FUELCELL ENERGY INC [FCELB] Filings

10-Q 1 fcel-20230731x10q.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, 2023

☐	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 5, 2023: 450,626,333

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, 2023 and October 31, 2022.	3

	Consolidated Statements of Operations and Comprehensive Loss for the three months ended July 31, 2023 and 2022.	4

	Consolidated Statements of Operations and Comprehensive Loss for the nine months ended July 31, 2023 and 2022.	5

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2023.	6

	Consolidated Statements of Changes in Equity for the three and nine months ended July 31, 2022.	7

	Consolidated Statements of Cash Flows for the nine months ended July 31, 2023 and 2022.	8

	Notes to Consolidated Financial Statements.	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	32

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	62

Item 4.	Controls and Procedures.	64

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	65

Item 1A.	Risk Factors.	65

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	65

Item 3.	Defaults Upon Senior Securities.	66

Item 4.	Mine Safety Disclosures.	66

Item 5.	Other Information.	66

Item 6.	Exhibits.	67

Signatures		70

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,
	2023		2022
ASSETS
Current assets:
Cash and cash equivalents, unrestricted	$	303,679	$	458,055
Restricted cash and cash equivalents - short-term		6,078		4,423
Investments - short-term		77,431		-
Accounts receivable, net		10,102		4,885
Unbilled receivables		18,986		11,019
Inventories		85,561		90,909
Other current assets		12,832		10,989
Total current assets		514,669		580,280
Restricted cash and cash equivalents - long-term		26,665		18,566
Inventories - long-term		7,549		7,549
Project assets, net		248,223		232,886
Property, plant and equipment, net		79,533		58,137
Operating lease right-of-use assets, net		8,690		7,189
Goodwill		4,075		4,075
Intangible assets, net		16,400		17,373
Other assets		39,449		13,662
Total assets⁽¹⁾	$	945,253	$	939,717
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	9,763	$	13,198
Current portion of operating lease liabilities		668		650
Accounts payable		22,404		28,196
Accrued liabilities		23,046		27,415
Deferred revenue		3,114		16,341
Total current liabilities		58,995		85,800
Long-term deferred revenue and customer deposits		-		9,095
Long-term operating lease liabilities		9,277		7,575
Long-term debt and other liabilities		109,130		82,863
Total liabilities⁽¹⁾		177,402		185,333
Redeemable Series B preferred stock (liquidation preference of $64,020 as of July 31, 2023 and October 31, 2022)		59,857		59,857
Redeemable noncontrolling interest		-		3,030
Total equity:
Stockholders’ equity:
Common stock ($0.0001 par value); 500,000,000 shares authorized as of July 31, 2023 and October 31, 2022; 444,704,081 and 405,562,988 shares issued and outstanding as of July 31, 2023 and October 31, 2022, respectively		44		41
Additional paid-in capital		2,186,405		2,094,076
Accumulated deficit		(1,485,177)		(1,407,973)
Accumulated other comprehensive loss		(1,620)		(1,752)
Treasury stock, Common, at cost (206,544 and 142,837 shares as of July 31, 2023 and October 31, 2022, respectively)		(1,026)		(855)
Deferred compensation		1,026		855
Total stockholder's equity		699,652		684,392
Noncontrolling interests		8,342		7,105
Total equity		707,994		691,497
Total liabilities, redeemable Series B preferred stock, redeemable noncontrolling interest and total equity	$	945,253	$	939,717

(1)

As of July 31, 2023 and October 31, 2022, the combined assets of the variable interest entities (“VIEs”) were $126,041 and $119,223, respectively, that can only be used to settle obligations of the VIEs. These assets include cash of $3,222, unbilled accounts receivable of $1,865, operating lease right of use assets of $1,176, other current assets of $21,289, restricted cash and cash equivalents of $500, project assets of $96,852 and other assets of $1,138 as of July 31, 2023, and cash of $2,149, unbilled accounts receivable of $1,070, other current assets of $14,373, operating lease right of use assets of $1,184 and project assets of $100,448 as of October 31, 2022. The combined liabilities of the VIEs as of July 31, 2023 include short-term operating lease liabilities of $157, accounts payable of $88,384, long-term operating lease liability of $1,476 and other non-current liabilities of $184 and, as of October 31, 2022, include short-term operating lease liabilities of $157, accounts payable of $76,050, accrued liabilities of $824 and long-term operating lease liability of $1,478.

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,
	2023		2022
Revenues:
Product	$	-	$	18,000
Service		9,841		9,049
Generation		10,982		10,877
Advanced Technologies		4,687		5,178
Total revenues		25,510		43,104
Costs of revenues:
Product		2,910		17,919
Service		9,575		7,718
Generation		17,483		18,136
Advanced Technologies		3,757		3,511
Total costs of revenues		33,725		47,284
Gross loss		(8,215)		(4,180)
Operating expenses:
Administrative and selling expenses		17,560		14,158
Research and development expenses		15,620		9,659
Total costs and expenses		33,180		23,817
Loss from operations		(41,395)		(27,997)
Interest expense		(1,912)		(1,622)
Interest income		3,966		932
Gain on extinguishment of finance obligations and debt, net		15,337		-
Other income, net		403		204
Loss before provision for income taxes		(23,601)		(28,483)
Provision for income taxes		-		(494)
Net loss		(23,601)		(28,977)
Net income attributable to noncontrolling interests		678		437
Net loss attributable to FuelCell Energy, Inc.		(24,279)		(29,414)
Series B preferred stock dividends		(800)		(800)
Net loss attributable to common stockholders	$	(25,079)	$	(30,214)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.06)	$	(0.08)
Basic and diluted weighted average shares outstanding		415,867,594		387,465,758


	Three Months Ended July 31,
	2023		2022
Net loss	$	(23,601)	$	(28,977)
Other comprehensive loss:
Foreign currency translation adjustments		(164)		(86)
Total comprehensive loss	$	(23,765)	$	(29,063)
Comprehensive income attributable to noncontrolling interests		678		437
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(24,443)	$	(29,500)

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,
	2023		2022
Revenues:
Product	$	9,095	$	36,000
Service		49,913		13,855
Generation		28,979		27,423
Advanced Technologies		12,945		14,005
Total revenues		100,932		91,283
Costs of revenues:
Product		7,425		39,159
Service		40,633		13,123
Generation		51,166		42,978
Advanced Technologies		10,779		10,408
Total costs of revenues		110,003		105,668
Gross loss		(9,071)		(14,385)
Operating expenses:
Administrative and selling expenses		47,637		64,357
Research and development expenses		43,000		22,316
Total costs and expenses		90,637		86,673
Loss from operations		(99,708)		(101,058)
Interest expense		(4,926)		(4,757)
Interest income		11,064		1,025
Gain on extinguishment of finance obligations and debt, net		15,337		-
Other income, net		216		61
Loss before provision for income taxes		(78,017)		(104,729)
Provision for income taxes		(581)		(494)
Net loss		(78,598)		(105,223)
Net loss attributable to noncontrolling interests		(1,394)		(4,968)
Net loss attributable to FuelCell Energy, Inc.		(77,204)		(100,255)
Series B preferred stock dividends		(2,400)		(2,400)
Net loss attributable to common stockholders	$	(79,604)	$	(102,655)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.19)	$	(0.27)
Basic and diluted weighted average shares outstanding		409,361,826		375,638,293


	Nine Months Ended July 31,
	2023		2022
Net loss	$	(78,598)	$	(105,223)
Other comprehensive income (loss):
Foreign currency translation adjustments		132		(326)
Total comprehensive loss	$	(78,466)	$	(105,549)
Comprehensive loss attributable to noncontrolling interests		(1,394)		(4,968)
Comprehensive loss attributable to FuelCell Energy, Inc.	$	(77,072)	$	(100,581)

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, 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	—		—		2,637		—		—		—		—		2,637		—		2,637
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Effect of foreign currency translation	—		—		—		—		447		—		—		447		—		447
Adjustment for deferred compensation	(21,106)		—		—		—		—		(68)		68		—		—		—
Reclass of redeemable non-controlling interest	—		—		—		—		—		—		—		—		3,030		3,030
Distribution to non-controlling interest	—		—		—		—		—		—		—		—		(106)		(106)
Net loss attributable to noncontrolling interests	—		—		—		2,464		—		—		—		2,464		(2,464)		—
Net Loss	—		—		—		(21,086)		—		—		—		(21,086)		—		(21,086)
Balance, January 31, 2023	405,732,053	$	41	$	2,095,667	$	(1,426,595)	$	(1,305)	$	(923)	$	923	$	667,808	$	7,565	$	675,373
Sale of common stock, net of fees	949,438		—		2,663		—		—		—		—		2,663		—		2,663
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	57,222		—		—		—		—		—		—		—		—		—
Share based compensation	—		—		3,194		—		—		—		—		3,194		—		3,194
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Effect of foreign currency translation	—		—		—		—		(151)		—		—		(151)		—		(151)
Distribution to non-controlling interest	—		—		—		—		—		—		—		—		(143)		(143)
Net loss attributable to noncontrolling interests	—		—		—		(392)		—		—		—		(392)		392		—
Net Loss	—		—		—		(33,911)		—		—		—		(33,911)		—		(33,911)
Balance, April 30, 2023	406,738,713	$	41	$	2,100,724	$	(1,460,898)	$	(1,456)	$	(923)	$	923	$	638,411	$	7,814	$	646,225
Sale of common stock, net of fees	37,931,204		3		83,268		—		—		—		—		83,271		—		83,271
Common stock issued, non-employee compensation	42,601		—		105		—		—		—		—		105		—		105
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards	34,164		—		(58)		—		—		—		—		(58)		—		(58)
Share based compensation	—		—		3,166		—		—		—		—		3,166		—		3,166
Preferred dividends — Series B	—		—		(800)		—		—		—		—		(800)		—		(800)
Adjustment for deferred compensation	(42,601)		—		—		—		—		(103)		103		—		—		—
Effect of foreign currency translation	—		—		—		—		(164)		—		—		(164)		—		(164)
Distribution to non-controlling interest	—		—		—		—		—		—		—		—		(150)		(150)
Net loss attributable to noncontrolling interests	—		—		—		(678)		—		—		—		(678)		678		—
Net Loss	—		—		—		(23,601)		—		—		—		(23,601)		—		(23,601)
Balance, July 31, 2023	444,704,081	$	44	$	2,186,405	$	(1,485,177)	$	(1,620)	$	(1,026)	$	1,026	$	699,652	$	8,342	$	707,994

Table of Contents

FUELCELL ENERGY, INC.

Consolidated Statements of Changes in Equity

(Unaudited)

(Amounts in thousands, except share amounts)

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

FUELCELL ENERGY INC [FCEL] Filings