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 plan during the expected timeframe and the expected effects and impacts of the Company’s restructuring plan; and (xi) our ability to achieve our sales plans, manufacturing capacity expansion plans, 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-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.

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 plan 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; 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 requirements of our contracts; and our ability to expand our customer base and maintain relationship…

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, 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.

Previous 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

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 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.

Previous wording

Total revenues for the three months ended January 31, 2025 of $19.0 million reflects an increase of $2.3 million from $16.7 million for the same period in the prior year. Cost of revenues for the three months ended January 31, 2025 of $24.2

Current wording

Total revenues for the three months ended April 30, 2025 of $37.4 million reflects an increase of $15.0 million from $22.4 million for the same period in the prior year. Cost of revenues for the three months ended April 30, 2025 of $46.8 million reflects an increase of $17.4 million from $29.5 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 $0.1 million during the three months ended January 31, 2025 and there were no product revenues in the comparable prior year period. The product revenues during the three months ended January 31, 2025 were 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 platform to the Sacramento Sewer District.

Current wording

Product revenues were $13.0 million during the three months ended April 30, 2025 and there were no product revenues in the comparable prior year period. The increase in product revenues during the three months ended April 31, 2025 was primarily driven by $12.0 million of revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for the replacement of four fuel cell modules for GGE’s 58.8 MW fuel cell power plant platform in Hwaseong-si, Korea, and $1.1 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.

Previous wording

Cost of product revenues increased $0.6 million for the three months ended January 31, 2025 to $3.0 million, compared to $2.4 million in the same period in the prior year. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $2.7 million for the three months ended January 31, 2025, compared to approximately $2.2 million for the three months ended January 31, 2024.

Current wording

Cost of product revenues increased $13.3 million for the three months ended April 30, 2025 to $16.3 million, compared to $2.9 million in the same period in the prior year, primarily due to the higher product sales in the three months ended April 30, 2025. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $2.9 million for the three months ended April 30, 2025, compared to approximately $2.8 million for the three months ended April 30, 2024.

Previous wording

For the three months ended January 31, 2025, we operated at an annualized production rate of approximately 31.2 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 33.2 MW for the three months ended January 31, 2024.

Current wording

For the three months ended April 30, 2025, we operated at an annualized production rate of approximately 29.9 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 30.9 MW for the three months ended April 30, 2024.

Previous wording

Service agreements revenues for the three months ended January 31, 2025 increased $0.2 million to $1.8 million from $1.6 million for the three months ended January 31, 2024. The increase in service agreements revenues during the three months ended January 31, 2025 was primarily driven by revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for GGE’s 58.8 MW fuel cell power plant platform in Hwasong-si, Korea. There were no module exchanges during the three months ended January 31, 2025 or during the three months ended January 31, 2024.

Current wording

Service agreements revenues for the three months ended April 30, 2025 increased $6.8 million to $8.1 million from $1.4 million for the three months ended April 30, 2024. The increase in service agreements revenues during the three months ended April 30, 2025 was primarily driven by revenue recognized from module exchanges under the Company’s LTSA with United Illuminating in New Haven, Connecticut. There were three module exchanges during the three months ended April 30, 2025, and no module exchanges during the three months ended April 30, 2024.

Previous wording

Cost of service agreements revenues decreased $0.2 million to $1.7 million for the three months ended January 31, 2025 from $1.9 million for the three months ended January 31, 2024. Cost of service agreements revenues includes maintenance and operating costs and costs of module exchanges.

Current wording

Cost of service agreements revenues increased $7.8 million to $9.1 million for the three months ended April 30, 2025 from $1.3 million for the three months ended April 30, 2024 due to the three module exchanges in the three months ended April 30, 2025, compared to no module exchanges during the three months ended April 30, 2024. Cost of service agreements revenues includes maintenance and operating costs and costs of module exchanges.

Previous wording

Cost of generation revenues totaled $15.3 million in the three months ended January 31, 2025, compared to $20.9 million in the three months ended January 31, 2024. The overall decrease in cost of generation revenues is primarily related to a reduction in the expensed construction costs related to the Toyota Project, which were $0.3 million in the three months ended January 31, 2025, compared to $3.5 million in the three months ended January 31, 2024 (which also included expensed gas costs). During the three months ended January 31, 2025, the Company incurred a mark-to-market net gain of $1.8 million related to natural gas purchase contracts, compared to a mark-to-market net loss of $1.9 million during the three months ended January 31, 2024. Cost of generation revenues included depreciation and amortization of approximately $8.0 million and $6.8 million for the three months ended January 31, 2025 and 2024, respectively.

Current wording

Cost of generation revenues totaled $18.4 million in the three months ended April 30, 2025, compared to $21.4 million in the three months ended April 30, 2024. The overall decrease in cost of generation revenues is primarily related to a reduction in the expensed construction costs related to the Toyota Project, which were $0.2 million in the three months ended April 30, 2025, compared to $2.6 million in the three months ended April 30, 2024 (which also included expensed gas costs). During the three months ended April 30, 2025, the Company incurred a mark-to-market net loss of $0.8 million related to natural gas purchase contracts, compared to a mark-to-market net loss of $2.3 million during the three months ended April 30, 2024. Cost of generation revenues included depreciation and amortization of approximately $8.7 million and $7.2 million for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

affiliate of EMTEC and Exxon Mobil Corporation, related to the Rotterdam project were approximately $3.5 million and revenue recognized under government contracts and other contracts were approximately $1.0 million for the three months ended January 31, 2025. This compares to Advanced Technologies contract revenues recognized under our Joint Development Agreement with EMTEC of approximately $2.5 million, revenue recognized under the Esso purchase order of approximately $1.0 million and revenue recognized under government contracts and other contracts of approximately $1.1 million for the three months ended January 31, 2024.

Current wording

Advanced Technologies contract revenues for the three months ended April 30, 2025 decreased to $4.1 million from $6.9 million for the three months ended April 30, 2024. Advanced Technologies contract revenues recognized under our Joint Development Agreement with ExxonMobil Technology and Engineering Company (“EMTEC”) were approximately $2.3 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 $1.2 million and revenue recognized under government contracts and other contracts were approximately $0.6 million for the three months ended April 30, 2025. This compares to Advanced Technologies contract revenues recognized under our Joint Development Agreement with EMTEC of approximately $2.7 million, revenue recognized under the Esso purchase order of approximately $2.1 million and revenue recognized under government contracts and other contracts of approximately $2.1 million for the three months ended April 30, 2024.

Previous wording

Advanced Technologies contracts for the three months ended January 31, 2025 generated a gross profit of $1.5 million, compared to a gross profit of $1.3 million for the same period in the prior year. The increase was due primarily to the higher revenues recognized during the three months ended January 31, 2025 compared to the three months ended January 31, 2024.

Current wording

Advanced Technologies contracts for the three months ended April 30, 2025 generated a gross profit of $1.0 million, compared to a gross profit of $3.1 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 April 30, 2025 compared to the three months ended April 30, 2024.

Previous wording

Administrative and selling expenses were $15.0 million and $16.4 million for the three months ended January 31, 2025 and 2024, respectively. Administrative and selling expenses were lower during the three months ended January 31, 2025 than during the three months ended January 31, 2024 primarily due to lower compensation expense as a result of the recent restructuring actions.

Current wording

Administrative and selling expenses were $16.5 million and $17.7 million for the three months ended April 30, 2025 and 2024, respectively. Administrative and selling expenses were lower during the three months ended April 30, 2025 than during the three months ended April 30, 2024 primarily due to lower compensation expense as a result of the restructuring actions in September of fiscal year 2024 and November of fiscal year 2025.

Previous wording

Research and development expenses decreased to $11.1 million for the three months ended January 31, 2025 compared to $14.4 million for the three months ended January 31, 2024. The decrease is primarily due to a decrease in spending on the Company’s ongoing 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, as well as a shift in engineering resource allocation toward supporting an increase in funded Advanced Technologies activities.

Current wording

Research and development expenses decreased to $9.9 million for the three months ended April 30, 2025 compared to $16.6 million for the three months ended April 30, 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, as well as a shift in engineering resource allocation toward supporting funded Advanced Technologies activities.

Previous wording

Loss from operations for the three months ended January 31, 2025 was $32.9 million compared to $42.5 million for the three months ended January 31, 2024. This decrease was driven primarily by a $3.1 million decrease in operating expenses and a $6.5 million decrease in gross loss.

Current wording

Loss from operations for the three months ended April 30, 2025 was $35.8 million compared to $41.4 million for the three months ended April 30, 2024. This decrease was driven primarily by a $7.9 million decrease in operating expenses, partially offset by a $2.4 million increase in gross loss.

Previous wording

Interest expense for the three months ended January 31, 2025 and 2024 was $2.6 million and $2.3 million, respectively. Interest expense for both periods includes interest on 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 increased for the three months ended January 31, 2025, as this period also 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, and 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 April 30, 2025 and 2024 was $2.5 million and $2.3 million, respectively. Interest expense for both periods includes interest on 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 increased for the three months ended April 30, 2025, as this period also 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, and on the facility with EXIM (as defined elsewhere herein), which was entered into in October 2024.

Previous wording

Interest income was $2.4 million and $4.1 million for the three months ended January 31, 2025 and 2024, respectively. The decrease in interest income during the three months ended January 31, 2025 was primarily driven by lower money market investments compared to the three months ended January 31, 2024. Interest income for the three months ended January 31, 2025 and 2024 represents interest earned on money market investments and investments in U.S. Treasury Securities.

Current wording

Interest income was $1.8 million and $3.4 million for the three months ended April 30, 2025 and 2024, respectively. The decrease in interest income during the three months ended April 30, 2025 was primarily driven by lower money market investments compared to the three months ended April 30, 2024. Interest income for the three months ended April 30, 2025 and 2024 represents interest earned on money market investments and investments in U.S. Treasury Securities.

Previous wording

Other income (expense), net was $0.7 million and $(3.7) million for the three months ended January 31, 2025 and 2024, respectively. Other income, net for the three months ended January 31, 2025 relates primarily to an unrealized gain of $0.9 million on the OpCo Financing Facility interest rate swap derivative. Other expense, net for the three months ended January 31, 2024 relates primarily to a loss on the OpCo Financing Facility interest rate swap derivative of $3.5 million as a result of a decrease of approximately 100 basis points in the Secured Overnight Financing Rate (“SOFR”).

Current wording

Other (expense) income, net was $(1.1) million and $2.6 million for the three months ended April 30, 2025 and 2024, respectively. Other expense, net for the three months ended April 30, 2025 relates primarily to an unrealized loss of $1.6 million on the OpCo Financing Facility interest rate swap derivative. Other income, net for the three months ended April 30, 2024 relates primarily to a gain on the OpCo Financing Facility interest rate swap derivative of $2.7 million.

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 in Korea. Provision for income tax recorded for each of the three months ended January 31, 2025 and 2024 was $0.0 million.

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 in Korea. Provision for income tax recorded for the three months ended April 30, 2025 was $0.1 million, and we recorded no provision for income tax for the three months ended April 30, 2024.

Previous wording

Net (loss) income attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the flip structure of our tax equity financings with East West Bancorp, Inc. (“East West Bank”), Renewable Energy Investors, LLC (“REI”), and Franklin Park 2023 FCE Tax Equity Fund, LLC (“Franklin Park”).

Current wording

Net income (loss) attributable to noncontrolling interests is the result of allocating profits and losses to noncontrolling interests under the hypothetical liquidation at book value (“HLBV”) method. HLBV is a balance sheet-oriented approach for applying the equity method of accounting when there is a complex structure, such as the flip structure of our tax equity financings with East West Bancorp, Inc. (“East West Bank”), Renewable Energy Investors, LLC (“REI”), and Franklin Park 2023 FCE Tax Equity Fund, LLC (“Franklin Park”).

Previous wording

For the three months ended January 31, 2025 and 2024, net loss attributable to noncontrolling interest totaled $1.0 million and $0.3 million, respectively, for the LIPA Yaphank Project tax equity financing transaction with REI.

Current wording

For the three months ended April 30, 2025 and 2024, net (loss) income attributable to noncontrolling interest totaled $(0.1) million and $0.2 million, respectively, for the LIPA Yaphank Project tax equity financing transaction with REI.

Previous wording

For the three months ended January 31, 2025 and 2024, net income (loss) attributable to noncontrolling interest totaled $0.4 million and $(20.7) million, respectively, for the Derby Projects tax equity financing transaction with Franklin Park. The loss in the three months ended January 31, 2024 was primarily a result of accelerated depreciation allocated to the noncontrolling interest under the HLBV method.

Current wording

For the three months ended April 30, 2025 and 2024, net income (loss) attributable to noncontrolling interest totaled $0.4 million and $(6.1) million, respectively, for the Derby Projects tax equity financing transaction with Franklin Park. The loss in the three months ended April 30, 2024 was primarily a result of accelerated depreciation allocated to the noncontrolling interest under the HLBV method.

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 January 31, 2025 and 2024, net loss attributable to common stockholders was $29.1 million and $20.6 million, respectively, and net loss per common share was $1.42 and $1.37, respectively. The increase in net loss per common share is primarily due to the decreased net loss attributable to noncontrolling interest during the three months ended January 31, 2025 (compared to the net loss attributable to noncontrolling interest that benefitted the comparable prior year period), partially offset by a decrease in loss from operations. The net loss per common share for the three months ended January 31, 2025 benefited from the higher number of weighted average shares outstanding due to share issuances since January 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 April 30, 2025 and 2024, net loss attributable to common stockholders was $38.8 million and $32.9 million, respectively, and net loss per common share was $1.79 and $2.18, respectively. The increase in net loss attributable to common stockholders was primarily due to the net income of $0.3 million attributable to noncontrolling interest during the three months ended April 30, 2025 (compared to the net loss of $5.5 million attributable to noncontrolling interest that benefited the comparable prior year period). The decrease in net loss per common share is primarily due to the higher number of weighted average shares outstanding due to share issuances since April 30, 2024.

Previous wording

Overall gross profit from service agreements revenues was $0.2 million for the three months ended January 31, 2025, compared to a gross loss of $ (0.3) million for the three months ended January 31, 2024. The overall gross margin was 9.7% for the three months ended January 31, 2025 compared to a gross margin of (16.8)% in the comparable prior year period.

Current wording

Overall gross loss from service agreements revenues was $0.7 million for the six months ended April 30, 2025, which was an increase from a gross loss of $0.2 million for the six months ended April 30, 2024. The overall gross margin was (7.4)% for the six months ended April 30, 2025 compared to a gross margin of (5.7)% in the six months ended April 30, 2024.

Previous wording

Revenues from generation for the three months ended January 31, 2025 totaled $11.3 million, which represents an increase of $0.9 million from the $10.5 million of revenue recognized for the three months ended January 31, 2024. The increase reflects an increase in revenue of $1.7 million generated by 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 both of which became operational in December 2023, partially offset by lower revenue from other plants due to lower output resulting from routine maintenance activities. Generation revenues for the three months ended January 31, 2025 and 2024 reflect revenue from electricity generated under our power purchase agreements (“PPAs”), the sale of renewable energy credits, and additionally for the three months ended January 31, 2025, the sale of hydrogen from the Toyota Project.

Current wording

Revenues from generation for the six months ended April 30, 2025 totaled $23.5 million, which represents a decrease of $1.1 million from generation revenues recognized of $24.6 million for the six months ended April 30, 2024. The decrease in generation revenues reflects lower output from plants in our generation operating portfolio resulting from routine maintenance activities, partially offset by revenue generated by 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”), both of which became operational in December 2023. Generation revenues for the six months ended April 30, 2025 and 2024 reflect revenue from electricity generated under our PPAs and the sale of renewable energy credits from our generation operating portfolio.

Previous wording

We currently have four projects with fuel sourcing risk, which are the Toyota Project, which requires procurement of renewable natural gas (“RNG”), and our 14.0 MW and 2.8 MW Derby Projects and our 7.4 MW project in Yaphank Long Island (the “Yaphank Project”), which require natural gas for which there is no pass-through mechanism. A two-year (through May of 2025) fuel supply contract 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 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 Yaphank Project asset and further impairment charges for the Toyota Project asset.

Current wording

We currently have four projects with fuel sourcing risk, which are the Toyota Project, our 14.0 MW and 2.8 MW Derby Projects and our 7.4 MW 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 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

Restructuring expense of $1.5 million for the three months ended January 31, 2025 was a result of the Company’s workforce reductions in November 2024, which represented approximately 13% of the Company’s global workforce and were intended to reduce costs and align production levels with current levels of demand in a manner that is consistent with the Company’s long-term strategic plan. The workforce was reduced across our global operations including Calgary, Canada and at our North American production facility in Torrington, Connecticut, at our corporate offices in Danbury, Connecticut and at other remote locations.

Current wording

Restructuring expense of $1.5 million for the six months ended April 30, 2025 was a result of the Company’s workforce reductions in November 2024, which represented approximately 13% of the Company’s global workforce and were intended to reduce costs and align production levels with levels of demand in a manner consistent with the Company’s long-term strategic plan. The workforce was reduced across our global operations including Calgary, Canada and at our

Previous wording

For the three months ended January 31, 2025 and 2024, net loss attributable to noncontrolling interest totaled $3.5 million and $3.6 million, respectively, for the Groton Project tax equity financing transaction with East West Bank.

Current wording

For the six months ended April 30, 2025 and 2024, net loss attributable to noncontrolling interest totaled $3.5 million and $3.3 million, respectively, for the Groton Project tax equity financing transaction with East West Bank.

Previous wording

As of January 31, 2025, unrestricted cash and cash equivalents totaled $98.1 million compared to $148.1 million as of October 31, 2024. During the year ended October 31, 2024 and the three months ended January 31, 2025, the Company invested in United States (U.S.) Treasury Securities. The amortized cost of the U.S. Treasury Securities outstanding totaled $110.3 million as of January 31, 2025 compared to $109.1 million as of October 31, 2024 and is classified as Investments - short-term on the Consolidated Balance Sheets.

Current wording

As of April 30, 2025, unrestricted cash and cash equivalents totaled $116.1 million compared to $148.1 million as of October 31, 2024. During the year ended October 31, 2024 and the six months ended April 30, 2025, the Company invested in United States (U.S.) Treasury Securities. The amortized cost of the U.S. Treasury Securities outstanding totaled $60.9 million as of April 30, 2025 compared to $109.1 million as of October 31, 2024 and is classified as Investments - short-term on the Consolidated Balance Sheets.

Previous wording

During the first quarter of fiscal year 2025, the Company received the second 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 during the three months ended January 31, 2025 which is recorded as noncontrolling interest on the Consolidated Balance Sheets.

Current wording

During the first six 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 six months ended April 30, 2025 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 first quarter of fiscal year 2025, approximately 0.7 million shares of the Company’s common stock were sold under the Amended Sales Agreement at an average sale price of $9.19 per share, resulting in gross proceeds of approximately $6.3 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $5.9 million after deducting sales commissions totaling approximately $0.1 million and fees totaling approximately $0.3 million. As of January 31, 2025, approximately $198.6 million of shares remained available for sale under the Amended Sales Agreement. See Note 12. “Stockholders’ Equity” for additional information regarding the 2022 Sales Agreement and 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 (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 April 30, 2025, approximately 1.6 million shares of the Company’s common stock were sold under the Amended Sales Agreement at an average sale price of $5.00 per share, resulting in gross proceeds of approximately $8.1 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $7.7 million after deducting sales commissions totaling approximately $0.2 million and fees totaling approximately $0.2 million. During the first six months of fiscal year 2025, approximately 2.3 million shares of the Company’s common stock were sold under the Amended Sales Agreement at an average sale price of $6.25 per share, resulting in gross proceeds of approximately $14.5 million before deducting sales commissions and fees, and net proceeds to the Company of approximately $13.6 million after deducting sales commissions totaling approximately $0.3 million and fees totaling approximately $0.6 million. As of April 30, 2025, approximately $190.4 million of shares remained available for sale under the Amended Sales Agreement. See Note 12. “Stockholders’ Equity” for additional information regarding the 2022 Sales Agreement and the Amended Sales Agreement.

Previous wording

On December 27, 2024, the Company filed Post-Effective Amendment No. 1 and Post-Effective Amendment No. 2 to the Registration Statement on Form S-3 (File No. 333-274971) (the “Registration Statement”), each including a base prospectus covering the offering, issuance and sale by the Company of up to $405,000,000 of common stock, warrants and units (or any combination thereof) from time to time in one or more offerings and a prospectus supplement covering the offering, issuance and sale by the Company from time to time of up to $204,922,876.65 of the Company’s common stock, which was the amount remaining under the Amended Sales Agreement as of December 27, 2024. On March 5, 2025, the Company filed Post-Effective Amendment No. 3 to the Registration Statement to update certain information, to provide an updated consent of its independent registered public accounting firm, and to provide an update about the amount of shares remaining available for offer and sale by the Company under the Amended Sales Agreement. In the event that the Amended Sales Agreement is terminated, any portion of the aggregate amount of shares of common stock included in the prospectus supplement that is not sold pursuant to the Amended Sales Agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.

Current wording

On December 27, 2024, the Company filed Post-Effective Amendment No. 1 and Post-Effective Amendment No. 2 to the Registration Statement on Form S-3 (File No. 333-274971) (the “Registration Statement”), each including a base prospectus covering the offering, issuance and sale by the Company of up to $405,000,000 of common stock, warrants and units (or any combination thereof) from time to time in one or more offerings and a prospectus supplement covering the offering, issuance and sale by the Company from time to time of up to $204,922,876.65 of the Company’s common stock, which was the amount remaining under the Amended Sales Agreement as of December 27, 2024. On March 5, 2025, the Company filed Post-Effective Amendment No. 3 to the Registration Statement to update certain information, to provide an updated consent of its independent registered public accounting firm, and to provide an update about the amount of shares then remaining available for offer and sale by the Company under the Amended Sales Agreement. The Registration Statement, as amended by the Post-Effective Amendments, was declared effective by the SEC on March 10, 2025. In the event that the Amended Sales Agreement is terminated, any portion of the aggregate amount of shares of common stock included in the prospectus supplement that is not sold pursuant to the Amended Sales Agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.

Previous wording

To grow our generation operating portfolio, the Company expects to 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

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.

Previous wording

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 January 31, 2025, the Company had three projects representing an additional 8.7 MW in development, which projects 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.

Current 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 April 30, 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 April 30, 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.

Previous wording

As of January 31, 2025, net debt outstanding related to project assets was $114.3 million. Future required payments, inclusive of principal and interest, totaled $135.4 million as of January 31, 2025. The outstanding finance obligations under our sale-leaseback transactions totaled $18.8 million as of January 31, 2025, of which $10.9 million represents the current carrying value of finance obligations less future required payments.

Current wording

As of April 30, 2025, net debt outstanding related to project assets was $112.1 million. Future required payments, inclusive of principal and interest, totaled $131.0 million as of April 30, 2025. The outstanding finance obligations under our sale-leaseback transactions totaled $18.8 million as of April 30, 2025, of which $11.3 million represents the current carrying value of finance obligations less future required payments.

Previous wording

In January 2025, we entered into a PPA with Eversource and United Illuminating in Hartford, Connecticut, for a 7.4 MW solid oxide fuel cell power generation system. Power from these solid oxide fuel cells will be sold to Eversource and United Illuminating through the 20-year term of the PPA. The current expectation is that we will complete construction in calendar year 2026 and commence commercial operations in December 2026, subject in each case to completing customary development steps and obtaining financing for the project.

Current wording

In January 2025, we entered into a PPA with Eversource and United Illuminating in Hartford, Connecticut, for a 7.4 MW carbonate fuel cell power generation system. Power from this project will be sold to Eversource and United Illuminating through the 20-year term of the PPA. The current expectation is that we will complete construction in calendar year 2026 and commence commercial operations in December 2026, subject in each case to completing customary development steps and obtaining financing for the project.

Previous wording

Overall, backlog increased by approximately 28.0% to $1.31 billion as of January 31, 2025, compared to $1.03 billion as of January 31, 2024, primarily as a result of the Hartford Project.

Current wording

Overall, backlog increased by approximately 18.7% to $1.26 billion as of April 30, 2025, compared to $1.06 billion as of April 30, 2024, primarily as a result of the Hartford Project and the LTSA with GGE with respect to the GGE Platform.

Previous wording

As discussed above, backlog also increased due to the LTSA with GGE with respect to the GGE Platform. The GGE Platform is comprised of 21 SureSource 3000 molten carbonate fuel cells (each a “Plant”). Each Plant is comprised of two 1.4-MW carbonate fuel cell modules. Pursuant to the LTSA, GGE and the Company have agreed that (i) GGE will purchase from the Company 42 1.4-MW carbonate fuel cell modules to replace existing fuel cell modules at the GGE Platform, (ii) the Company will provide certain balance of plant replacement components if and to the extent the parties reasonably determine existing components should be replaced, and (iii) the Company will provide long term operations and maintenance services for the GGE Platform. The total amount payable by GGE under the LTSA for the 42 replacement fuel cell modules, balance of plant replacement components, and service was $159.6 million USD, with payments being made and to be made over time as such replacement fuel cell modules are commissioned and the service obligations under the LTSA for such Plants commence. This amount was recorded as backlog concurrent with the execution of the LTSA on May 28, 2024, and has since been reduced as revenue has been recognized under the LTSA which commenced in the fourth quarter of fiscal year 2024.

Current wording

The GGE Platform is comprised of 21 SureSource 3000 molten carbonate fuel cells (each a “Plant”). Each Plant is comprised of two 1.4-MW carbonate fuel cell modules. Pursuant to the LTSA, GGE and the Company have agreed that (i) GGE will purchase from the Company 42 1.4-MW carbonate fuel cell modules to replace existing fuel cell modules at the GGE Platform, (ii) the Company will provide certain balance of plant replacement components if and to the extent the parties reasonably determine existing components should be replaced, and (iii) the Company will provide long term operations and maintenance services for the GGE Platform. The total amount payable by GGE under the LTSA for the 42 replacement fuel cell modules, balance of plant replacement components, and service was $159.6 million USD, with payments being made and to be made over time as such replacement fuel cell modules are commissioned and the service obligations under the LTSA for such Plants commence. This amount was recorded as backlog concurrent with the execution of the LTSA on May 28, 2024, and has since been reduced as revenue has been recognized under the LTSA which commenced in the fourth quarter of fiscal year 2024.

Previous wording

Backlog represents definitive agreements executed by the Company and our customers. Projects for which we have an executed PPA are included in generation backlog, which represents future revenue under long-term PPAs. The Company’s ability to recognize revenue in the future under a PPA is subject to the Company’s completion of construction of the project covered by such PPA. Should the Company not complete the construction of the project covered by a PPA, it will forgo future revenues with respect to the project and may incur penalties and/or impairment charges related to the project. Projects sold to customers (and not retained by the Company) are included in product sales and service agreements backlog, and the related generation backlog is removed upon sale. Together, the service and generation portion of backlog had a weighted average term of approximately 16 years as of January 31, 2025, with weighting based on the dollar amount of backlog and utility service contracts of up to 20 years in duration at inception.

Current wording

Backlog represents definitive agreements executed by the Company and our customers. Projects for which we have an executed PPA are included in generation backlog, which represents future revenue under long-term PPAs. The Company’s ability to recognize revenue in the future under a PPA is subject to the Company’s completion of construction of the project covered by such PPA. Should the Company not complete the construction of the project covered by a PPA, it will forgo future revenues with respect to the project and may incur penalties and/or impairment charges related to the project. Projects sold to customers (and not retained by the Company) are included in product sales and service agreements backlog,

Previous wording

During the three months ended January 31, 2025, we utilized short term cash to build our inventory of modules to be shipped to Korea under our LTSA with GGE. We expect to recognize revenue from these module shipments during fiscal years 2025 and 2026. In the fourth quarter of fiscal year 2024, we were able to arrange working capital financing from the Export-Import Bank of the United States to support the Company’s obligations under the LTSA with GGE. We remain focused on attracting similar supportive capital structures as we execute on our growth strategy. We also built project inventory as part of our safe harbor strategy for certain U.S. projects.

Current wording

During the six months ended April 30, 2025, we utilized short term cash to build our inventory of modules to be shipped to Korea under our LTSA with GGE. We have recognized revenue for the four modules shipped during the six months ended April 30, 2025, and we expect to continue to recognize revenue from additional module shipments during the remainder of fiscal year 2025 and fiscal year 2026. During the six months ended April 30, 2025, we also used short term cash to build project inventory as part of our safe harbor strategy for certain U.S. projects.