cash within twelve months of the balance sheet date. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Debt | |
Schedule of Debt | Debt as of July 31, 2022 and October 31, 2021 consisted of the following (in thousands): July 31, October 31, 2022 2021 Connecticut Green Bank Loan $ 4,800 $ 4,800 Connecticut Green Bank Loan (Bridgeport Fuel Cell Project) 3,716 4,318 Liberty Bank Term Loan Agreement (Bridgeport Fuel Cell Project) 5,903 7,465 Fifth Third Bank Term Loan Agreement (Bridgeport Fuel Cell Project) 5,903 7,465 Finance obligation for sale-leaseback transactions 56,526 56,492 State of Connecticut Loan 7,987 8,622 Finance lease obligations 67 102 Deferred finance costs (1,245) (1,556) Total debt and financing obligations 83,657 87,708 Current portion of long-term debt and financing obligations (9,810) (10,085) Long-term debt and financing obligations $ 73,847 $ 77,623 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Jul. 31, 2022 | |
Benefit Plans | |
Schedule of Share-Based Compensation Reflected in Consolidated Statement of Operations and Comprehensive Loss | Share-based compensation was reflected in the Consolidated Statements of Operations and Comprehensive Loss as follows (in thousands): Three months Ended July 31, Nine months Ended July 31, 2022 2021 2022 2021 Cost of revenues $ 175 $ 133 $ 512 $ 449 Administrative and selling expense 1,598 706 4,126 2,941 Research and development expense 135 33 319 97 $ 1,908 $ 872 $ 4,957 $ 3,487 |
Summary of RSA and RSU Activity | The following table summarizes our RSA and RSU activity for the nine months ended July 31, 2022: Restricted Stock Awards and Units Shares Weighted-Average Fair Value Outstanding as of October 31, 2021 2,543,541 $ 5.08 Granted – performance units 169,026 11.70 Granted – time-vesting restricted stock units 652,597 9.20 Vested (88,388) 3.54 Outstanding as of January 31, 2022 3,276,776 $ 6.27 Granted – time-vesting restricted stock units 85,804 5.52 Vested (25,464) 9.57 Forfeited (21,559) 9.05 Outstanding as of April 30, 2022 3,315,557 6.21 Granted – time-vesting restricted stock units 273,407 5.36 Vested (2,022) 15.06 Forfeited (13,588) 9.20 Outstanding as of July 31, 2022 3,573,354 $ 6.13 |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 14 Months Ended | ||||||||
Aug. 01, 2022 | Jul. 12, 2022 | May 01, 2022 | Jun. 11, 2021 | Jul. 31, 2022 | Jul. 31, 2022 | Apr. 30, 2022 | Jul. 31, 2021 | Jan. 31, 2021 | Jul. 31, 2022 | Apr. 30, 2022 | Jul. 31, 2022 | Oct. 31, 2021 | |
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Cash and cash equivalents, unrestricted | $ 456,479 | $ 456,479 | $ 456,479 | $ 456,479 | $ 432,213 | ||||||||
Common Stock | |||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Stock issued during period shares new issues | 7,814,115 | 19,896,904 | 43,978,999 | 25,000,000 | |||||||||
Common Stock | 2022 Open Market Sale Agreement | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | |||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Average sale price per share | $ 3.63 | ||||||||||||
Stock issued during period shares new issues | 10,700,000 | 18,500,000 | 7,800,000 | ||||||||||
Payments of commissions | $ 800 | $ 700 | |||||||||||
Gross proceeds from issuance of common stock | 39,200 | 27,900 | |||||||||||
Net proceeds from issuance of common stock | $ 38,400 | $ 27,200 | |||||||||||
Common Stock | 2022 Open Market Sale Agreement | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | Maximum | |||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Aggregate number of shares to be offered | 95,000,000 | ||||||||||||
Stock issued during period shares new issues | 95,000,000 | ||||||||||||
Common Stock | 2021 Open Market Sale Agreement | Agents | |||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Aggregate offering price | $ 500,000 | ||||||||||||
Average sale price per share | $ 7.79 | ||||||||||||
Stock issued during period shares new issues | 0 | 0 | 64,000,000 | 64,000,000 | |||||||||
Payments of commissions | $ 10,000 | $ 10,000 | |||||||||||
Gross proceeds from issuance of common stock | 498,100 | 498,100 | |||||||||||
Net proceeds from issuance of common stock | $ 488,100 | $ 488,100 | |||||||||||
Common Stock | 2021 Open Market Sale Agreement | Agents | Maximum | |||||||||||||
Nature Of Business And Basis Of Presentation [Line Items] | |||||||||||||
Aggregate offering price | $ 500,000 |
Tax Equity Financings (Details)
Tax Equity Financings (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Jul. 07, 2022 USD ($) | Dec. 13, 2021 USD ($) | Aug. 04, 2021 USD ($) | Nov. 30, 2021 USD ($) MW | Aug. 31, 2021 USD ($) MW | Jul. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2021 USD ($) | |
Tax Equity Financing | ||||||||||
Net income (loss) attributable to noncontrolling interest | $ 437 | $ (4,968) | ||||||||
Redeemable noncontrolling interest | 3,030 | 3,030 | $ 3,030 | |||||||
East West Bank Partnership Flip Transaction | ||||||||||
Tax Equity Financing | ||||||||||
Capacity of plant | MW | 7.4 | |||||||||
Tax equity financing commitment | $ 12,000 | $ 15,000 | ||||||||
Tax equity financing, Aggregate fee | $ 500 | |||||||||
Tax equity financing, Withdrawal right, Percent of return of investment | 101% | |||||||||
Initial draw | $ 3,000 | |||||||||
Closing costs | 800 | |||||||||
Remaining amount of draw | $ 12,000 | |||||||||
Percentage of cash and tax allocations to be received | 95% | |||||||||
REI Partnership Flip Transaction | ||||||||||
Tax Equity Financing | ||||||||||
Capacity of plant | MW | 7.4 | |||||||||
Tax equity financing commitment | $ 12,400 | 11,900 | 11,900 | |||||||
Amount of Refund | 500 | |||||||||
Amount of distribution | $ 100 | $ 200 | ||||||||
Percentage of annual interest rate | 2.73% | |||||||||
Initial draw | $ 3,200 | |||||||||
Closing costs | $ 400 | |||||||||
Remaining amount of draw | $ 9,200 | $ 9,200 | ||||||||
Legal and advisory fees | $ 400 | |||||||||
Percentage of cash and tax allocations to be received | 95% | |||||||||
Percentage of amount payable | 10.30% | |||||||||
Redeemable noncontrolling interest | $ 12,400 | |||||||||
First Anniversary of Project Achieving Commercial Operations [Member] | East West Bank Partnership Flip Transaction | ||||||||||
Tax Equity Financing | ||||||||||
Tax equity financing commitment, Contributions | $ 4,000 | |||||||||
Second Anniversary of Project Achieving Commercial Operations [Member] | East West Bank Partnership Flip Transaction | ||||||||||
Tax Equity Financing | ||||||||||
Tax equity financing commitment, Contributions | 4,000 | |||||||||
Third Anniversary of Project Achieving Commercial Operations [Member] | East West Bank Partnership Flip Transaction | ||||||||||
Tax Equity Financing | ||||||||||
Tax equity financing commitment, Contributions | $ 4,000 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 20, 2021 USD ($) item | Oct. 29, 2021 USD ($) | Jul. 31, 2022 USD ($) item | Apr. 30, 2022 USD ($) | Jul. 31, 2021 USD ($) | Jul. 31, 2022 USD ($) item | Jul. 31, 2021 USD ($) | Oct. 31, 2019 USD ($) | Apr. 29, 2022 USD ($) | Apr. 28, 2022 USD ($) | Jan. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | |
Disaggregation Of Revenue [Line Items] | ||||||||||||
Contract asset | $ 20,700 | $ 20,700 | $ 20,500 | |||||||||
Contract liability | 34,700 | 34,700 | $ 36,700 | |||||||||
Research Costs | 9,659 | $ 3,023 | 22,316 | $ 7,810 | ||||||||
Emre joint development agreement [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Research Costs | $ 45,000 | |||||||||||
Research costs reimbursement amount | $ 50,000 | $ 45,000 | ||||||||||
Milestone based payments | $ 5,000 | 5,000 | ||||||||||
Investment Amount | $ 5,000 | 5,000 | ||||||||||
Discount on purchase of fuel cell module | 5,000 | |||||||||||
POSCO Energy Settlement Agreement | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Deferred revenue | $ 22,200 | |||||||||||
Number of modules | item | 2 | |||||||||||
Stand alone selling price per sale module | $ 3,000 | |||||||||||
Extended warranty term | 7 years | |||||||||||
Stand alone selling price per warranty module | $ 650 | |||||||||||
Settlement agreement variable consideration from contract with customer | $ 3,900 | $ 7,900 | ||||||||||
Option to purchase warranty module units | item | 6 | 12 | ||||||||||
Option to purchase additional warranty module units | item | 14 | |||||||||||
Modules units, order placed | item | 20 | |||||||||||
Product | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Remaining performance obligations | $ 38,300 | $ 38,300 | ||||||||||
Service Agreements [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Remaining performance obligations | 112,200 | 112,200 | ||||||||||
Advanced Technologies Contracts [Member] | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Remaining performance obligations | $ 30,200 | $ 30,200 | ||||||||||
Posco Energy | ||||||||||||
Disaggregation Of Revenue [Line Items] | ||||||||||||
Deferred revenue | $ 22,200 |
Accounts Receivable, Net and _3
Accounts Receivable, Net and Unbilled Receivables - Schedule of Accounts Receivable, Net and Unbilled Receivables (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Accounts Receivable, Net and Unbilled Receivables | ||
Product, Service and Generation, Amount billed | $ 10,032 | $ 13,854 |
Product, Service and Generation, Unbilled receivables | 8,505 | 7,175 |
Product, Service and Generation, Accounts receivable | 18,537 | 21,029 |
Advanced Technologies including U.S. government, Amount billed | 2,069 | 876 |
Advanced Technologies including U.S. government, Unbilled receivables | 1,956 | 1,749 |
Advanced Technologies including U.S. government, Accounts receivable | 4,025 | 2,625 |
Accounts receivable, net and unbilled receivables | $ 22,562 | $ 23,654 |
Accounts Receivable, Net and _4
Accounts Receivable, Net and Unbilled Receivables - Schedule of Accounts Receivable, Net and Unbilled Receivables (Parenthetical) (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Accounts Notes And Loans Receivable [Line Items] | ||
Additional long-term unbilled receivables | $ 8,505 | $ 7,175 |
Government [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
U.S. government accounts receivable, including unbilled receivables | 2,600 | 2,300 |
Other Assets [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Additional long-term unbilled receivables | $ 10,200 | $ 11,600 |
Accounts Receivable, Net and _5
Accounts Receivable, Net and Unbilled Receivables - Additional Information (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 |
Accounts Receivable, Net and Unbilled Receivables | ||
Allowance for doubtful accounts receivable, current | $ 0 | $ 0 |
Inventories - Components of Inv
Inventories - Components of Inventories (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Inventories | ||
Raw materials | $ 31,347 | $ 25,968 |
Work-in-process | 53,845 | 45,692 |
Inventories | 85,192 | 71,660 |
Inventories - short-term | (80,606) | (67,074) |
Inventories - long-term | $ 4,586 | $ 4,586 |
Inventories - Components of I_2
Inventories - Components of Inventories (Parenthetical) (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 |
Inventories | ||
Completed standard component and modules | $ 35.3 | $ 39.7 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | |
Costs of Revenues | ||||
Inventory [Line Items] | ||||
Excess plant capacity and manufacturing variances cost incurred | $ 3 | $ 1.7 | $ 7.7 | $ 5 |
Project Assets - Summary of Pro
Project Assets - Summary of Project Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2022 | Oct. 31, 2021 | |
Project Assets [Line Items] | ||
Accumulated depreciation | $ (28,004) | $ (19,844) |
Project Assets, net | 246,018 | 223,277 |
Project Assets - Operating [Member] | ||
Project Assets [Line Items] | ||
Project Assets, gross | 164,725 | 116,286 |
Project Assets - Operating, net | $ 136,721 | 96,442 |
Project Assets - Operating [Member] | Minimum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 4 years | |
Project Assets - Operating [Member] | Maximum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 20 years | |
Project Assets - Construction in progress [Member] | ||
Project Assets [Line Items] | ||
Project Assets, gross | $ 109,297 | $ 126,835 |
Project Assets - Construction in progress [Member] | Minimum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 7 years | |
Project Assets - Construction in progress [Member] | Maximum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 20 years | |
Project Assets BOP And Site Construction [Member] | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 20 years | |
Project Assets Modules [Member] | Minimum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 4 years | |
Project Assets Modules [Member] | Maximum | ||
Project Assets [Line Items] | ||
Project assets estimated useful life | 7 years |
Project Assets - Additional Inf
Project Assets - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2022 USD ($) | Jul. 31, 2022 USD ($) project MW | Oct. 31, 2021 USD ($) project | |
Project Assets [Line Items] | |||
Number of project assets | project | 10 | 9 | |
Long-term project assets construction in progress | $ 109,300 | $ 109,300 | $ 126,800 |
Impairment charges | 14,000 | 2,800 | |
Long Term Project Assets | 246,018 | 246,018 | 223,277 |
Power Purchase Agreement | |||
Project Assets [Line Items] | |||
Sale leaseback transaction, net book value | 136,700 | 136,700 | 96,400 |
Toyota | |||
Project Assets [Line Items] | |||
Long Term Project Assets | 21,300 | $ 21,300 | |
Toyota Project [Member] | |||
Project Assets [Line Items] | |||
Power capacity under construction phase | MW | 2.3 | ||
Impairment charges | $ 6,900 | $ 14,000 | $ 2,800 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Oct. 31, 2021 | |
Goodwill And Intangible Assets [Line Items] | |||||
Goodwill | $ 4,075 | $ 4,075 | $ 4,075 | ||
Intangible assets, net | 17,697 | 17,697 | $ 18,670 | ||
Impairment of goodwill | 0 | ||||
Bridgeport Fuel Cell, LLC | |||||
Goodwill And Intangible Assets [Line Items] | |||||
Amortization expenses | $ 300 | $ 300 | $ 900 | $ 900 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 21,912 | $ 21,912 |
Accumulated Amortization | (4,215) | (3,242) |
Net Amount | 17,697 | 18,670 |
Bridgeport PPA | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 12,320 | 12,320 |
Accumulated Amortization | (4,215) | (3,242) |
Net Amount | 8,105 | 9,078 |
In Process Research And Development | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 9,592 | 9,592 |
Net Amount | $ 9,592 | $ 9,592 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Other Current Assets | ||
Advance payments to vendors | $ 6,671 | $ 4,005 |
Prepaid expenses and other | 7,588 | 5,172 |
Other current assets | $ 14,259 | $ 9,177 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Other Assets | ||
Long-term stack residual value | $ 263 | |
Long-term unbilled receivables | $ 10,233 | 11,581 |
Other | 4,479 | 5,154 |
Other assets | $ 14,712 | $ 16,998 |
Other Assets - Schedule of Ot_2
Other Assets - Schedule of Other Assets (Parenthetical) (Details) $ in Millions | Jul. 31, 2022 USD ($) | Oct. 31, 2021 USD ($) | Jun. 29, 2016 customer |
Other Assets | |||
Number of customers under agreement | customer | 1 | ||
Contractual Obligation | $ | $ 2.4 | $ 2.2 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Accrued Liabilities | ||
Accrued payroll and employee benefits | $ 6,737 | $ 2,544 |
Accrued product warranty cost | 378 | 72 |
Accrued service agreement and PPA costs | 10,009 | 9,112 |
Accrued legal, taxes, professional and other | 5,411 | 4,371 |
Accrued liabilities | $ 22,535 | $ 16,099 |
Accrued Liabilities - Schedul_2
Accrued Liabilities - Schedule of Accrued Liabilities (Parenthetical) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Oct. 31, 2021 | |
Schedule Of Accrued Liabilities [Line Items] | |||||
Product warranty accrual, payment and adjustments | $ 200 | $ 7 | $ 400 | $ 19 | |
Loss reserve on service agreements | 6,400 | 6,400 | $ 6,500 | ||
Bridgeport Fuel Cell Project | |||||
Schedule Of Accrued Liabilities [Line Items] | |||||
Reserve for performance guarantees | $ 3,600 | $ 3,600 | $ 2,500 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | |
Lessee Lease Description [Line Items] | ||||
Operating lease expense | $ 400 | $ 400 | $ 1,147 | $ 1,143 |
Operating lease, weighted average remaining lease term | 20 years | 20 years | ||
Operating lease, weighted average discount rate | 8.30% | 8.30% | ||
Operating lease, payments | $ 400 | $ 300 | $ 1,084 | $ 902 |
Minimum | ||||
Lessee Lease Description [Line Items] | ||||
Operating and finance lease, remaining lease term | 1 year | |||
Maximum | ||||
Lessee Lease Description [Line Items] | ||||
Operating and finance lease, remaining lease term | 26 years |
Leases - Summary of Undiscounte
Leases - Summary of Undiscounted Maturities of Operating Lease and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Operating Leases | ||
2022 (remaining) | $ 1,251 | |
2023 | 804 | |
2024 | 767 | |
2025 | 693 | |
2026 | 719 | |
Thereafter | 12,597 | |
Total undiscounted lease payments | 16,831 | |
Less imputed interest | (8,414) | |
Total discounted lease payments | 8,417 | |
Finance Leases | ||
2022 (remaining) | 50 | |
2023 | 29 | |
Total undiscounted lease payments | 79 | |
Less imputed interest | (12) | |
Total discounted lease payments | $ 67 | $ 102 |
Finance Lease Liability Statement Of Financial Position Extensible List | Debt Current, Other Liabilities Noncurrent | Debt Current, Other Liabilities Noncurrent |
Stockholders' Equity and Warr_3
Stockholders' Equity and Warrant Liabilities - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 11 Months Ended | 14 Months Ended | ||||||||
Aug. 01, 2022 | Jul. 12, 2022 | May 01, 2022 | Jun. 11, 2021 | Jul. 31, 2022 | Jul. 31, 2022 | Apr. 30, 2022 | Jul. 31, 2021 | Jan. 31, 2021 | Jul. 31, 2022 | Apr. 30, 2022 | Jul. 31, 2022 | Sep. 08, 2022 | |
Series C Warrants | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Exercise price of warrants or rights | $ 19.20 | $ 19.20 | $ 19.20 | $ 19.20 | |||||||||
Class of warrant or right term | 5 years | ||||||||||||
Common Stock | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Stock issued during period shares new issues | 7,814,115 | 19,896,904 | 43,978,999 | 25,000,000 | |||||||||
2022 Open Market Sale Agreement | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Percentage of sales commission | 2% | ||||||||||||
2022 Open Market Sale Agreement | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | Subsequent Event | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Shares remaining under the plan | 76,500,000 | ||||||||||||
2022 Open Market Sale Agreement | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | Common Stock | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Stock issued during period shares new issues | 10,700,000 | 18,500,000 | 7,800,000 | ||||||||||
Gross proceeds from issuance of common stock | $ 39.2 | $ 27.9 | |||||||||||
Net proceeds from issuance of common stock | 38.4 | 27.2 | |||||||||||
Payments of commissions | $ 0.8 | $ 0.7 | |||||||||||
Average sale price per share | $ 3.63 | ||||||||||||
Shares remaining under the plan | 87,200,000 | 87,200,000 | 87,200,000 | 87,200,000 | |||||||||
2022 Open Market Sale Agreement | Maximum | Jefferies LLC, B. Riley Securities, Inc., Barclays Capital Inc., BMO Capital Markets Corp., BofA Securities, Inc., Canacord Genuity LLC, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Loop Capital Markets LLC | Common Stock | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Stock issued during period shares new issues | 95,000,000 | ||||||||||||
2021 Open Market Sale Agreement | Agents | Common Stock | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Stock issued during period shares new issues | 0 | 0 | 64,000,000 | 64,000,000 | |||||||||
Gross proceeds from issuance of common stock | $ 498.1 | $ 498.1 | |||||||||||
Net proceeds from issuance of common stock | 488.1 | 488.1 | |||||||||||
Payments of commissions | $ 10 | $ 10 | |||||||||||
Aggregate offering price | $ 500 | ||||||||||||
Percentage of sales commission | 2% | ||||||||||||
Average sale price per share | $ 7.79 | ||||||||||||
2021 Open Market Sale Agreement | Maximum | Agents | Common Stock | |||||||||||||
Stockholders' Equity Note | |||||||||||||
Aggregate offering price | $ 500 |
Stockholders' Equity and Warr_4
Stockholders' Equity and Warrant Liabilities - Schedule of Warrant Activity (Details) - Series C Warrants | 9 Months Ended |
Jul. 31, 2022 shares | |
Class of Warrant or Right, Outstanding | 950,102 |
Warrants expired | (950,102) |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Details) - $ / shares | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2005 | Jul. 31, 2022 | Jul. 31, 2021 | |
Class Of Stock [Line Items] | |||
Preferred stock, par value | $ 0.01 | ||
Maximum | |||
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 250,000 | ||
Series B Preferred Stock | |||
Class Of Stock [Line Items] | |||
Preferred stock, shares authorized | 105,875 | 105,875 | |
Preferred stock, dividend rate, percentage | 5% | 5% | 5% |
Redeemable Preferred Stock - Re
Redeemable Preferred Stock - Redeemable Series B Preferred Stock (Details) - Series B Preferred Stock - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | Oct. 31, 2021 | Mar. 31, 2005 | |
Class Of Stock [Line Items] | ||||||
Preferred stock, shares authorized | 105,875 | 105,875 | 105,875 | |||
Preferred stock, liquidation preference per share | $ 1,000 | $ 1,000 | ||||
Preferred Stock Shares Outstanding | 64,020 | 64,020 | 64,020 | |||
Temporary equity, carrying amount, attributable to parent | $ 59,857 | $ 59,857 | $ 59,857 | |||
Preferred stock, shares issued | 64,020 | 64,020 | 64,020 | |||
Dividends, preferred stock, cash | $ 800 | $ 800 | $ 2,400 | $ 2,400 |
Loss Per Share - Calculation of
Loss Per Share - Calculation of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Jul. 31, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | Jul. 31, 2021 | Apr. 30, 2021 | Jan. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | |
Numerator | ||||||||
Net loss attributable to FuelCell Energy, Inc. | $ (29,414) | $ (11,997) | $ (100,255) | $ (76,874) | ||||
Preferred dividends - Series B | (800) | $ (800) | $ (800) | (800) | $ (800) | $ (800) | ||
Net loss attributable to common stockholders | $ (30,214) | $ (12,797) | $ (102,655) | $ (79,274) | ||||
Denominator | ||||||||
Weighted average common shares outstanding - basic | 387,465,758 | 337,291,562 | 375,638,293 | 323,983,465 | ||||
Weighted average common shares outstanding - diluted | 387,465,758 | 337,291,562 | 375,638,293 | 323,983,465 | ||||
Net loss to common stockholders per share - basic | $ (0.08) | $ (0.04) | $ (0.27) | $ (0.24) | ||||
Net loss to common stockholders per share - diluted | $ (0.08) | $ (0.04) | $ (0.27) | $ (0.24) | ||||
Series B Preferred Stock | ||||||||
Numerator | ||||||||
Preferred dividends - Series B | $ (800) | $ (800) | $ (2,400) | $ (2,400) |
Loss Per Share - Schedule of Po
Loss Per Share - Schedule of Potentially Dilutive Securities Excluded from the Diluted Loss Per Share Calculation (Details) - shares | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2005 | Jul. 31, 2022 | Jul. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from diluted loss per share calculation | 3,631,422 | 3,676,091 | |
Series B Preferred Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Preferred stock, dividend rate, percentage | 5% | 5% | 5% |
Series C Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from diluted loss per share calculation | 950,102 | ||
Outstanding Options To Purchase Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from diluted loss per share calculation | 20,231 | 22,388 | |
Unvested Restricted Stock Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from diluted loss per share calculation | 3,573,354 | 2,665,764 | |
Series B Cumulative Preferred Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Potentially dilutive securities excluded from diluted loss per share calculation | 37,837 | 37,837 |
Restricted Cash - Additional In
Restricted Cash - Additional Information (Details) - USD ($) $ in Millions | Jul. 31, 2022 | Oct. 31, 2021 |
Restricted Cash. | ||
Restricted cash and cash equivalents | $ 23.2 | $ 28 |
Restricted Cash - Summary of Al
Restricted Cash - Summary of Allocation of Restricted Cash (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Restricted Cash. | ||
Cash Restricted for Outstanding Letters of Credit | $ 4,824 | $ 6,478 |
Cash Restricted for PNC Sale-Leaseback Transactions | 4,599 | 5,514 |
Cash Restricted for Crestmark Sale-Leaseback Transaction | 2,892 | 2,887 |
Bridgeport Fuel Cell Park Project Debt Service and Performance Reserves | 9,714 | 11,937 |
Other | 1,130 | 1,183 |
Total Restricted Cash | 23,159 | 27,999 |
Restricted Cash and Cash Equivalents - Short-Term | (5,627) | (11,268) |
Restricted cash and cash equivalents - long-term | $ 17,532 | $ 16,731 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jul. 31, 2022 | Oct. 31, 2021 |
Debt Instrument [Line Items] | ||
Finance lease obligations | $ 67 | $ 102 |
Finance Lease Liability Statement Of Financial Position Extensible List | Debt Current, Other Liabilities Noncurrent | Debt Current, Other Liabilities Noncurrent |
Deferred finance costs | $ (1,245) | $ (1,556) |
Total debt and financing obligations | 83,657 | 87,708 |
Current portion of long-term debt and financing obligations | (9,810) | (10,085) |
Long-term debt and financing obligations | 73,847 | 77,623 |
Connecticut Green Bank Loan [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 4,800 | 4,800 |
Connecticut Green Bank Loan (Bridgeport Fuel Cell Project) [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 3,716 | 4,318 |
Liberty Bank Term Loan Agreement (Bridgeport Fuel Cell Project) [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 5,903 | 7,465 |
Fifth Third Bank Term Loan Agreement (Bridgeport Fuel Cell Project) [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 5,903 | 7,465 |
Finance Obligation for Sale-Lease Back Transactions [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | 56,526 | 56,492 |
State of Connecticut [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Line of Credit | $ 7,987 | $ 8,622 |
Benefit Plans - Additional Info
Benefit Plans - Additional Information (Details) | 9 Months Ended | |
Dec. 10, 2021 shares | Jul. 31, 2022 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | Should the Company’s share price achieve the 200% performance level, awardees will receive up to 169,026 additional performance units. | |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Oct. 31, 2024 | |
Share Based Compensation Arrangement by Share-Based Payment Award, Rate of Vesting | 0.333 | |
Performance Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted Stock Awards and Units, Granted, Shares | 169,026 | |
Performance shares expensed period | 3 years | |
Number of additional units outstanding | 1,179,960 | |
Time Based Awards | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted Stock Awards and Units, Granted, Shares | 642,464 | |
TSR Performance Shares | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted Stock Awards and Units, Granted, Shares | 169,026 | |
Performance awards valued per share | $ / shares | $ 11.70 | |
2018 Omnibus Incentive Plan | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The FY 2022 LTI Plan consists of two award components: (1) relative total shareholder return (“TSR”) performance units, and (2) time-vesting restricted stock units. | |
Maximum | LTI Plan | Restricted Stock Units | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Additional shares issued upon performance | 169,026 |
Benefit Plans - Schedule of Sha
Benefit Plans - Schedule of Share-Based Compensation Reflected in Consolidated Statement of Operations and Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2022 | Jul. 31, 2021 | Jul. 31, 2022 | Jul. 31, 2021 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 1,908 | $ 872 | $ 4,957 | $ 3,487 |
Costs of Revenues | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | 175 | 133 | 512 | 449 |
Administrative and Selling Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | 1,598 | 706 | 4,126 | 2,941 |
Research and Development Expense | ||||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||||
Allocated Share-based Compensation Expense | $ 135 | $ 33 | $ 319 | $ 97 |
Benefit Plans - Summary of RSA
Benefit Plans - Summary of RSA and RSU Activity (Details) - $ / shares | 3 Months Ended | ||
Jul. 31, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted Stock Awards and Units, Outstanding, Shares, Beginning Balance | 3,315,557 | 3,276,776 | 2,543,541 |
Restricted Stock Awards and Units, Vested, Shares | (2,022) | (25,464) | (88,388) |
Restricted Stock Awards and Units, Forfeited, Shares | (13,588) | (21,559) | |
Restricted Stock Awards and Units, Outstanding, Shares, Ending Balance | 3,573,354 | 3,315,557 | 3,276,776 |
Restricted Stock Awards and Units, Outstanding, Weighted-Average Fair Value, Beginning Balance | $ 6.21 | $ 6.27 | $ 5.08 |
Restricted Stock Awards and Units, Vested, Weighted-Average Fair Value | 15.06 | 9.57 | 3.54 |
Restricted Stock Awards and Units, Forfeited, Weighted-Average Fair Value | 9.20 | 9.05 | |
Restricted Stock Awards and Units, Outstanding, Weighted-Average Fair Value, Ending Balance | $ 6.13 | $ 6.21 | $ 6.27 |
Performance Shares | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted Stock Awards and Units, Granted, Shares | 169,026 | ||
Restricted Stock Awards and Units, Granted, Weighted-Average Fair Value | $ 11.70 | ||
Time Based Awards | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Restricted Stock Awards and Units, Granted, Shares | 273,407 | 85,804 | 652,597 |
Restricted Stock Awards and Units, Granted, Weighted-Average Fair Value | $ 5.36 | $ 5.52 | $ 9.20 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 14, 2020 USD ($) item | Jun. 28, 2020 USD ($) | Apr. 27, 2020 USD ($) | Oct. 31, 2020 USD ($) | Apr. 30, 2022 USD ($) | Apr. 30, 2022 USD ($) | Jul. 31, 2022 USD ($) project MW | Oct. 31, 2021 USD ($) | Dec. 20, 2021 USD ($) | |
Commitments And Contingencies [Line Items] | |||||||||
Recorded unconditional purchase obligation | $ 75,600 | ||||||||
Loss contingency, damages sought | $ 880,000 | ||||||||
Total number of projects | project | 3 | ||||||||
Impairment charges | $ 14,000 | $ 2,800 | |||||||
Long Term Project Assets | $ 246,018 | $ 223,277 | |||||||
POSCO Energy Settlement Agreement | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Unspecified warranty claims | $ 1,000 | ||||||||
Accounts receivable outstanding | $ 11,200 | $ 11,200 | |||||||
Contingent liability | $ 1,800 | ||||||||
Number of counts | item | 4 | ||||||||
Tulare Biomart Project | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Term for procuring fuel | 20 years | ||||||||
LIPA project | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Term for procuring fuel | 7 years | ||||||||
LIPA project | Maximum | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Term for procuring fuel | 18 years | ||||||||
CT-RFP 2 Derby 14.9 Mega Watt Project | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Under construction power plant capacity | MW | 14 | ||||||||
SCEF-Derby 208 Mega Watt Project | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Under construction power plant capacity | MW | 2.8 | ||||||||
Toyota | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Long Term Project Assets | $ 21,300 | ||||||||
Derby Project 14.0 Mega Watt | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Under construction power plant capacity | MW | 14 | ||||||||
Long Term Project Assets | $ 26,200 | ||||||||
Derby Project 2.8 Mega Watt | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Under construction power plant capacity | MW | 2.8 | ||||||||
Long Term Project Assets | $ 600 | ||||||||
Bridgeport | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Operating power plant capacity | MW | 14.9 | ||||||||
Hartford | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Operating power plant capacity | MW | 7.4 | ||||||||
Posco Energy | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Loss contingency, damages sought | $ 200,000 | $ 3,300 | |||||||
Unspecified warranty claims | 7,000 | ||||||||
License termination | $ 110,000 | ||||||||
Bond amount | $ 46,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Settlement Agreement (Details) | 9 Months Ended | ||||||
Dec. 20, 2021 USD ($) item | Jul. 31, 2022 USD ($) item | Jul. 31, 2022 KRW (₩) item | Jun. 30, 2022 item | Jan. 31, 2022 item | Dec. 23, 2021 USD ($) | Oct. 31, 2021 USD ($) | |
Commitments And Contingencies [Line Items] | |||||||
Amount of contractual Obligation | $ 2,400,000 | $ 2,200,000 | |||||
POSCO Energy Settlement Agreement | |||||||
Commitments And Contingencies [Line Items] | |||||||
Contingent liability | $ 1,800,000 | ||||||
Period within which an application should be filed | 5 days | ||||||
Warrant period against module defect from the date of shipment. | 18 months | ||||||
Warrant period against module defect from the date of installation | 12 months | ||||||
Period for reimbursement due to shortfall or defect | 7 years | ||||||
Percentage of maximum annual reimbursement obligation | 7.50% | ||||||
Number of firm, non-cancelable orders | item | 12 | ||||||
Number of weeks within which the orders to be placed | item | 2 | ||||||
Price per module of the orders to be placed | $ 3,000,000 | ||||||
Number of modules delivered | item | 6 | 6 | |||||
Period of right of first refusal on operation and maintenance services | 24 months | ||||||
Number of balance of plant units | item | 8 | 8 | |||||
Purchase price per unit of balance of plant units | $ 2,116,500 | ₩ 2,550,000,000 | |||||
Amount of contractual Obligation | $ 24,000,000 | ||||||
Payments for contractual obligation | $ 24,000,000 | ||||||
POSCO Energy Settlement Agreement | Settlement agreement orders on or before June 30, 2022 | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of additional firm, non-cancelable orders to be placed | item | 8 | ||||||
Price per module of the orders to be placed | $ 3,000,000 | ||||||
POSCO Energy Settlement Agreement | Settlement agreement orders on or before December 31, 2022 | |||||||
Commitments And Contingencies [Line Items] | |||||||
Number of additional firm, non-cancelable orders to be placed | item | 14 | ||||||
Price per module of the orders to be placed | $ 3,000,000 |