SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 19, 2019
FUELCELL ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
(State or Other Jurisdiction of
3 Great Pasture Road
|(Address of Principal Executive Offices)||(Zip Code)|
Registrant’s telephone number, including area code: (203) 825-6000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|¨||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)|
|¨||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)|
|¨||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))|
|¨||Pre-commencement communications pursuant to Rule 13e-4(c) under 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 on which registered|
|Common Stock, $0.0001 par value per share||FCEL||
The Nasdaq Stock Market LLC
(Nasdaq Global Market)
Indicate by check mark whether the registrant is an emerging growth company as defined in 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).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
|Item 1.01.||Entry into a Material Definitive Agreement.|
On March 5, 2013, FuelCell Energy, Inc. (the “Company”) closed on a long-term loan agreement with the Clean Energy Finance and Investment Authority, which is now known as the Connecticut Green Bank (“Green Bank”), for a loan totaling approximately $5.9 million in support of the Bridgeport fuel cell project (as amended from time to time, the “Loan Agreement”). Under the terms of the Loan Agreement prior to the amendment of such terms as described below, the interest rate was 5% percent per annum and principal repayments were to commence on the eighth anniversary of the project’s provisional acceptance date of December 20, 2021. Outstanding amounts under the Loan Agreement were secured by future cash flows from the Bridgeport fuel cell project contracts. On May 9, 2019, in connection with the execution of a subordinated credit agreement between Dominion Bridgeport Fuel Cell, LLC (which is now known as Bridgeport Fuel Cell, LLC) and Green Bank (the “Bridgeport Credit Agreement”) relating to the acquisition of the Bridgeport fuel cell project, a repayment of principal was made to Green Bank under the Loan Agreement reducing the principal balance to $1.8 million and, following such repayment, the collateral on such loan consists of a security interest in the Company’s interest in the service agreement between the Company and Bridgeport Fuel Cell, LLC, the project owner.
On and effective as of December 19, 2019, the Company and Green Bank entered into an amendment to the Loan Agreement (the “Amendment”). Upon the execution of the Amendment on December 19, 2019, Green Bank made an additional loan to the Company in the aggregate principal amount of $3.0 million (the “December 2019 Loan”), which is to be used (i) first, to pay closing fees related to the acquisition of the Bridgeport fuel cell project and the Bridgeport Credit Agreement, other fees, and accrued interest from May 9, 2019, totaling $404,000 (“Accrued Fees”), and (ii) thereafter, for general corporate purposes as determined by the Company, including, but not limited to, expenditures in connection with the project being constructed by Groton Station Fuel Cell, LLC (“Groton Fuel Cell”). Pursuant to the terms of the Amendment, Green Bank will have no further obligation to make loans under the Loan Agreement and the Company will have no right to make additional draws under the Loan Agreement.
The Amendment provides that, until such time as the loan (which includes both the outstanding principal balance of the original loan under the Loan Agreement and the outstanding principal amount of the December 2019 Loan) has been repaid in its entirety, interest on the outstanding balance of the loan shall accrue monthly in arrears from the date of the Amendment at a rate of 5% per annum until May 8, 2019 and at a rate of 8% per annum thereafter, payable by the Company on a monthly basis in arrears. The Amendment further provides that the payment by the Company of the Accrued Fees (as described above) includes any shortfall of interest due but unpaid by the Company through and including November 30, 2019. Interest payments made by the Company after the date of the Amendment are to be applied first to interest that has accrued on the outstanding principal balance of the original loan under the Loan Agreement and then to interest that has accrued on the December 2019 Loan.
The Amendment also modifies the repayment and mandatory prepayment terms and extends the maturity date set forth in the original Loan Agreement. Under the Amendment, to the extent that excess cash flow reserve funds under the credit agreement, dated May 9, 2019, among Dominion Bridgeport Fuel Cell, LLC (which is now known as Bridgeport Fuel Cell, LLC), Liberty Bank, and Fifth Third Bank (the “Bridgeport Senior Credit Agreement”) are eligible for disbursement to Bridgeport Fuel Cell, LLC pursuant to Section 6.23(c) of the Bridgeport Senior Credit Agreement, such funds are to be paid to Green Bank, to be applied first to repay the outstanding principal balance of the original loan under the Loan Agreement and thereafter to repay the outstanding principal amount of the December 2019 Loan, until repaid in full. The Amendment further provides that the entire unpaid balance of the loan and all other obligations due under the Loan Agreement will be due and payable on May 9, 2026 if not paid sooner in accordance with the Loan Agreement. Finally, with respect to mandatory prepayments, the Amendment provides that, when the Company has closed on the subordinated project term loan pursuant to the Commitment Letter, dated February 6, 2019, issued by Green Bank to Groton Fuel Cell to provide a subordinated project term loan to Groton Fuel Cell in the amount of $5.0 million (the “Groton Commitment Letter”), the Company will be required prepay to Green Bank the lesser of any then outstanding amount of the December 2019 Loan and the amount of the subordinated project term loan actually advanced by Green Bank.
The Loan Agreement, as amended by the Amendment, continues to include customary representations and warranties, affirmative and negative covenants, and events of default that permit Green Bank, at its option, to cause the unpaid principal amount of the loan together with accrued interest and other obligations to become immediately due and payable. Such events of default include, among other things, the termination of the Bridgeport fuel cell project, the occurrence of certain events of default under certain project agreements, failure to pay amounts due under the Loan Agreement, failures to comply with the Loan Agreement or related loan documents, certain failures to pay indebtedness, certain bankruptcy events, the entry of certain judgments against the Company, a change of control, and a material loss or impairment of collateral not fully covered by insurance. Upon an event of default, at the option of Green Bank, the unpaid balance of the loan shall bear interest at the otherwise applicable interest rate plus 3% per annum until such event of default is cured or waived.
The foregoing summary of the terms of the Amendment and the terms of the Loan Agreement, as amended by the Amendment, is qualified in its entirety by reference to (i) the full text of the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference, and (ii) the full text of the original Loan Agreement, a copy of which was previously filed and is attached as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
For additional information regarding the Bridgeport Credit Agreement and the Bridgeport Senior Credit Agreement, please see the Current Report on Form 8-K filed by the Company on May 14, 2019 (as amended by the Form 8-K/A filed by the Company on July 12, 2019) and the Current Report on Form 8-K filed by the Company on May 22, 2019.
|Item 2.03.||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
|Item 7.01.||Regulation FD Disclosure.|
On December 20, 2019, the Company issued a press release providing a project update which includes the Amendment. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.
|Item 9.01.||Financial Statements and Exhibits.|
(d) Exhibits. The following exhibits are being filed or, with respect to Exhibit 99.1, furnished herewith:
|10.1||Amendment to Loan Agreement, dated December 19, 2019, between Connecticut Green Bank and FuelCell Energy, Inc.|
|10.2||Loan Agreement, dated as of March 5, 2013, between Clean Energy Finance and Investment Authority, as Lender, and the Company, as Borrower (incorporated by reference to Exhibit 10.69 to the Company’s Quarterly Report on Form 10-Q for the period ended January 31, 2013).|
|99.1||FuelCell Energy, Inc. Press Release dated December 20, 2019.|
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|FUELCELL ENERGY, INC.|
|Date: December 20, 2019||By:||/s/ Michael S. Bishop|
|Michael S. Bishop|
|Executive Vice President and Chief Financial Officer|
AMENDMENT TO LOAN AGREEMENT
CONNECTICUT GREEN BANK,
FUELCELL ENERGY, INC.,
December 19, 2019
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT (the “Amendment”) is entered into as of December 19, 2019 (the “Amendment Effective Date”), by and between FuelCell Energy, Inc., a Delaware corporation having its principal place of business at 3 Great Pasture Road, Danbury, Connecticut 06810 (“Borrower”), and Connecticut Green Bank (formerly known as the Clean Energy Finance and Investment Authority) having its principal place of business at 845 Brook Street, Rocky Hill, Connecticut 06067 (the “Lender”).
WHEREAS, the Borrower and Lender entered into a Loan Agreement for an amount of $5,873,188.45 dated as of March 5, 2013 (the “Loan Agreement”);
WHEREAS, on May 9th 2019, in connection with the acquisition of the Bridgeport Fuel Cell fuel cell plant (the “Bridgeport Project”), Dominion Bridgeport Fuel Cell, LLC, an affiliate of the Borrower, entered into a Second Lien Credit Agreement with Lender (the “Bridgeport Credit Agreement”) pursuant to which Lender made a loan to Dominion Bridgeport Fuel Cell, LLC in the amount of $6,026,165.34 (the “Bridgeport Subordinated Loan”) and immediately thereafter, Dominion Bridgeport Fuel Cell, LLC changed its name to Bridgeport Fuel Cell, LLC (such entity may be hereinafter referred to as “Bridgeport Project Owner”);
WHEREAS, a portion of the Bridgeport Subordinated Loan made by Lender to Bridgeport Project Owner pursuant to the Bridgeport Credit Agreement was applied to the principal balance of the Loan Agreement reducing such principal balance to $1,800,000 (such principal balance under the Loan Agreement may be hereinafter referred to the “A Loan”);
WHEREAS, the Borrower owes Lender certain closing fees related to closing on the acquisition of the Bridgeport Project and Bridgeport Credit Agreement, other fees, and accrued interest going back to May 9th 2019, in an amount totaling four hundred four thousand dollars $404,000 (“Accrued Fees”);
WHEREAS, the Borrower and Lender desire to enter into this Amendment to modify and amend the Loan Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, the parties hereby agree and amend and modify the Loan Agreement as follows:
1. Definitions. Except as otherwise provided herein, terms defined in the Loan Agreement shall have the same meaning when use herein. Terms defined in the singular shall have the same meaning when used in the plural and vice versa.
2. Amendments. The Loan Agreement is hereby modified and amended as follows:
(a) Section 1.1, Definitions of the Loan Agreement is amended as follows:
(i) The definition of “Account Control Agreement” is deleted in its entirety.
(ii) The following defined term shall be added to Section 1.1:
“Bridgeport Senior Credit Agreement” shall mean the Credit Agreement dated as of May, 9, 2019 among Dominion Bridgeport Fuel Cell, LLC as Borrower, Liberty Bank, as Administrative Agent and Co-Lead Arranger and Fifth Third Bank, as Co-lead Arranger.”
(iii) The following defined term shall be added to Section 1.1:
“Groton Commitment Letter” shall mean that certain Commitment Letter dated February 6, 2019 issued by Lender to Groton Station Fuel Cell, LLC (an affiliate of Borrower) to provide a subordinated project term loan to Groton Station Fuel Cell, LLC in the amount of $ 5,000,000.”
(iv) The definition of “Loan” is amended and replaced in its entirety as follows: “Loan shall mean the aggregate of the A Loan and the B Loan.”
(v) The definition of “Project Account” is deleted in its entirety.
(vi) The term “Maturity Date” is amended and replaced in its entirety with the following: “Maturity Date means May 9, 2026.”
(b) Section 2.1 of the Loan Agreement is amended and replaced in its entirety with the following:
“Lender agrees that, simultaneously with execution of the Amendment, Lender shall make to the Borrower an additional loan in an aggregate principal amount of $3,000,000 (the “B Loan”). Borrower shall use the proceeds of the B Loan: (1) first, to pay the Accrued Fees; and (2) thereafter, for general corporate purposes as determined by Borrower, including, but not limited to, expenditures in connection with the project being constructed by Groton Station Fuel Cell, LLC. Borrower and Lender agree that, except for the B Loan, Lender shall have no further obligation to make additional Loans under the Loan Agreement.”
(c) Section 2.3 (a) of the Loan Agreement is amended and replaced in its entirety with the following:
“Accrued Interest; Interest Payments.
Until such time as the Loan has been repaid to Lender in its entirety, interest on the outstanding balance of the Loan shall accrue monthly in arrears from the date of the Amendment at a rate per annum equal to 5% until May 8, 2019 and 8% thereafter and be paid by Borrower to Lender on a monthly basis in arrears. Lender and Borrower agree that the payment by Borrower to Lender of the Accrued Fees incorporates any shortfall of interest due by Borrower to Lender but unpaid by Borrower through and including November 30, 2019. Interest payments made by Borrower shall first be applied to interest that has accrued on the A Loan and then to interest that has accrued on the B Loan. All computations of interest hereunder for the Loan shall be made on the basis of a 360 day year and the actual number of days elapsed.”
(d) Sections 2.4 (a) and (b) of the Loan Agreement are amended and replaced in the entirety with the following:
“(a) Repayment of Loan. To the extent that Excess Cash Flow Reserve Funds (as defined in the Bridgeport Senior Credit Agreement) are eligible for disbursement to Bridgeport Project Owner pursuant to Section 6.23 (c) of the Bridgeport Senior Credit Agreement, any such funds shall be paid to Lender either by Bridgeport Project Owner by a direct assignment of such funds or by Borrower upon receipt of such funds from Bridgeport Project Owner and first be applied to repay the A Loan and thereafter to repay the B Loan until the Loan has been repaid in full. The entire unpaid balance of the Loan and all other obligations due hereunder shall be due and payable on the Maturity Date if not sooner paid in accordance with the Loan Agreement.”
(e) Section 2.4 (c) of the Loan Agreement shall be redesignated as “Section 2.4 (b)”.
(f) Section 2.4 (d) of the Loan Agreement shall be redesignated as “Section 2.4 (c)” and shall be amended and replaced in its entirety with the following:
“(c) Mandatory Prepayment. At such time as Lender has closed on the subordinated project term loan pursuant to the Groton Commitment Letter, Borrower shall be required to prepay to Lender the lesser of any then outstanding amount of the B Loan and the amount of subordinated project term loan actually advanced by Lender. In connection with entering into the Amendment, Lender agrees that the Groton Commitment Letter is in full force and effect, and represents the binding commitment of Lender to fund in accordance with the terms of the Groton Commitment Letter.
(g) Section 2.6 of the Loan Agreement is deleted in its entirety.
(h) Section 3.2 of the Loan Agreement is deleted in its entirety.
(i) Section 5.18 of the Loan Agreement is deleted in its entirety.
(j) Section 7.5 of the Loan Agreement is deleted in its entirety.
3. Effective Date, Agreement Remains in Full Force and Effect. This Amendment shall amend and become part of the Loan Agreement effective as of the Amendment Effective Date. All other provisions of the Loan Agreement and the Loan Documents shall remain in full force and effect except as modified hereby.
4. Integrated Agreement; Amendment. This Amendment, together with the Loan Agreement and the Loan Documents, constitute the entire agreement between Lender and Borrower concerning the subject matter hereof, and may not be altered or amended except by written agreement signed by Lender and Borrower.
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment to Loan Agreement as of the date first above written.
|FUELCELL ENERGY, INC.|
|By:||/s/ Michael S. Bishop|
|Name:||Michael S. Bishop|
|Title:||Executive Vice President, Chief|
|Financial Officer and Treasurer|
|CONNECTICUT GREEN BANK|
|By:||/s/ Bryan T. Garcia|
|Name:||Bryan T. Garcia|
|Title:||President and CEO|
FOR IMMEDIATE RELEASE
Significant On-Site Progress on CMEEC / U.S. Naval Submarine Base Project
Connecticut Green Bank Provides Additional Financing
|·||Construction on the Fuel Cell Micro-Grid Project for the Connecticut Municipal Electric Energy Cooperative (CMEEC) on the U.S. Naval Submarine Base in Groton is on Track|
|·||Significant On-Site Work Completed with Power Plant Deliveries Commencing|
|·||Liquidity Profile Enhanced with $3 Million Loan|
DANBURY, CT – December 20, 2019- - Today, FuelCell Energy, Inc. (Nasdaq: FCEL), a global leader in delivering clean, innovative and affordable molten-carbonate fuel cell solutions, outlined the significant construction progress it has made to-date, the expected delivery schedule and the current financing approach for the CMEEC Fuel Cell Micro-Grid Project on the U.S. Naval Submarine Base in Groton including:
|·||CMEEC Fuel Cell Micro-Grid Project located on the U.S. Naval Submarine Base, Groton, CT: Announced in May 2017, this project includes the installation and commissioning of two FuelCell Energy SureSource 4000 power plants which will provide 7.4 megawatts of continuous power generation. FuelCell Energy has now completed significant site work on the base, including excavation, wiring and pouring of the concrete pads for siting the fuel cell plants. The delivery of the fuel cell modules and balance of plant will begin during the first week of January 2020, with the first plant expected to be commissioned in the spring of 2020.|
|·||Additional Liquidity: Supported by the strength of the CMEEC project, Connecticut Green Bank has agreed to an incremental $3 million corporate loan. Upon the commercial operation date of the CMEEC project, the loan is expected to be converted into a project company term loan and secured by the consistent cash flow generation of the CMEEC project.|
“FuelCell has pivoted to executing on our future, we are focused on executing our core business, exceeding customer expectations, and delivering on and adding to our significant project backlog, including this mission critical project for CMEEC and the U.S. Naval Submarine Base in Groton” noted Jason Few, President and Chief Executive Officer of FuelCell Energy. “We have also taken this opportunity to continue our earlier improvements to our corporate liquidity profile, which creates an additional working capital lever. I would like to thank CMEEC for its partnership on this critical energy solution for the U.S. Navy Submarine Base, and the Connecticut Green Bank for their continued strong support and partnership with FuelCell Energy. We are also thankful for the opportunity and confidence placed on FuelCell Energy to serve the U.S. Armed Forces.”
“We are honored to be a partner in this project with the Navy and FuelCell Energy. To be part of this project at the U.S. Naval Submarine Base, which will help the Navy meet their resiliency objectives, is very exciting,” said Mike Lane, Interim CEO and CFO of CMEEC. “We continue to be encouraged by the progress FuelCell Energy is making as a company and look forward to potential projects in the future.”
“We are pleased to provide FuelCell Energy additional funding and support for this important clean energy resiliency project with CMEEC and the Navy,” said Bert Hunter, Chief Investment Officer, Connecticut Green Bank. “We are encouraged by the progress FuelCell Energy is making as a company. FuelCell has a long history in Connecticut as a key part of the distributed energy landscape, and this Connecticut project is a great example of the solution they provide.”
The Connecticut Municipal Electric Energy Cooperative, or CMEEC, is a public power entity that provides electric services to several municipal utilities and participating wholesale customers. The municipal utilities, in turn, provide electricity to roughly 100,000 residential, commercial/industrial and small business customers located in New England. CMEEC is headquartered in Norwich, Connecticut.
As a reminder, the Company will host a conference call on Tuesday, January 14, 2020, at 10:00 am EST to review its financial performance. In addition, senior leadership will unveil the pillars of its transformation strategy under the direction of its President and CEO, Jason Few. Conference call details will be provided at a later date.
This news release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements with respect to the Company’s anticipated financial results and statements regarding the Company’s plans and expectations regarding the continuing development, commercialization and financing of its fuel cell technology and business plans. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, changes to projected deliveries and order flow, changes to production rate and product costs, general risks associated with product development, manufacturing, changes in the regulatory environment, customer strategies, unanticipated manufacturing issues that impact power plant performance, changes in critical accounting policies, potential volatility of energy prices, rapid technological change, competition, and the Company’s ability to achieve its sales plans and cost reduction targets, as well as other risks set forth in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which any such statement is based.
About FuelCell Energy
FuelCell Energy, Inc. (NASDAQ: FCEL) delivers efficient, affordable and clean solutions for the supply, recovery and storage of energy. We design, manufacture, undertake project development of, install, operate and maintain megawatt-scale fuel cell systems, serving utilities and industrial and large municipal power users with solutions that include both utility-scale and on-site power generation, carbon capture, local hydrogen production for transportation and industry, and long duration energy storage. With SureSource™ installations on three continents and millions of megawatt hours of ultra-clean power produced, FuelCell Energy is a global leader in designing, manufacturing, installing, operating and maintaining environmentally responsible fuel cell power solutions. Visit us online at www.fuelcellenergy.com and follow us on Twitter @FuelCell_Energy.
SureSource, SureSource 1500, SureSource 3000, SureSource 4000, SureSource Recovery, SureSource Capture, SureSource Hydrogen, SureSource Storage, SureSource Service, SureSource Capital, FuelCell Energy, and FuelCell Energy logo are all trademarks of FuelCell Energy, Inc.
Source: FuelCell Energy
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