FUELCELL ENERGY INC [FCEL] Filings

10-Q 1 fcel-20240731x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 1-14204

FUELCELL ENERGY, INC.

(Exact name of registrant as specified in its charter)


Delaware		06-0853042
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3 Great Pasture Road Danbury, Connecticut		06810
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (203) 825-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

FCEL

The Nasdaq Stock Market LLC

(Nasdaq Global Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock, par value $0.0001 per share, outstanding as of September 3, 2024: 556,009,549

Table of Contents

FUELCELL ENERGY, INC.

FORM 10-Q

Table of Contents


		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

	Consolidated Balance Sheets as of July 31, 2024 and October 31, 2023.	3

	Consolidated Statements of Operations and Comprehensive Loss for the three months ended July 31, 2024 and 2023.	4

	Consolidated Statements of Operations and Comprehensive Loss for the nine months ended July 31, 2024 and 2023.	5

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2024.	6

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2023.	7

	Consolidated Statements of Cash Flows for the nine months ended July 31, 2024 and 2023.	8

	Notes to Consolidated Financial Statements.	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	25

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	56

Item 4.	Controls and Procedures.	57

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	58

Item 1A.	Risk Factors.	58

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	60

Item 3.	Defaults Upon Senior Securities.	60

Item 4.	Mine Safety Disclosures.	60

Item 5.	Other Information.	60

Item 6.	Exhibits.	61

Signatures		63

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

FUELCELL ENERGY, INC.

Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands, except share and per share amounts)



		July 31,		October 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents, unrestricted	$	159,347	$	249,952
Restricted cash and cash equivalents - short-term		9,686		5,159
Investments - short-term		107,817		103,760
Accounts receivable, net		11,161		3,809
Unbilled receivables		30,169		16,296
Inventories		129,349		84,456
Other current assets		12,439		12,881
Total current assets		459,968		476,313
Restricted cash and cash equivalents - long-term		49,148		44,465
Inventories - long-term		2,743		7,329
Project assets, net		248,790		258,066
Property, plant and equipment, net		121,382		89,668
Operating lease right-of-use assets, net		7,884		8,352
Goodwill		4,075		4,075
Intangible assets, net		15,104		16,076
Other assets		39,816		51,176
Total assets⁽¹⁾	$	948,910	$	955,520
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	12,232	$	10,067
Current portion of operating lease liabilities		760		599
Accounts payable		16,928		26,518
Accrued liabilities		25,970		26,313
Deferred revenue		10,649		2,406
Total current liabilities		66,539		65,903
Long-term deferred revenue		1,979		732
Long-term operating lease liabilities		8,708		8,992
Long-term debt and other liabilities		126,720		119,588
Total liabilities⁽¹⁾		203,946		195,215
Redeemable Series B preferred stock (liquidation preference of $64,020 as of July 31, 2024 and October 31, 2023)		59,857		59,857
Total equity:
Stockholders’ equity:
Common stock ($0.0001 par value); 1,000,000,000 shares authorized as of July 31, 2024 and October 31, 2023; 553,840,943 and 450,626,862 shares issued and outstanding as of July 31, 2024 and October 31, 2023, respectively		55		45
Additional paid-in capital		2,277,417		2,199,661
Accumulated deficit		(1,600,134)		(1,515,541)
Accumulated other comprehensive loss		(1,576)		(1,672)
Treasury stock, Common, at cost (376,340 and 246,468 shares as of July 31, 2024 and October 31, 2023, respectively)		(1,198)		(1,078)
Deferred compensation		1,198		1,078
Total stockholders’ equity		675,762		682,493
Noncontrolling interests		9,345		17,955
Total equity		685,107		700,448
Total liabilities, redeemable Series B preferred stock and total equity	$	948,910	$	955,520

(1)

As of July 31, 2024 and October 31, 2023, the combined assets of the variable interest entities (“VIEs”) were $318,699 and $235,290, respectively, that can only be used to settle obligations of the VIEs. These assets include cash of $4,239, accounts receivable of $726, unbilled accounts receivable of $8,403, operating lease right of use assets of $1,667, other current assets of $137,326, restricted cash and cash equivalents of $625, project assets of $161,964 and other assets of $3,749 as of July 31, 2024, and cash of $4,797, unbilled accounts receivable of $1,876, operating lease right of use assets of $1,680, other current assets of $50,713, restricted cash and cash equivalents of $526, project assets of $170,444, derivative assets of $4,127 and other assets of $1,125 as of October 31, 2023. The combined liabilities of the VIEs as of July 31, 2024 include short-term operating lease liabilities of $203, accounts payable of $184,900, accrued liabilities of $497, deferred revenue of $132, long-term operating lease liability of $2,146 and other non-current liabilities of $2,725 and, as of October 31, 2023, include short-term operating lease liabilities of $203, accounts payable of $165,824, long-term operating lease liability of $2,159 and other non-current liabilities of $187.

See accompanying notes to consolidated financial statements.

Table of Contents

FUELCELL ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands, except share and per share amounts)


	Three Months Ended July 31,
	2024		2023
Revenues:
Product	$	250	$	-
Service		1,411		9,841
Generation		13,402		10,982
Advanced Technologies		8,632		4,687
Total revenues		23,695		25,510
Costs of revenues:
Product		4,181		2,910
Service		1,146		9,575
Generation		18,761		17,483
Advanced Technologies		5,809		3,757
Total costs of revenues		29,897		33,725
Gross loss		(6,202)		(8,215)
Operating expenses:
Administrative and selling expenses		14,599		17,560
Research and development expenses		12,816		15,620
Total costs and expenses		27,415		33,180
Loss from operations		(33,617)		(41,395)
Interest expense		(2,555)		(1,912)
Interest income		3,269		3,966
Gain on extinguishment of finance obligations and debt, net		-		15,337
Other (expense) income, net		(2,218)		403
Loss before provision for income taxes		(35,121)		(23,601)
Provision for income taxes		(2)		-
Net loss		(35,123)		(23,601)
Net (loss) income attributable to noncontrolling interests		(2,463)		678
Net loss attributable to FuelCell Energy, Inc.		(32,660)		(24,279)
Series B preferred stock dividends		(800)		(800)
Net loss attributable to common stockholders	$	(33,460)	$	(25,079)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.07)	$	(0.06)
Basic and diluted weighted average shares outstanding		503,183,725		415,867,594


	Three Months Ended July 31,
	2024		2023
Net loss	$	(35,123)	$	(23,601)
Other comprehensive loss:
Foreign currency translation adjustments		141		(164)
Total comprehensive loss	$	(34,982)	$	(23,765)
Comprehensive (loss) income attributable to noncontrolling interests		(2,463)		678
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(32,519)	$	(24,443)

Table of Contents

FUELCELL ENERGY, INC.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(Amounts in thousands, except share and per share amounts)


	Nine Months Ended July 31,
	2024		2023
Revenues:
Product	$	250	$	9,095
Service		4,397		49,913
Generation		38,013		28,979
Advanced Technologies		20,146		12,945
Total revenues		62,806		100,932
Costs of revenues:
Product		9,510		7,425
Service		4,301		40,633
Generation		61,079		51,166
Advanced Technologies		12,917		10,779
Total costs of revenues		87,807		110,003
Gross loss		(25,001)		(9,071)
Operating expenses:
Administrative and selling expenses		48,659		47,637
Research and development expenses		43,796		43,000
Total costs and expenses		92,455		90,637
Loss from operations		(117,456)		(99,708)
Interest expense		(7,168)		(4,926)
Interest income		10,726		11,064
Gain on extinguishment of finance obligations and debt, net		-		15,337
Other (expense) income, net		(3,278)		216
Loss before provision for income taxes		(117,176)		(78,017)
Provision for income taxes		(2)		(581)
Net loss		(117,178)		(78,598)
Net loss attributable to noncontrolling interests		(32,585)		(1,394)
Net loss attributable to FuelCell Energy, Inc.		(84,593)		(77,204)
Series B preferred stock dividends		(2,400)		(2,400)
Net loss attributable to common stockholders	$	(86,993)	$	(79,604)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.19)	$	(0.19)
Basic and diluted weighted average shares outstanding		469,387,264		409,361,826


	Nine Months Ended July 31,
	2024		2023
Net loss	$	(117,178)	$	(78,598)
Other comprehensive income (loss):
Foreign currency translation adjustments		96		132
Total comprehensive loss	$	(117,082)	$	(78,466)
Comprehensive loss attributable to noncontrolling interests		(32,585)		(1,394)
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(84,497)	$	(77,072)

See accompanying notes to consolidated financial statements.

Table of Contents

FUELCELL ENERGY, INC.

Consolidated Statements of Changes in Equity

(Unaudited)

(Amounts in thousands, except share amounts)


	Common Stock
	Shares	Amount		Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Deferred Compensation			Total Stockholders' Equity		Noncontrolling Interests	Total Equity
Balance, October 31, 2023	450,626,862	$	45	$	2,199,661	$	(1,515,541)	$	(1,672)	$	(1,078)	$	1,078	$	682,493	$	17,955	$	700,448
Common stock issued, non-employee compensation	44,398		—		51		—		—		—		—		51		—		51
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	1,235,192		—		(926)		—		—		—		—		(926)		—		(926)
Share based compensation	—		—		2,876		—		—		—		—		2,876		—		2,876
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Effect of foreign currency translation	—		—		—		—		33		—		—		33		—		33
Adjustment for deferred compensation	(44,398)		—		—		—		—		(51)		51		—		—		—
Contributions received from sale of noncontrolling interest	—		—		—		—		—		—		—		—		25,122		25,122
Distribution to noncontrolling interests	—		—		—		—		—		—		—		—		(236)		(236)
Net Loss	—		—		—		(19,793)		—		—		—		(19,793)		(24,606)		(44,399)
Balance, January 31, 2024	451,862,054	$	45	$	2,200,862	$	(1,535,334)	$	(1,639)	$	(1,129)	$	1,129	$	663,934	$	18,235	$	682,169
Sale of common stock, net of fees	6,463,716		1		5,892		—		—		—		—		5,893		—		5,893
Common stock issued, non-employee compensation	46,357		—		47		—		—		—		—		47		—		47
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	68,597		—		(52)		—		—		—		—		(52)		—		(52)
Share based compensation	—		—		3,002		—		—		—		—		3,002		—		3,002
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Effect of foreign currency translation	—		—		—		—		(78)		—		—		(78)		—		(78)
Adjustment for deferred compensation	(33,948)		—		—		—		—		(35)		35		—		—		—
Distribution to non-controlling interest	—		—		—		—		—		—		—		—		(425)		(425)
Net Loss	—		—		—		(32,140)		—		—		—		(32,140)		(5,516)		(37,656)
Balance, April 30, 2024	458,406,776	$	46	$	2,208,951	$	(1,567,474)	$	(1,717)	$	(1,164)	$	1,164	$	639,806	$	12,294	$	652,100
Sale of common stock, net of fees	95,220,151		9		65,839		—		—		—		—		65,848		—		65,848
Common stock issued, non-employee compensation	70,360		—		47		—		—		—		—		47		—		47
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	195,182		—		30		—		—		—		—		30		—		30
Share based compensation	—		—		3,350		—		—		—		—		3,350		—		3,350
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Adjustment for deferred compensation	(51,526)		—		—		—		—		(34)		34		—		—		—
Effect of foreign currency translation	—		—		—		—		141		—		—		141		—		141
Distribution to non-controlling interest	—		—		—		—		—		—		—		—		(485)		(485)
Net Loss	—		—		—		(32,660)		—		—		—		(32,660)		(2,464)		(35,124)
Balance, July 31, 2024	553,840,943	$	55	$	2,277,417	$	(1,600,134)	$	(1,576)	$	(1,198)	$	1,198	$	675,762	$	9,345	$	685,107

Table of Contents

FUELCELL ENERGY, INC.

Consolidated Statements of Changes in Equity

(Unaudited)

(Amounts in thousands, except share amounts)


	Common Stock
	Shares		Amount		Additional Paid-in Capital	Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Deferred Compensation			Total Stockholders' Equity		Noncontrolling Interests		Total Equity
Balance, October 31, 2022	405,562,988	$	41	$	2,094,076	$	(1,407,973)	$	(1,752)	$	(855)	$	855	$	684,392	$	7,105	$	691,497
Common stock issued, non-employee compensation	21,106		—		68		—		—		—		—		68		—		68
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	169,065		—		(314)		—		—		—		—		(314)		—		(314)
Share based compensation

FUELCELL ENERGY INC [FCEL] Filings
FUELCELL ENERGY INC [FCELB] Filings
10-Q	[2024-09-05]
10-Q	[2024-06-10]
10-Q	[2024-03-07]
10-K	[2023-12-19]
10-Q	[2023-09-11]
10-Q	[2023-06-08]
10-Q	[2023-03-09]
10-K	[2022-12-20]
10-Q	[2022-09-08]
10-Q	[2022-06-09]
10-Q	[2022-03-10]
10-K	[2021-12-29]
10-Q	[2021-09-14]
10-Q	[2021-06-10]
10-Q	[2021-03-16]
10-K	[2021-01-21]
10-Q	[2020-09-10]
10-Q	[2020-06-12]
10-Q	[2020-03-16]
10-K	[2020-01-22]
10-Q	[2019-09-09]
10-Q	[2019-06-17]
10-Q	[2019-03-07]
10-K	[2019-01-10]
10-Q	[2018-09-06]
10-Q	[2018-06-07]
10-Q	[2018-03-08]
10-K	[2018-01-11]
10-Q	[2017-09-08]
10-Q	[2017-06-08]
10-Q	[2017-03-09]
10-K	[2017-01-12]
10-Q	[2016-09-08]
10-Q	[2016-06-09]
10-Q	[2016-03-10]
10-K	[2016-01-08]
10-Q	[2015-09-09]
10-Q	[2015-06-09]
10-Q	[2015-03-11]
10-K	[2015-01-09]
10-Q	[2014-09-09]
10-Q	[2014-06-05]
10-Q	[2014-03-12]
10-K	[2014-01-06]
10-Q	[2013-09-06]
10-Q	[2013-06-07]
10-Q	[2013-03-12]
10-K	[2013-01-14]
10-Q	[2012-09-07]
10-Q	[2012-06-08]
10-Q	[2012-03-12]
10-K	[2012-01-17]

FUELCELL ENERGY INC [FCEL] Filings

FUELCELL ENERGY INC [FCELB] Filings