Home Energy company FuelCell Energy: Project Update – Groton Sub Base – The Groton Project – Form 8-K

FuelCell Energy: Project Update – Groton Sub Base – The Groton Project – Form 8-K

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UNITED STATES

SAFETY AND EXCHANGES COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to section 13 or 15(d) of the

Stock Exchange Act of 1934

Report Date (Date of First Reported Event): September 29, 2022

FUELCELL ENERGY, INC.

(Exact name of the holder as specified in his charter)

Delaware

1-14204

06-0853042

(State or other jurisdiction of

Incorporation)

(Commission

File number)

(IRS Employer

ID number.)

3 Route of the Great Pastures,

Danbury, Connecticut

06810

(Address of main executive offices)

(Postal code)

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

Not applicable

(Former name or address, if changed since last report)

Check the appropriate box below if the filing of Form 8-K is intended to concurrently satisfy the filer’s filing obligation under any of the following provisions:

Written communications pursuant to Rule 425 of the Securities Act (17 CFR 230.425)

Solicit material in accordance with Rule 14a-12 of the Exchange Act (17 CFR 240.14a-12)

Pre-opening communications pursuant to Rule 14d-2(b) of the Exchange Act (17 CFR 240.14d-2(b))

Pre-opening communications pursuant to Rule 13e-4(c) of the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class

Trading Symbol(s)

Name of each exchange listed on

Common shares, par value of $0.0001 per share

FCEL

The Nasdaq Stock Market LLC
(Nasdaq global market)

Indicate with a check mark whether the registrant is an emerging growth company within the meaning of Rule 405 of the Securities Act of 1933 (§230.405 of this Chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b- 2 of this chapter).

Growing emerging company

If the company is an emerging growth company, indicate with a check mark whether the registrant has elected not to use the extended transition period to comply with new or revised financial accounting standards under the section 13(a) of the Exchange Act.

Item 8.01.Other events.

Project Update – Groton Sub Base – The Groton Project

As previously reported in its Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2022, upon restarting the commissioning process for the 7.4 MW platform at the US Navy in Groton, Connecticut (the “Project Groton”), FuelCell Energy, Inc. (the “Company”) experienced performance anomalies primarily in the Mixer Ejector Oxidizer (“MEO”), which is a Sophisticated Groton project-specific equipment designed to optimize fuel and airflow within the rig. The company further disclosed that it was in talks with the Connecticut Municipal Electric Energy Cooperative (“CMEEC”) and the United States Navy about operating the project at a reduced power of 3.0 MW per platform ( a total system power of 6.0 MW) at the start of commercial operations in order to optimize the performance of each of the two MEO units while implementing upgrades of each of the two MEO units. The upgrades should bring the system to peak production in about a year.

On September 29, 2022, the United States Navy granted an extension of the deadline by which commercial operations must be completed at the Groton Project from September 30, 2022 to November 30, 2022. The Groton Project has completed operations at approximately 6.0 MW and has passed a seven-day performance test required by the US Navy and is therefore operating at the level at which the company has proposed to begin commercial operations. However, the Company requires CMEEC and US Navy approval to begin commercial operations at reduced production. Although discussions are progressing, there can be no assurance that CMEEC and the US Navy will provide such final approval to begin commercial operations at 6.0 MW.

In addition, as previously disclosed, in August 2021, the Company entered into a tax equity financing transaction with East West Bancorp, Inc. (“East West Bank”) for the Groton project. East West Bank’s tax fairness pledge is $15 million. As part of the initial closing, the Company drew $3.0 million. Under the original terms of the Company’s agreement with East West Bank, the Company would have been eligible to draw down the remaining amount of the commitment, approximately $12 million, once the Groton project reaches commercial operation. In addition, under the original terms of the Company’s agreement with East West Bank, the Groton Project had a required commercial exploitation deadline of October 18, 2021. East West Bank granted several extensions to the exploitation deadline. trade, who collectively extended the deadline to May. 15, 2022, in exchange for a total fee of $0.4 million. Since business operations were delayed beyond May 15, 2022, East West Bank had a conditional withdrawal right to request the return of its investment in an amount equal to 101% of the investment amount.

On July 7, 2022, the Company and East West Bank amended their tax equity financing agreement. Under this amended agreement, the deadline for trade operations has been extended to September 30, 2022. In addition, the terms of East West Bank’s remaining investment commitment of $12.0 million have been amended so that East West Bank will contribute $4.0 million on each of the first, second and third anniversaries of commercial operation of the Groton Project, rather than contributing the full $12.0 million when the Groton Project will reach commercial exploitation. These contributions are subject to certain conditions precedent from the customer, including certification by an independent third party that the plant is operating in accordance with the power purchase agreement. Along with this amendment, the Company agreed to an aggregate fee of $0.5 million (which includes the costs of the previous extensions described above), which will be payable by the Company upon commencement of commercial operations of the plant.

The Company continues to provide periodic updates to East West Bank regarding its discussions with CMEEC and the US Navy regarding the commencement of commercial operations at the Groton Project at approximately 6.0 MW and has advised East West Bank of receipt by the US Navy of an extension of the deadline for commercial operations until November 30, 2022.

On October 4, 2022, the Company and East West Bank further amended their tax equity financing agreement to extend the deadline by which commercial operations must be completed at the Groton Project from September 30, 2022 to November 30, 2022. If the project has not completed commercial operations by November 30, 2022, East West Bank will then have a conditional withdrawal right to request the return of its investment in an amount equal to 101% of the amount of the investment. In addition, changes to the Groton Project documents between CMEEC and the Company following an agreement to commence operations at less than 7.4 MW may require East West Bank’s approval under the rights of East West Bank under the agreement between East West Bank and the Company. If such approval is required, the Company cannot guarantee that East West Bank will give its approval.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be executed on its behalf by the duly authorized undersigned.

FUELCELL ENERGY, INC.

Date: October 4, 2022

By:

/s/ Michael S. Bishop

Michael S. Bishop

Executive Vice President and Chief Financial Officer

Disclaimer

FuelCell Energy Inc. published this content on October 04, 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unmodified, on October 04, 2022 21:21:03 UTC.

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Analyst Recommendations for FUELCELL ENERGY, INC.

2022 sales 137M

2022 net income -129M

Net cash 2022 311M

PER 2022 ratio -10.4x
2022 return
Capitalization 1,419 million
1,419 million
EV / Sales 2022 8.09x
EV / Sales 2023 8.06x
# of employees 384
Floating 96.7%

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