FuelCell Energy - 10-K annual report 2025

FUELCELL ENERGY, INC.

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PART I

Item 1.BUSINESS

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Forward-Looking Statement Disclaimer

This Annual Report on Form 10-K 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, future results of operations, plans, objectives, expectations, future performance, future 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:

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 under Item 1A. Risk Factors of this report and the following risks and uncertainties:

We cannot assure you that:

The forward-looking statements contained herein speak only as of the date of this report and readers are cautioned not to place undue reliance on these forward-looking statements. Except for ongoing obligations to disclose material information under the federal securities laws, we expressly disclaim any obligation or undertaking to release publicly any updates or

revisions to any such statement to reflect any change in our expectations or any change in events, conditions or circumstances on which any such statement is based.

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Risk Factor Summary

Our business is subject to numerous risks and uncertainties, including those described in Item 1A. Risk Factors of this report. These risks include, but are not limited to the following:

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General Information

Information contained in this report concerning the electric power supply industry and the distributed generation market, the distributed hydrogen market, the energy storage market and the carbon capture market, our general expectations concerning these industries and markets, and our position within these industries and markets are based on market research, industry publications, other publicly available information and assumptions made by us based on this information and our knowledge of these industries and markets, which we believe to be reasonable. Although we believe that the market research, industry publications and other publicly available information, including the sources that we utilized in preparing certain portions of this report, are reliable, they have not been independently verified by us and, accordingly, we cannot assure you that such information is accurate in all material respects. Our estimates, particularly as they relate to our general expectations concerning the electric power supply industry and the distributed generation market, the distributed hydrogen market, the energy storage market and the carbon capture market, involve risks and uncertainties and are subject to change based on various factors, including those discussed under the section of this report entitled “Item 1A. Risk Factors.”

Unless otherwise specifically noted herein, all degrees refer to Fahrenheit (“F”); kilowatt (“kW”) and megawatt (“MW”) numbers used in this report designate nominal or rated capacity of the referenced power plant which is the design rated output of the referenced power plant as of the date of initiation of commercial operations; “efficiency” or “electrical efficiency” means the ratio of the electrical energy generated in the conversion of a fuel to the total energy contained in the fuel (lower heating value, the standard for power plant generation, assumes the water in the product is in vapor form; as opposed to higher heating value, which assumes the water in the product is in liquid form, net of parasitic load); kW means 1,000 watts; MW means 1,000,000 watts; “kilowatt hour” (“kWh”) is equal to 1 kW of power supplied to or taken from an electric circuit steadily for one hour; and one British Thermal Unit (“Btu”) is equal to the amount of heat necessary to raise one pound of pure water from 59^oF to 60^oF at a specified constant pressure.

All dollar amounts are in U.S. dollars unless otherwise noted.

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Overview

FuelCell Energy is a clean energy technology company and a stationary fuel cell manufacturer with 22 years of operating experience in this field. Founded in 1969 and headquartered in Danbury, Connecticut, we manufacture and sell our proprietary molten carbonate fuel cell systems, which deliver large-scale, continuous clean power and advanced emissions management. Unlike traditional power generation methods that rely on combustion, our fuel cells generate electricity electrochemically through a chemical reaction rather than burning fuel, resulting in ultra-low emissions and high efficiency. Our carbonate fuel cell systems are fuel-flexible, with the ability to run on biofuels, renewable natural gas, or hydrogen-hydrocarbon blends, and provide reliable baseload power, carbon capture, and thermal energy for chilling, heating, and process steam. As global energy demand rises driven by artificial intelligence (“AI”), electrification, and the need for enhanced grid resiliency, we believe solutions like ours will be vital in addressing next-generation needs, helping to strengthen the grid, reducing pollution, and supporting decarbonization goals. We have proven utility-scale projects operating at 10 MW, 20 MW, and 58.8 MW, each with more than seven years of continuous run time. As a company, we are motivated by our purpose of enabling a world empowered by clean energy.

We target a range of markets and applications with our products, including utilities and independent power producers, data centers, wastewater treatment, commercial and hospitality, and microgrids, among others. We market our products primarily in the U.S. and Canada, the European Union (the “EU”) and the United Kingdom (the “UK”), and priority Asian markets including South Korea, Singapore, Malaysia, and Thailand. We selectively pursue additional opportunities in other regions that align with our strategic priorities.  We focus our expansion on markets and regions that value clean distributed generation, have poor grid reliability and/or challenged transmission and distribution lines, and can benefit from the value streams our products provide.

In addition to our existing core molten carbonate-based commercial products, we engage strategically in research and development, both company-funded and carried out under grants from and commercial agreements with private companies and various government agencies through our Advanced Technologies programs. Our Advanced Technologies programs are currently focused on continued development and advancement of our core carbonate fuel cell technology as well as commercialization of our solid oxide electrolysis technology for distributed hydrogen. We focus on generating revenue from our core recurring and non-recurring revenue sources, while working to identify the next trends in clean energy we believe we can commercialize, take to market, and grow into future revenue streams.

Our Market Opportunity and Value Proposition

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We believe that we are positioned to capture significant growth opportunities by providing scalable, clean power and carbon capture solutions to meet the needs of data centers for reliability and sustainability, utilities seeking to alleviate grid constraints, industrial and manufacturing companies requiring on-site combined heat and power (“CHP”), and large commercial facilities demanding resiliency and emissions reduction. We believe there is a large and expanding market for our commercially available molten carbonate-based platform, supported by strong policy tailwinds in the U.S. and abroad. For example, in the United States, the recently adopted One Big Beautiful Bill Act (“OBBBA”) reinstated the 30% Investment Tax Credit for fuel cells through at least 2032 and provided for the continuation and expansion of Section 45Q for carbon capture and utilization ($85/ton for utilization and capture), creating what we believe are clear economic incentives for the adoption of fuel cells. In addition, South Korea’s Clean Hydrogen Portfolio Standard program provides long-term purchase contracts and direct market incentives for clean energy power generators, creating what we view as a stable and attractive market for fuel cell technologies like those offered by FuelCell Energy. These programs—along with state, local, and other international initiatives—are accelerating the commercialization of clean distributed generation and carbon capture technologies. We believe that our carbonate fuel cell products are uniquely positioned to benefit from these policies and related market opportunities.

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Our carbonate fuel cell products deliver reliable, clean baseload power, avoid harmful emissions such as sulfur oxide (“SOx”), nitrogen oxide (“NOx”), and particulate matter, produce hydrogen and high-grade heat, and isolate and remove CO₂ from exhaust streams. These capabilities align directly with long-term structural demand for decarbonization and energy resiliency, which we expect will expand the addressable market for our products and create durable growth opportunities. Fuel flexibility is another critical advantage of our carbonate fuel cell platform, providing the ability to run on biofuels, renewable natural gas, or hydrogen-hydrocarbon blends.

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According to the International Energy Agency, global electricity demand from data centers is projected to more than double by 2030 to approximately 945 terawatt-hours. The primary driver: the exponential rise of AI-optimized workloads.

This macro trend is creating a number of challenges that we believe can be addressed with solutions such as our carbonate fuel cell platform:

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Demand surge from AI/Cloud: The exponential rise of AI and cloud workloads is driving electricity demand far beyond what current transmission infrastructure can deliver, with hyperscalers needing new power as quickly as possible. Our ability to rapidly deploy modular, high-density fuel cell systems could enable data centers to bring multi-megawatt capacity online in months (once all permits are secured), compared to 3–7 years for traditional utility or gas turbine solutions.

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Scarcity of powered land: Limited availability of building sites for data centers with pre-positioned power infrastructure means the best parcels are often bid up, leaving developers with constrained options and longer timelines to bring their data centers online. Our modular products are 1.25 MW power blocks (or modules) that can be scaled to meet hundreds of megawatts of demand. This modularity supports phased deployment, rapid expansion, and redundancy, which we believe makes it ideal for data centers, industrial campuses, and utility-scale projects. With a power density of up to 33 MW per acre, our systems can help to maximize output even in space-constrained environments, creating opportunities to unlock new development sites and enabling efficient land use.

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Long utility interconnection timelines: Securing new high-voltage interconnections or substation builds for traditional power generation can take 5–7 years or more, delaying construction and revenue. Our systems do not require utility interconnection when operating in the off-grid mode and can operate as true power islands, unlocking new sites, or adding power to existing locations. By minimizing reliance on long transmission lines and avoiding grid congestion, our systems can reduce potential points of failure and provide resilient on-demand power.

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Gas turbine queues: Large-scale behind-the-meter generation faces 3–5-year procurement and construction timelines due to equipment shortages and supply chain bottlenecks. We offer a competitive alternative with comparable or better levelized cost of energy than gas engines and turbines, accelerated revenue capture, and reduced permitting risk.

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Environmental & permitting constraints: Stringent NOx and SOx emissions caps and local community opposition to combustion-based technologies make traditional gas generation difficult, often stalling projects in non-attainment areas. Our quiet and low emissions profile—with virtually no NOx or SOx, significantly lower CO₂, and unique carbon recovery/capture capability can expedite or even exempt projects from complex air permitting, enabling deployment in challenging districts.

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Reliability concerns: Unlike solar or wind power, fuel cells provide continuous, reliable power output. Our carbonate fuel cell platform delivers baseload power to critical loads, operating continuously to support mission-critical applications. Our carbonate fuel cell system can increase or decrease output by as much as 20% per minute, providing flexibility to respond to dynamic demand or grid fluctuations. Proven island-mode operation generally provides uninterrupted power even during grid outages, enhancing resiliency and energy security for customers.

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Cost unpredictability: Volatile energy markets and transmission delays can threaten budgets and timelines, compressing margins and complicating long-term planning. Our on-site generation helps secure more predictable energy costs, reducing exposure to market volatility and transmission risk and supporting more predictable financial outcomes.

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Our carbonate fuel cell systems are engineered for seamless integration with a wide range of energy assets, including microgrid controllers, battery energy storage systems, turbines, reciprocating engines, solar arrays, wind farms, and Organic Rankine Cycle systems. This interoperability enables customers to optimize energy management, enhance grid resiliency, and maximize the value of both renewable and conventional resources. By supporting hybrid configurations, our systems can deliver firm, dispatchable power while complementing intermittent renewables and legacy generation assets.

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See the section below entitled “Our Markets” for information regarding our existing and target markets.

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Our Markets

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We target three major market opportunities with our technology—distributed generation; carbon capture, utilization and sequestration; and distributed hydrogen.

Our core carbonate platform, which is commercially available, supports distributed generation, carbon capture applications, and distributed hydrogen production. In addition, we are developing our solid oxide electrolysis platform, which is intended to provide a second pathway for distributed hydrogen production upon commercialization.

We market our clean energy solutions worldwide, primarily in the U.S. and Canada, the EU and the UK, and priority Asian markets including South Korea (the largest fuel cell market), Singapore, Malaysia, and Thailand. The utilities and independent power producer market has historically been our largest market, with customers that include utilities on the East and West coasts of the United States, such as UIL Holdings Corporation, Inc. (owned by Avangrid, Inc., a wholly owned subsidiary of Iberdrola), the Long Island Power Authority (“LIPA”) and Southern California Edison. In Europe, utility customers include E.ON Connecting Energies, one of the largest utilities in the world. In South Korea, we are contracted to operate and maintain a number of large-scale utility deployments, including a 20 MW power plant project for Korea Southern Power Company (“KOSPO”), a 20 MW power plant project for Noeul Green Energy Co., Ltd., and a 58.8 MW power plant project for Gyeonggi Green Energy Co., Ltd.

Our carbonate fuel cell systems are producing power for a variety of industrial, commercial, municipal and government customers, including manufacturing facilities, pharmaceutical processing facilities, universities, healthcare facilities and wastewater treatment facilities. These institutions expect efficient, clean, and continuous power to reduce operating expenses, reduce greenhouse gas emissions and avoid pollutant emissions to meet their sustainability goals, while boosting resiliency and limiting dependence on the distribution grid. CHP applications further support economic and sustainability initiatives by minimizing or avoiding the use of combustion-based boilers for heat. Our patented carbonate fuel cell system is unique in its ability to run on biogas.

Our Business Strategy

In 2019, we launched our “Powerhouse” strategy to strengthen our business, maximize operational efficiencies, and position us for future growth. As we executed against the original three strategic pillars, we made meaningful progress, and in fiscal year 2022 we updated the pillars to “Grow, Scale, and Innovate.” In November 2024, following our Board of Directors’ approval of a restructuring and revised strategic plan, we refined aspects of the strategy and updated the pillars to “Focus, Scale, and Innovate.” Most recently, in connection with additional restructuring actions undertaken in June 2025, we further refined elements of our strategy while maintaining the strategic pillars of “Focus, Scale, and Innovate.”

Focus — Focusing on our core carbonate platform

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Scale — Growing revenue and expanding product and manufacturing capabilities based on market demand

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Innovate — Innovating for the future

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Recent Restructuring

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In November 2024 and again in June 2025, we announced global restructuring of our operations aimed to reduce operating costs, realign resources toward advancing the Company’s core carbonate technologies, and protect the Company’s competitive position amid slower-than-expected market investments in clean energy. These restructuring plans included workforce reductions as well as reduced spending on product development, overhead and other costs, recalibration of the Torrington manufacturing facility production schedule to align with contracted demand, the deferral of certain compensation and benefit obligations, the cessation of the majority of development efforts with respect to our solid oxide technology, and other targeted cost-saving measures.

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Prior to the implementation of the restructuring actions announced in November 2024 and June 2025, our manufacturing and research and development facility in Calgary, Alberta, Canada focused on the engineering and development of our solid oxide power generation and electrolysis technologies. This facility also housed our solid oxide power generation and electrolysis stack research and development effort and includes equipment for the manufacturing of solid oxide cells and stacks, including advanced manufacturing capabilities. Beginning in fiscal year 2022 and continuing in fiscal years 2023 and 2024, we made investments in the Calgary facility, including by increasing the total leased facility space and ordering long lead process equipment, with the goal of increasing solid oxide production capacity. However, our global restructuring plans deferred and cancelled certain previously planned capital and project expenditures related to solid oxide manufacturing in our facility in Calgary, Canada. As a result of these restructuring plans, we have deferred the capital spending required to complete the Calgary expansion and do not currently expect to complete this project.  In addition, as part of these restructuring plans, we ceased development of the solid oxide power generation platform and began focusing on demonstrating the capabilities of our solid oxide electrolysis platform, for which we expect to seek partnerships for product commercialization and manufacturing.

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Our Business Model

Our business model is based on multiple revenue streams, targeting both recurring revenue and non-recurring revenue. Recurring revenue is delivered through recurring electricity, capacity, and renewable energy credit sales under power purchase agreements (“PPAs”) and tariffs for projects we retain in our generation portfolio, as well as service revenue, mainly through long-term service agreements. Non-recurring revenue is generated through product and component sales, as well as from public and private industry research contracts related to the development of our Advanced Technologies.

Our primary revenue streams (as reported in our Consolidated Statements of Operations and Comprehensive Loss) consist of:  

We are a complete solutions provider for our systems, controlling the design, development, sale, manufacturing, installation, operation, and maintenance of our patented fuel cell technology under long-term power purchase and service agreements. When utilizing long-term PPAs, the end-user of the power or utility hosts the installation and only pays for power as it is delivered, avoiding up-front capital investment. We also develop projects and sell equipment directly to customers, providing a complete solution of engineering, installing, and servicing the fuel cell power plant under an engineering, procurement, and construction agreement (“EPC”) and a long-term maintenance and service agreement. (See the sections below entitled “Engineering, Procurement and Construction” and “Service and Warranty Agreements” for more information.) We maintain the long-term recurring service obligation and associated revenues coterminously with the operating life of such projects.

Customers and developers generally have the option to either purchase our fuel cell products outright or to enter into a PPA under which the customer or developer (i.e. the end-user of the power) commits to purchase power as it is produced for an extended period of time, typically 10 to 20 years. We may elect to retain ownership of a fuel cell project, or we may elect to sell all or some of the project to a third party.  If a project or project asset is sold, revenue from the sale is recognized and reflected in the Product revenues line item of our Consolidated Statements of Operations and Comprehensive Loss, and we recognize revenue separately for the long-term maintenance and service agreement with respect to the project over the term of that agreement. If a project is retained, we recognize electricity, capacity and/or renewable energy credits monthly over the term of the PPA. We report the financial performance of retained projects as Generation revenues and Cost of generation revenues in our Consolidated Statements of Operations and Comprehensive Loss.

We typically operate and maintain our fuel cell projects over their useful life regardless of the ownership structure. For projects not operating under a PPA, customers enter into long-term service agreements with us, some of which have terms of up to 20 years. We report the revenue earned under long-term maintenance and service agreements as Service agreements revenues in our Consolidated Statements of Operations and Comprehensive Loss.

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Given our long history of developing, investing in and deploying our fuel cell solutions, we believe we have distinct competitive advantages that underpin and enable our strategy, including a strong portfolio of products, intellectual property, deep technical expertise, strategic innovation and development relationships, and a track record of operational excellence.

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Our Product Platforms and Applications

Our Carbonate Fuel Cell Platform

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Our carbonate fuel cell platform is the cornerstone of our product portfolio. Our products are sold in modular 1.25 MW power blocks (or modules) and can be scaled to meet hundreds of megawatts of demand. The high output of our 1.25 MW power block reduces the total number of fuel cell systems needed for large-scale applications. Our systems are configurable for a range of customer applications—from thermal use to carbon capture.

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Our fuel cell systems consist of one or more power blocks supported by mechanical and electrical balance of plant components. The mechanical balance of plant components manage fuel and air preparation. The electrical balance of plant components convert the clean direct current (“DC”) power produced by the power blocks into alternative current (“AC”) power and deliver it to the grid or to the end-use system consuming the energy.

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There are three distinguishing design features of our carbonate fuel cell platform:

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Thermal applications for cooling and heating: Thermal energy from our fuel cell systems can be used for absorption chilling for space cooling at data centers and other sites. It can also be used for industrial process steam, domestic hot water, space heating, or to support anaerobic digestion at wastewater treatment plants. The large operating size of our power blocks enhances the value of thermal recovery, compared to smaller fuel cell systems.

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Sustainability benefits: Operating at high temperatures allows the electrode reactions to proceed efficiently without expensive platinum-type catalysts. Our carbonate fuel cell platform operates at temperatures that are high enough to allow the conversion of methane into hydrogen (called reforming) in the fuel cell stack. This conversion allows the fuel cell stack to generate hydrogen directly from a methane-based fuel source like natural gas or biogas. This combustion-free process emits water, not pollutants, which helps to support customer sustainability goals and contributes to local air quality. Some U.S. states have already classified certain fuel cells as Class I renewable power generation due to their low carbon emissions, negligible criteria pollutants, and high efficiency.

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Additionally, our commercially available Tri-gen system, which is based on our core carbonate fuel cell platform, delivers three value streams from a single system—power, hydrogen, and water.

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Applications of Our Carbonate Fuel Cell Platform

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Carbonate-Based Distributed Generation

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We market the systems built on our carbonate fuel cell products in different configurations for different applications to meet demanding power needs across industries, including:

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These configurations and applications can be used to address the demanding needs of data centers for continuous operation, manufacturers and hospitals for resilient on-site energy, universities for campus-wide energy management, utilities for grid support, wastewater treatment facilities for biogas utilization and emissions reduction and hydrogen fueling stations for sustainable mobility.

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Carbon Capture, Recovery and Utilization

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Our advanced platform integrates carbon capture, recovery, and utilization technologies to significantly reduce emissions and enable cleaner power generation across diverse applications:

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Hydrogen Generation

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Our carbonate-based Tri-gen system produces zero-carbon hydrogen. Our first Tri-gen system is being used by Toyota Motor North America at their Port of Long Beach operations center. While today’s market pace for clean hydrogen adoption is gradual, we believe that our Tri-gen system demonstrates the real-world potential of fuel cell innovation and positions us to capture growth as hydrogen demand accelerates.

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Solid Oxide Electrolysis Platform

Our solid oxide electrolysis technology (which is under development) may provide an additional route to low- or zero-carbon hydrogen.

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An electrolyzer is a system that performs electrolysis, which is the process of using electricity to split water molecules (H₂O) into hydrogen (H₂) and oxygen (O₂).  The largest factor in the cost of electrolysis-produced hydrogen is the cost of electricity. Our solid oxide electrolysis platform is designed to address cost, scale, and efficiency gaps that exist with other electrolysis technologies. Key differentiators of our solid oxide electrolysis platform include:

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Our solid oxide electrolysis platform operates at high temperatures, enabling high efficiency of up to 34 kWh/kg at the stack level and up to 40–45 kWh/kg at the system level. When paired with industrial or nuclear heat, efficiency improves even further, reducing the levelized cost of hydrogen by up to 10% compared to PEM systems. Hydrogen purity exceeds 99.85%, which makes it suitable for demanding industrial applications.

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Demonstration of our solid oxide electrolysis platform is being undertaken at Idaho National Laboratory (“INL”) in conjunction with the U.S. Department of Energy and is intended as a steppingstone for a system level field demonstration of our solid oxide electrolysis platform. The demonstration unit was shipped to and arrived at INL in January 2025 and is fully installed. It is currently being tested by the Company and INL. We expect this solid oxide electrolysis platform will demonstrate its capabilities in the hydrogen generation market and are seeking partners to advance the commercialization and deployment of this technology. In addition, we are collaborating with Malaysia Marine and Heavy Engineering Holdings Berhad (KLSE: MHB) to support a contract awarded to us for a Detailed Feasibility Study (“DFS”) of a low-carbon fuel production facility in Malaysia. The purpose of the DFS is to evaluate the production of low-carbon fuel utilizing solid oxide electrolysis technology with carbon dioxide and water as feedstocks.

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We believe that applications for this technology will include centralized large scale hydrogen production from grid-scale renewables or nuclear power, producing green ammonia or methanol, producing synfuels like sustainable aviation fuel and also decarbonizing steel production, refineries, and industrial heating applications. We have adopted a module-centric strategy to allow us to concentrate our resources on developing high-efficiency stacks and are seeking partnerships to further our commercialization efforts. Such a partnership would allow the complexities and expenses of system customization, site design, balance of plant procurement and EPC work to be managed by large-scale project developers. We believe this strategy will have the added benefit of streamlining our manufacturing processes, simplifying our supply chain, and lowering our working capital intensity. Lastly, focusing on our core modular technology and design allows us to dedicate our engineering resources to the advancement of stack and module technology, including both performance and cost optimization.

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Competition

The market for clean and reliable energy is highly competitive and rapidly evolving, shaped by global energy demand, government incentives, and the accelerating growth of data centers and other critical infrastructure. Customers increasingly require power solutions that deliver reliability, efficiency and scalability, often at a rapid pace. While traditional electric grids supplied by coal, gas, hydro, and nuclear plants remain prevalent, clean energy technologies are now able to compete with the grid and long-distance transmission in terms of levelized cost of electricity.

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Competitive Landscape and Alternatives

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Our solutions face competition from a broad array of technologies, including the electric grid, wind turbines, solar arrays, linear generators, hydro facilities, and a range of hydrogen and fuel cell offerings from both incumbent and emerging competitors. In the distributed generation marketplace, alternatives such as micro-turbines, turbines, and reciprocating gas engines also compete for customer adoption. Product development cycles in this sector are long, and success depends on product quality, efficiency, and robust intellectual property strategies.

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Differentiators of Our Carbonate Fuel Cell Technology

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We believe that our carbonate fuel cell technology addresses challenges in the markets in which we compete by providing the following differentiators:

To maintain and strengthen our competitive position, we continue to invest in research and development, focusing on improving efficiency and cost effectiveness as well as expanding platform capabilities such as developing carbon separation and capture technologies.    

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Commitment to Sustainability

As a company, we are committed to helping our customers reduce their environmental impact. We are equally committed to reducing our environmental impact, including the reduction of our own carbon footprint on a per unit basis, guided by the same principles of responsibility and innovation that underpin our platforms. As part of this commitment, during fiscal year 2025, we:

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Our sustainability strategy is anchored in three pillars—Environmental, Social, and Governance—covering 12 action areas that address climate action, air quality, circular design, product efficiency, workforce development and employee wellbeing, responsible supply chain, and strong governance. Our commitment spans the full life cycle of our platforms, from design and manufacturing through installation and ongoing service, with systems engineered for circularity. At end of life, we refurbish and reuse components where feasible and recycle more than 90% of the module by weight, minimizing waste and supporting resource efficiency. This is a departure from combustion-based, wind, and solar power generation methods that typically produce a significant amount of unrecyclable waste, which increases landfill use, and in the case of solar, creates the possibility of toxic material contamination.  

Research and Development

We have a rich history of innovation dating back to our founding in 1969 as Energy Research Corporation, and our pioneering research in electrochemistry and materials science established the foundation for our proprietary carbonate fuel cell technology. Our progress over the decades has been powered by highly skilled and mission-driven teams composed of scientists, engineers, manufacturing technicians, and technology professionals whose deep expertise, commitment to excellence, and passion for enabling a world powered by clean energy continue to drive our leadership in advanced fuel cell solutions.

Advanced Technologies Programs

Our Advanced Technologies programs include research and development and demonstration programs funded by third parties. We undertake both privately funded and publicly funded research and development to develop and grow these opportunities, reduce product and output costs, and expand our technology portfolio. Our Advanced Technologies programs are currently focused on continued development and advancement of our core carbonate fuel cell technology, including carbon capture and recovery, as well as commercialization of our solid oxide electrolysis technology for distributed hydrogen. We report the revenue earned under these programs as Advanced Technologies contract revenues in our Consolidated Statements of Operations and Comprehensive Loss.

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We have historically worked on technology development with various U.S. government departments and agencies, including the U.S. Department of Energy (the “DOE”) and the Department of State (the “DOS”). Government funding, principally from the DOE and DOS, provided 2%, 4% and 3% of our revenue for the fiscal years ended October 31, 2025, 2024, and 2023, respectively. In addition to these U.S. government departments and agencies, we also work to develop technologies through privately funded programs with companies like Canadian Natural Resources and ExxonMobil Technology and Engineering Company (formerly known as ExxonMobil Research and Engineering Company) (“EMTEC”) along with the ExxonMobil Low Carbon Business Solutions business unit.

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Beyond the external funding sources described above, we intend to prudently invest capital to accelerate commercialization of complementary technologies, including solid oxide electrolysis and carbon capture and separation, as discussed below in more detail in the section entitled “Company Funded Research and Development.”

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License and Joint Development Agreements with EMTEC

EMTEC and FuelCell Energy began working together in 2016 under an initial joint development agreement with a focus on better understanding the fundamental science behind carbonate fuel cells for use in advanced applications and specifically how to increase efficiency in separating and concentrating carbon dioxide from the exhaust of natural gas-fueled power generation. This collaboration has progressed from lab testing to preparation for real-world deployment with ExxonMobil subsidiaries, with a pilot project expected to be completed and commissioned in calendar year 2026 at Esso Nederland B.V.’s (“Esso”) Rotterdam refinery. This will mark a pivotal shift from research and development to industrial-scale demonstration, supported by policy incentives and international funding, which we believe will position our carbon capture technology for broader market adoption.

In June 2019, we entered into a license agreement with EMTEC to facilitate the further development of our carbon capture platform (the “EMTEC License Agreement”). Pursuant to the EMTEC License Agreement, we granted EMTEC and its affiliates a non-exclusive, worldwide, fully-paid, perpetual, irrevocable, non-transferable license and right to use our patents filed on or before April 30, 2021, and any data, know-how, improvements, equipment designs, methods, processes and the like provided directly by the Company or its affiliates to EMTEC or its affiliates under any agreement, or otherwise, on or before April 30, 2021, to the extent it is useful to research, develop and commercially exploit carbonate fuel cells in applications in which the fuel cells concentrate carbon dioxide from external industrial and power sources and for any other purpose attendant thereto or associated therewith, in exchange for a $10 million payment. Such right and license is sublicensable to third parties performing work for or with EMTEC or its affiliates but is not otherwise sublicensable.

The EMTEC License Agreement facilitated the execution of the Joint Development Agreement between the Company and EMTEC (which was originally effective as of October 31, 2019) (as amended to date, the “Joint Development Agreement”). The initial focus of the Joint Development Agreement was to further enhance carbonate fuel cell technology for the purpose of capturing carbon dioxide from industrial facilities.

As amended to date,  the term of the Joint Development Agreement will end on December 31, 2026 (unless terminated earlier), and we and EMTEC continue to work to allow for technical readiness of the Generation 2 Technology fuel cell module as well as pursue additional continuous technology development.

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In parallel with the Joint Development Agreement, we and EMTEC will pursue pioneer commercial deployments of the Generation 2 Technology with third parties, with us as the fuel cell module manufacturer for such deployments.

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Under the Joint Development Agreement, we may pursue new carbon capture projects with third parties for the remaining duration of the term of the Joint Development Agreement using Generation 1 Technology or Generation 2 Technology (provided that the use of Generation 2 Technology must be limited to the use of Generation 2 physical fuel cell properties and design elements in Generation 1 Technology modules), with any new sales of such activities, authorized work, and carbon capture projects, when summed together, having the capability of capturing no more than 250,000 tons of CO₂ on a cumulative annual basis.

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Following expiration of the term of the Joint Development Agreement, the Company will also have the opportunity to continue to service continuing obligations for such projects entered into during the term of the Joint Development Agreement (e.g., completion of contracted builds, service and repair/replacement of components, etc.). To allow the Company to pursue such projects, EMTEC also granted to the Company a worldwide, non-exclusive, royalty-free, irrevocable (during the term of the Joint Development Agreement), non-sub-licensable license to EMTEC’s Generation 1 Technology as well as to EMTEC’s Generation 2 Technology physical fuel cell properties and design elements (including EMTEC’s background information and background patents relating to Generation 2 Technology physical fuel cell properties and design elements).

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The expected annual budget for the anticipated work through the remaining term of the Joint Development Agreement is at least $10.0 million per year, subject to approval by EMTEC. Research costs will be set forth in project descriptions that are subject to mutual agreement and pre-approval by us and EMTEC in writing.

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For our use in power applications and hydrogen applications, the Joint Development Agreement includes certain worldwide, non-exclusive, perpetual, irrevocable licenses to practice the Program Results (as defined in the Joint Development Agreement), EMTEC’s background information and background patents for Generation 1 Technology, and

EMTEC’s background information and background patents for Generation 2 Technology, which will continue on a royalty-free basis going forward.

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In addition to our work with EMTEC under the Joint Development Agreement, on January 31, 2024, we received a purchase order valued at $11.6 million from Esso (an affiliate of Exxon Mobil Corporation and EMTEC), for fuel cell modules as well as engineering, procurement, fabrication, testing and delivery services required for the construction and implementation of the modular point source carbon capture pilot plant at Esso’s refinery in Rotterdam, The Netherlands. The carbon capture system to be installed at the pilot plant will directly capture CO₂ emissions from an exhaust stream at Esso’s refinery while simultaneously producing heat and power. The system will sequester captured CO₂ under the North Sea as part of the Porthos Project. This pilot plant project achieved meaningful milestones in fiscal year 2025, as we completed manufacture of the fuel cell modules to be installed at the pilot plant and Esso continued to make significant progress on the site work in Rotterdam. We expect to ship the fuel cell modules to Rotterdam and expect that this pilot plant will be completed and commissioned in calendar year 2026.

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Third party funded research and development is included in Advanced Technologies (revenue) in our consolidated financial statements.

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Company Funded Research and Development

In addition to research and development performed under research contracts, including as described under the heading “Advanced Technologies Programs” above, we also fund our own research and development activities to (i) advance our core carbonate portfolio, including the development of carbon recovery and capture applications, (ii) advance the development of our solid oxide electrolysis cell and module technology with the goal of supporting growing demand for applications in the hydrogen generation market segment, and (iii) support our generation operating portfolio with product enhancements and improvements.

We work to continuously improve and mature our products and implement lessons learned into our product designs and manufacturing process subsequent to introduction. We also continue to invest in improvement initiatives with respect to our core molten carbonate technology. For example, we have identified improvement opportunities ranging from improved thermal management by reducing internal temperature to improving the performance of our electrical balance of plant and implemented design changes to our commercial platforms which are expected to improve overall product performance. As it relates to our fuel cell modules, these improvements center around delivering more uniform temperature distribution of the cell stack within the modules with the intent of improving efficiency and output over the life of the modules to achieve the product’s expected design life. Continued extension of design life and efficiency of our modules over time is a core research and development focus. For example, in fiscal year 2025, we introduced a 1.25 MW power block (or module) with an electrical efficiency level of 50%.

In addition, we are also continuing to invest in our commercialization of our patented technologies, such as carbon capture and separation and solid oxide electrolysis for hydrogen production and energy storage as we believe these technologies represent significant future market opportunities. Through fiscal year 2024, we invested in product development and manufacturing scale up for two solid oxide platforms: power generation and electrolysis. However, with the restructuring actions announced in November 2024 and June 2025, we have ceased development of the solid oxide power generation platform and are focusing on demonstrating the capabilities of our solid oxide electrolysis platform while seeking partners to advance the commercialization and deployment of this technology.

Company funded research and development is included in Research and development expenses (operating expenses) in our consolidated financial statements.

Proprietary Rights and Licensed Technology

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Our intellectual property consists of patents, trade secrets, institutional knowledge and know-how that we believe is a competitive advantage and represents a barrier to entry for potential competitors. We have extensive experience in designing, manufacturing, operating and maintaining fuel cell power plants. This experience cannot be easily or quickly replicated, which, combined with our trade secrets, proprietary processes and patents, safeguards our intellectual property rights.

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As of October 31, 2025, we (excluding our subsidiaries) had 152 U.S. patents and 319 patents in other jurisdictions covering our fuel cell technology (in certain cases covering the same technology in multiple jurisdictions), with patents directed to various aspects of our carbonate technology, solid oxide fuel cell technology, proton exchange membrane fuel cell technology and applications thereof. As of October 31, 2025, we also had 29 patent applications pending in the U.S. and 79 patent applications pending in other jurisdictions.

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As of October 31, 2025, our subsidiary, Versa Power Systems, Ltd. (“Versa”), had 19 U.S. patents and 63 international patents covering solid oxide fuel cell technology (in certain cases covering the same technology in multiple jurisdictions). As of October 31, 2025, Versa also had 13 pending U.S. patent applications and 24 patent applications pending in other jurisdictions.

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In addition, as of October 31, 2025, our subsidiary, FuelCell Energy Solutions, GmbH, had license rights to 2 U.S. patents and 7 patents outside the U.S. (in certain cases covering the same technology in multiple jurisdictions) for carbonate fuel cell technology licensed from Fraunhofer IKTS.

We continue to innovate, and no patent expiration, either individually or in the aggregate, is expected to have any material impact on our current or anticipated operations.

Certain of our U.S. patents are the result of government-funded research and development programs, including our DOE programs. U.S. patents we own that resulted from government-funded research are subject to the government potentially exercising “march-in” rights. We believe that the likelihood of the U.S. government exercising these rights is remote and would only occur if we ceased our commercialization efforts and there was a compelling national need to use the patents.

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Manufacturing and Service Facilities

We operate a 167,000 square-foot manufacturing facility in Torrington, Connecticut where we produce the individual cell packages and assemble fuel cell modules for our carbonate fuel cell products. This facility also houses our global service center. Our completed modules are conditioned in Torrington and shipped directly to customer sites. We continue to invest in manufacturing capability with the goal of reducing production bottlenecks and driving productivity, including investments in automation, laser welding, and the construction of additional integrated conditioning capacity. We also constructed a SureSource 1500 in Torrington during fiscal year 2022, which operates as a testing facility for qualifying new supplier components and performance testing and validation of continued platform innovations, including carbon recovery.  

As of October 31, 2025, the Torrington facility was operating at a 41 MW per year annualized production rate on a single production shift. Maximum annualized capacity (module manufacturing, final assembly, testing and conditioning) is 100 MW per year under the Torrington facility’s current configuration when being fully utilized. We believe that the Torrington facility could accommodate an estimated annualized production capacity of up to 350 MW per year with additional capital investments in machinery, equipment, tooling, labor, outsourcing of certain processes, and inventory. We have evaluated several manufacturing scaling scenarios, which include increasing annualized production capacity at the Torrington facility as well as building out new manufacturing facilities. These scenarios include evaluation of our vendors, supply chain base, labor and resource availability. We have undertaken this comprehensive evaluation with the goal of ensuring that we are ready to expand quickly and efficiently to meet customer requirements.

We design and manufacture the core fuel cell components that are stacked on top of each other to build a fuel cell stack. For megawatt-scale power plants, four fuel cell stacks are combined to build a 1.25 MW power block (or module). To complete the system, the modules are combined with the balance of plant (“BOP”) components. The mechanical BOP components process the incoming fuel such as natural gas or biogas and include various fuel handling and processing equipment such as pipes and blowers. The electrical BOP components process the power generated for use by the customer and include electrical interface equipment such as an inverter. The BOP components are either purchased directly from suppliers or the manufacturing is outsourced based on our designs and specifications. This strategy allows us to leverage our manufacturing capacity, focusing on the critical aspects of the power plant where we have specialized knowledge and expertise and possess extensive intellectual property. BOP components are shipped directly to a project site and are then assembled with the fuel cell module into a complete power plant.

The Torrington production and service facility and the Danbury corporate headquarters and research and development facility are ISO 9001:2015 and ISO 14001:2015 certified and our Field Service operation (which maintains the installed fleet of our systems) is ISO 9001:2015 certified, reinforcing the tenets of our quality management system and a focus on

safety, continuous improvement, and commitment to quality, environmental stewardship, and customer satisfaction. Sustainability is promoted throughout our organization. We manufacture our products and manage them through end-of-life using environmentally friendly business processes and practices, certified to ISO 14001:2015. We continually strive to improve how we plan and execute across the entire product life cycle. We maintain a chain of custody and responsibility of our products throughout the product life cycle and strive for “cradle-to-cradle” sustainable business practices, incorporating sustainability in our corporate culture. When our systems reach the end of their useful lives, we can refurbish and re-use certain parts and then recycle most of what we cannot re-use. By weight, approximately 93% of the entire power plant can be re-used or recycled at the end of its useful life.

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Our manufacturing and research and development facility in Calgary, Alberta, Canada is focused on the engineering and development of solid oxide electrolysis technology. This facility also houses our stack research and development effort and includes equipment for the manufacturing of solid oxide electrolysis cells and stacks, including advanced manufacturing capabilities.

We have a manufacturing and service facility in Taufkirchen, Germany that has the capability to perform final module assembly for up to 20 MW per year of sub-megawatt fuel cell power systems to service the European market. Our European service activities are also operated out of this location. Our operations in Europe are certified under both ISO 9001:2015 and ISO 14001:2015.

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As we continue our focus on business in international markets such as Europe and Asia, we plan to explore manufacturing and assembly opportunities in those markets to achieve more efficient product manufacturing and supply chain operations, as well as meet the increasing government requirements for the inclusion of locally sourced content and components in order to benefit from enhanced clean energy investment incentives.

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Raw Material Sourcing and Supplier Relationships

We use various commercially available raw materials and components to construct a fuel cell module, including nickel and stainless steel, which are key inputs in our manufacturing process. Our fuel cell stack raw materials are sourced from multiple vendors and are not considered precious metals. We have a global integrated supply chain with qualified sources of supply, many of which are located locally in the regions in which we have established manufacturing and service operations, including Europe and Asia. We have not sourced or procured, and do not source or procure, directly or indirectly, any materials from Russia.  

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From time to time, we may enter into over-the-counter financial hedges to mitigate market price volatility associated with our underlying physical commodity exposure (and other asset classes) consistent with our Financial Risk Management Policy. These hedges are non-speculative in nature, are entered into with investment grade-rated multinational financial institutions and are governed under the terms of the International Swaps and Derivative Association.

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While we manufacture fuel cells in our Torrington facility, the electrical and mechanical BOP components are assembled by and procured from several suppliers. All of our suppliers must undergo a stringent and rigorous qualification process. We continually evaluate and qualify new suppliers as we diversify our supplier base in our pursuit of lower costs, security of supply, and consistent quality. We purchase mechanical and electrical BOP components from third party vendors, based on our own proprietary designs.

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Assuring the absence of conflict minerals in our products is a continuing initiative. Our fuel cells, including the fuel cell components and completed fuel cell module, do not utilize any 3TG minerals (i.e., tin, tungsten, tantalum and gold) that are classified as conflict minerals. We utilize componentry in the BOP, such as computer circuit boards, that utilize trace amounts of 3TG minerals. For perspective, total shipments in fiscal year 2024 weighed approximately 2.4 million pounds, of which only approximately 29 pounds, or 0.001207% of the total, represented 3TG minerals, so the presence of these minerals is negligible. Our conflict mineral disclosure filed with the Securities and Exchange Commission (“SEC”) on Form SD contains specific information on the actions we are taking to avoid the use of conflict minerals.

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As we continue to grow our business, we remain focused on improving quality, increasing the competitive supply landscape, maintaining existing supplier relationships, as well as building strong new key supplier relationships to expand our supply chain options.

Engineering, Procurement and Construction

We provide customers with complete turn-key solutions, including development, engineering, procurement, construction, interconnection and operations for our fuel cell projects. We have developed relationships with many design firms and licensed general contractors and have a repeatable, safe, and efficient execution philosophy that has been successfully demonstrated in numerous jurisdictions, both domestically and abroad, all with an exemplary safety record. The ability to rapidly and safely execute installations minimizes high-cost construction period financing and can assist customers in certain situations when the commercial operations date for a project is time sensitive.

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Services and Warranty Agreements

We offer a comprehensive portfolio of services, including engineering, project management and installation, and long-term operating and maintenance programs, including trained technicians that remotely monitor and operate our systems around the world, 24 hours a day and 365 days a year. We directly employ field technicians to service our systems and maintain distribution centers near our customers to support the high availability of our systems.

For all operating projects not under a PPA, customers purchase long-term service agreements (“LTSAs”), some of which have terms of up to 20 years. Pricing for LTSAs is based upon the value of service assurance and the markets in which we compete and includes all future maintenance and fuel cell module exchanges. Each system has a target design life of 25-to-30 years. The fuel cell modules, with legacy modules having a 5-year target cell design life and current production modules having a 7-year target cell design life, go through periodic replacement, while the BOP systems, which consist of conventional mechanical and electrical equipment, are maintained over the life of the project.

Beginning in fiscal year 2024, we began entering into LTSAs with certain customers in South Korea, pursuant to which we agreed to provide replacement modules and to service these customers’ facilities after they transitioned away from their prior service providers. These LTSAs provide the Company with an incremental product sale opportunity.

Under the typical provisions of both our LTSAs and PPAs, we provide services to monitor, operate, service and maintain our systems to meet specified performance levels. Operations and maintenance are key drivers for installed projects to deliver their projected revenue and cash flows. The service aspects of our business model provide a recurring and predictable revenue stream for the Company. We have committed future production for scheduled fuel cell module exchanges under LTSAs and PPAs through the respective expiration dates of such LTSAs and PPAs, which range through 2042. The pricing structure of the LTSAs incorporates these scheduled exchanges and the committed nature of this production facilitates our production planning. Many of our PPAs and LTSAs include guarantees for system performance, including electrical output and heat rate. Should the system not meet the minimum performance levels, we may be required to replace the fuel cell module with a new or used replacement module and/or pay performance penalties. Our goal is to optimize our fuel cell system to meet expected operating parameters throughout its contracted service terms.

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In addition to our service agreements, we provide a warranty for our products against manufacturing or performance defects for a specific period of time. The warranty term in the U.S. is typically 15 months after shipment or 12 months after acceptance of our products. We accrue for estimated future warranty costs based on historical experience.

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Government Regulation and Public Policy

Our Company and our products are subject to various federal, provincial, state and local laws and regulations relating to, among other things, land use, safe working conditions, handling and disposal of hazardous and potentially hazardous substances and emissions of pollutants into the atmosphere. Emissions of SOx and NOx from our power plants are substantially lower than conventional combustion-based generating stations and are far below existing and proposed regulatory limits. The primary emissions from our power plants, assuming no cogeneration application, are humid flue gas that is discharged at temperatures of 700-800° F, water that is discharged at temperatures of 10-20° F above ambient air temperatures, and CO₂ that is generated in per-kW hour amounts that are, due to the high efficiency of fuel cells, significantly less than conventional fossil fuel central generation power plants. Depending on the jurisdiction, whether our plants require water discharge permits is dependent upon whether the discharge is directed to a storm drain or wastewater system.

We operate in a global market shaped by evolving government policies intended to promote clean power and distributed energy technologies, including fuel cells. These policies vary by region and may include mechanisms such as investment tax credits, cash grants, performance-based incentives, environmental attribute programs, permitting and interconnection requirements, and applicable utility tariffs. A summary of certain policies follows.

United States

The recent passage of the OBBBA in the United States, supported by the ongoing expansion of U.S. natural gas infrastructure, marks, what we believe is, a significant development for our industry, by reinstating the Investment Tax Credit for fuel cell projects and the Section 45Q tax credit for carbon capture and utilization:

Our fuel cells are currently deployed in several states as baseload power sources, including applications such as microgrids. We believe that the combination of supportive policy measures, technology flexibility, and market demand trends positions us to pursue growth opportunities in the evolving energy landscape. Actual results will depend on customer adoption, competitive dynamics, and other factors described in Part II, Item 1A. Risk Factors.

South Korea

South Korea’s Clean Hydrogen Portfolio Standard (“CHPS”) program provides long-term purchase contracts and direct market incentives for clean energy power generators, creating what we believe to be a stable and attractive market for fuel cell technologies like those offered by FuelCell Energy. The CHPS program, launched in 2024, mandates clean hydrogen adoption through:

We believe this program will create a more predictable revenue environment for companies deploying hydrogen and fuel cell technologies, aligning with global decarbonization trends.

Europe

European governments continue to be supportive of hydrogen-based generation and efficient CHP applications. In the European Union (“EU”), the Emissions Trading System (“ETS”) has created carbon capture sequestration allowances to be applied to ETS calculations for carbon not released into the atmosphere and instead placed into a storage location for future use.  Similar credits are allowed for entities that capture CO₂ emissions to produce precipitated calcium carbonate, in which the used CO₂ is chemically bound.  The EU is anticipated to develop a standard to be able to classify when CO₂ has been “stored”. We believe that these developments, along with legislation recently passed by the EU Parliament leading to the creation of the European Hydrogen Bank funded with 3 billion euros, will provide market support for carbon capture technologies. Additionally, in response to the hardships and global energy market disruption caused by Russia's invasion of Ukraine, the EU adopted the REPowerEU Plan. REPowerEU is a plan for: saving energy, producing clean energy, and diversifying the EU’s energy supplies. The REPowerEU Plan is backed by financial and legal measures to build the new energy infrastructure and system that Europe needs.

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Significant Customers and Information about Geographic Areas

Information concerning the Company’s dependence on significant customers is incorporated herein by reference to Note 1. “Nature of Business, Basis of Presentation and Significant Accounting Policies–Concentrations” of the Notes to the Consolidated Financial Statements.

Human Capital Management and Development

We are committed to attracting and retaining highly qualified and motivated employees who drive our organization’s success and strengthen the communities we serve. Our recruitment practices are grounded in merit and professional qualifications, and we adhere strictly to all applicable laws—both domestic and international—pertaining to nondiscrimination in the workplace. Our dedication to excellence is consistently reflected in our employee training and development programs and policies.

As of October 31, 2025, we had 424 full-time employees, of which 381 were located in the United States, 25 were located in Canada, 7 were located in Germany, and 11 were located in South Korea. We had no part time employees as of October 31, 2025.

In November 2024, we announced a global restructuring of our operations in the U.S., Canada, and Germany that aimed to reduce operating costs, realign resources toward advancing the Company’s core technologies, and protect the Company’s competitive position amid slower-than-expected-investments in clean energy. The restructuring plan included a reduction in our workforce of approximately 13% or 75 employees in November 2024 and included reduced spending on product development, overhead and other costs. This followed a 4% or 17 employee reduction in workforce in September 2024.

In June 2025, we announced a second global restructuring plan to further reduce operating costs, realign resources toward advancing the Company’s core carbonate technologies, and protect the Company’s competitive position amid slower-than-expected market investments in clean energy. This plan includes: (i) a workforce reduction of 122 employees, or approximately 22% of our workforce across the U.S., Canada and Germany (which reduction was implemented on June 5, 2025), (ii) a significant reduction of discretionary overhead spending, (iii) recalibration of the Torrington manufacturing facility production schedule to align with contracted demand, rather than forecasted demand, which, without continued growth in our closed order book, would result in a decrease in our annualized production rate, (iv) the deferral of certain compensation and benefit obligations, (v) the cessation of the majority of development efforts with respect to our solid oxide technology, and (vi) other targeted cost-saving measures. 

Compensation and Benefits

Our compensation philosophy is built on a simple principle: to attract, develop, and retain world-class talent, we must offer programs that are competitive, well-structured, and purposeful. We provide market-competitive base pay, complemented by benefits that support financial security and well-being. Our programs include an annual Management Incentive Plan, Long-Term Equity Incentive Plans, and a Company-matched 401(k) plan. Equity ownership is also a central feature of our compensation philosophy, as employee equity ownership ensures that our team will share directly when they create value

for our stockholders. In this way, our compensation approach not only rewards performance but also aligns our people with the long-term success of the Company.

Workforce Environmental Health and Safety

We take workplace jobsite safety and environmental compliance very seriously. Under our robust environmental, health and safety (“EH&S”) program, we strongly encourage the reporting of near misses to identify opportunities for improvement, and we regularly evaluate our EH&S protocols in an effort to keep our facilities and workspaces environmentally friendly and safe for our team members, stakeholders, customers, and visitors.

We are committed to EH&S excellence. Our Environmental Management System is certified to ISO 14001:2015, and our Occupational Health & Safety Management System is certified to ISO 45001:2018. Health and safety are both a bottom-up and top-down priority as the Company’s Board of Directors is actively engaged in ongoing review of our policies, protocols and performance.

Our EH&S core principles are:

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We are also in the process of performing life cycle analyses on our products, as well as our production and office locations, and developing a roadmap to net zero carbon emissions.

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Our safety performance is excellent and is demonstrated by experience modification rates below the industry average of 1.0 for the last 7 fiscal years: 2019: 0.65, 2020: 0.59, 2021: 0.68, 2022: 0.088, 2023: 0.89, 2024: 0.83, and 2025: 0.84. We have maintained an “A” rating since 2016 providing “Safety Tier 1” performance with ISNetworld, a database for online contractor safety management designed to streamline companies’ and contractors’ compliance pre-qualification processes. Because EH&S compliance is a priority for us, we also leverage ISNetworld to qualify contractors that work on our projects.

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Available Information

We file annual, quarterly and current reports, proxy statements and other information electronically with the SEC. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, including any exhibits thereto, and all amendments to those reports are made available free of charge through the “Investors” section of the Company’s website (http://www.fuelcellenergy.com) as soon as practicable after such material is electronically filed with, or furnished to, the SEC. Material contained on our website is not incorporated by reference in this report. Our executive offices are located at 3 Great Pasture Road, Danbury, CT 06810. The SEC also maintains a website that contains reports and other information regarding issuers that file electronically with the SEC located at http://www.sec.gov.

Information about our Executive Officers

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ITEM 1A.RISK FACTORS

An investment in our common stock involves a high degree of risk. Prior to making a decision about investing in our securities, you should carefully consider the specific risk factors discussed below, together with all of the other information in this Annual Report on Form 10-K, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business, financial condition, or results of operations. If any such risks actually occur, our business, financial condition, or results of operations could be materially and adversely affected. In such cases, the market price of our common stock could decline, and you may lose all or part of your investment.

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Risks Related to Our Business, Industry and Supply Chain

We have incurred losses and anticipate continued losses and negative cash flows.

We have transitioned from a research and development company to a commercial products manufacturer, services provider and developer. We have not been profitable since our year ended October 31, 1997. We expect to continue to incur net losses and generate negative cash flows until we can produce sufficient revenues and gross profit to cover our costs. We may never become profitable. Even if we do achieve profitability, we may be unable to sustain or increase our profitability in the future. For the reasons discussed in more detail below, there are uncertainties associated with our achieving and sustaining profitability. We have, from time to time, sought financing in the public markets in order to fund operations and will continue to do so. Our future ability to obtain such financing could be impaired by a variety of factors, including, but not limited to, the price of our common stock and general market conditions.

Our cost reduction strategy for manufacturing may not succeed or may be significantly delayed, which may result in our inability to deliver improved margins.

Our cost reduction strategy for manufacturing is based on the assumption that increases in production will result in economies of scale. In addition, our cost reduction strategy relies on advancements in our manufacturing process, global competitive sourcing, engineering design, reducing the cost of capital and technology improvements (including stack life and projected power output). Failure to achieve our cost reduction targets could have a material adverse effect on our results of operations and financial condition.

We have debt and finance obligations outstanding and may incur additional debt in the future, which may adversely affect our financial condition and future financial results.

As of October 31, 2025, our total consolidated debt and finance obligations outstanding (“indebtedness”) was $122.9 million ($119.6 million, net of deferred finance costs).

Our ability to make scheduled payments of principal and interest and other required repayments depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control. Our business may not generate cash flows from operations in the future sufficient to service our debt and make necessary capital expenditures. If we are unable to generate such cash flows, we may be required to adopt one or more alternatives, such as selling assets, further restructuring our operations, restructuring our debt or obtaining additional equity capital on terms that may be onerous or dilutive.

We may incur additional indebtedness in the future in the ordinary course of business, which could include onerous restrictions on us. If new debt is added to current debt levels, the risks described above could intensify. Our debt agreements contain representations and warranties, affirmative and negative covenants, and events of default that entitle the lenders to cause our indebtedness under such debt agreements to become immediately due and payable.

We rely on project financing for our generation operating portfolio, which includes debt and tax equity financing arrangements, to realize the benefits provided by investment tax credits and accelerated tax depreciation. In the event that interest rates rise or there are changes in tax policy, our financial results could be harmed.

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Rising interest rates may increase our cost of capital. Part of our business strategy is to generate positive cash flows after debt service from our generation operating portfolio. Rising interest rates may have an adverse impact on the cost of debt and thus result in lower cash flows after debt service than we realize today. We also expect that projects we retain in our generation operating portfolio will receive capital from tax equity investors who derive a significant portion of their economic returns through tax benefits. Tax equity investors are generally entitled to substantially all of the project’s tax benefits, such as those provided by the U.S. investment tax credit (“ITC”) and Modified Accelerated Cost Recovery System or bonus depreciation. Our ability to obtain additional financing in the future depends on the continued confidence of financing sources in our business model and the continued availability of tax benefits applicable to our products. If we are unable to enter into tax equity financing agreements with attractive pricing terms, or at all, we may not be able to obtain the capital needed to finance the build out of our generation assets which would impact our overall liquidity and our business, financial condition and results of operations.

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Unanticipated increases or decreases in business growth have resulted and may continue to result in adverse consequences to our financial condition and business strategy.

We operate a 167,000 square-foot manufacturing facility in Torrington, Connecticut where we produce the individual cell packages and assemble the fuel cell modules for our carbonate fuel cell products. The maximum annualized capacity (module manufacturing, final assembly, testing and conditioning) is 100 MW per year under the Torrington facility’s current configuration when being fully utilized. We believe that the Torrington facility could accommodate an estimated annualized production capacity of up to 350 MW per year with additional capital investments in machinery, equipment, tooling, labor, outsourcing of certain processes and inventory.

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We have a manufacturing and service facility in Taufkirchen, Germany that has the capability to perform final module assembly for up to 20 MW per year of carbonate sub-megawatt fuel cell power platforms to service the European market. Our European service activities are also operated out of this location.

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Prior to the implementation of the restructuring actions announced in November 2024 and June 2025, our manufacturing and research and development facility in Calgary, Alberta, Canada focused on the engineering and development of our solid oxide power generation and electrolysis technologies. This facility also housed our solid oxide power generation and electrolysis stack research and development effort and includes equipment for the manufacturing of solid oxide cells and stacks, including advanced manufacturing capabilities. Beginning in fiscal year 2022 and continuing in fiscal years 2023 and 2024, we made investments in the Calgary facility, including by increasing the total leased facility space and ordering long lead process equipment, with the goal of increasing solid oxide production capacity. However, in November 2024 and June 2025, we announced global restructuring plans relating to our operations in the U.S., Canada, and Germany that aim to reduce operating costs, realign resources toward advancing the Company’s core carbonate technologies, and protect the Company’s competitive position amid slower-than-expected market investments in clean energy. These restructuring plans also include the deferment and cancelation of certain previously planned capital and project expenditures related to solid oxide manufacturing in our facility in Calgary, Canada. As a result of these restructuring plans, we have deferred the capital spending required to complete the Calgary expansion and do not currently expect to complete this project.  In addition, as part of these restructuring plans, we ceased development of the solid oxide power generation platform and began focusing on demonstrating the capabilities of our solid oxide electrolysis platform. We expect to seek partnerships for solid oxide product commercialization and manufacturing.

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If our business grows more quickly than we anticipate, our existing and manufacturing facilities and plans to increase production may be inadequate to meet demand and we may need to seek out new or additional space, or retrofit or further equip our existing facilities, at considerable cost to us. If our business does not grow as quickly as we expect, our existing manufacturing facilities would, in part, represent excess capacity for which we may not be able to recover the cost. In that circumstance, our revenues may be inadequate to support our committed costs and our planned growth, and our gross margins and business strategy would be adversely affected.

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Our workforce reduction may cause unintended consequences and our results of operations may be harmed.

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On June 5, 2025, we implemented a workforce reduction of approximately 22%, or 122 employees across our U.S., Canadian and German operations. While we believe this workforce reduction was necessary to help realign the Company’s

cost structure, this reduction may yield unintended consequences, such as the loss of certain institutional knowledge and technical expertise, as well as attrition beyond our intended reduction in workforce and reduced employee morale, which may cause our employees who were not affected by the reduction in workforce to seek alternate employment. Additional attrition could impede our ability to meet our operational goals, which could have a material adverse effect on our financial performance. In addition, as a result of the reductions in our workforce, we may face an increased risk of employment litigation. Furthermore, employees whose positions were eliminated may seek employment with our competitors. Although all our employees are required to sign a confidentiality and non-competition agreement with us at the time of hire, we cannot assure you that the confidential nature of our proprietary information will be maintained in the course of such future employment.

If our restructuring plan and workforce reduction do not result in the intended benefits or savings or result in unanticipated costs, including, but not limited to, additional charges and/or higher than expected severance and employee termination benefits costs, or if we are unable to successfully implement our restructuring plan, our results of operations and financial condition could be materially adversely affected. We cannot assure you that we will not undertake additional reduction and/or restructuring activities, that any of our efforts will be successful, or that we will be able to realize the cost savings and other anticipated benefits from our current or any future restructuring or reduction plans. In addition, if we continue to reduce our workforce, it may adversely impact our ability to respond rapidly to any new product, growth or revenue opportunities and to execute on our backlog and business plans.

If our intangible assets and long-lived assets (including project assets) become impaired in the future, we may again be required to record a significant charge to operations.

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We have recorded significant impairment charges to operations in our financial statements upon our determination, and we may in the future be required to record significant impairment charges to operations in our financial statements should we again determine, that our long-lived assets (i.e., project assets, property, plant and equipment and amortizing intangible assets) are impaired. Such charges have had and may continue to have a significant negative impact on our reported financial condition and results of operations. Project assets, property, plant and equipment, goodwill, indefinite-lived intangible assets and inventory impairment charges totaled approximately $65.8 million, $1.3 million and $2.4 million for the fiscal years ended October 31, 2025, 2024 and 2023, respectively.

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As required by accounting rules, we review any goodwill and/or indefinite-lived intangible assets recorded on our balance sheet for impairment at least annually as of July 31 or more frequently if facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit that has goodwill is less than its carrying value. Factors that may be considered a change in circumstances indicating that the carrying value of our goodwill might not be recoverable include a significant decline in projections of future cash flows and lower future growth rates in our industry. If the assets have been determined to be abandoned or not recoverable, we are required to record a charge reflecting impairment of the assets. We review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. We consider a project asset commercially viable and recoverable if such project asset is anticipated to be sellable for a profit, or generates positive cash flows, in excess of the cost of the project asset once it is either fully developed or fully constructed. When a project asset is not considered commercially viable or costs are not deemed to be recoverable, we are required to record a charge reflecting the impairment of such project asset.

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Our Advanced Technologies contracts are subject to the risk of termination by the contracting party and we may not realize the full amounts allocated under some contracts due to the lack of Congressional appropriations or early termination.

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A portion of our revenues has been derived from long-term cooperative agreements and other contracts with the DOE and other U.S. government agencies. These agreements are important to the continued development of our technology and our products. We also contract with private sector companies under certain Advanced Technologies contracts to develop strategically important and complementary offerings.

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Generally, our privately funded Advanced Technologies contracts, including our Joint Development Agreement with EMTEC, our contracted demonstration projects undertaken with EMTEC or other ExxonMobil affiliates, and our government research and development contracts are subject to the risk of termination at the convenience of the contracting party and may contain certain milestones and deliverables which we may not be able to meet if actual results or the timing of deliverables differ materially from our original estimates or contractually agreed timelines. Furthermore, with respect to government-funded contracts, irrespective of the amounts allocated by the contracting agency, such contracts are subject

to annual Congressional appropriations and the results of government or agency sponsored reviews and audits of our cost reduction projections and efforts. We can only receive funds under government-funded contracts ultimately made available to us annually by Congress as a result of the appropriations process. Accordingly, we cannot be sure whether we will receive the full amounts awarded under our privately funded, government research and development or other contracts. Termination of the contracts or failure to receive the full amounts under any of our Advanced Technologies contracts could materially and adversely affect our business prospects, results of operations and financial condition.

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Utility companies may resist the adoption of distributed generation and could impose customer fees or interconnection requirements on our customers that could make our products less desirable.

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Investor-owned utilities may resist adoption of distributed generation fuel cell plants as such plants are disruptive to the utility business model that primarily utilizes large central generation power plants and associated transmission and distribution. On-site distributed generation that is on the customer-side of the electric meter competes with the utility. Distributed generation on the utility-side of the meter generally has power output that is significantly less than central generation power plants and may be perceived by the utility as too small to materially impact its business, limiting its interest. Additionally, perceived technology risk may limit utility interest in stationary fuel cell power plants.

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Utility companies commonly charge fees to larger, industrial customers for disconnecting from the electric grid or for having the capacity to use power from the electric grid for back up purposes. These fees could increase the cost to our customers of using our SureSource products and could make our products less desirable, thereby harming our business prospects, results of operations and financial condition.

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We depend on third party suppliers for the development and timely supply of key raw materials and components for our products.

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We use various raw materials and components to construct a fuel cell module, including nickel and stainless steel, that are critical to our manufacturing process. We also rely on third-party suppliers for the BOP components in our products. Suppliers must undergo a qualification process, which takes four to twelve months. We continually evaluate new suppliers, and we are currently qualifying several new suppliers. There are a limited number of suppliers for some of the key components of our products. In addition, to the extent the processes that our suppliers use to manufacture components are proprietary, we may be unable to obtain comparable components from alternative suppliers, all of which could harm our business prospects, results of operations and financial condition. We do not know whether we will be able to maintain long-term supply relationships with our critical suppliers, or secure new long-term supply relationships on terms that will allow us to achieve our objectives, if at all. A supplier’s failure to develop and supply components in a timely manner or to supply components that meet our quality, quantity or cost requirements or our technical specifications, or our inability to obtain alternative sources of these components on a timely basis or on terms acceptable to us, could each harm our ability to manufacture our products.  In addition, our supply chain was adversely affected by the COVID-19 pandemic, and in the future could be adversely affected by pandemics or other widespread adverse public health events, which may create global shipping and logistics challenges. These challenges may include extended shipping lead times and pricing pressures on transportation and logistics that could adversely impact our ability to meet our production schedules and project deadlines, may result in additional and increased costs, or may otherwise adversely impact our business, results of operations and financial condition. If such events occur and we are unable to pass these costs on to our customers or timely complete projects, we may experience reduced revenue and other adverse impacts on our business, results of operations and financial condition.

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An increase in energy costs may materially adversely affect our business, financial condition, and results of operations.

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Our results of operations can be directly affected by volatility in the cost and availability of energy, which is subject to global supply and demand and other factors beyond our control. Higher energy costs result in increases in operating expenses at our manufacturing facilities, in the expense of shipping materials to our facilities, and in the expense of operating our projects for which we procure natural gas, all of which may in turn adversely affect our business, financial condition, and results of operations.

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Failure to meet Environmental, Social, and Governance (“ESG”) expectations or standards or to achieve our ESG goals could adversely affect our business, results of operations, financial condition, and stock price.

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In recent years, there has been an increased focus from stakeholders on ESG matters, including greenhouse gas emissions and climate-related risks, renewable energy, water stewardship, waste management, diversity, equality and inclusion, responsible sourcing and supply chain, human rights, and social responsibility. Given our commitment to ESG matters, we actively manage these issues and have established and publicly announced certain goals, commitments, and targets which we may refine or even expand further in the future. These goals, commitments, and targets reflect our current plans and aspirations and are not guarantees that we will be able to achieve them. Evolving stakeholder expectations and our efforts to manage these issues, report on them, and accomplish our goals present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material adverse impact, including on our reputation and stock price.

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Such risks and uncertainties include:

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•      reputational harm, including damage to our relationships with customers, suppliers, investors, governments, or other stakeholders;

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Any failure, or perceived failure, to meet evolving stakeholder expectations and industry standards or achieve our ESG goals, commitments, and targets could have an adverse effect on our business, results of operations, financial condition, and stock price.

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Risks Related to Sales of our Products

We derive significant revenue from contracts awarded through competitive bidding processes involving substantial costs and risks. Our contracted projects may not convert to revenue, and our project awards and sales pipeline may not convert to contracts, which may have a material adverse effect on our revenue and cash flows.

We expect a significant portion of the business that we will seek in the foreseeable future will be awarded through competitive bidding against other fuel cell technologies and other forms of power generation. The competitive bidding process involves substantial costs and a number of risks, including the significant cost and managerial time to prepare bids and proposals for contracts that may not be awarded to us and our failure to accurately estimate the resources and costs that will be required to fulfill any contract we win. In addition, following a contract award, we may encounter significant expense, delay or contract modifications or award revocation as a result of our competitors protesting or challenging contracts awarded to us in competitive bidding. Our failure to compete effectively in this procurement environment could adversely affect our revenue and/or profitability.

Some of the project awards we receive and orders we accept from customers require certain conditions or contingencies (such as permitting, interconnection, financing or regulatory approval) to be satisfied, some of which are outside of our control. Certain awards are cancelable or revocable at any time prior to contract execution. The time periods from receipt of an award to execution of a contract, or receipt of a contract to installation may vary widely and are determined by a number of factors, including the terms of the award, governmental policies or regulations that go into effect after the award, the terms of the customer contract and the customer’s site requirements. These same or similar conditions and contingencies may be required by financiers in order for us to draw on financing to complete a project. If these conditions or contingencies are not satisfied, or changes in laws affecting project awards occur, or awards are revoked or cancelled, project awards may not convert to contracts, and installations may be delayed or canceled. This could have an adverse impact on our revenue and cash flow and our ability to complete construction of a project.

We have signed product sales contracts, EPCs, PPAs and long-term service agreements with customers subject to contractual, technology, operating, commodity (i.e. natural gas) and fuel pricing risks as well as market conditions that may negatively affect our operating results.

We apply the transfer of control over time revenue recognition method under Accounting Standards Codification Topic 606: Revenue from Contracts with Customers to certain service contracts which are subject to estimates. On an annual basis, we perform a review process to help ensure that total estimated contract costs include estimates of costs to complete that are based on the most recent available information. The amount of costs incurred on a cumulative to date basis as a function of estimated costs at completion is applied to contract consideration to determine the cumulative revenue that should be recognized to date.

We have contracted under long-term service agreements with certain customers to provide service on our products over terms of up to 20 years. Under the provisions of these contracts, we provide services to maintain, monitor, and repair customer power plants to meet minimum operating levels. Pricing for service contracts is based upon estimates of future costs including future module exchanges. While we have conducted tests to determine the overall life of our products, we have not run certain of our products over their projected useful life or in all potential conditions prior to large scale commercialization. As a result, we cannot be sure that these products will last to their expected useful life or perform as anticipated in all conditions, which could result in warranty claims, performance penalties, maintenance and module replacement costs in excess of our estimates, losses on service contracts and/or a negative perception of our products. As a result of our products’ lack of maturity, we have incurred and may continue to incur charges for warranty claims, performance penalties, maintenance and module replacement costs in excess of our estimates and losses on service contracts. Each of these risks may be material under these contracts and, as a result, we have experienced and may continue to experience diminished returns and we have been required to and may be required, in the future, to write off all or a portion of our capitalized costs in these project assets.

In certain instances, we have executed PPAs with the utility, end-user of the power or site host of the fuel cell power plant. We may then sell the PPA and power plant to a project investor or retain the project and collect revenue from the sale of power over the term of the PPA, recognizing electricity revenue as power is generated and sold. Our growing portfolio of project assets used to generate and sell power under PPAs and utility tariff programs exposes us to operational risks and uncertainties, including, among other things, lost revenues due to prolonged outages, replacement equipment costs, risks associated with facility start-up operations, failures in the availability or acquisition of fuel (including natural gas and renewable natural gas), the impact of severe adverse weather conditions, natural disasters, terrorist attacks, cybersecurity attacks, risks of property damage or injury from energized equipment, availability of adequate water resources and ability to intake and discharge water, use of new or unproven technology, fuel commodity price risk and fluctuating market prices, and lack of alternative available fuel sources.

Our ability to proceed with projects under development and complete construction of projects on schedule and within budget may be adversely affected by escalating costs for materials and fuel (including natural gas and renewable natural gas), supply chain and logistics challenges, tariffs, labor and regulatory compliance, inability to obtain necessary permits, interconnections or other approvals on acceptable terms or on schedule and by other factors. If any development project or construction is not completed, is delayed or is subject to cost overruns, we could become obligated to make delay or termination payments or become obligated for other damages under contracts, experience diminished returns or be required to write off all or a portion of our capitalized costs in the project. Each of these events could have an adverse effect on our business, financial condition, results of operations and prospects.

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We extend product warranties for our products, which products are complex and could contain defects and may not operate at expected performance levels, which could impact sales and market adoption of our products, affect our operating results or result in claims against us.

We develop complex and evolving products, and we continue to advance the capabilities of our fuel cell stacks. We produce carbonate fuel stacks with a 7-year cell design life. We provide product warranties for a specific period of time against manufacturing or performance defects. We accrue for warranty costs based on historical warranty claim experience; however, actual future warranty expenses may be greater than we have assumed in our estimates. Issues have been and may continue to be found in existing or new products including, but not limited to, module decay rates which have exceeded and may continue to exceed design expectations. This has resulted and may continue to result in a delay in recognition or loss of revenues and may result in loss of market share or failure to achieve broad market acceptance. The occurrence of defects has also caused and may continue to cause us to incur significant warranty, support and repair costs

in excess of our estimates, could divert the attention of our engineering personnel from our product development efforts, and could harm our relationships with our customers. Although we seek to limit our liability, a product liability claim brought against us, even if unsuccessful, would likely be time consuming, could be costly to defend, and may hurt our reputation in the marketplace. Our customers could also seek and obtain damages from us for their losses.

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We currently face and will continue to face significant competition, including from products using other energy sources that may be lower priced or have preferred environmental characteristics.

We compete on the basis of our products’ reliability, efficiency, environmental considerations and cost. Technological advances in alternative energy products, improvements in the electric grid or other sources of power generation that use lower priced fuel or no fuel, or other fuel cell technologies may negatively affect the development or sale of some or all of our products or make our products less economically attractive, non-competitive or obsolete prior to or after commercialization. Significant decreases in the price of alternative technologies or grid delivered electricity, or significant increases in the price of our fuels could have a material adverse effect on our business because other generation sources could be more economically attractive to consumers than our products. Additionally, in certain markets, consumers and regulators have expressed a preference for zero-carbon generating resources over fueled resources, which could adversely affect sales of our products in such markets.

Other companies, some of which have substantially greater resources than ours, are currently engaged in the development of products and technologies that are similar to, or may be competitive with, our products and technologies. Several companies in the U.S. are engaged in fuel cell development, although we are the only domestic company engaged in manufacturing and deployment of stationary carbonate fuel cells. Other emerging fuel cell technologies include small or portable proton exchange membrane fuel cells, stationary phosphoric acid fuel cells, stationary solid oxide fuel cells, and small residential solid oxide fuel cells. Any of these technologies and any of our competitors has the potential to capture market share in our target markets. There are also other potential fuel cell competitors internationally that could capture market share.

Other than fuel cell developers, we must also compete with companies that manufacture combustion-based distributed power equipment, including various engines and turbines, and have well-established manufacturing, distribution, operating and cost features. Electrical efficiency of these products can be competitive with our power plants in certain applications. Significant competition may also come from gas turbine companies and large scale solar and wind technologies.

Our plans are dependent on market acceptance of our products.

Our plans are dependent upon market acceptance of, as well as enhancements to, our products. Fuel cell systems represent an emerging market, and we cannot be sure that potential customers will accept fuel cells as a replacement for traditional power sources or non-fuel based power sources, hydrogen generation sources or storage. As is typical in a rapidly evolving industry, demand and market acceptance for recently introduced products and services are subject to a high level of uncertainty and risk. Since the distributed generation, hydrogen, carbon capture and storage markets are still evolving, it is difficult to predict with certainty the size of these markets and their growth rates. The development of a market for our products may be affected by many factors that are out of our control, including:

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If a sufficient market fails to develop or develops more slowly than we anticipate, we may be unable to recover the losses we will have incurred in the development of our products, and we may never achieve profitability.

Our development timeline for bringing our solid oxide electrolysis technology to market has shifted as a result of delays in adoption of clean energy technologies generally and implementation of our recent global restructuring actions, which have re-focused our business on our core carbonate technologies. In addition, our timeline for bringing our carbon capture technology to market will be subject to conditions outside of our control.

Due to changes in the pace of hydrogen adoption, uncertainty regarding large scale clean energy policies globally, and our global restructuring plans announced in November 2024 and June 2025, which  aim to reduce operating costs, realign resources toward advancing the Company’s core carbonate technologies, and protect the Company’s competitive position amid slower-than-expected market investments in clean energy, we have reduced our workforce, reduced spending on product development, ceased our manufacturing capacity expansion efforts at our facility in Calgary, Canada, ceased the development of our solid oxide power generation platform and focused on demonstrating the capabilities of our solid oxide electrolysis product. With our renewed primary focus on our core carbonate technologies, the commercialization of our solid oxide electrolysis technology will be paced by market adoption of new clean energy products and our ability to contract with third-party partners to bring this solution to market. In addition, the commercialization of our carbon capture technology will be paced by the timing of the completion, commissioning and successful demonstration of the carbon capture and sequestration pilot project at the Port of Rotterdam, by our ability to negotiate and execute a definitive commercial agreement with EMTEC or another ExxonMobil affiliate with respect to the manufacture of the fuel cell modules and certain other equipment necessary for new carbon capture projects, and by market adoption of this technology. If we are unable to successfully commercialize our carbon capture technology, if the commercialization of our carbon capture technology is delayed, or if we are unable to negotiate a mutually agreeable commercial agreement with EMTEC or another ExxonMobil affiliate, then our ability to generate revenue and achieve profitability from sales of these new products will be delayed or may not occur at all. If we are unable to meet cost or performance goals with respect to our solid oxide electrolysis product or our carbon capture products once commercialized, including goals for power output, hydrogen production, rates of carbon capture, useful life and reliability (as applicable), then our ability to generate revenue and achieve profitability from sales of these new products will be delayed or may not occur at all. In addition, if we are unable to develop additional commercially viable products in the future, we may not be able to generate sufficient revenue to become profitable. The profitable commercialization of our products depends on our ability to reduce the costs of our products, and there can be no assurance that we will be able to sufficiently reduce these costs to achieve profitability.

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Our products use inherently dangerous, flammable fuels, operate at high temperatures and use corrosive carbonate material, each of which could subject our business to product liability claims.

Our business exposes us to potential product liability claims that are inherent in products that use hydrogen. Our products utilize fuels such as natural gas and convert these fuels internally to hydrogen that is used by our products to generate electricity. Although our platforms do not combust fuels for the generation of electricity, the fuels we use are combustible and may be toxic. In addition, our molten carbonate and solid oxide electrolysis products operate at high temperatures and use corrosive carbonate material, which could expose us to potential liability claims. Although we incorporate a robust design and redundant safety features in our power plants, have established comprehensive safety, maintenance, and training programs, follow third-party certification protocols, codes and standards, and do not store natural gas or hydrogen at our power plants, we cannot guarantee that there will not be accidents. Any accidents involving our products or other hydrogen-using products could materially impede widespread market acceptance and demand for our products. In addition, we might be held responsible for damages beyond the scope of our insurance coverage. We also cannot predict whether we will be able to maintain adequate insurance coverage on acceptable terms.

Risks Related to Privacy, Data Protection and Cybersecurity

Our reliance on information technology continues to grow, and disruptions, failures, or security breaches could materially impact both our operations and the operations of our power plant platforms. Furthermore, the rise in information technology security threats and increasingly sophisticated cybercrime presents ongoing risks to our systems, networks, products, and services.

Our operations depend on information technology networks and systems, including the Internet, for processing, transmitting, and storing electronic and financial data. These resources support a range of business processes and activities, such as monitoring and operating power plants owned by us or our customers, and managing production, manufacturing, financial, logistics, sales, marketing, and administrative functions. Furthermore, we collect and retain data that is sensitive both to our organization and to third parties. The secure operation of information technology networks and systems, as

well as the responsible processing and maintenance of this data, are essential to our business operations and strategic objectives.

Our information technology infrastructure is essential for communication with employees, customers, suppliers, and other parties, as well as for meeting regulatory, legal, and tax obligations and operating our fuel cell power plants. Several of these information technology systems are managed by third-party vendors or involve shared service centers, making them potentially vulnerable to damage, disruption, or shutdown from events such as software or database upgrades, power outages, hardware malfunctions, computer viruses, cyberattacks, emerging technology risks, telecom failures, user mistakes, natural disasters, terrorist actions, or other catastrophic incidents. If any of our key information technology systems were severely affected and our disaster recovery or business continuity measures did not resolve the situation quickly, it may harm our product sales, financial health, and operational results. We may also face delays in reporting financial data or encounter disruptions in fuel cell plant operations, which could lead to performance penalties under our customer contracts.

Information technology security threats — from user error to cybersecurity attacks designed to gain unauthorized access to our systems, networks and data — are increasing in frequency and sophistication. Cybersecurity attacks may range from random attempts to coordinated and targeted attacks, including sophisticated computer crime and advanced persistent threats. These threats pose a risk to the security of our systems and networks and the confidentiality, availability and integrity of our data. Cybersecurity attacks could also include attacks targeting customer data or the security, integrity and/or reliability of the hardware and software installed in our products. We could experience cybersecurity attacks that result in unauthorized parties gaining access to our information technology systems, our networks, and/or our power plants. However, to date, no cybersecurity attack has resulted in any material loss of data, interrupted our day-to-day operations or had a material impact on our financial condition, results of operations or liquidity. While we actively manage information technology security risks within our control, there can be no assurance that such actions will be sufficient to mitigate all potential risks to our systems, networks and data. In addition to the direct potential financial risk as we continue to build, own and operate generation assets, other potential consequences of a material cybersecurity attack include reputational damage, litigation with third parties, disruption to systems, unauthorized release of confidential or otherwise protected information, corruption of data, diminution in the value of our investment in research, development and engineering, and increased cybersecurity protection and remediation costs, which in turn could adversely affect our competitiveness, results of operations and financial condition. The amount of insurance coverage we maintain may be inadequate to cover claims or liabilities relating to a cybersecurity attack.

Additionally, the legal and regulatory environment surrounding information security and privacy in the U.S. and international jurisdictions is constantly evolving. Violation or non-compliance with any of these laws or regulations, contractual requirements relating to data security and privacy, or our own privacy and security policies, either intentionally or unintentionally, or through the acts of intermediaries could have a material adverse effect on our brand, reputation, business, financial condition and results of operations, as well as subject us to significant fines, litigation losses, third-party damages and other liabilities.

Tax, Accounting, Compliance and Regulatory Risks

We are required to maintain effective internal control over financial reporting. In a prior fiscal year, our management identified a material weakness in our internal control over financial reporting. If other control deficiencies are identified in the future, we may not be able to report our financial results accurately, prevent fraud or file our periodic reports in a timely manner, which may adversely affect investor confidence in our Company and, as a result, the value of our common stock.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act (“Section 404”), to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting. Complying with Section 404 requires a rigorous compliance program as well as adequate time and resources. We may not be able to complete our internal control evaluation, testing and any required remediation in a timely fashion. Additionally, if we identify one or more material weaknesses in our internal control over financial reporting, we will not be able to assert that our internal controls are effective. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

In a prior fiscal year, our management identified a material weakness in our internal control over financial reporting, which has been remediated. We cannot be certain that other material weaknesses and control deficiencies will not occur in the future. If material weaknesses are identified in the future, or if we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated and we could be subject to investigations or sanctions by regulatory authorities, which would require additional financial and management resources, and the value of our common stock could decline.

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To the extent we identify future weaknesses or deficiencies, there could be material misstatements in our consolidated financial statements and we could fail to meet our financial reporting obligations. As a result, our ability to obtain additional financing on favorable terms or at all could be materially and adversely affected which, in turn, could materially and adversely affect our business, our financial condition and the value of our common stock. If we are unable to assert that our internal control over financial reporting is effective in the future, investor confidence in the accuracy and completeness of our financial reports could be further eroded, which would have a material adverse effect on the price of our common stock.

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Our results of operations could vary as a result of changes to our accounting policies or the methods, estimates and judgments we use in applying our accounting policies.

The methods, estimates and judgments we use in applying our accounting policies have a significant impact on our results of operations. Such methods, estimates and judgments are, by their nature, subject to substantial risks, uncertainties and assumptions, and factors may arise over time that could lead us to reevaluate our methods, estimates and judgments.

In future periods, management will continue to reevaluate its estimates for contract margins, service agreements, loss accruals, warranty, performance guarantees, liquidated damages, inventory valuation allowances and allowance for doubtful accounts. Changes in those estimates and judgments could significantly affect our results of operations and financial condition. We will also adopt changes required by the Financial Accounting Standards Board and the SEC.

We may be affected by environmental and other governmental regulation.

We are subject to various federal, state and local laws and regulations relating to, among other things, land use, safe working conditions, handling and disposal of hazardous and potentially hazardous substances and emissions of carbon dioxide and pollutants into the atmosphere. Our business exposes us to the risk of harmful substances escaping into the environment, resulting in personal injury or loss of life, damage to or destruction of property, and natural resource damage. Depending on the nature of the claim, our current insurance policies may not adequately reimburse us for costs incurred in settling environmental damage claims, and in some instances, we may not be reimbursed at all. In addition, it is possible that industry-specific laws and regulations will be adopted covering matters such as transmission scheduling, distribution, emissions, and the characteristics and quality of our products, including installation and servicing. These regulations could limit the growth in the use of carbonate fuel cell products, decrease the acceptance of fuel cells as a commercial product and increase our costs and, therefore, the price of our products. We believe that our businesses are operating in compliance in all material respects with applicable environmental laws; however, these laws and regulations have changed frequently in the past and it is reasonable to expect additional and more stringent changes in the future. Accordingly, compliance with existing or future laws and regulations could have a material adverse effect on our business prospects, results of operations and financial condition. If we fail to comply with applicable environmental laws and regulations, governmental authorities may seek to impose fines and penalties on us or to revoke or deny the issuance or renewal of operating permits and private parties may seek damages from us. Under those circumstances, we might be required to curtail or cease operations, conduct site remediation or other corrective action, or pay substantial damage claims.

Given that some of our product configurations run on fossil fuels, we may be negatively impacted by CO_2-related changes in applicable laws, regulations, ordinances, rules or the requirements of the incentive programs on which we and our customers currently rely. Changes in any of the laws, regulations, ordinances or rules that apply to our installations and new technology could make it illegal or more costly for us or our customers to install and operate our products at particular sites. Additionally, our customers and potential customers’ energy procurement policies may prohibit or limit their willingness to procure our products. Our business prospects may be negatively impacted if we are prevented from completing new installations or our installations become more costly as a result of laws, regulations, ordinances, or rules applicable to our products, or by our customers’ and potential customers’ energy procurement policies.

In addition, certain of our products benefit from federal, state and local governmental incentives, mandates or other programs promoting clean energy generation. Any changes to or termination of these programs could reduce demand for our products, impair sales financing, and adversely impact our business, financial condition and results of operations.

A negative government audit could result in an adverse adjustment of our revenue and costs and could result in civil and criminal penalties.

Government agencies, such as the Defense Contract Audit Agency, routinely audit and investigate government contractors. These agencies review a contractor’s performance under its contracts, cost structure, and compliance with applicable laws, regulations, and standards. If the agencies determine through these audits or reviews that we improperly allocated costs to specific contracts, they will not reimburse us for these costs. Therefore, an audit could result in adjustments to our revenue and costs.

Further, although we have internal controls in place to oversee our government contracts, no assurance can be given that these controls are sufficient to prevent isolated violations of applicable laws, regulations and standards. If the agencies determine that we or one of our subcontractors engaged in improper conduct, we may be subject to civil or criminal penalties and administrative sanctions, payments, fines, and suspension or prohibition from doing business with the government, any of which could materially affect our results of operations and financial condition.

Exports of certain of our products are subject to various export control regulations and may require a license or permission from the U.S. Department of State, the U.S. Department of Energy or other agencies.

As an exporter, we must comply with various laws and regulations relating to the export of products, services and technology from the U.S. and with the laws and regulations of other countries having jurisdiction over our operations. We are subject to export control laws and regulations, including the International Traffic in Arms Regulation, the Export Administration Regulation, and the Specially Designated Nationals and Blocked Persons List, which generally prohibit U.S. companies and their intermediaries from exporting certain products, importing materials or supplies, or otherwise doing business with restricted countries, businesses or individuals, and require companies to maintain certain policies and procedures to ensure compliance. We are also subject to the Foreign Corrupt Practices Act, which prohibits improper payments to foreign governments and their officials by U.S. and other business entities. Under these laws and regulations, U.S. companies may be held liable for their actions and actions taken by their strategic or local partners or representatives. If we, or our intermediaries, fail to comply with the requirements of these laws and regulations, or similar laws of other countries, governmental authorities in the United States or elsewhere, as applicable, could seek to impose civil and/or criminal penalties, which could damage our reputation and have a material adverse effect on our business, financial condition and results of operations.

Our business currently benefits from the availability of rebates, tax credits and other financial programs and incentives, and changes to such benefits could cause our revenue to decline and harm our financial results.

We utilize governmental rebates, tax credits, and other financial incentives to lower the effective price of our products to customers including in the U.S. and South Korea. The U.S. federal government and some state and local governments provide incentives to current and future end users and purchasers of our solutions in the form of rebates, tax credits and other financial incentives, such as payments for renewable energy credits associated with renewable energy generation. Our solutions have qualified for tax exemptions, incentives, or other customer incentives in many states. Some states have utility procurement programs, Renewables Portfolio Standards (“RPSs”) or Clean Energy Standards (“CESs”) for which our technologies are eligible; however, our solutions may not be eligible for other RPSs and CESs, particularly when fueled in whole or in part with natural gas.

Under the Inflation Reduction Act of 2022 (the “IRA”), the U.S. federal government offers certain federal tax benefits, including the Production Tax Credit under Section 45 of the Internal Revenue Code (the “PTC”) and the ITC, both of which were succeeded by “technology-neutral” versions set forth in Sections 45Y and 48E, respectively. After December 31, 2024, new fuel cell systems operating on natural gas or a non-zero carbon fuel became ineligible for the ITC under the IRA, except to the extent eligible fuel cell projects or equipment were properly safe harbored prior to December 31, 2024, under the applicable federal tax guidance rules. On July 4, 2025, the U.S. federal government enacted the OBBBA, which restored the federal ITC, which was applicable prior to the enactment of the IRA, for fuel cell projects beginning construction after December 31, 2025, at a 30% rate through 2033, regardless of the level of emissions from the fuel cell facility. These federal tax benefits under both the IRA and the OBBBA have certain legal and operational requirements.

There may be uncertainty as to how such requirements promulgated under the IRA and the OBBBA are interpreted. If IRS guidance regarding implementation of the IRA or the OBBBA is viewed by potential customers or investors as unclear, tax credit financing may be delayed or diminished, harming our ability to secure financing for customers. Changes in federal tax benefits over time also may affect our future performance.

Some countries outside the U.S. also provide incentives to current and future end users and purchasers of solutions like ours. For example, in South Korea, RPSs, Clean Hydrogen Portfolio Standard and CESs are in place to promote the use of renewable, low- or zero-carbon power generation. Changes in the availability of rebates, tax credits, and other financial programs and incentives could reduce demand for our products and adversely impact our business results. Additionally, these incentives and procurement programs or obligations may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy. The continuation of these programs and incentives depends upon continued political support of the fuel cell industry.

Risks Related to Our Need for Additional Capital

We will need to raise additional capital, and such capital may not be available on acceptable terms, if at all. If we do raise additional capital utilizing equity, existing stockholders will suffer dilution. If we do not raise additional capital, our business could fail or be materially and adversely affected.

The implementation of our business plan and strategy requires additional capital to fund operations as well as investment by us in project assets. If we are unable to raise additional capital in the amounts required, on terms acceptable to us, or at all, we will not be able to successfully implement our business plan and strategy. Our capital-intensive business model increases the risk that we will not be able to successfully implement our plans if we do not raise additional capital in the amounts required.

In addition, if we raise additional funds through further issuances of our common stock, or securities convertible into or exchangeable for shares of our common stock, into the public market, including shares of our common stock issued upon exercise of options or warrants, holders of our common stock could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our then-existing capital stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we cannot raise additional funds when we need them, our business and prospects could fail or be materially and adversely affected. In addition, if additional funds are not secured in the future, we will have to modify, reduce, defer or eliminate parts of our present and anticipated future projects, or sell some or all of our assets.

Risks Related to our Intellectual Property and Technology Licenses

We depend on our intellectual property, and our failure to protect that intellectual property could adversely affect our future growth and success.

Failure to protect our existing intellectual property rights may result in the loss of our exclusivity or the right to use our technologies. If we do not adequately ensure our freedom to use certain technology, we may have to pay others for rights to use their intellectual property, pay damages for infringement, misappropriation, or other violation, or be enjoined from using such intellectual property. We rely on patent, trade secret, trademark and copyright law to protect our intellectual property.

We previously licensed certain of our carbonate fuel cell manufacturing intellectual property to POSCO Energy Co., Ltd. (“POSCO Energy”) on an exclusive basis in the South Korean and broader Asian markets, and pursuant to the terms of our Settlement Agreement with POSCO Energy, we have done so again, but this time on a limited, non-exclusive basis to enable module replacement to POSCO Energy’s existing long-term service agreement customers only. In addition, effective as of June 11, 2019, we entered into a license agreement with EMTEC to facilitate the further development of our carbon capture platform (the “EMTEC License Agreement”). Pursuant to the EMTEC License Agreement, we granted EMTEC and its affiliates a non-exclusive, worldwide, fully-paid, perpetual, irrevocable, non-transferable license and right to use our patents filed on or before April 30, 2021, and any data, know-how, improvements, equipment designs, methods, processes and the like provided directly by us or our affiliates to EMTEC or its affiliates under any agreement or otherwise, on or before April 30, 2021, to the extent it is useful to research, develop and commercially exploit carbonate fuel cells in applications in which the fuel cells concentrate carbon dioxide from external industrial and power sources and for any