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Subsequent Events | 12 Months Ended
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Oct. 31, 2019
Subsequent Events [Abstract] |
Subsequent Events | Note 23. Subsequent Events ExxonMobil Research and Engineering Company Joint Development Agreement On November 5, 2019, the Company signed a two-year JDA with EMRE, pursuant to which the Company will continue exclusive research and development efforts with EMRE to evaluate and develop new and/or improved carbonate fuel cells to reduce carbon dioxide emissions from industrial and power sources, in exchange for (a) payment of (i) an exclusivity and technology access fee of $5.0 million, (ii) up to $45.0 million for research and development efforts, and (iii) milestone-based payments of up to $10.0 million after certain technological milestones are met, and (b) certain licenses to patents and patent applications, and copyrightable works resulting from the JDA. Orion Credit Agreement As disclosed in Note 13. “Debt”, on October 31, 2019, the Company and certain of its subsidiaries as guarantors entered into the Orion Credit Agreement with the Agent and certain of its affiliates as lenders for a $200.0 million senior secured credit facility, structured as a delayed draw term loan, to be provided by the lenders. On November 22, 2019, the Company made a second draw under the Orion Credit Agreement (the “Second Funding”) of $65.5 million, which was funded by Orion Energy Credit Opportunities Fund II, L.P., Orion Energy Credit Opportunities Fund II GPFA, L.P., Orion Energy Credit Opportunities Fund II PV, L.P., and Orion Energy Credit Opportunities FuelCell Co-Invest, L.P. (the “Orion Lenders”), such that the total fundings to the Company under the Orion Facility were equal to $80.0 million. The funds drawn in the Second Funding were reduced by a Loan Discount (described further in Note 13. “Debt”) of $1.6 million, which was retained by the Orion Lenders. Proceeds from the Second Funding were used to repay outstanding third party debt of the Company with respect to certain other Company projects, including the construction loan from Fifth Third Bank on the Groton Project and the loan from Webster Bank on the CCSU Project, as well as to fund remaining going forward construction costs relating to certain projects, including the Groton Project (a 7.4 MW project), the LIPA Yaphank Solid Waste Management Project (a 7.4 MW project), and the Tulare BioMAT project (a 2.8 MW project). In accordance with the Orion Credit Agreement in connection with the Second Funding, on November 22, 2019, the Company issued to the Orion Lenders warrants to purchase up to a total of 14.0 million shares of the Company’s common stock (the “Second Funding Warrants”), with an initial exercise price with respect to 8.0 million of such shares of $0.242 per share and with an initial exercise price with respect to 6.0 million of such shares of $0.620 per share (such $0.620 per share exercise price being at a premium to the market price at the time of entry into the Orion Credit Agreement). In conjunction with the Second Funding, the Company and the other loan parties entered into the First Amendment to the Orion Credit Agreement (the “First Orion Amendment”), which required the Company to establish a $5.0 million debt reserve, with such reserve to be released on the first date following the date of the Second Funding on which all of the following events shall have occurred: (a) each of (x) the commercial operation date for the Tulare BioMAT project shall have occurred and (y) a disposition, refinancing or tax equity investment in the Tulare BioMAT project of at least $5 million is consummated; (b) each of (x) the Groton Project shall have achieved its business plan in accordance with the Groton Construction Budget (as defined in the Orion Credit Agreement), (y) the commercial operation date for the Groton Project shall have occurred and (z) the Groton Project shall have met its annualized output and heat rate guarantees for three months; and (c) a disposition, refinancing or tax equity investment of at least $30 million shall have occurred with respect to the Groton Project. The First Orion Amendment further requires the Company (i) to provide, no later than December 31, 2019 (or such later date as the Agent may, in its sole discretion, agree in writing), a biogas sale and purchase agreement through December 31, 2021 for the Tulare BioMAT project, which was obtained as of such date, (ii) to obtain by December 31, 2019 (or such later date as the Agent may, in its sole discretion, agree in writing) a fully executed contract for certain renewable energy credits for the Groton Project, which was obtained as of such date, and (iii) to provide by January 31, 2020 (or such later date as the Agent may, in its sole discretion, agree in writing) certain consents and estoppels from CMEEC related to the Groton Project and an executed, seventh modification to the lease between CMEEC and the United States Government, acting by and through the Department of the Navy. The First Orion Amendment provides that, if the requirements set forth in clauses (ii) and (ii) above are not timely satisfied, the Company will grant the Agent, on behalf of the Orion Lenders, a security interest and lien on all of the Company’s intellectual property, with such lien and security interest to be released at such time as the Company has satisfied such requirements. In addition, in connection with the January 2020 Letter Agreement among the Company, FCE Ltd. and Enbridge described below, on January 20, 2020, in order to obtain the lenders’ consent to the January 2020 Letter Agreement as required under the Orion Credit Agreement, the Company and the other loan parties entered into the Second Amendment to the Orion Credit Agreement (the “Second Orion Amendment”), which adds a new affirmative covenant to the Orion Credit Agreement that obligates the Company to, and to cause FCE Ltd. to, on or prior to November 1, 2021, either (i) pay and satisfy in full all of their respective obligations in respect of, and fully redeem and cancel, all of the Series 1 Preferred Shares of FCE Ltd., or (ii) deposit in a newly created account of FCE Ltd. or the Company cash in an amount sufficient to pay and satisfy in full all of their respective obligations in respect of, and to effect a redemption and cancellation in full of, all of the Series 1 Preferred Shares of FCE Ltd. The Second Orion Amendment also provides that the articles of FCE Ltd. setting forth the modified terms of the Series 1 Preferred Shares will be considered a “Material Agreement” under the Orion Credit Agreement. Under the Second Orion Amendment, a failure to satisfy this new affirmative covenant or to otherwise comply with the terms of the Series 1 Preferred Shares will constitute an event of default under the Orion Credit Agreement, which could result in the acceleration of any amounts outstanding under the Orion Credit Agreement. Cashless Exercise of Certain Orion Warrants On January 9, 2020, the Orion Lenders exercised, on a cashless basis, Orion Warrants (with cash exercise prices of $0.310 per share and $ 0.242 per share) representing the right to purchase, in the aggregate, 12.0 million shares of the Company’s common stock. Because these warrants were exercised on a cashless basis pursuant to the formula set forth in the warrants, the Orion Lenders received, in the aggregate, a “net number” of 9,396,319 shares of the Company’s common stock upon the exercise of Initial Funding Warrants representing the right to purchase 6.0 million shares of the Company’s common stock and Second Funding Warrants representing the right to purchase 6.0 million shares of the Company’s common stock. The other 2,603,681 shares, which were not issued to the Orion Lenders due to the cashless nature of the exercise, are no longer required to be reserved for issuance upon exercise of the Orion Warrants. Termination of Construction Loan Agreement with Fifth Third Bank As disclosed in Note 13. “Debt”, on February 28, 2019, the Company, through its indirect wholly-owned subsidiary, Groton Borrower, entered into the Groton Agreement with Fifth Third Bank pursuant to which Fifth Third Bank agreed to make available to Groton Borrower a construction loan facility in an aggregate principal amount of up to $23.0 million to fund the manufacture, construction, installation, commissioning and start-up of the 7.4 MW Groton Project. Groton Borrower made an initial draw under the Groton Facility on the date of closing of the facility of $9.7 million and made an additional draw of $1.4 million in April 2019. The total outstanding balance under the Groton Facility as of November 22, 2019 (prior to the payment described below) was $11.1 million. Groton Borrower and Fifth Third Bank entered into a payoff letter, dated November 22, 2019, pursuant to which, on November 22, 2019, the Agent, on behalf of Groton Borrower, paid off all of Groton Borrower’s indebtedness to Fifth Third Bank under the Groton Agreement and thereby terminated the Groton Facility. Termination of Term Loan Agreements with Webster Bank On November 22, 2019, the Webster Bank debt was repaid in full and the borrowing arrangement was terminated. Connecticut Green Bank Loan As described in Note 13. “Debt”, the Company had a long-term loan agreement with 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 “Green Bank Loan Agreement”). On and effective as of December 19, 2019, the Company and Green Bank entered into an amendment to the Green Bank Loan Agreement (the “Green Bank Amendment”). Upon the execution of the Green Bank 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 Subordinated 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 Green Bank Amendment, Green Bank will have no further obligation to make loans under the Green Bank Loan Agreement and the Company will have no right to make additional draws under the Green Bank Loan Agreement. The Green Bank Amendment provides that, until such time as the loan (which includes both the outstanding principal balance of the original loan under the Green Bank 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 Green Bank 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 Green Bank 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 Green Bank Amendment are to be applied first to interest that has accrued on the outstanding principal balance of the original loan under the Green Bank Loan Agreement and then to interest that has accrued on the December 2019 Loan. The Green Bank Amendment also modifies the repayment and mandatory prepayment terms and extends the maturity date set forth in the original Green Bank Loan Agreement. Under the Green Bank Amendment, to the extent that excess cash flow reserve funds under the BFC Credit Agreement are eligible for disbursement to Bridgeport Fuel Cell, LLC pursuant to Section 6.23(c) of the BFC 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 Green Bank Loan Agreement and thereafter to repay the outstanding principal amount of the December 2019 Loan, until repaid in full. The Green Bank Amendment further provides that the entire unpaid balance of the loan and all other obligations due under the Green Bank Loan Agreement will be due and payable on May 9, 2026 if not paid sooner in accordance with the Green Bank Loan Agreement. Finally, with respect to mandatory prepayments, the Green Bank 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. Series B Preferred Stock Dividend On October 30, 2019, the Company declared dividends on the Series B Preferred Stock, which included the accrued dividends payable under the Series B Certificate of Designation with respect to the May 15, 2019 and August 15, 2019 dividend payment dates and the dividends payable with respect to the November 15, 2019 dividend payment date, which were paid on or about November 15, 2019. The aggregate dividend payment was $2.4 million. Series 1 Preferred Stock Return of Capital and Dividend Payment On November 26, 2019, the Company made the return of capital and dividend payments due as of March 31, 2019, June 30, 2019 and September 30, 2019, in an aggregate amount equal to Cdn. $0.9 million on the Series 1 Preferred Stock. Series 1 Preferred Stock – Letter Agreement As described in Note 15. “Redeemable Preferred Stock,” as of October 31, 2019, FCE Ltd. or the Company, as the guarantor of FCE Ltd.’s payment obligations with respect to the Series 1 Preferred Shares, was obligated to pay, on or before December 31, 2020, all accrued and unpaid dividends on the Series 1 Preferred Shares and the balance of the principal redemption price with respect to all of the Series 1 Preferred Shares. As of October 31, 2019, the aggregate amount of all accrued and unpaid dividends to be paid on the Series 1 Preferred Shares on December 31, 2020 was expected to be Cdn. $21.1 million and the balance of the principal redemption price to be paid on December 31, 2020 with respect to all of the Series 1 Preferred Shares was expected to be Cdn. $4.4 million. Interest under the Series 1 Preferred Shares accrued at annual rate of 5%. In addition, the holder of the Series 1 Preferred Shares had the right to exchange such shares for fully paid and non-assessable shares of common stock of the Company at certain specified prices, and FCE Ltd. had the option of making dividend payments in the form of common stock of the Company or cash. On January 20, 2020, the Company, FCE Ltd. and Enbridge entered into a letter agreement (the “January 2020 Letter Agreement”), pursuant to which they agreed to amend the articles of FCE Ltd. relating to and setting forth the terms of the Series 1 Preferred Shares to: (i) remove the provisions of the articles permitting or requiring the issuance of shares of the Company’s common stock in exchange for the Series 1 Preferred Shares or as payment of amounts due to the holders of the Series 1 Preferred Shares, (ii) remove certain provisions of the articles relating to the redemption of the Series 1 Preferred Shares, (iii) increase the annual dividend rate, commencing on January 1, 2020, to 15%, (iv) extend the final payment date for all accrued and unpaid dividends and all return of capital payments (i.e., payments of the principal redemption price) from December 31, 2020 to December 31, 2021, (v) clarify when dividend and return of capital payments are to be made in the future and extend the quarterly dividend and return of capital payments through December 31, 2021(which were previously to be paid each quarter through December 31, 2020), (vi) remove certain terms and provisions of the articles that are no longer applicable, and (vii) make other conforming changes to the articles. In addition, the parties agreed to amend the Company’s guarantee in favor of Enbridge as necessary or as the parties may mutually agree, in either case, in order to be consistent with such amended articles and to maintain the Company’s guarantee of FCE Ltd.’s obligations under the Series 1 Preferred Shares. After taking into account the amendments to the terms of the Series 1 Preferred Shares described in the January 2020 Letter Agreement, the aggregate amount of all accrued and unpaid dividends to be paid on the Series 1 Preferred Shares on December 31, 2021 is expected to be Cdn. $26.5 million and the balance of the principal redemption price to be paid on December 31, 2021 with respect to all of the Series 1 Preferred Shares is expected to be Cdn. $3.5 million. Sales of Common Stock under Sales Agreement During the period beginning on November 7, 2019 and ending on (and including) November 11, 2019, the Company issued and sold a total of approximately 7.9 million shares of its common stock under the Sales Agreement at prevailing market prices, with an average sale price of $0.46 per share, and raised aggregate gross proceeds of approximately $3.6 million, before deducting expenses and commissions. Commissions of $0.1 million were paid to the Sales Agent in connection with these sales, resulting in net proceeds to the Company of approximately $3.5 million. The Company had sold an aggregate of approximately 17,998,846 shares of common stock under the Sales Agreement as of November 11, 2019.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
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