FUELCELL ENERGY INC

Previous wording

This Quarterly Report on Form 10-Q contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements other than statements of historical fact included in this Form 10-K, including statements regarding the Company’s future financial condition, results of operations, plans, objectives, expectations, future performance, business operations and business prospects, are forward-looking statements. Words such as “expects,” “anticipates,” “estimates,” “goals,” “projects,” “intends,” “plans,” “believes,” “predicts,” “should,” “seeks,” “will,” “could,” “would,” “may,” “forecast,” and similar expressions and variations of such words are intended to identify forward-looking statements and are included, along with this statement, for purposes of complying with the safe harbor provisions of the PSLRA. Forward-looking statements are neither historical facts, nor assurances of future performance. Instead, such statements are based only on our beliefs, expectations, and assumptions regarding the future. As such, the realization of matters expressed in forward-looking statements involves inherent risks and uncertainties. Such statements relate to, among other things, the following: (i) the development and commercialization by FuelCell Energy, Inc. and its subsidiaries of fuel cell technology and products and the market for such products; (ii)the expected timing of completion of our ongoing projects; (iii) our business plans and strategies; (iv) the markets in which we expect to operate; (v)expected operating results such as revenue growth and earnings; (vi) our belief that we have sufficient liquidity to fund our business operations for the next 12 months; (vii) future funding under Advanced Technologies contracts; (viii) future financing for projects, including equity and debt investments by investors and commercial bank financing, as well as overall financial market conditions; (ix) the expected cost competitiveness of our technology; (x) our ability to successfully implement our restructuring plans during the expected timeframe and the expected effects and impacts of the Company’s restructuring plans; and (xi) our ability to achieve our sales plans, our plans to increase our annualized production rate in the future in connection with sales growth, market access and market expansion goals, and cost reduction targets.

Current wording

This Quarterly Report on Form 10-Q contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). All statements other than statements of historical fact included in this Form 10-Q, including statements regarding the Company’s future financial condition, results of operations, plans, objectives, expectations, future performance, business operations and business prospects, are forward-looking statements. Words such as “expects,” “anticipates,” “estimates,” “goals,” “projects,” “intends,” “plans,” “believes,” “predicts,” “should,” “seeks,” “will,” “could,” “would,” “may,” “forecast,” and similar expressions and variations of such words are intended to identify forward-looking statements and are included, along with this statement, for purposes of complying with the safe harbor provisions of the PSLRA. Forward-looking statements are neither historical facts, nor assurances of future performance. Instead, such statements are based only on our beliefs, expectations, and assumptions regarding the future. As such, the realization of matters expressed in forward-looking statements involves inherent risks and uncertainties. Such statements relate to, among other things, the following: (i) the development and commercialization by FuelCell Energy, Inc. and its subsidiaries of fuel cell technology and products and the market for such products; (ii)the expected timing of completion of our ongoing projects; (iii) our business plans and strategies; (iv) the markets in which we expect to operate; (v)expected operating results such as revenue growth and earnings; (vi) our belief that we have sufficient liquidity to fund our business operations for the next 12 months; (vii) future funding under Advanced Technologies contracts; (viii) future financing for projects, including equity and debt investments by investors and commercial bank financing, as well as overall financial market conditions; (ix) the expected cost competitiveness of our technology; (x) our ability to successfully implement our restructuring plans during the expected timeframe and the expected effects and impacts of the Company’s restructuring plans; and (xi) our ability to achieve our sales plans, our plans to increase our annualized production rate in the future in connection with sales growth, market access and market expansion goals, and cost reduction targets.

Previous wording

The forward-looking statements contained in this report are subject to risks and uncertainties, known and unknown, that could cause actual results and future events to differ materially from those set forth in or contemplated by the forward-looking statements, including, without limitation, the risks described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and in the section below entitled “Item 1A. Risk Factors,” and the following risks and uncertainties: general risks associated with product development and manufacturing; general economic conditions; changes in interest rates, which may impact project financing; supply chain disruptions; changes in the utility regulatory environment; changes in the utility industry and the markets for distributed generation, distributed hydrogen, and fuel cell power plants configured for carbon capture or carbon separation; potential volatility of commodity prices that may adversely affect our projects; availability of government subsidies and economic incentives for alternative energy technologies; risks that our restructuring plans will not result in the intended benefits or savings or will result in unanticipated costs, including but not limited to additional charges and/or higher than expected costs or will yield unintended consequences to our remaining workforce and results of operations; our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations; our ability to maintain compliance with the listing rules of The Nasdaq Stock Market; rapid technological change; competition; the risk that our bid awards will not convert to contracts or that our contracts will not convert to revenue; market acceptance of our products; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States (“GAAP”); factors affecting our liquidity position and financial condition; government appropriations; the ability of the government and third parties to terminate their development contracts at any time; the ability of the government to exercise “march-in” rights with respect to certain of our patents; our ability to successfully market and sell our products internationally; our ability to develop additional commercially viable products; our ability to implement our strategy; our ability to reduce our levelized cost of energy and deliver on our cost reduction strategy generally; our ability to protect our intellectual property; litigation and other proceedings; the risk that commercialization of our new products will not occur when anticipated or, if it does, that we will not have adequate capacity to satisfy demand; our need for and the availability of additional financing; our ability to generate positive cash flow from operations; our ability to service our long-term debt; our ability to increase the output and longevity of our platforms and to meet the performance requirem…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The forward-looking statements contained in this report are subject to risks and uncertainties, known and unknown, that could cause actual results and future events to differ materially from those set forth in or contemplated by the forward-looking statements, including, without limitation, the risks described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 and in the section below entitled “Item 1A. Risk Factors,” and the following risks and uncertainties: general risks associated with product development and manufacturing; general economic conditions; changes in interest rates, which may impact project financing; supply chain disruptions; changes in the utility regulatory environment; changes in the utility industry and the markets for distributed generation, distributed hydrogen, and fuel cell power plants configured for carbon capture or carbon separation; potential volatility of commodity prices that may adversely affect our projects; availability of government subsidies and economic incentives for alternative energy technologies; risks that our restructuring plans will not result in the intended benefits or savings or will result in unanticipated costs, including but not limited to additional charges and/or higher than expected costs or will yield unintended consequences to our remaining workforce and results of operations; our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations; our ability to maintain compliance with the listing rules of The Nasdaq Stock Market; rapid technological change; competition; the risk that our bid awards will not convert to contracts or that our contracts will not convert to revenue; market acceptance of our products; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States (“GAAP”); factors affecting our liquidity position and financial condition; government appropriations; the ability of the government and third parties to terminate their development contracts at any time; the ability of the government to exercise “march-in” rights with respect to certain of our patents; our ability to successfully market and sell our products internationally; our ability to develop additional commercially viable products in the future; our ability to implement our strategy; our ability to reduce our levelized cost of energy and deliver on our cost reduction strategy generally; our ability to protect our intellectual property; litigation and other proceedings; the risk that commercialization of our new products will not occur when anticipated or, if it does, that we will not have adequate capacity to satisfy demand; our need for and the availability of additional financing; our ability to generate positive cash flow from operations; our ability to service our long-term debt; our ability to increase the output and longevity of our platforms and to meet the perfor…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

successful; we will be able to obtain financing or raise capital to achieve our business plans; the government will appropriate the funds anticipated by us under our government contracts; the government will not exercise its right to terminate any or all of our government contracts; or we will be able to achieve any other result anticipated in any other forward-looking statement contained herein.

Current wording

We cannot assure you that: we will be able to meet any of our development or commercialization schedules; any of our new products or technologies, once developed, will be commercially successful; our power plants will be commercially successful; we will be able to obtain financing or raise capital to achieve our business plans; the government will appropriate the funds anticipated by us under our government contracts; the government will not exercise its right to

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to the accompanying financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The preparation of financial statements and related disclosures 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, as well as management’s assessment of the Company’s ability to meet its obligations as they come due over the next twelve months. Actual results could differ from those estimates. Estimates are used in accounting for, among other things, revenue recognition, lease right-of-use assets and liabilities, loss accruals on service agreements, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, allowance for credit losses, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), valuation of derivatives, 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. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024 filed with the Securities and Exchange Commission (“SEC”). Unless otherwise indicated, the terms “Company”, “FuelCell Energy”, “we”, “us”, and “our” refer to FuelCell Energy, Inc. and its subsidiaries. All tabular dollar amounts are in thousands.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to the accompanying financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The preparation of financial statements and related disclosures 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, as well as management’s assessment of the Company’s ability to meet its obligations as they come due over the next twelve months. Actual results could differ from those estimates. Estimates are used in accounting for, among other things, revenue recognition, lease right-of-use assets and liabilities, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, allowance for credit losses, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), valuation of derivatives, 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. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025 filed with the Securities and Exchange Commission (“SEC”). Unless otherwise indicated, the terms “Company”, “FuelCell Energy”, “we”, “us”, and “our” refer to FuelCell Energy, Inc. and its subsidiaries. All tabular dollar amounts are in thousands.

Previous wording

We target a range of markets and applications with our products, including utilities and independent power producers, data centers, wastewater treatment, commercial and hospitality, food and beverage, and microgrids, among others. We market our products primarily in the United States, Europe and Korea, and we are also pursuing opportunities in other countries around the world. We target for expansion and development markets and geographic regions that benefit from and value clean distributed generation; are located where there are high energy costs, poor grid reliability, and/or challenged transmission and distribution lines; can leverage the multiple value streams delivered by our platforms (electricity, hydrogen, thermal, water, and carbon recovery); are aligned with regulatory frameworks that harmonize energy, economic and environmental policies; and are committed to reducing their Scope 1 and Scope 2 emissions.

Current wording

We target a range of markets and applications with our products, including utilities and independent power producers, data centers, wastewater treatment, commercial and hospitality, and microgrids, among others. We market our products primarily in the U.S. and Canada, the European Union and the United Kingdom, and priority Asian markets including South Korea, Singapore, Malaysia, and Thailand. We selectively pursue additional opportunities in other regions that align with our strategic priorities. We focus our expansion on markets and regions that value clean distributed generation, have poor grid reliability and/or challenged transmission and distribution lines, and can benefit from the value streams our products provide.

Previous wording

Total revenues for the three months ended July 31, 2025 of $46.7 million reflects an increase of $23.0 million from $23.7 million for the same period in the prior year. Cost of revenues for the three months ended July 31, 2025 of $51.9 million reflects an increase of $22.0 million from $29.9 million for the same period in the prior year. A discussion of the changes in product revenues, service agreements revenues, generation revenues and Advanced Technologies contract revenues follows.

Current wording

Total revenues for the three months ended January 31, 2026 of $30.5 million reflects an increase of $11.5 million from $19.0 million for the same period in the prior year. Cost of revenues for the three months ended January 31, 2026 of $36.4 million reflects an increase of $12.2 million from $24.2 million for the same period in the prior year. A discussion of the changes in product revenues, service agreements revenues, generation revenues and Advanced Technologies contract revenues follows.

Previous wording

Product revenues were $26.0 million during the three months ended July 31, 2025 and $0.3 million in the comparable prior year period. The increase in product revenues during the three months ended July 31, 2025 was primarily driven by $24.0 million of revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for the delivery and commissioning of eight fuel cell modules for GGE’s 58.8 MW fuel cell power plant platform in Hwaseong-si, Korea, and $2.0 million of revenue recognized under the Company's sales contract with Ameresco, Inc., which was entered into during the second quarter of fiscal year 2024, pursuant to which the Company is to provide a 2.8 MW carbonate fuel cell platform to the Sacramento Area Sewer District.

Current wording

Product revenues were $12.0 million during the three months ended January 31, 2026 and $0.1 million in the comparable prior year period. The increase in product revenues during the three months ended January 31, 2026 was primarily driven by $6.0 million of revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for the delivery and commissioning of two fuel cell modules for GGE’s 58.8 MW fuel cell power plant platform in Hwaseong-si, Korea (the “GGE Platform”), and $6.0 million of revenue recognized under the Company's LTSA with CGN-Yulchon Generation Co., Ltd. (“CGN”) for the delivery and commissioning of two fuel cell modules for CGN’s Yulchon facility in South Korea (the “CGN Platform”). Revenue for the three months ended January 31, 2026 was $6.0 million lower than planned, driven by the timing of commissioning for two delivered and installed modules that entered service in February 2026, for which commissioning was previously planned to take place within the three months ended January 31, 2026.

Previous wording

Cost of product revenues increased $24.9 million for the three months ended July 31, 2025 to $29.1 million, compared to $4.2 million in the same period in the prior year, primarily due to the higher product sales in the three months ended July 31, 2025. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $2.9 million for the three months ended July 31, 2025, compared to approximately $3.5 million for the three months ended July 31, 2024.

Current wording

Cost of product revenues increased $13.4 million for the three months ended January 31, 2026 to $16.4 million, compared to $3.0 million in the same period in the prior year, primarily due to the higher product sales in the three months ended January 31, 2026. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $4.1 million for the three months ended January 31, 2026, compared to approximately $2.7 million for the three months ended January 31, 2025.

Previous wording

For the three months ended July 31, 2025, we operated at an annualized production rate of approximately 33.2 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 29.3 MW for the three months ended July 31, 2024.

Current wording

For the three months ended January 31, 2026, we operated at an annualized production rate of approximately 32.6 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 31.2 MW for the three months ended January 31, 2025.

Previous wording

Service agreements revenues for the three months ended July 31, 2025 increased $1.7 million to $3.1 million from $1.4 million for the three months ended July 31, 2024. The increase in service agreements revenues during the three months ended July 31, 2025 was primarily driven by revenue recognized under the Company’s LTSA with GGE for service provided by the Company to GGE’s 58.8 MW fuel cell power plant platform in Hwaseong-si, Korea. There were no module exchanges during the three months ended July 31, 2025, and no module exchanges during the three months ended July 31, 2024.

Current wording

Service agreements revenues for the three months ended January 31, 2026 increased $1.3 million to $3.2 million from $1.8 million for the three months ended January 31, 2025. The increase in service agreements revenues during the three months ended January 31, 2026 was primarily driven by revenue recognized under the Company’s LTSA with GGE for service provided by the Company to the GGE Platform, due to the increased number of fuel cell modules in operation at the GGE Platform over the past year. There were no module exchanges during each of the three month periods ended January 31, 2026 and 2025.

Previous wording

Cost of service agreements revenues increased $2.5 million to $3.6 million for the three months ended July 31, 2025 from $1.1 million for the three months ended July 31, 2024, primarily driven by the cost of providing service under the Company’s LTSA with GGE.

Current wording

Cost of service agreements revenues increased $1.2 million to $2.8 million for the three months ended January 31, 2026 from $1.7 million for the three months ended January 31, 2025, primarily driven by the cost of providing service under the Company’s LTSA with GGE.

Previous wording

Overall gross loss from service agreements revenues was $(0.5) million for the three months ended July 31, 2025, compared to a gross profit of $0.3 million for the three months ended July 31, 2024. The overall gross margin was (16.4)% for the three months ended July 31, 2025 compared to a gross margin of 18.8% in the comparable prior year period. Gross margin was lower during the three months ended July 31, 2025 primarily due to the fact that work performed during the three months ended July 31, 2025 was performed pursuant to service agreements with lower margins.

Current wording

Overall gross profit from service agreements revenues was $0.4 million for the three months ended January 31, 2026, compared to a gross profit of $0.2 million for the three months ended January 31, 2025. The overall gross margin was 11.5% for the three months ended January 31, 2026 compared to a gross margin of 9.7% in the comparable prior year period.

Previous wording

Revenues from generation for the three months ended July 31, 2025 totaled $12.4 million, which represents a decrease of $1.0 million from the $13.4 million of revenue recognized for the three months ended July 31, 2024. The decrease in generation revenues reflects lower output from plants in our generation operating portfolio resulting from routine maintenance activities during the quarter. Generation revenues for the three months ended July 31, 2025 and 2024 reflect revenue from electricity generated under our power purchase agreements (“PPAs”) and the sale of renewable energy credits from our generation operating portfolio.

Current wording

Revenues from generation for the three months ended January 31, 2026 totaled $11.0 million, which represents a decrease of $0.4 million from the $11.3 million of generation revenues recognized for the three months ended January 31, 2025. The decrease in generation revenues reflects lower output from plants in our generation operating portfolio during the quarter compared to output from plants in our generation operating portfolio during the same period in the prior year. Generation revenues for the three months ended January 31, 2026 and 2025 reflect revenue from electricity generated under our power purchase agreements (“PPAs”) and the sale of renewable energy credits from our generation operating portfolio.

Previous wording

Cost of generation revenues totaled $15.3 million in the three months ended July 31, 2025, compared to $18.8 million in the three months ended July 31, 2024. The overall decrease in cost of generation revenues is primarily related to a mark-to-market net gain of $1.0 million related to natural gas purchase contracts recognized during the three months ended July 31, 2025, compared to a mark-to-market net loss of $0.9 million during the three months ended July 31, 2024. Cost of generation revenues for the three months ended July 31, 2024 also included an impairment charge of $1.1 million relating to project assets then under construction relating to the PPAs for Trinity College and for UConn (as defined elsewhere herein). Cost of generation revenues included depreciation and amortization of approximately $7.7 million and $7.3 million for the three months ended July 31, 2025 and 2024, respectively.

Current wording

Cost of generation revenues totaled $14.1 million for the three months ended January 31, 2026, compared to $15.3 million for the three months ended January 31, 2025. The overall decrease in cost of generation revenues is primarily related to a mark-to-market net gain of $3.6 million related to natural gas purchase contracts recognized during the three months ended January 31, 2026, compared to a mark-to-market net gain of $1.8 million during the three months ended January 31, 2025. Cost of generation revenues included depreciation and amortization of approximately $8.7 million and $8.0 million for the three months ended January 31, 2026 and 2025, respectively.

Previous wording

We currently have four projects with fuel sourcing risk, which are the Toyota Project, the 14.0 MW Derby Fuel Cell Project and the 2.8 MW SCEF Fuel Cell Project, both located in Derby, Connecticut (collectively, the “Derby Projects”), and our 7.4 MW project in Yaphank Long Island (the “LIPA Yaphank Project”), all of which require natural gas for which

Current wording

We currently have four projects with fuel sourcing risk, which are the Toyota Project, the 14.0 MW Derby Fuel Cell Project and the 2.8 MW SCEF Fuel Cell Project, the latter two of which are located in Derby, Connecticut (collectively, the “Derby Projects”), and our 7.4 MW project in Yaphank Long Island (the “LIPA Yaphank Project”), all of which require natural gas for which there is no pass-through mechanism. A one-year fuel supply contract (through May of 2026) has been executed for the Toyota Project. Six-year (through October 2029) fuel supply contracts have been executed for

Previous wording

there is no pass-through mechanism. A one-year fuel supply contract (through May of 2026) has been executed for the Toyota Project. Six-year (through October 2029) fuel supply contracts have been executed for the 14.0 MW and 2.8 MW Derby Projects. We are currently in the midst of a seven-year contract (through September 2028) for our 7.4 MW LIPA Yaphank Project. The Company will look to extend the duration of these contracts should market and credit conditions allow. If the Company is unable to secure fuel on favorable economic terms, it may result in impairment charges to the Derby Project assets or the LIPA Yaphank Project asset and further impairment charges for the Toyota Project asset.

Current wording

the 14.0 MW and 2.8 MW Derby Projects. We are currently in the midst of a seven-year contract (through September 2028) for our 7.4 MW LIPA Yaphank Project. The Company will look to extend the duration of these contracts should market and credit conditions allow. If the Company is unable to secure fuel on favorable economic terms, it may result in impairment charges to the Derby Project assets or the LIPA Yaphank Project asset and further impairment charges for the Toyota Project asset.

Previous wording

Advanced Technologies contract revenues for the three months ended July 31, 2025 decreased to $5.3 million from $8.6 million for the three months ended July 31, 2024. Advanced Technologies contract revenues recognized under our Joint Development Agreement with ExxonMobil Technology and Engineering Company (“EMTEC”) were approximately $3.1 million, revenues arising from the purchase order received from Esso Nederland B.V. (“Esso”), an affiliate of EMTEC and Exxon Mobil Corporation, related to the Rotterdam project were approximately $1.4 million and revenue recognized under government contracts and other contracts were approximately $0.8 million for the three months ended July 31, 2025. This compares to Advanced Technologies contract revenues recognized under our Joint Development Agreement with EMTEC of approximately $1.8 million, revenue recognized under the Esso purchase order of approximately $3.5 million and revenue recognized under government contracts and other contracts of approximately $3.3 million for the three months ended July 31, 2024.

Current wording

Advanced Technologies contract revenues for the three months ended January 31, 2026 decreased to $4.3 million from $5.7 million for the three months ended January 31, 2025. Advanced Technologies contract revenues recognized under our Joint Development Agreement with ExxonMobil Technology and Engineering Company (“EMTEC”) were approximately $1.7 million, revenues arising from the purchase order received from Esso Nederland B.V. (“Esso”), an affiliate of EMTEC and Exxon Mobil Corporation, related to the Rotterdam project were approximately $1.9 million and revenue recognized under government contracts and other contracts were approximately $0.7 million for the three months ended January 31, 2026. This compares to Advanced Technologies contract revenues recognized under our Joint Development Agreement with EMTEC of approximately $1.2 million, revenue recognized under the Esso purchase order of approximately $3.5 million and revenue recognized under government contracts and other contracts of approximately $1.1 million for the three months ended January 31, 2025.

Previous wording

Cost of Advanced Technologies contract revenues decreased to $3.8 million for the three months ended July 31, 2025, compared to $5.8 million for the three months ended July 31, 2024.

Current wording

Cost of Advanced Technologies contract revenues decreased to $3.1 million for the three months ended January 31, 2026, compared to $4.2 million for the three months ended January 31, 2025.

Previous wording

Advanced Technologies contracts for the three months ended July 31, 2025 generated a gross profit of $1.4 million, compared to a gross profit of $2.8 million for the same period in the prior year. The decrease was due primarily to lower margins on some of the contracts under which revenues were recognized during the three months ended July 31, 2025 compared to the three months ended July 31, 2024.

Current wording

Advanced Technologies contracts for the three months ended January 31, 2026 generated a gross profit of $1.2 million, compared to a gross profit of $1.5 million for the same period in the prior year.

Previous wording

Administrative and selling expenses were $14.1 million and $14.6 million for the three months ended July 31, 2025 and 2024, respectively. Administrative and selling expenses were lower during the three months ended July 31, 2025 than during the three months ended July 31, 2024 primarily due to lower compensation expense as a result of the restructuring actions in September of fiscal year 2024, and in November and June of fiscal year 2025.

Current wording

Administrative and selling expenses were $13.5 million and $15.0 million for the three months ended January 31, 2026 and 2025, respectively. Administrative and selling expenses were lower during the three months ended January 31, 2026 than during the three months ended January 31, 2025 primarily due to lower compensation expense as a result of the restructuring actions in November and June of fiscal year 2025.

Previous wording

Research and development expenses decreased to $7.6 million for the three months ended July 31, 2025 compared to $12.8 million for the three months ended July 31, 2024. The decrease is primarily due to a decrease in spending on the Company’s commercial development efforts related to our solid oxide power generation and electrolysis platforms and carbon separation and carbon recovery solutions compared to the comparable prior year period.

Current wording

Research and development expenses decreased to $7.0 million for the three months ended January 31, 2026 compared to $11.1 million for the three months ended January 31, 2025. The decrease is primarily due to a decrease in spending on the Company’s commercial development efforts related to our solid oxide power generation and electrolysis platforms and related lower compensation expense as a result of the restructuring actions in November and June of fiscal year 2025.

Previous wording

Restructuring expense of $4.1 million for the three months ended July 31, 2025 related to the Company’s workforce reductions in June 2025.

Current wording

Restructuring expense of $1.5 million for the three months ended January 31, 2025 related to the Company’s workforce reductions in November 2024. There were no comparable charges during the three months ended January 31, 2026.

Previous wording

Loss from operations for the three months ended July 31, 2025 was $95.4 million compared to $33.6 million for the three months ended July 31, 2024. This increase was driven primarily by the impairment and restructuring expenses recognized during the three months ended July 31, 2025, partially offset by decreases in Administrative and selling expenses and Research and development expenses compared to the comparable prior year period and a $1.1 million decrease in gross loss.

Current wording

Loss from operations for the three months ended January 31, 2026 was $26.3 million compared to $32.9 million for the three months ended January 31, 2025. This decrease was driven primarily by decreases in Administrative and selling expenses and Research and development expenses compared to the comparable prior year period.

Previous wording

Interest expense for the three months ended July 31, 2025 and 2024 was $2.5 million and $2.6 million, respectively. Interest expense for both periods includes interest on the Derby Senior Back Leverage Loan Facility and the Derby Subordinated Back Leverage Loan Facility (in each case, as defined elsewhere herein), which were entered into in April 2024, the OpCo Financing Facility (as defined elsewhere herein), which was entered into in May 2023, and interest on the Groton Senior Back Leverage Loan Facility and the Groton Subordinated Back Leverage Loan Facility (in each case, as defined elsewhere herein), which were entered into in August 2023. Interest expense for the three months ended July 31, 2025 also includes interest on the facility with EXIM (as defined elsewhere herein), which was entered into in October 2024.

Current wording

Interest expense for the three months ended January 31, 2026 and 2025 was $2.8 million and $2.6 million, respectively. Interest expense for both periods includes interest on the Derby Senior Back Leverage Loan Facility, the Derby Subordinated Back Leverage Loan Facility, the OpCo Financing Facility, the Groton Senior Back Leverage Loan Facility, the Groton Subordinated Back Leverage Loan Facility, and the 2024 EXIM Financing (in each case, as defined elsewhere herein), which was entered into in October 2024. Interest expense for the three months ended January 31, 2026 also includes interest on the 2025 EXIM Financing (as defined elsewhere herein), which was entered into in November 2025.

Previous wording

Interest income was $2.1 million and $3.3 million for the three months ended July 31, 2025 and 2024, respectively. The decrease in interest income during the three months ended July 31, 2025 was primarily driven by lower money market investments compared to the three months ended July 31, 2024, partially offset by interest of $0.5 million earned on employee retention credits from the Internal Revenue Service. These employee retention credits were earned during the COVID-19 pandemic and accrued interest until such credits were received by the Company during the three months ended July 31, 2025. Interest income for the three months ended July 31, 2025 represents interest earned on money market investments, interest earned on investments in U.S. Treasury Securities and interest earned on employee retention credits. Interest income for the three months ended July 31, 2024 represents interest earned on money market investments and interest earned on investments in U.S. Treasury Securities.

Current wording

Interest income was $2.5 million and $2.4 million for the three months ended January 31, 2026 and 2025, respectively. The increase in interest income during the three months ended January 31, 2026 was primarily driven by higher money market investments compared to the three months ended January 31, 2025. Interest income for the three months ended January 31, 2026 represents interest earned on money market investments. Interest income for the three months ended January 31, 2025 represents interest earned on money market investments and interest earned on investments in U.S. Treasury Securities.

Previous wording

We have not paid federal or state income taxes in several years due to our history of net operating losses, although we have paid foreign income and withholding taxes, primarily in Korea. Provision for income tax recorded for the nine months

Current wording

We have not paid federal or state income taxes in several years due to our history of net operating losses, although we have paid foreign income and withholding taxes, primarily in South Korea. Provision for income tax recorded for each of the three months ended January 31, 2026 and 2025 was $0.

Previous wording

For the three months ended July 31, 2025 and 2024, net loss attributable to noncontrolling interest totaled $(0.01) million and $(0.2) million, respectively, for the Groton Project tax equity financing transaction with East West Bank.

Current wording

For the three months ended January 31, 2026 and 2025, net loss attributable to noncontrolling interest totaled $3.9 million and $3.5 million, respectively, for the Groton Project tax equity financing transaction with East West Bank.

Previous wording

For the three months ended July 31, 2025 and 2024, net loss attributable to noncontrolling interest totaled $(0.6) million and $(0.4) million, respectively, for the LIPA Yaphank Project tax equity financing transaction with REI.

Current wording

For the three months ended January 31, 2026 and 2025, net income (loss) attributable to noncontrolling interest totaled $0.3 million and $(1.0) million, respectively, for the LIPA Yaphank Project tax equity financing transaction with REI.

Previous wording

For the three months ended July 31, 2025 and 2024, net income (loss) attributable to noncontrolling interest totaled $0.4 million and $(1.8) million, respectively, for the Derby Projects tax equity financing transaction with Franklin Park. The loss in the three months ended July 31, 2024 was primarily a result of accelerated depreciation allocated to the noncontrolling interest under the HLBV method.

Current wording

For both of the three month periods ended January 31, 2026 and 2025, net income attributable to noncontrolling interest totaled $0.4 million for the Derby Projects tax equity financing transaction with Franklin Park.

Previous wording

Net loss attributable to common stockholders represents the net loss for the period less the preferred stock dividends on the Series B Preferred Stock. For the three month periods ended July 31, 2025 and 2024, net loss attributable to common stockholders was $92.5 million and $33.5 million, respectively, and net loss per common share was $3.78 and $1.99, respectively. The increase in net loss attributable to common stockholders and net loss per common share was primarily due to the impairment and restructuring expenses recognized during the three months ended July 31, 2025. The net loss per share for the three months ended July 31, 2025 benefitted from the higher number of weighted average shares outstanding due to share issuances since July 31, 2024.

Current wording

Net loss attributable to common stockholders represents the net loss for the period less the preferred stock dividends on the Series B Preferred Stock. For the three month periods ended January 31, 2026 and 2025, net loss attributable to common stockholders was $23.7 million and $29.1 million, respectively, and net loss per common share was $0.49 and $1.42, respectively. The decrease in net loss attributable to common stockholders was primarily due to the decrease in loss from operations for the three months ended January 31, 2026. The decrease in net loss per share for the three months ended January 31, 2026 also benefitted from the higher number of weighted average shares outstanding due to share issuances since January 31, 2025.

Previous wording

As of July 31, 2025, unrestricted cash and cash equivalents totaled $174.7 million compared to $148.1 million as of October 31, 2024. During the year ended October 31, 2024 and the nine months ended July 31, 2025, the Company invested in United States (U.S.) Treasury Securities. The amortized cost of the U.S. Treasury Securities outstanding totaled $109.1 million as of October 31, 2024 and were classified as Investments - short-term on the Consolidated Balance Sheets. There were no outstanding U.S. Treasury Securities as of July 31, 2025 as all U.S. Treasury Securities that were outstanding during the nine month period ended July 31, 2025 matured prior to July 31, 2025.

Current wording

As of January 31, 2026, unrestricted cash and cash equivalents totaled $311.8 million compared to $278.1 million as of October 31, 2025. There were no outstanding U.S. Treasury Securities as of January 31, 2026 or October 31, 2025, as all U.S. Treasury Securities that were outstanding during the three month period ended January 31, 2025 matured prior to October 31, 2025.

Previous wording

During the first nine months of fiscal year 2025, the Company received the second annual funding from East West Bank under the tax equity financing transaction between the Company and East West Bank and, as a result, the Company received a $4.0 million contribution during the nine months ended July 31, 2025 which is recorded as noncontrolling interest on the Consolidated Balance Sheets.

Current wording

During the first quarter of fiscal year 2026, the Company received the third and final annual funding from East West Bancorp, Inc. (“East West Bank”) under the tax equity financing transaction between the Company and East West Bank and, as a result, the Company received a $4.0 million contribution which is recorded as noncontrolling interest on the Consolidated Balance Sheets.

Previous wording

On April 10, 2024, the Company entered into Amendment No. 1 to the Open Market Sale Agreement, dated July 12, 2022 (the “2022 Sales 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 (each, an “Agent” and together, the “Agents”) (the 2022 Sales Agreement as amended, the “Amended Sales Agreement”), with respect to an at the market offering program under which the Company may, from time to time, offer and sell shares of its common stock having an aggregate offering price of up to $300,000,000 (exclusive of any amounts previously sold under the 2022 Sales Agreement prior to its amendment). On December 27, 2024, the Company entered into Amendment No. 2 to the Amended Sales Agreement, which removed certain representations and warranties relating to the Company’s status as a well-known seasoned issuer. During the three months ended July 31, 2025, approximately 6.8 million shares of the Company’s common stock were sold under the Amended Sales Agreement at an average sale price of $5.70 per share, resulting in gross proceeds of approximately $39.0 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $38.1 million after deducting sales commissions totaling approximately $0.8 million and fees totaling approximately $0.1 million. During the first nine months of fiscal year 2025, approximately 9.2 million shares of the Company’s common stock were sold under the Amended Sales Agreement at an average sale price of $5.84 per share, resulting in gross proceeds of approximately $53.5 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $51.6 million after deducting sales commissions totaling approximately $1.1 million and fees totaling approximately $0.8 million. As of July 31, 2025, approximately $151.4 million of shares remained available for sale under the Amended Sales Agreement.

Current wording

On April 10, 2024, the Company entered into Amendment No. 1 to the Open Market Sale Agreement, dated July 12, 2022 (as amended, the “Sales 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 (each, an “Agent” and together, the “Agents”), with respect to an at the market offering program under which the Company could, from time to time, offer and sell shares of its common stock having an aggregate offering price of up to $300.0 million (exclusive of any amounts previously sold under the Sales Agreement prior to its amendment). On December 27, 2024, the Company entered into Amendment No. 2 to the Sales Agreement, which removed certain representations and warranties relating to the Company’s status as a well-known seasoned issuer. Following the sale of substantially all of the $300.0 million of shares previously available under the Sales Agreement, on December 30, 2025, the Company entered into Amendment No. 3 to the Sales Agreement, which removed J.P. Morgan Securities LLC as an Agent and increased the amount of shares that may be sold by the Company under the Sales Agreement to $200.0 million (exclusive of any amounts previously sold under the Sales Agreement prior to the date of Amendment No. 3). During the three months ended January 31, 2026, approximately 6.4 million shares of the Company’s common stock were sold under the Sales Agreement at an average sale price of $8.82 per share, resulting in gross proceeds of approximately $56.3 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $54.9 million after deducting sales commissions totaling approximately $1.1 million and fees totaling approximately $0.3 million. As of January 31, 2026, approximately $157.1 million of shares remained available for sale under the Sales Agreement.

Previous wording

Following the end of the quarter, approximately 2.7 million shares of the Company’s common stock were sold under the Amended Sales Agreement, at an average sale price of $4.55 per share, resulting in gross proceeds of approximately $12.1 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $11.8 million after deducting sales commissions and fees totaling approximately $0.3 million. Approximately $139.4 million of shares remained available for sale under the Amended Sales Agreement following these sales.

Current wording

Subsequent to January 31, 2026, approximately 0.3 million shares of the Company’s common stock were sold under the Sales Agreement, at an average sale price of $7.67 per share, resulting in gross proceeds of approximately $2.6 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $2.5 million after deducting sales commissions and fees totaling approximately $0.1 million. Approximately $154.5 million of shares remained available for sale under the Sales Agreement following these sales.

Previous wording

See Note 12. “Stockholders’ Equity” for additional information regarding the 2022 Sales Agreement and the Amended Sales Agreement.

Current wording

See Note 12. “Stockholders’ Equity” to our consolidated financial statements for additional information regarding the Sales Agreement.

Previous wording

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 2025 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 and manufacturing expansion, (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 advance the commercialization of its solid oxide and carbon capture platforms through partnerships with third parties, (viii) implement capacity expansion for our carbonate products when required, (ix) seek partnerships for solid oxide product commercialization and manufacturing, (x) implement the product cost reductions necessary to achieve profitable operations, (xi) manage working capital and the Company’s unrestricted cash balance and (xii) access the capital markets to raise funds through the sale of debt and equity securities, convertible notes, and other equity-linked instruments.

Current wording

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 2026 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 and manufacturing expansion, (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 advance the commercialization of its solid oxide and carbon capture platforms through partnerships with third parties, (viii) implement capacity expansion for its carbonate products when required, (ix) seek partnerships for solid oxide product commercialization and manufacturing, (x) implement the product cost reductions necessary to achieve profitable operations, (xi) manage working capital and the Company’s unrestricted cash balance and (xii) access the capital markets to raise funds through the sale of debt and equity securities, convertible notes, and other equity-linked instruments.

Previous wording

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 transactions, partnership flip transactions and the monetization and/or transfer of eligible investment and production tax credits) to finance its project asset portfolio as these projects commence commercial operations. The Company may also seek to undertake private placements of debt securities to finance its project asset portfolio. The Company is also pursuing financing to support its commercial efforts, which include deployment of modules to the repowering opportunities in the Korean market including the GGE project (as defined elsewhere herein). 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 also expect to seek 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

Current wording

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 transactions, partnership flip transactions and the monetization and/or transfer of eligible investment and production tax credits) to finance its project asset portfolio as these projects commence commercial operations. The Company may also seek to undertake private placements of debt securities to finance its project asset portfolio. The Company is also pursuing financing to support its commercial efforts, which include deployment of modules to the repowering opportunities in the South Korean market including the GGE (as defined elsewhere herein) project. 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 also expect to seek 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 further reduce or slow planned spending, further 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.

Previous wording

To grow our generation operating portfolio, the Company may continue to invest in developing and building turn-key fuel cell projects, which will be owned by the Company and classified as project assets on the Consolidated Balance Sheets. This strategy requires liquidity and the Company expects to continue to have increasing liquidity requirements as project sizes increase and more projects are added to backlog. We may commence building project assets upon the award of a project or execution of a multi-year PPA with an end-user that has a strong credit profile. Project development and construction cycles, which span the time between securing a PPA and commercial operation of the platform, vary substantially and can take years. As a result of these project cycles and strategic decisions to finance the construction of certain projects, we may need to make significant up-front investments of resources in advance of the receipt of any cash from the sale or long-term financing of such projects. To make these up-front investments, we may use our working capital, seek to raise funds through the sale of equity or debt securities, or seek other financing arrangements. Delays in construction progress and completing current projects in process within budget, or in completing financing or the sale of our projects may impact our liquidity in a material way.

Current wording

To grow our generation operating portfolio, the Company may continue to invest in developing and building turn-key fuel cell projects, which will be owned by the Company and classified as project assets on the Consolidated Balance Sheets. This strategy requires liquidity and the Company expects to continue to have increasing liquidity requirements as project sizes increase and more projects are added to backlog. We may commence building project assets upon the award of a project or execution of a multi-year PPA with an end-user that has a strong credit profile. Project development and construction cycles, which span the time between securing a PPA and commercial operation of the platform, vary substantially and can take years. As a result of these project cycles and strategic decisions to finance the construction of certain projects, we may need to make significant up-front investments of resources in advance of the receipt of any cash from the sale or long-term financing of such projects. To make these up-front investments, we may use our working capital, seek to raise funds through the sale of equity or debt securities, or seek other financing arrangements. Delays in

Previous wording

We believe retaining ownership of our generation operating portfolio generally contributes to higher long-term cash flows to the Company than if these projects had been sold. Our generation operating portfolio totaled 62.8 MW as of July 31, 2025. We expect generation revenue to continue to grow as additional projects achieve commercial operation, but this revenue amount may also fluctuate from year to year depending on platform output, operational performance and management and site conditions. The Company actively markets its products in order to grow this portfolio; however, the Company may also sell certain projects to investors from time to time. As of July 31, 2025, the Company had one project representing an additional 7.4 MW in development, which is expected to generate operating cash flows in future periods, if completed. We have worked with and are continuing to work with lenders and financial institutions to secure construction financing, long-term debt, tax equity and sale-leasebacks for our project asset portfolio, but there can be no assurance that such financing can be attained, or that, if attained, it will be retained and sufficient.

Current wording

Our generation operating portfolio totaled 62.8 MW as of January 31, 2026. We expect generation revenue to continue to grow as additional projects achieve commercial operation, but this revenue amount may also fluctuate from year to year depending on platform output, operational performance and management and site conditions. The Company actively markets its products in order to grow this portfolio; however, the Company may also sell certain projects to investors from time to time. As of January 31, 2026, the Company had two projects representing an additional 8.5 MW in development, which are expected to generate operating cash flows in future periods, if completed. We have worked with and are continuing to work with lenders and financial institutions to secure construction financing, long-term debt, tax equity and sale-leasebacks for our project asset portfolio, but there can be no assurance that such financing can be attained, or that, if attained, it will be retained and sufficient.

Previous wording

As of July 31, 2025, net debt outstanding related to project assets was $109.0 million. Future required payments, inclusive of principal and interest, totaled $126.5 million as of July 31, 2025. The outstanding finance obligations under our sale-leaseback transactions totaled $18.8 million as of July 31, 2025, of which $11.6 million represents the current carrying value of finance obligations less future required payments.

Current wording

As of January 31, 2026, net debt outstanding related to project assets was $102.7 million. Future required payments, inclusive of principal and interest, totaled $117.6 million as of January 31, 2026. The outstanding finance obligations under our sale-leaseback transactions totaled $18.8 million as of January 31, 2026, of which $12.4 million represents the current carrying value of finance obligations less future required payments.