FCEL 10-K & 10-Q changes, risk factors and insider trading

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.

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 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 continue to rise or there are changes in tax policy, our financial results could be harmed.

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. TheWe believe that the Torrington facility is sized tocould accommodate thean eventualestimated annualized production capacity of up to 200350 MW per year with additional capital investmentinvestments in machinery, equipment, toolingtooling, labor, outsourcing of certain processes and inventory.

OurPrior 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 is focused on the engineering and development of our SOFCsolid oxide power generation and SOECelectrolysis technologies. This facility also houseshoused our SOFCsolid oxide power generation and SOECelectrolysis 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 2022,2022 and continuing in fiscal years 2023 and 2024, we started making additionalmade investments in the Calgary facility, including by increasing the total leased facility tospace establishand aordering centerlong lead process equipment, with the goal of competence and excellence forincreasing solid oxide cell and stack research and manufacturing. This facility includes equipment for the manufacturing of solid oxide cells and stacks, including an advanced automated stack manufacturing line which has been developed to ensure that the labor and overhead which are required to produce these technologies are optimized for efficiency and complement the low direct material cost of the stack. The current annualized production capacity of the Calgary facility is 6 MW of SOEC production based on currently installed equipment. During the fiscal years ended October 31, 2024 and 2023, we entered into lease expansions, extensions and amending agreements which expanded the space leased in Calgary to include an additional approximately 68,000 square feet, for a total of approximately 100,000 square feet of space. In addition, long-lead process equipment has been ordered to facilitate the expansion of manufacturing capacity for the solid oxide platforms in Calgary. Upon the completion of the Calgary capacity expansion, we believe that the total annualized SOEC manufacturing capacity could potentially be increased to up to 80 MW per year.capacity. However, in November 2024,2024 and June 2025, we announced a global restructuring ofplans relating to our operations in the U.S., Canada, and Germany that aimsaim 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-investmentsslower-than-expected market investments in clean energy. ThisThese restructuring planplans also includesinclude the deferment and cancelation of certain previously planned capital and project expenditures.expenditures related to solid oxide manufacturing in our facility in Calgary, Canada. As a result of thisthese restructuring plan,plans, we have deferred the capital spending required to complete the Calgary expansion and do not currently haveexpect anto estimated completion date forcomplete this project. IfIn 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 restructuringsolid planoxide doeselectrolysis notplatform. resultWe in the intended benefits or savings or results in unanticipated costs, including but not limitedexpect to additionalseek chargespartnerships and/orfor highersolid thanoxide expectedproduct costs, or if we are unable to successfully implement our restructuring plan during the expected timeframe, our results of operationscommercialization and financial condition could be materially adversely affected. For more information about our restructuring plan, please see Part II, Item 8, Note 4 — Restructuring and Note 22 — Subsequent Events.manufacturing.

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 and planned 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. If our business grows more quickly than we anticipate, our existing and planned manufacturing facilities may become inadequate 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 goodwill and other indefinite-lived intangible assets and long-lived assets (including project assets) become impaired,impaired in the future, we may again be required to record a significant charge to operations.

We have recorded significant impairment charges,charges to operations in our financial statements upon our determination, and we may in the future be required to record significant impairment charges,charges to operations in our financial statements should we determineagain determine, that our goodwill, other indefinite-lived intangible assets (i.e., in process research and development (“IPR&D”)) and other long-lived assets (i.e., project assets, property, plant and equipment and amortizing intangible assets) are impaired. Such charges mighthave had and may continue to have a significant negative impact on our reported financial condition and results of operations. Project assets andassets, property, plant and equipmentequipment, goodwill, indefinite-lived intangible assets and inventory impairment charges totaled approximately $1.3$65.8 million, $2.4$1.3 million and $1.8$2.4 million for the fiscal years ended October 31, 2024,2025, 20232024 and 2022,2023, respectively.

As required by accounting rules, we review any goodwill and/or indefinite-lived intangible assets recorded on our goodwillbalance 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. We review IPR&D for impairment on an annual basis as of July 31 or more frequently if facts and circumstances indicate the fair value is less than the carrying value. If the technologyassets hashave been determined to be abandoned or not recoverable, we would beare required to record a charge reflecting impairment of the asset.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. IfWhen any of oura project assetsasset areis not considered commercially viable or costs are not deemed to be recoverable, we would beare required to record a charge reflecting the impairment of such project assets.asset.

Generally, our privately funded Advanced Technologies contracts, including our EMTEC Joint Development Agreement,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.

We use various raw materials and components to construct a fuel cell module, including nickel and stainless steelsteel, 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.

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 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 couldmay be material under these contracts and, as a result, we have experienced and may continue to experience diminished returns orand we have been required to and may be requiredrequired, in the future, to write off all or a portion of our capitalized costs in these project assets.

We develop complex and evolving productsproducts, 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 are also in the process of manufacturing and selling SOEC and SOFC products. 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.

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 PEMproton 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.

We must develop additional commercially viable products in order to achieve profitability. Our development timeline for bringing newour commerciallysolid viableoxide productselectrolysis technology to market has shifted as a result of delays in adoption of clean energy technologies,technologies timing of product developmentsgenerally and implementation of our recently announcedrecent global restructuring and workforce reduction plan,actions, which mayhave notre-focused our business on our core carbonate technologies. In addition, our timeline for bringing our carbon capture technology to market will be successful.subject to conditions outside of our control.

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 SureSourcemolten 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.

WeOur are increasingly dependentreliance on information technology,technology continues to grow, and disruptions, failuresfailures, or security breaches of our information technology infrastructure could havematerially aimpact material adverse effect onboth our operations and the operations of our power plant platforms. InFurthermore, addition,the increasedrise in information technology security threats and moreincreasingly sophisticated computercybercrime crimepresents poseongoing a riskrisks to our systems, networks, productsproducts, and services.

We rely on information technology networks and systems, including the Internet, to process, transmit and store electronic and financial information and to manage a variety of business processes and activities, including communication with power plants owned by us or our customers and production, manufacturing, financial, logistics, sales, marketing and administrative functions. Additionally, we collect and store data that is sensitive to us and to third parties. Operating these information technology networks and systems and processing and maintaining this data, in a secure manner, are critical to our business operations and strategy. We depend on ourOur information technology infrastructure tois communicateessential internallyfor and externallycommunication with employees, customers, supplierssuppliers, and others.other Weparties, alsoas usewell informationas technologyfor networks and systems to comply withmeeting regulatory, legallegal, and tax requirementsobligations and to operateoperating our fuel cell power plants. TheseSeveral of these information technology systems, many of whichsystems are managed by thirdthird-party partiesvendors or used in connection withinvolve shared service centers, maymaking bethem susceptiblepotentially vulnerable to damage, disruptionsdisruption, or shutdownsshutdown duefrom toevents failuressuch duringas the process of upgradingsoftware or replacingdatabase software, databases or components thereof,upgrades, power outages, hardware failures,malfunctions, computer viruses, attacks by computer hackers or other cybersecurity risks including the impact ofcyberattacks, emerging technologies,technology telecommunicationrisks, telecom failures, user errors,mistakes, natural disasters, terrorist attacksactions, or other catastrophic events.incidents. If any of our significantkey information technology systems sufferwere severeseverely damage, disruption or shutdown,affected and our disaster recovery andor business continuity plansmeasures dodid not effectively resolve the issuessituation inquickly, ait timelymay manner,harm our product sales, financial conditionhealth, and resultsoperational ofresults. operationsWe may bealso materially and adversely affected, and we could experienceface delays in reporting our financial results,data or ourencounter disruptions in fuel cell power plant operationsoperations, maywhich becould disrupted, exposing uslead to performance penalties under our contractscustomer with customers.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 have experienced, and may continue tocould experience in the future, cybersecurity attacks that have resultedresult in unauthorized parties gaining access to our information technology systemssystems, our networks, and networks and, in one instance, gaining control of the information technology system at one of/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.

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 theour 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 LTSAlong-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 other purpose attendant thereto or associated therewith. Such right and license is sublicensable to third parties performing work for or with EMTEC or its affiliates, but is not otherwise sublicensable. Furthermore, on November 5, 2019, we entered into the EMTEC Joint Development Agreement, pursuant to which we agreed to grant EMTEC and its affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, sub-licensable, non-transferable (subject to certain exceptions) right and license to practice certain Company background intellectual property (to the extent not already licensed pursuant to the EMTEC License Agreement) for new carbonate fuel cell technology in carbon capture applications and hydrogen applications. We depend on POSCO Energy and EMTEC to also protect our intellectual property rights, but we cannot assure you that POSCO Energy or EMTEC will do so.

As of October 31, 2024,2025, we (excluding our subsidiaries) had 148152 U.S. patents and 307319 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, SOFCsolid oxide fuel cell technology, PEMproton exchange membrane fuel cell technology and applications thereof. As of October 31, 2024,2025, we also had 2829 patent applications pending in the U.S. and 8679 patent applications pending in other jurisdictions. As of October 31, 2024,2025, our subsidiary, Versa Power Systems, Ltd. (“Versa”), had 19 U.S. patents and 6863 international patents covering SOFCsolid oxide fuel cell technology (in certain cases covering the same technology in multiple jurisdictions). As of October 31, 2024,2025, Versa also had 13 pending U.S. patent applications and 3024 patent applications pending in other jurisdictions. In addition, as of October 31, 2024,2025, 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.

Our products require a long-term investment from our customers. Global inflationary pressures, particularly in the United States, have increased recently to levels not seen in recent years. Should our customers be impacted by these pressures, it could result in delays in purchasing decisions which could impact future sales of our products and our results of operations. In addition, downturns in the worldwide economy, due to inflation, geopolitics, major central bank policy actions including interest rate increases, public health crises, or other factors could also adversely affect our business.

Economic and political events in 20232023, 2024 and 20242025 have altered the landscape in which we and other U.S. companies operate in a variety of ways. In response to inflationary pressures,pressures over the past several years, the U.S. Federal Reserve has raised interest rates, resultingwhich resulted in an increase in the cost of borrowing for us, our customers, our suppliers, and other companies relying on debt financing. World events, such as the Russian invasioninstitution of tariff measures between the U.S. and other countries and the ongoing war between Russia and Ukraine and the resulting economic sanctions, have impacted the global economy. Prolonged inflationary conditions, high and/or increased interest rates, and additional sanctions or retaliatory measures related to the Russia-Ukraine crisis, tariffs or other geo-political situations, could further negatively affect U.S. and international commerce and exacerbate or prolong the period of high energy prices and supply chain constraints. At this time, the extent and duration of these economic and political events and their effects on the economy and the Company are impossible to predict.

In addition to historical information, this discussion and analysis contains forward-looking statements. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Please see the section of this Annual Report entitled “Forward-Looking Statement Disclaimer” for a discussion of the uncertainties, risks and assumptions associated with these statements, as well as the other risks set forth in our filings with the SEC including those set forth under the section entitled “Item 1A1A. Risk Factors” in this Annual Report.

Total revenues for the year ended October 31, 20242025 decreasedincreased $11.3$46.0 million, or 9%,41%, to $112.1$158.2 million from $123.4$112.1 million for the year ended October 31, 2023.2024. Total costs of revenues for the year ended October 31, 20242025 increased by $14.1$36.5 million, or 11%,25%, to $148.1$184.6 million from $133.9$148.1 million for the year ended October 31, 2023.2024. The Company’s gross margin was (32.016.7)% in fiscal year 2024,2025, as compared to a gross margin of (8.532.0)% in fiscal year 2023.2024. A discussion of the changes in product revenues, service agreements revenues, generation revenues and Advanced Technologies contract revenues follows.

Product revenues, cost of product revenues and gross (loss) profit from product revenues for the years ended October 31, 20242025 and 20232024 were as follows:

Product revenues for the year ended October 31, 20242025 were $25.7$69.1 million compared to $19.6$25.7 million for the year ended October 31, 2023.2024. The increase in product revenues during the year ended October 31, 20242025 was primarily driven by $18.0$66.0 million of revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for the replacement of 622 fuel cell modules for GGE’s 58.8 MW fuel cell power plant platform in Hwasong-si, Korea.South TheKorea, compared to the revenue recognized for the replacement of 6 fuel cell modules in the year ended October 31, 2024. Partially offsetting the increase alsoin reflectsrevenue $7.7recognized millionunder ofthe LTSA with GGE is the decrease in revenue recognized under the Company’s sales contract with Ameresco, Inc.,Inc. which$3.1 million of revenue was recognized under the Company’s sales contract with Ameresco, Inc. for the year ended October 31, 2025, compared to $7.7 million in the year ended October 31, 2024. The Company’s sales contract with Ameresco, Inc. was entered into during the second quarter of fiscal year 2024, pursuant to which the Company is to provide a 2.8 MW platform to the Sacramento Sewer District.

Cost of product revenues increased $26.7$43.3 million for the year ended October 31, 20242025 to $39.6$82.9 million, compared to $12.9$39.6 million in the sameyear periodended inOctober the31, prior year,2024, primarily due to the higher product sales in fiscal year 2024.2025. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $13.1 million for the year ended October 31, 2025 compared to approximately $11.9 million for the year ended October 31, 2024 compared to approximately $12.0 million for the year ended October 31, 2023.2024.

Product revenues for the year ended October 31, 20242025 generated a gross loss of $13.9$(13.7) million compared to a gross profitloss of $6.7$(13.9) million for the year ended October 31, 2023.2024. The gross loss for both of the yearyears ended October 31, 2025 and 2024 was primarily due to the manufacturing variances discussed above. The gross profit for the year ended October 31, 2023 is a direct result of the product revenues recognized related to the expiration without exercise of KFC’s module purchase option, the release of previously constrained product revenue and the fact that there were no corresponding costs associated with the recognition of these revenues.

For the year ended October 31, 2024,2025, we operated at an annualized production rate of approximately 27.731.5 MW, which is aan decreaseincrease from the annualized production rate of 32.727.7 MW for the year ended October 31, 2023.2024. The reductionincrease in the annualized production rate for fiscal year 20242025 is primarily due to moderatingincreasing our production levels in our Torrington facility as a result of market demand timing.

For the year ended October 31, 2024, accrued2025, performance penalties under our service agreements totaled approximately $1.5$0.8 million compared to approximately $1.2$0.4 million for the year ended October 31, 2023.2024. Accrued performancePerformance guarantees represent variable consideration for service contracts and accordingly are recorded as an offset to service agreements revenues.

Cost of service agreements revenues decreasedincreased $33.9$11.5 million to $22.6 million for the year ended October 31, 2025 from $11.1 million for the year ended October 31, 20242024. fromCost $45.0of millionservice agreements revenues were higher for the year ended October 31, 2023.2025 Cost of service agreements revenues were lowerthan for the year ended October 31, 2024 than for the year ended October 31, 2023 primarily due to the factcosts thatassociated 15with newthe greater number of module exchanges occurredperformed during the yearyear, endedas Octoberwell 31,as 2023,the whilecosts thereof werecommissioning fewerGGE module exchangesmodules during the yearyear. endedThe Octoberincrease 31,was 2024,offset and also as a result ofby a net decrease relating to the recognition of service agreement loss accrualaccruals during fiscal year 20242025 of approximately $0.5 million. We record loss accruals for service agreements when the estimated cost of future module exchanges and maintenance and monitoring activities exceeds the remaining unrecognized consideration. Estimates for future costs onunder service agreements are determined by a number of factors including the estimated remaining life of the module(s), used replacement modules available, and future operating plans for the power platform.

We work to continuously improve and mature our products and implement lessons learned into our product designs and manufacturing process subsequent to introduction. We examine data related to module field performance, identify improvement opportunities and invest in improvement initiatives with respect to our core molten carbonate technology. 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 withinof the cell stack within the modules with the intent of improving output over the life of the modules to achieve the product’s expected design life.

Overall gross loss from service agreements revenues was $(2.2) million for the year ended October 31, 2025 which increased from a gross loss of $(1.1) million for the year ended October 31, 2024 which decreased from a gross profit of $4.1 million for the year ended October 31, 2023.2024. The overall gross margin was (11.311.0)% for the year ended October 31, 20242025, compared to a gross margin of 8.4%(11.3)% in the comparable prior year period. Gross margin was lower during the year ended October 31, 2024, primarily due to the fact that only 2 new module exchanges were completed during the year, compared to the 15 new module exchanges completed during the year ended October 31, 2023 under service agreements with higher margins.2024.

Revenues from generation for the year ended October 31, 20242025 totaled $50.0$48.0 million, which represents ana increasedecrease of $12.5$2.0 million from revenue recognized of $37.5$50.0 million for the year ended October 31, 2023.2024. The increasedecrease reflectsin generation revenues of $2.6 million generated by the Toyota project, which became operational during the first quarter of fiscal year 2024, and revenue of $15.6 million generated by the Derby Projects (as defined below), both of which became operational in December 2023, partially offset by lower revenue from other plants due toreflects lower output from plants in our generation operating portfolio resulting from routine maintenance activities. Generation revenues for the years ended October 31, 20242025 and 20232024 reflect revenue from electricity generated under our power purchase agreements (“PPAs”), and the sale of renewable energy credits, and additionally, for the year ended October 31, 2024, the sale of hydrogencredits from theour Toyotageneration project.operating portfolio.

TheCost overall gross loss fromof generation revenues wastotaled $(29.9)$64.0 million for the year ended October 31, 2025 compared to $79.9 million for the year ended October 31, 2024. The overall decrease in cost of generation revenues is primarily related to the mark-to-market net gain recognized during the year ended October 31, 2025 of $4.7 million related to natural gas purchase contracts, compared to a mark-to-market net loss of $6.9 million for the year ended October 31, 2024, whichand representspartially andue increaseto a decrease in grossexpensed lossconstruction ofand $4.5gas million,costs fromrelated ato grossthe lossToyota ofproject, $(25.4)which were $0.7 million for the year ended October 31, 2023. The increase in gross loss from generation revenues is primarily related to the mark-to-market loss of $6.9 million recorded for the year ended October 31, 20242025, compared to a mark-to-market net gain of $4.1$3.6 million for the year ended October 31, 2023, offset by a decrease in construction and gas costs being expensed related to the Toyota project and higher margins of the operating fleet for the year ended October 31, 2024.

Advanced Technologies contract revenues increaseddecreased to $20.6 million for the year ended October 31, 2025 compared to $26.5 million for the year ended October 31, 2024 compared to $17.2 million for the year ended October 31, 2023.2024. Advanced Technologies contract revenues recognized under the Joint Development Agreement (as amended, the “Joint Development Agreement”) between the Company and ExxonMobil Technology and Engineering Company f/k/a ExxonMobil Research and Engineering Company (“EMTEC”) (which was originally effective as of October 31, 2019) (as amended, the “EMTEC Joint Development Agreement”) were approximately $8.8$9.5 million during the year ended October 31, 2024,2025, which was aan decreaseincrease of $1.7$0.7 million compared to the year ended October 31, 2023.2024. Revenues arising from the purchase order received from Esso Nederland B.V. (“Esso”), an affiliate of EMTEC and Exxon Mobil Corporation, related to the Rotterdam project were approximately $10.7$8.1 million during the year ended October 31, 2024,2025, which was ana increasedecrease of $8.7$2.5 million compared to the year ended October 31, 2023.2024. Advanced Technologies contract revenues recognized under government and other contracts were approximately $7.1$3.0 million for the year ended October 31, 2024,2025, which werewas $2.3a decrease of $4.1 million higher compared to the year ended October 31, 2023.2024.

Cost of Advanced Technologies contract revenues increaseddecreased $4.3$2.4 million to $15.1 million for the year ended October 31, 2025, compared to $17.5 million for the year ended October 31, 2024, compared to $13.2 million for the year ended October 31, 2023.2024. This increasedecrease is primarily a result of the higherlower level of activity and the scope of work performed under the purchase order received from Esso described above, as well as the higher level of activity performedand under thegovernment EMTECand Jointother Development Agreementcontracts during the year ended October 31, 2024,2025, compared to the year ended October 31, 2023.2024.

Advanced Technologies contracts for the year ended October 31, 20242025 generated a gross profit of $9.0$5.5 million compared to a gross profit of $4.0$9.0 million for the year ended October 31, 2023.2024. The increaseddecreased gross profit was primarily due to the higherlower revenuesmargins recognized under the purchase order received from Esso and under government and other contracts during the year ended October 31, 2024,2025, compared to the year ended October 31, 2023.2024.

Administrative and selling expenses were $60.7 million for the year ended October 31, 2025, which decreased from $64.6 million for the year ended October 31, 2024, whichprimarily increaseddue slightlyto fromlower $64.5compensation millionexpense foras a result of the restructuring actions in September of fiscal year ended2024 Octoberand 31,in 2023.November and June of fiscal year 2025.

Research and development expenses decreased to $34.1 million for the year ended October 31, 2025 compared to $55.4 million for the year ended October 31, 2024 compared to $61.0 million for the year ended October 31, 2023.2024. The decrease is primarily due to a shiftdecrease in engineering resource allocation toward supporting the increase in the Advanced Technologies activities described above, partially offset by an increase in spending, including spending for labor (including increased headcount) and materials, on the Company’s ongoing commercial development efforts related to our solid oxide power generation and electrolysis platforms and carbon separation and carbon recovery solutions.solutions compared to the year ended October 31, 2024.

Restructuring expense of $2.6$5.3 million for the year ended October 31, 20242025 was a result of the Company’s workforce reductions duringin theNovember period,2024 and June 2025, which represented approximately 4%13% and 22% of the Company’s global workforceworkforce, respectively, and were intended to reduce costsoperating costs, realign resources toward advancing the Company's core carbonate technologies, and alignprotect productionthe levelsCompany's withcompetitive currentposition levelsamid ofslower-than-expected demandmarket investments in aclean manner that is consistent with the Company’s long-term strategic plan.energy. The workforce was reduced across our global operations including Calgary, Canada and at theour North American production facility in Torrington, Connecticut, asat well as atour corporate offices in Danbury, Connecticut and at other remote locations. For more information about the restructuring planplans and the related workforce reductions that occurred in September and2024, November 2024, and June 2025, please see Part II, Item 8, Note 4 — RestructuringImpairment and Note 22 — Subsequent Events.Restructuring.

Loss from operations for the year ended October 31, 20242025 was $158.5$192.3 million compared to $136.1$158.5 million for the year ended October 31, 2023.2024. This increase was driven primarily driven by the higherimpairment grossand lossrestructuring inexpenses recognized during the year ended October 31, 2024 of $35.9 million compared to the gross loss of $10.5 million in the year ended October 31, 2023. The increase in gross loss is a result of higher gross loss from product revenues, service agreement revenues and generation revenues,2025, partially offset by higherdecreases grossin profitAdministrative fromand Advanced Technologies contracts. The gross loss is also offset by lower operatingselling expenses inand theResearch yearand endeddevelopment October 31, 2024expenses compared to the year ended October 31, 2023, primarily related to lower research2024 and developmenta expenses,decrease offsetof by$9.5 themillion restructuringin expensegross recorded.loss.

Interest expense for the years ended October 31, 20242025 and 20232024 was $9.7$10.4 million and $7.2$9.7 million, respectively. Interest expense for both periods includes interest on the OpCo Financing Facility (as defined elsewhere herein), which was entered into in May 2023, and interest on the Groton Senior Back Leverage Loan Facility and the Groton Subordinated Back Leverage Loan Facility (in each case, as defined elsewhere herein), which were entered into in August 2023. Interest expense increased for the year ended October 31, 20242025, as this period also includes a full year of interest on the Derby Senior Back Leverage Loan Facility and the Derby Subordinated Back Leverage Loan Facility (in each case, as defined elsewhere herein), which were entered into in April 2024. Interest expense for the year ended October 31, 2023 also included interest associated with finance obligations for failed sale-leaseback transactions2024, and interest on the loans2024 associatedEXIM withFinancing the(as Bridgeportdefined Fuelelsewhere Cell Projectherein), which werewas extinguishedentered into in MayOctober 2023.2024.

Other income (expense) income,, net

Other income (expense) income,, net was ($2.3)$3.2 million and $4.7($2.3) million for the years ended October 31, 20242025 and 2023,2024, respectively. Other income, net for the year ended October 31, 2025 primarily relates to employee retention credits of $3.4 million that were earned during the COVID-19 pandemic and received during year ended October 31, 2025 and a gain of $0.4 million related to refundable research and development tax credits, partially offset by an unrealized loss of $0.7 million on the OpCo Financing Facility interest rate swap derivative. Other expense, net for the year ended October 31, 2024 primarily relates to a loss on the OpCo Financing Facility interest rate swap derivative of $3.1 millionmillion, partially offset by a gain of $1.0 million relating to refundable research and development tax credits. Other income, net for the year ended October 31, 2023 reflects a gain on the OpCo Financing Facility derivative contract of $3.3 million and $1.9 million of refundable research and development tax credits.

We have not paid federal or state income taxes in several years due to our history of net operating losses, although we have paid foreign income and withholding taxes in South Korea. Provision for income tax recorded for the years ended October 31, 20242025 and 20232024 was $25$0.1 thousandmillion and $0.6$25 million,thousand, respectively. The provision for income tax recorded for the year ended October 31, 2023 reflects the realization of withholding taxes on customer deposits.

For the years ended October 31, 20242025 and 2023,2024, net loss attributable to noncontrolling interest totaled $(1.4) million and net income attributable to noncontrolling interest totaled $0.9 million and $2.0 million, respectively, for the LIPA Yaphank projectProject tax equity financing transaction with REI.

For the years ended October 31, 20242025 and 2023,2024, net loss attributable to noncontrolling interest totaled $(3.53.6) million and $($2.53.5) millionmillion, respectively, for the Groton Project tax equity financing transaction with East West Bank.

For the yearyears ended October 31, 2025 and 2024, net income attributable to noncontrolling interest totaled $1.5 million and net loss attributable to noncontrolling interest totaled $(28.3) millionmillion, respectively, for the Derby Projects tax equity financing transaction with Franklin Park. The loss isin the year ended October 31, 2024 was primarily driven by the Investment Tax Credit (“ITC”) attributable to the noncontrolling interest for the 2023 tax year. The ITC reduces the noncontrolling interest’s claim on hypothetical liquidation proceeds in the HLBV waterfall and is nonrecurring. The loss is also a result of accelerated depreciation allocated to the noncontrolling interest under the HLBV method. The above noted items resulted in a reduction in liquidation proceeds which drove the loss in the year ended October 31, 2024. There was no comparable net loss for the year ended October 31, 2023, as the Derby Projects began operations in the first quarter of fiscal year 2024.

Net loss attributable to common stockholders represents the net loss for the period less the preferred stock dividends on the Series B Preferred Stock. For the years ended October 31, 20242025 and 2023,2024, net loss attributable to common stockholders was $129.2$191.1 million and $110.8$129.2 million, respectively, and loss per common share was $7.83$7.42 and $7.92,$7.83, respectively. The increase in the net loss attributable to common stockholders for the year ended October 31, 20242025 is primarily due to the lack of gain on extinguishment of finance obligationsimpairment and debt,restructuring netexpenses recognized during the year ended October 31, 2024 (compared to the gain in the year ended October 31, 2023) and the increase in loss from operations during the year ended October 31, 2024,2025, partially offset by the increaseddecreased net loss attributable to noncontrolling interests for the year ended October 31, 20242025 compared to the year ended October 31, 2023.2024. The net loss per common share for the year ended October 31, 20242025 benefited from the higher number of weighted average shares outstanding due to share issuances since October 31, 2023.2024.

As of October 31, 2024,2025, unrestricted cash and cash equivalents totaled $148.1$278.1 million compared to $250.0$148.1 million as of October 31, 2023.2024. During the years ended October 31, 20242025 and 2023,2024, the Company invested in United States (U.S.) Treasury Securities. The amortized cost of the U.S. Treasury Securities outstanding totaled $109.1 million as of October 31, 2024, compared to $103.8 million as of October 31, 2023 and is classified as Investments – short-term on the Consolidated Balance Sheets. The outstanding U.S. Treasury Securities as of October 31, 2024 matured between November 5, 2024 and November 29, 2024.

During the first quarter of fiscal year 2024,2025, the Company completed its technical improvement plan to bringreceived the Groton Project (defined elsewhere herein) to its rated capacity and the Groton Project reached its design rated output of 7.4 MW. The Company achieved all conditions precedent required for the firstsecond annual funding from East West Bank under the tax equity financing transaction between the Company and East West Bank and, as a result, the Company received a $4.0 million contribution during the year ended October 31, 20242025 which is recorded as noncontrolling interest on the Consolidated Balance Sheets.

Part I, Item 1A, “Risk Factors” of our most recently filed Annual Report on Form 10-K for the fiscal year ended October 31, 2025, filed with the Securities and Exchange Commission on December 18, 2025 (the “2025 Annual Report”), sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. Those risk factors continue to be relevant to an understanding of our business, financial condition and operating results and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. “Risk Factors” of the 2025 Annual Report.

BUSINESS UPDATES AND RECENT DEVELOPMENTS

Comparison of the Three Months Ended AprilJuly 30,31, 2026 and 2025

Our revenues and cost of revenues for the three months ended AprilJuly 30,31, 2026 and 2025 were as follows:

Total revenues for the three months ended AprilJuly 30,31, 2026 of $35.6$33.0 million reflects a decrease of $1.8$13.7 million from $37.4$46.7 million for the same period in the prior year. Cost of revenues for the three months ended AprilJuly 30,31, 2026 of $48.5$57.5 million reflects an increase of $1.7$5.6 million from $46.8$51.9 million for the same period in the prior year. A discussion of the changes in product revenues, service agreements revenues, generation revenues and Advanced Technologies contract revenues follows.

Our product revenues and related costs for the three months ended AprilJuly 30,31, 2026 and 2025 were as follows:

Product revenues were $18.0 million during the three months ended AprilJuly 30,31, 2026 and $13.0$26.0 million in the comparable prior year period. The increasedecrease in product revenues during the three months ended AprilJuly 30,31, 2026 was primarily driven by $18.0 million of revenue recognized under the Company’s long-term service agreement (“LTSA”) with Gyeonggi Green Energy Co., Ltd. (“GGE”) for the delivery and commissioning of six fuel cell modules for GGE’s 58.8 MW fuel cell power plant platform in Hwaseong-si, Korea (the “GGE Platform”), compared to $12.0$24.0 million of revenue recognized for the delivery and commissioning of foureight fuel cell modules for the GGE Platform in the comparable prior year period.

Cost of product revenues increased $4.0$8.0 million for the three months ended AprilJuly 30,31, 2026 to $20.3$37.1 million, compared to $16.3$29.1 million in the same period in the prior year,year. This increase is primarily due to a charge of approximately $4.0 million to reduce the highercarrying productvalue salesof certain inventories to net realizable value and a charge of approximately $13.0 million for losses on firm purchase commitments that were recorded for the three months ended July 31, 2026, in each case in connection with Phase 0 of the CEPA with Fit, partially offset by lower costs due to the fact that fewer fuel cell modules were delivered and commissioned in the three months ended AprilJuly 30,31, 2026. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, totaled approximately $3.1$2.8 million for the three months ended AprilJuly 30,31, 2026, compared to approximately $2.9 million for the three months ended AprilJuly 30,31, 2025.

For the three months ended AprilJuly 30,31, 2026, we operated at an annualized production rate of approximately 36.437.1 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 29.933.2 MW for the three months ended AprilJuly 30,31, 2025.

Service agreements revenues and related costs for the three months ended AprilJuly 30,31, 2026 and 2025 were as follows:

Service agreements revenues for the three months ended AprilJuly 30,31, 2026 decreased $4.0$0.7 million to $4.2$2.4 million from $8.1$3.1 million for the three months ended AprilJuly 30,31, 2025. The decrease in service agreements revenues during the three months ended AprilJuly 30,31, 2026 was primarily due to less service agreements revenues recognized from commissioning modules for GGE compared to the factthree thatmonths thereended July 31, 2025. There were no module exchanges during the three months ended AprilJuly 30,31, 2026 compared to the three module exchangesor during the three months ended AprilJuly 30,31, 2025.

Cost of Advancedservice Technologies contractagreements revenues decreasedincreased $0.1 million to $2.7$3.8 million for the three months ended AprilJuly 30,31, 2026,2026 comparedfrom to $3.1$3.6 million for the three months ended AprilJuly 30,31, 2025.

Cost of Advanced Technologies contractscontract revenues decreased to $2.3 million for the three months ended AprilJuly 30,31, 2026 generated a gross profit of $2.0 million,2026, compared to a gross profit of $1.0$3.8 million for the samethree periodmonths inended theJuly prior31, year.2025.

Administrative and selling expenses were $14.7$13.6 million and $16.5$14.1 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively. Administrative and selling expenses were lower during the three months ended AprilJuly 30,31, 2026 than during the three months ended April 30, 2025 primarily due to lower compensationconsulting, expenselegal asand aaccounting resultfees ofcompared to the restructuringsame actionsperiod in Junethe 2025.prior year.

Research and development expenses decreasedincreased to $7.7$8.5 million for the three months ended AprilJuly 30,31, 2026 compared to $9.9$7.6 million for the three months ended AprilJuly 30,31, 2025. The decreaseincrease is primarily due to aan decreaseincrease in spending on thecertain Company’s commercialproduct development effortsprojects relatedcompared to ourthe solidsame oxideperiod power generation and electrolysis platforms and related lower compensation expense as a result ofin the restructuringprior actions in November and June of fiscal year 2025.year.

Restructuring expense of $0.01$4.1 million for the three months ended AprilJuly 30,31, 2025 related to the Company’s workforce reductions in NovemberJune 2024.2025. There were no comparable charges during the three months ended AprilJuly 30,31, 2026.

Loss from operations for the three months ended AprilJuly 30,31, 2026 was $77.9$46.7 million compared to $35.8$95.4 million for the three months ended AprilJuly 30,31, 2025. This increasedecrease was driven primarily by the impairment charges relateddue to the Company’slack decisionof toimpairment upgrade the Groton Project, partially offset by decreases in Administrativeexpense and sellingrestructuring expensesexpense and Research and development expenses forduring the three months ended AprilJuly 30,31, 20262026, compared to the comparablethree priormonths yearended period.July 31, 2025, partially offset by the charges recognized to bring certain inventories and firm purchase commitments to net realizable value during the three months ended July 31, 2026.

Interest expense for the three months ended AprilJuly 30,31, 2026 and 2025 was $2.9 million and $2.5 million, respectively. Interest expense for both periods includes interest on the Derby Senior Back Leverage Loan Facility, the Derby Subordinated Back Leverage Loan Facility, the OpCo Financing Facility, the Groton Senior Back Leverage Loan Facility, the Groton Subordinated Back Leverage Loan Facility, and the 2024 EXIM Financing (in each case, as defined elsewhere herein), which was entered into in October 2024.. Interest expense for the three months ended AprilJuly 30,31, 2026 also includes interest on the 2025 EXIM Financing and the 2026 EXIM Financing (in each case, as defined elsewhere herein), which waswere entered into in November 2025.2025 and June 2026, respectively.

Interest income was $2.5$3.6 million and $1.8$2.1 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively. The increase in interest income during the three months ended AprilJuly 30,31, 2026 was primarily driven by higher money market investments compared to the three months ended AprilJuly 30,31, 2025. Interest income for the three months ended AprilJuly 30,31, 2026 represents interest earned on money market investments. Interest income for the three months ended AprilJuly 30,31, 2025 represents interest earned on money market investments andinvestments, interest earned on investments in U.S. Treasury Securities.Securities and interest earned on employee retention credits.

Other income (expense),income, net was $0.6$0.7 million and $(1.1)$3.9 million for the three months ended AprilJuly 30,31, 2026 and 2025, respectively. Other income, net for the three months ended AprilJuly 30,31, 2026 relates primarily to unrealized gains of $0.3 million on the OpCo Financing Facility interest rate swap derivative and $0.5 million relating to research and development tax credits, offset by foreign currency losses of $0.1 million. Other expense, net for the three months ended April 30, 2025 relates primarily to unrealized losses of $1.6$1.0 million on the OpCo Financing Facility interest rate swap derivative. Other income, net for the three months ended July 31, 2025 relates primarily to $3.4 million of employee retention credits earned during the COVID-19 pandemic that were received during the three months ended July 31, 2025, as well as an unrealized gain of $0.6 million on the OpCo Financing Facility interest rate swap derivative.

We have not paid federal or state income taxes in several years due to our history of net operating losses, although we have paid foreign income and withholding taxes, primarily in South Korea. BenefitThe from (provision for) income tax recorded for the three months ended AprilJuly 30,31, 2026 and 2025 was $0.1 million$0 and $(0.1)$40.0 million,thousand, respectively.

Dividends recorded on our 5% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) were $0.8 million for each of the three month periods ended AprilJuly 30,31, 2026 and 2025.

Net income (loss) attributable to noncontrolling interests

For the three months ended AprilJuly 30,31, 2026 and 2025, net (loss) income attributable to noncontrolling interest totaled $(0.03)$1.0 million and $0.01 million, respectively, for the Groton Project tax equity financing transaction with East West Bank.

For both of the three month periodsmonths ended AprilJuly 30,31, 2026 and 2025, net loss attributable to noncontrolling interest totaled $0.1$0.03 million and $0.6 million, respectively, for the LIPA Yaphank Project tax equity financing transaction with REI.

For both of the three month periodsmonths ended AprilJuly 30,31, 2026 and 2025, net income attributable to noncontrolling interest totaled $0.2 million and $0.4 millionmillion, respectively, for the Derby Projects tax equity financing transaction with Franklin Park.

Net loss attributable to common stockholders represents the net loss for the period less the preferred stock dividends on the Series B Preferred Stock. For the three month periods ended AprilJuly 30,31, 2026 and 2025, net loss attributable to common stockholders was $78.7$45.3 million and $38.8$92.5 million, respectively, and net loss per common share was $1.45$0.64 and $1.79,$3.78, respectively. The increasedecrease in net loss attributable to common stockholders was primarily due to the increasedecrease in loss from operations for the three months ended AprilJuly 30,31, 2026. The decrease in net loss per common share for the three months ended AprilJuly 30,31, 2026 wasalso primarilybenefitted due tofrom the higher number of weighted average shares outstanding due to share issuances since AprilJuly 30,31, 2025.

Comparison of the SixNine Months Ended AprilJuly 30,31, 2026 and 2025

Our revenues and cost of revenues for the sixnine months ended AprilJuly 30,31, 2026 and 2025 were as follows:

Total revenues for the sixnine months ended AprilJuly 30,31, 2026 of $66.1$99.1 million reflects ana increasedecrease of $9.7$4.0 million from $56.4$103.1 million for the same period in the prior year. Cost of revenues for the sixnine months ended AprilJuly 30,31, 2026 of $84.9$142.4 million reflects an increase of $13.9$19.5 million from $71.0$122.9 million for the same period in the prior year. A discussion of the changes in product revenues, service agreements revenues, generation revenues and Advanced Technologies contract revenues follows.

Our product revenues and related costs for the sixnine months ended AprilJuly 30,31, 2026 and 2025 were as follows:

Product revenues for the sixnine months ended AprilJuly 30,31, 2026 were $30.1$48.1 million, compared to $13.1$39.1 million in product revenues for the sixnine months ended AprilJuly 30,31, 2025. Product revenues for the sixnine months ended AprilJuly 30,31, 2026 were driven primarily by revenue recognized under the Company’s LTSA with GGE for the delivery and commissioning of eight14 fuel cell modules for the GGE Platform, and $6.0 million of revenue recognized under the Company's LTSA with CGN-Yulchon Generation Co., Ltd. (“CGN”) for the delivery and commissioning of two fuel cell modules for CGN’s Yulchon facility in South Korea (the “CGN Platform”). Product revenues for the sixnine months ended AprilJuly 30,31, 2025 were driven primarily by revenue recognized of $36.0 million under the Company’s LTSA with GGE for the delivery and commissioning of fourtwelve fuel cell modules for the GGE Platform.Platform and $3.1 million under the Company’s sales contract with Ameresco, Inc.

Cost of product revenues totaled $36.7$73.8 million in the sixnine months ended AprilJuly 30,31, 2026, compared to $19.3$48.4 million in the sixnine months ended AprilJuly 30,31, 2025. The increase in cost of product revenues in the sixnine months ended AprilJuly 30,31, 2026 is primarily due to a charge of approximately $4.0 million to reduce the tencarrying value of certain inventories to net realizable value and a charge of approximately $13.0 million for losses on firm purchase commitments that were recorded for the three months ended July 31, 2026, in each case in connection with Phase 0 of the CEPA with Fit, as well as the higher volume of fuel cell modules that were delivered and commissioned underin the Company’snine LTSAsmonths withended GGEJuly and31, CGN.2026 compared to the nine months ended July 31, 2025. Manufacturing variances, primarily related to production volumes and unabsorbed overhead costs, increased to approximately $7.2$9.9 million for the sixnine months ended AprilJuly 30,31, 2026, compared to approximately $5.6$8.5 million for the sixnine months ended AprilJuly 30,31, 2025.

For the sixnine months ended AprilJuly 30,31, 2026, we operated at an annualized production rate of approximately 34.535.4 MW in our Torrington, CT manufacturing facility, compared to an annualized production rate of 30.630.5 MW for the sixnine months ended AprilJuly 30,31, 2025.