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Stockholders' Equity and Warrant Liabilities | 9 Months Ended
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Jul. 31, 2020
Equity [Abstract] |
Stockholders' Equity and Warrant Liabilities | Note 12. Stockholders’ Equity and Warrant Liabilities Increase in Authorized Shares The Company obtained stockholder approval on May 8, 2020 at the reconvened 2020 Annual Meeting of Stockholders (the “Annual Meeting”) to increase the number of shares of common stock we are authorized to issue under our Certificate of Incorporation, as amended. Our stockholders approved a 112,500,000 increase in the number of authorized shares of common stock. Accordingly, on May 11, 2020, the Company filed a Certificate of Amendment of the Certificate of Incorporation of the Company with the Delaware Secretary of State increasing the total number of authorized shares of common stock from 225,000,000 shares to 337,500,000 shares. At Market Issuance Sales Agreement On October 4, 2019, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc. (“B. Riley FBR”) to create an at-the-market equity program under which the Company was entitled, from time to time, to offer and sell up to 38.0 million shares of its common stock through B. Riley FBR. However, to ensure that the Company had sufficient shares available for reservation and issuance upon exercise of all of the warrants to be issued to the lenders under the Orion Facility (as discussed in further detail below), the Company, effective as of October 31, 2019, reduced the number of shares reserved for future issuance and sale under the Sales Agreement from 27.9 million shares to 7.9 million shares (thus allowing for total aggregate issuances (past and future) of up to 18.0 million shares under the Sales Agreement) and reserved 20.0 million shares for issuance upon exercise of the warrants by the Orion lenders. Under the Sales Agreement, B. Riley FBR was entitled to a commission in an amount equal to 3.0% of the gross proceeds from each sale of shares under the Sales Agreement. There were no sales under the Sales Agreement during the three months ended July 31, 2020. During the nine months ended July 31, 2020, 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 B. Riley FBR in connection with these sales, resulting in net proceeds to the Company of approximately $3.5 million. On June 5, 2020, the Company provided written notice to B. Riley FBR of the Company’s determination to terminate the Sales Agreement, effective as of 5 p.m. Eastern Time on June 12, 2020. As a result of the termination of the Sales Agreement, there have been and will be no further sales of the Company’s common stock thereunder. Open Market Sale Agreement On June 16, 2020, the Company entered into an Open Market Sale Agreement with Jefferies, with respect to an at the market offering program under which the Company may offer and sell up to $75 million of shares of the Company’s common stock from time to time. The shares sold under the Open Market Sale Agreement were sold pursuant to the Company’s shelf registration statement on Form S-3, previously filed with the SEC on August 10, 2018. A prospectus supplement related to the Company’s at the market offering program with Jefferies was filed with the SEC on June 16, 2020. Under the Open Market Sale Agreement, the Company must pay (and has paid) Jefferies a commission equal to 3.0% of the aggregate gross proceeds it receives from each sale of shares under the Open Market Sale Agreement. From the date of the Open Market Sale Agreement through July 31, 2020, 25.1 million shares were sold under the Open Market Sale Agreement at an average sales price of $2.56 per share, resulting in gross proceeds of $64.3 million, before deducting expenses and sales commissions. Commissions of $1.9 million were paid to Jefferies in connection with these sales, resulting in net proceeds to the Company of approximately $62.3 million, of which $1.1 million was received subsequent to July 31, 2020. Refer to Note. 18. “Subsequent Events” for information on common stock sales made subsequent to July 31, 2020. Amendment and Restatement of the Company’s 2018 Omnibus Incentive Plan At the Annual Meeting, the Company’s stockholders approved the amendment and restatement of the FuelCell Energy, Inc. 2018 Omnibus Incentive Plan (as so amended and restated, the “Plan”), which authorizes the Company to issue up to 4,000,000 additional shares of the Company’s common stock pursuant to awards granted under the Plan and provides for an increase in the annual limit on the grant-date fair value of awards to any non-employee director of the Company from $200,000 to $250,000. Following the approval of the Plan by the Company’s stockholders at the Annual Meeting, the Plan provides the Company with the authority to issue a total of 4,333,333 shares of the Company’s common stock, 1,000,000 shares of which have been reserved for settlement of restricted stock units granted pursuant to an employment agreement, effective as of August 26, 2019, between the Company and Jason Few, our President and Chief Executive Officer (the “Sign-On Award”). The Sign-On Award was contingent upon obtaining stockholder approval of a sufficient number of additional shares under the Plan. The Company previously recorded the grants as a liability and, after obtaining such stockholder approval, has adjusted accordingly by reclassifying the liability to additional paid in capital. The grants will be recorded as a part of stock-based compensation going forward. The Plan authorizes grants of stock options, stock appreciation rights, restricted stock, restricted stock units, shares, performance shares, performance units, incentive awards and dividend equivalent units to officers, other employees, directors, consultants and advisors. Outstanding Warrants Orion Warrants In connection with the closing of the Orion Facility and the Initial Funding, on October 31, 2019, the Company issued warrants to the lenders under the Orion Facility to purchase up to a total of 6,000,000 shares of the Company’s common stock, at an exercise price of $0.31 per share (the “Initial Funding Warrants”). In addition, pursuant to the Orion Facility, on the date of the Second Funding (November 22, 2019), the Company issued warrants to the lenders under the Orion Facility to purchase up to a total of 14,000,000 shares of the Company’s common stock, with an exercise price with respect to 8,000,000 of such shares of $0.242 per share and with an exercise price with respect to 6,000,000 of such shares of $0.62 per share (the “Second Funding Warrants”, and together with the Initial Funding Warrants, the “Orion Warrants”). The Orion Warrants have an 8-year term from the date of issuance, are exercisable immediately beginning on the date of issuance, and include provisions permitting cashless exercises. On January 9, 2020, the lenders exercised, on a cashless basis, Orion Warrants (with cash exercise prices of $0.31 per share and $0.62 per share) representing the right to purchase, in the aggregate, 12,000,000 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 lenders received, in the aggregate 9,396,320 shares of the Company’s common stock upon the cashless exercise of Initial Funding Warrants representing the right to purchase 6,000,000 shares of the Company’s common stock and Second Funding Warrants representing the right to purchase 6,000,000 shares of the Company’s common stock. The cashless exercise resulted in 2,603,680 shares no longer being required to be reserved for issuance upon exercise of the Orion Warrants. Following this exercise, warrants to purchase 8,000,000 shares of the Company’s common stock, with an exercise price of $0.242 per share, remain outstanding. The estimated fair value of the Orion Warrants upon issuance was based on a Black-Scholes model using Level 2 inputs, including volatility of 96%, a risk free rate of 1.63%, the Company’s common stock price as of October 31, 2019 of $0.24 per share and the term of 8 years, which resulted in a total value of $3.9 million. The Orion Warrants will be remeasured to fair value each reporting period. The Orion Warrants that were converted on January 9, 2020 were remeasured to fair value immediately preceding the conversion based upon volatility of 103.7%, a risk free rate of 1.81% and the Company’s common stock price of $2.29 on January 8, 2020, which resulted in a $23.7 million charge for the three months ended January 31, 2020. The estimated fair value of the converted warrants as of the date of conversion of $26.0 million was reclassified to Additional paid in capital. The Company remeasured the remaining warrants at July 31, 2020 based upon a volatility of 111.97%, a risk free rate of 0.39% and the Company’s common stock price at July 31, 2020 of $2.23 per share, which resulted in a charge of $1.7 million and $15.6 million for the three and nine months ended July 31, 2020, respectively. The estimated fair value of the remaining warrants outstanding was $17.2 million as of July 31, 2020 and is classified as Long-term debt and other liabilities. Other Warrants On May 3, 2017, the Company completed an underwritten public offering of (i) 1,000,000 shares of its common stock, (ii) Series C warrants to purchase 1,000,000 shares of its common stock and (iii) Series D warrants to purchase 1,000,000 shares of its common stock. The Series C warrants have an exercise price of $19.20 per share and a term of five years. The Series D warrants were exercised previously and are no longer outstanding. No Series C warrants were exercised during the three and nine months ended July 31, 2020. The following table summarizes outstanding warrant activity during the nine months ended July 31, 2020:
|  | Series C Warrants |  |  | Orion Warrants |
Balance as of October 31, 2019 |  |  | 964,114 |  |  |  | 6,000,000 |
Warrants issued |  |  | — |  |  |  | 14,000,000 |
Warrants converted |  |  | — |  |  |  | (12,000,000 | )
Balance as of July 31, 2020 |  |  | 964,114 |  |  |  | 8,000,000 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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