FUELCELL ENERGY INC [FCEL] Filings

10-Q 1 fcel-20220731x10q.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, 2022

☐	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 2, 2022: 405,562,988

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, 2022 and October 31, 2021.	3

	Consolidated Statements of Operations and Comprehensive Loss for the three months ended July 31, 2022 and 2021.	4

	Consolidated Statements of Operations and Comprehensive Loss for the nine months ended July 31, 2022 and 2021.	5

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2022.	6

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2021.	7

	Consolidated Statements of Cash Flows for the nine months ended July 31, 2022 and 2021.	8

	Notes to Consolidated Financial Statements.	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	55

Item 4.	Controls and Procedures.	56

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	57

Item 1A.	Risk Factors.	61

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	61

Item 3.	Defaults Upon Senior Securities.	61

Item 4.	Mine Safety Disclosures.	61

Item 5.	Other Information.	61

Item 6.	Exhibits.	62

Signatures		64

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,
	2022		2021
ASSETS
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
LIABILITIES AND STOCKHOLDERS' EQUITY
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 Series B preferred stock (liquidation preference of $64,020 as of July 31, 2022 and October 31, 2021)		59,857		59,857
Redeemable noncontrolling interest		3,030		3,030
Total equity:
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

(1)

The consolidated assets as of July 31, 2022 and October 31, 2021 include $105,641 and $54,375, respectively, of assets of the variable interest entity (“VIE”) that can only be used to settle obligations of the VIE. These assets include cash of $2,842, unbilled accounts receivable of $1,067, operating lease right of use assets of $1,186 and project assets of $100,546 as of July 31, 2022, and cash of $1,364 and project assets of $53,012 as of October 31, 2021, respectively. The consolidated liabilities as of July 31, 2022 include short-term operating lease liabilities of $157, accrued liabilities of $500 and long-term operating lease liability of $1,478. The consolidated liabilities as of October 31, 2021 were $0.

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,
	2022		2021
Revenues:
Product	$	18,000	$	—
Service		9,049		14,344
Generation		10,877		6,230
Advanced Technologies		5,178		6,246
Total revenues		43,104		26,820
Costs of revenues:
Product		17,919		1,903
Service		7,718		13,026
Generation		18,136		6,728
Advanced Technologies		3,511		4,063
Total costs of revenues		47,284		25,720
Gross (loss) profit		(4,180)		1,100
Operating expenses:
Administrative and selling expenses		14,158		8,662
Research and development expenses		9,659		3,023
Total costs and expenses		23,817		11,685
Loss from operations		(27,997)		(10,585)
Interest expense		(1,622)		(1,554)
Other income, net		1,136		149
Loss before provision for income taxes		(28,483)		(11,990)
Provision for income taxes		(494)		(7)
Net loss		(28,977)		(11,997)
Net income attributable to noncontrolling interest		437		—
Net loss attributable to FuelCell Energy, Inc.		(29,414)		(11,997)
Series B preferred stock dividends		(800)		(800)
Net loss attributable to common stockholders	$	(30,214)	$	(12,797)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.08)	$	(0.04)
Basic and diluted weighted average shares outstanding		387,465,758		337,291,562


	Three Months Ended July 31,
	2022		2021
Net loss	$	(28,977)	$	(11,997)
Other comprehensive loss:
Foreign currency translation adjustments		(86)		(6)
Total comprehensive loss	$	(29,063)	$	(12,003)
Comprehensive income attributable to noncontrolling interest		437		—
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(29,500)	$	(12,003)

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)


	Nine Months Ended July 31,
	2022		2021
Revenues:
Product	$	36,000	$	—
Service		13,855		19,917
Generation		27,423		17,306
Advanced Technologies		14,005		18,427
Total revenues		91,283		55,650
Costs of revenues:
Product		39,159		6,190
Service		13,123		20,992
Generation		42,978		23,265
Advanced Technologies		10,408		12,477
Total costs of revenues		105,668		62,924
Gross loss		(14,385)		(7,274)
Operating expenses:
Administrative and selling expenses		64,357		27,264
Research and development expenses		22,316		7,810
Total costs and expenses		86,673		35,074
Loss from operations		(101,058)		(42,348)
Interest expense		(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		1,086		(797)
Loss before provision for income taxes		(104,729)		(76,871)
Provision for income taxes		(494)		(3)
Net loss		(105,223)		(76,874)
Net loss attributable to noncontrolling interest		(4,968)		—
Net loss attributable to FuelCell Energy, Inc.		(100,255)		(76,874)
Series B preferred stock dividends		(2,400)		(2,400)
Net loss attributable to common stockholders	$	(102,655)	$	(79,274)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.27)	$	(0.24)
Basic and diluted weighted average shares outstanding		375,638,293		323,983,465


	Nine Months Ended July 31,
	2022		2021
Net loss	$	(105,223)	$	(76,874)
Other comprehensive loss:
Foreign currency translation adjustments		(326)		(8)
Total comprehensive loss	$	(105,549)	$	(76,882)
Comprehensive loss attributable to noncontrolling interest		(4,968)		—
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(100,581)	$	(76,882)

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 Stockholder's Equity		Noncontrolling Interests	Total Equity
Balance, October 31, 2021	366,618,693	$	37	$	1,908,471	$	(1,265,251)	$	(819)	$	(586)	$	586	$	642,438	$	—	$	642,438
Common stock issued, non-employee compensation	20,673		—		100		—		—		—		—		100		—		100
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	60,052		—		(260)		—		—		—		—		(260)		—		(260)
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	(13,232)		—		—		—		—		(64)		64		—		—		—
Net loss attributable to noncontrolling interest	—		—		—		5,496		—		—		—		5,496		(5,496)		—
Net Loss	—		—		—		(46,120)		—		—		—		(46,120)		—		(46,120)
Balance, January 31, 2022	366,686,186	$	37	$	1,908,981	$	(1,305,875)	$	(910)	$	(650)	$	650	$	602,233	$	(5,496)	$	596,737
Sale of common stock, net of fees	19,896,904		2		118,262										118,264		—		118,264
Common stock issued, non-employee compensation	13,002		—		68		—		—		—		—		68		—		68
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	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	(13,002)		—		—		—		—		(68)		68		—		—		—
Reclassification of noncontrolling interest	—		—		—		—		—		—		—		—		12,419		12,419
Return of capital to noncontrolling interest	—		—		—		—		—		—		—		—		(496)		(496)
Distribution to noncontrolling interest	—		—		—		—		—		—		—		—		(95)		(95)
Net income attributable to noncontrolling interest	—		—		—		(91)		—		—		—		(91)		91		—
Net Loss	—		—		—		(30,126)		—		—		—		(30,126)		—		(30,126)
Balance, April 30, 2022	386,608,869	$	39	$	2,028,206	$	(1,336,092)	$	(1,059)	$	(718)	$	718	$	691,094	$	6,423	$	697,517
Sale of common stock, net of fees	7,814,115		—		27,173		—		—		—		—		27,173		—		27,173
Common stock issued, non-employee compensation	19,594		—		68		—		—		—		—		68		—		68
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	7,985		—		18		—		—		—		—		18		—		18
Share based compensation	—		—		1,961		—		—		—		—		1,961		—		1,961
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Effect of foreign currency translation	—		—		—		—		(86)		—		—		(86)		—		(86)
Adjustment for deferred compensation	(19,594)		—		—		—		—		(68)		68		—		—		—
Distribution to noncontrolling interest	—		—		—		—		—		—		—		—		(94)		(94)
Net income attributable to noncontrolling interest	—		—		—		(437)		—		—		—		(437)		437		—
Net Loss	—		—		—		(28,977)		—		—		—		(28,977)		—		(28,977)
Balance, July 31, 2022	394,430,969	$	39	$	2,056,626	$	(1,365,506)	$	(1,145)	$	(786)	$	786	$	690,014	$	6,766	$	696,780

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) Income		Treasury Stock		Deferred Compensation			Total Equity
Balance, October 31, 2020	294,706,758	$	29	$	1,359,454	$	(1,164,196)	$	(739)	$	(432)	$	432	$	194,548
Sale of common stock, net of fees	25,000,000		3		156,363		—		—		—		—		156,366
Orion warrant exercises	2,700,000		—		21,824		—		—		—		—		21,824
Common stock issued, non-employee compensation	2,734		—		45		—		—		—		—		45
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	4,521		—		8		—		—		—		—		8
Share based compensation	—		—		1,417		—		—		—		—		1,417
Preferred dividends — Series B	—		—		(800)		—		—

FUELCELL ENERGY INC [FCEL] Filings
FUELCELL ENERGY INC [FCELB] Filings
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