Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock, par value $0.0001 per share, outstanding as of March ~~11, 2020: 210,968,852~~

	January 31,			October 31,			January 31,			October 31,
	2020			2019			2021			2020
ASSETS
Current assets:
Cash and cash equivalents, unrestricted	$	38,254		$	9,434		$	178,570		$	149,867
Restricted cash and cash equivalents - short-term		8,178			3,473			12,252			9,233
Accounts receivable, net		5,593			3,292			10,021			9,563
Unbilled receivables		7,523			7,684			8,243			8,041
Inventories		58,433			54,515			61,901			50,971
Other current assets		6,805			5,921			7,422			6,306
Total current assets		124,786			84,319			278,409			233,981
Restricted cash and cash equivalents - long-term		27,481			26,871			18,772			32,952
Inventories - long-term		6,797			2,179			4,586			8,986
Project assets		147,924			144,115			164,593			161,809
Property, plant and equipment		39,794			41,134
Property, plant and equipment, net								35,304			36,331
Operating lease right-of-use assets, net		10,276			-			8,524			10,098
Goodwill		4,075			4,075			4,075			4,075
Intangible assets		20,939			21,264
Intangible assets, net								19,643			19,967
Other assets		9,327			9,489			18,488			15,339
Total assets	$	391,399		$	333,446		$	552,394		$	523,538
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	8,660		$	21,916		$	14,594		$	21,366
Current portion of operating lease liabilities		1,149			-			955			939
Accounts payable		14,117			16,943			8,034			9,576
Accrued liabilities		8,958			11,452			10,763			15,681
Deferred revenue		15,341			11,471			18,728			10,399
Preferred stock obligation of subsidiary		945			950			—			938
Total current liabilities		49,170			62,732			53,074			58,899
Long-term deferred revenue		29,797			28,705			25,579			31,501
Long-term preferred stock obligation of subsidiary		16,721			16,275			—			18,265
Long-term operating lease liabilities		9,466			-			8,327			9,817
Long-term debt and other liabilities		161,804			90,140			78,051			150,651
Total liabilities		266,958			197,852			165,031			269,133
Redeemable Series B preferred stock (liquidation preference of $64,020 as of January 31, 2020 and October 31, 2019)		59,857			59,857
Redeemable Series B preferred stock (liquidation preference of $64,020 as of January 31, 2021 and October 31, 2020)								59,857			59,857
Total equity:
Stockholders’ equity:
Common stock ($0.0001 par value); 225,000,000 shares authorized as of January 31, 2020 and October 31, 2019; 210,965,829 and 193,608,684 shares issued and outstanding as of January 31, 2020 and October 31, 2019, respectively		21			19
Common stock ($0.0001 par value); 337,500,000 shares authorized as of January 31, 2021 and October 31, 2020; 322,412,296 and 294,706,758 shares issued and outstanding as of January 31, 2021 and October 31, 2020, respectively								32			29
Additional paid-in capital		1,180,499			1,151,454			1,538,311			1,359,454
Accumulated deficit		(1,115,240	)		(1,075,089	)		(1,210,156	)		(1,164,196	)
Accumulated other comprehensive loss		(696	)		(647	)		(681	)		(739	)
Treasury stock, Common, at cost (34,194 and 42,496 shares as of January 31, 2020 and October 31, 2019, respectively)		(437	)		(466	)
Treasury stock, Common, at cost (58,080 and 56,411 shares as of January 31, 2021 and October 31, 2020, respectively)								(462	)		(432	)
Deferred compensation		437			466			462			432
Total stockholders’ equity		64,584			75,737			327,506			194,548
Total liabilities and stockholders' equity	$	391,399		$	333,446		$	552,394		$	523,538

	Three Months Ended January 31,						Three Months Ended January 31,
	2020			2019			2021			2020
Revenues:
Product	$	—		$	—		$	—		$	—
Service and license		5,612			11,772			4,913			5,612
Generation		5,442			1,479			4,891			5,442
Advanced Technologies		5,210			4,532			5,073			5,210
Total revenues		16,264			17,783			14,877			16,264
Costs of revenues:
Product		2,016			3,422			2,366			2,016
Service and license		1,618			12,319			5,099			1,618
Generation		5,557			1,636			7,115			5,557
Advanced Technologies		3,792			2,611			3,915			3,792
Total costs of revenues		12,983			19,988			18,495			12,983
Gross profit (loss)		3,281			(2,205	)
Gross (loss) profit								(3,618	)		3,281
Operating expenses:
Administrative and selling expenses		5,266			6,759			8,932			5,266
Research and development expenses		1,155			6,280			1,823			1,155
Total costs and expenses		6,421			13,039			10,755			6,421
Loss from operations		(3,140	)		(15,244	)		(14,373	)		(3,140	)
Interest expense		(3,277	)		(2,464	)		(2,545	)		(3,277	)
Loss on extinguishment of debt								(11,156	)		—
Loss on extinguishment of preferred stock obligation of subsidiary								(934	)		—
Change in fair value of common stock warrant liability		(34,245	)		—			(15,974	)		(34,245	)
Other income, net		531			160
Other (expense) income, net								(978	)		531
Loss before provision for income taxes		(40,131	)		(17,548	)		(45,960	)		(40,131	)
Provision for income taxes		(20	)		—			—			(20	)
Net loss		(40,151	)		(17,548	)		(45,960	)		(40,151	)
Series B preferred stock dividends		(931	)		(800	)		(800	)		(931	)
Series C preferred stock deemed dividends and redemption value adjustment		—			(9,005	)
Series D preferred stock deemed dividends and redemption accretion		—			(5,685	)
Net loss attributable to common stockholders	$	(41,082	)	$	(33,038	)	$	(46,760	)	$	(41,082	)
Loss per share basic and diluted:
Net loss per share attributable to common stockholders	$	(0.20	)	$	(3.97	)	$	(0.15	)	$	(0.20	)
Basic and diluted weighted average shares outstanding		202,216,493			8,321,702			312,109,888			202,216,493

	Common Stock																						Common Stock
	Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Deferred Compensation			Total Equity			Shares			Amount		Additional Paid-in Capital				Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Deferred Compensation		Total Equity
Balance, October 31, 2019		193,608,684	$	19	$	1,151,454		$	(1,075,089	)	$	(647	)	$	(466	)	$	466		$	75,737
Balance, October 31, 2020																								294,706,758		$	29	$	1,359,454		#	$	(1,164,196	)	$	(739	)	$	(432	)	$	432	$	194,548
Sale of common stock, net of fees																								25,000,000			3		156,363				—			—			—			—		156,366
Orion warrant exercises																								2,700,000			—		21,824				—			—			—			—		21,824
Common stock issued, non-employee compensation																								2,734			—		45				—			—			—			—		45
Stock issued under benefit plans, net of taxes paid upon vesting of restricted stock awards																								4,521			—		8				—			—			—			—		8
Share based compensation		—		—		488			—			—			—			—			488			—			—		1,417				—			—			—			—		1,417
Orion warrant exercises		9,396,320		1		25,993			—			—			—			—			25,994
Sale of common stock, net of fees		7,938,228		1		3,501			—			—			—			—			3,502
Taxes paid upon vesting of restricted stock awards, net of stock issued under benefit plans		2,585		—		(6	)		—			—			—			—			(6	)
Preferred dividends — Series B		—		—		(931	)		—			—			—			—			(931	)		—			—		(800	)			—			—			—			—		(800	)
Effect of foreign currency translation																								—			—		—				—			58			—			—		58
Adjustment for deferred compensation		20,012													29			(29	)		-			(1,669	)		—		—				—			—			(30	)		30		—
Effect of foreign currency translation		—		—		—			—			(49	)		—			—			(49	)
Net loss attributable to FuelCell Energy, Inc.		—		—		—			(40,151	)		—			—			—			(40,151	)
Balance, January 31, 2020		210,965,829	$	21	$	1,180,499		$	(1,115,240	)	$	(696	)	$	(437	)	$	437		$	64,584
Release of a share reserve																								(48	)		—		—				—			—			—			—		—
Net Loss																								—			—		—				(45,960	)		—			—			—		(45,960	)
Balance, January 31, 2021																								322,412,296		$	32	$	1,538,311			$	(1,210,156	)	$	(681	)	$	(462	)	$	462	$	327,506

Common Stock

Shares

Amount

Additional
Paid-in
Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

Deferred
Compensation

Total
Equity

Balance, October 31, 2018

7,972,686

$
1

$
1,073,463

$
(990,867
)

$
(403
)

$
(363
)

$
363

$
82,194

Share based compensation

—

—

987

—

—

—

—

987

Fee adjustment for common stock issuance

—

—

90

—

—

—

—

90

Taxes paid upon vesting of restricted stock
   awards, net of stock issued under benefit
   plans

1,946

—

27

—

—

—

—

27

Series C convertible preferred stock
   conversions

127,829

—

1,974

—

—

—

—

1,974

Series C convertible preferred stock
   adjustment for beneficial conversion feature

—

—

6,586

—

—

—

—

6,586

Series C convertible stock redemption value
   adjustments

—

—

(8,550
)

—

—

—

—

(8,550
)
Series D convertible preferred stock
   conversions

932,144

—

4,334

—

—

—

—

4,334

Series D convertible preferred stock
   redemption accretion

—

—

(3,793
)

—

—

—

—

(3,793
)
Preferred dividends — Series B

—

—

(800
)

—

—

—

—

(800
)
Impact of the adoption of Topic 606

—

—

—

(6,654
)

—

—

—

(6,654
)
Effect of foreign currency translation

—

—

—

—

7

—

—

7

Net loss attributable to FuelCell Energy, Inc.

—

—

—

(17,548
)

—

—

—

(17,548
)
Balance, January 31, 2019

9,034,605

$
1

$
1,074,318

$
(1,015,069
)

$
(396
)

$
(363
)

$
363

$
58,854

	Common Stock
	Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock			Deferred Compensation			Total Equity
Balance, October 31, 2019		193,608,684	$	19	$	1,151,454		$	(1,075,089	)	$	(647	)	$	(466	)	$	466		$	75,737
Share based compensation		—		—		488			—			—			—			—			488
Orion warrant exercises		9,396,320		1		25,993			—			—			—			—			25,994
Sale of common stock, net of fees		7,938,228		1		3,501			—			—			—			—			3,502
Taxes paid upon vesting of restricted stock awards, net of stock issued under benefit plans		2,585		—		(6	)		—			—			—			—			(6	)
Preferred dividends — Series B		—		—		(931	)		—			—			—			—			(931	)
Adjustment for deferred compensation		20,012		—		—			—			—			29			(29	)		—
Effect of foreign currency translation		—		—		—			—			(49	)		—			—			(49	)
Net loss attributable to FuelCell Energy, Inc.		—		—		—			(40,151	)		—			—			—			(40,151	)
Balance, January 31, 2020		210,965,829	$	21	$	1,180,499		$	(1,115,240	)	$	(696	)	$	(437	)	$	437		$	64,584

	Three Months Ended January 31,						Three Months Ended January 31,
	2020			2019			2021			2020
Cash flows from operating activities:
Net loss	$	(40,151	)	$	(17,548	)	$	(45,960	)	$	(40,151	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation		488			982			1,417			488
Loss from change in fair value of embedded derivatives		-			22
Depreciation and amortization		4,630			2,199			5,604			4,630
Change in fair value of common stock warrant liability		34,245			—			15,974			34,245
Gain on Series 1 preferred stock extinguishment		(475	)		—
Non-cash charge for extinguishment of preferred stock obligation of subsidiary								934			(475	)
Non-cash interest expense on preferred stock and debt obligations		1,591			1,574			1,566			1,591
Non-cash charge for extinguishment of debt								7,156			0
Operating lease expense		156			—			378			156
Operating lease payments		(211	)		—			(284	)		(211	)
Unrealized foreign exchange gains		(84	)		(12	)
Unrealized foreign currency losses (gains)								848			(84	)
Other non-cash transactions, net		308			187			628			308
(Increase) decrease in operating assets:
Accounts receivable		(2,301	)		1,329			(458	)		(2,301	)
Unbilled receivables		554			(7,828	)		(3,466	)		554
Inventories		(5,780	)		(1,227	)		(8,602	)		(5,780	)
Other assets		(1,141	)		139			(954	)		(1,141	)
Increase (decrease) in operating liabilities:
(Decrease) Increase in operating liabilities:
Accounts payable		(2,481	)		(152	)		(1,887	)		(2,481	)
Accrued liabilities		(816	)		2,532			(5,618	)		(816	)
Deferred revenue		4,962			5,845
Deferred revenue, royalty & license fee income								2,407			4,962
Net cash used in operating activities		(6,506	)		(11,958	)		(30,317	)		(6,506	)
Cash flows from investing activities:
Capital expenditures		(64	)		(1,591	)		(204	)		(64	)
Project asset expenditures		(7,624	)		(12,633	)		(4,387	)		(7,624	)
Project asset acquisition		(611	)		—			0			(611	)
Net cash used in investing activities		(8,299	)		(14,224	)		(4,591	)		(8,299	)
Cash flows from financing activities:
Repayment of debt		(15,535	)		(1,610	)		(82,292	)		(15,535	)
Proceeds from debt, net of debt discount		66,862			17,250			0			66,862
Payment of deferred financing costs		(2,455	)		(485	)		0			(2,455	)
Common stock issued for stock plans and related expenses								8			0
Payment of preferred dividends and return of capital		(3,385	)		(1,036	)		(800	)		(3,385	)
Common stock issued for stock plans and related expenses		—			31
Repayment of preferred stock obligation of subsidiary								(21,541	)		0
Common stock issuance, net of fees								156,363			0
Proceeds from sale of common stock and warrant exercises, net		3,502			-			654			3,502
Net cash provided by financing activities		48,989			14,150			52,392			48,989
Effects on cash from changes in foreign currency rates		(49	)		7			58			(49	)
Net increase (decrease) in cash, cash equivalents and restricted cash		34,135			(12,025	)
Net increase in cash, cash equivalents and restricted cash								17,542			34,135
Cash, cash equivalents and restricted cash-beginning of period		39,778			80,239			192,052			39,778
Cash, cash equivalents and restricted cash-end of period	$	73,913		$	68,214		$	209,594		$	73,913
Supplemental cash flow disclosures:
Cash interest paid	$	558		$	827
Cash interest paid and early prepayment charge							$	8,185		$	558
Noncash financing and investing activity:
Series C preferred share conversions		—			1,974
Series D preferred share conversions		—			4,334
Operating lease liabilities		489			—			1,336			489
Operating lease right-of-use assets		489			—			1,336			489
Net noncash reclasses from project assets to inventory		2,756			—
Net noncash reclassifications from project assets to inventory								2,072			2,756
Warrant exercises		25,994			—			21,170			25,994
Accrued purchase of fixed assets, cash to be paid in subsequent period		9			107			47			9
Accrued purchase of project assets, cash to be paid in subsequent period		495			2,050			839			495

FuelCell Energy, Inc., together with its subsidiaries (the “Company”, “FuelCell Energy”, “we”, “us”, or “our”), is a leading integrated fuel cell ~~company with~~company. Founded in 1969, FuelCell Energy is a ~~growing global presence in delivering environmentally-responsible distributed baseload power solutions through our proprietary, molten-carbonate~~manufacturer of clean fuel cell ~~technology.~~power platforms delivering power and thermal energy and capable of delivering hydrogen, long-duration hydrogen energy storage, and carbon capture applications. We develop turn-key distributed power generation solutions and operate and provide comprehensive service for the life of the power plant. FuelCell Energy is focused on growing its global presence in delivering environmentally responsible distributed baseload power solutions through its proprietary, molten-carbonate and solid oxide fuel cell technologies. We are working to expand the proprietary technologies that we have developed over the past five decades into new ~~products,~~product platforms, applications, markets and geographies. Our mission and purpose ~~remains~~is to utilize our proprietary, state-of-the-art fuel cell ~~power plants~~platforms to ~~reduce~~enable a world empowered by clean energy and contribute to climate change mitigation. FuelCell Energy’s platforms are capable of reducing the global environmental footprint of baseload power generation by providing environmentally responsible solutions for reliable electrical power, distributed hydrogen, electrolysis, long-duration hydrogen-based energy storage, carbon capture, microgrid applications, hot water, steam, ~~chilling, hydrogen, micro-grid applications,~~ and ~~carbon capture.~~chilling. Our customer base includes utility companies, municipalities, universities, hospitals, government entities/military bases and a variety of industrial and commercial enterprises. Our leading geographic markets are currently the United States and South Korea, and we are pursuing opportunities in other countries around the world.

The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial information. Accordingly, they do not contain all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all normal and recurring adjustments necessary to fairly present the Company’s financial position and results of operations as of and for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 have been included. All intercompany accounts and transactions have been eliminated.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The balance sheet as of October 31, ~~2019~~2020 has been derived from the audited financial statements at that date, but it does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements should be read in conjunction with the Company’s financial statements and notes thereto for the fiscal year ended October 31, ~~2019,~~2020, which are contained in the Company’s Annual Report on Form 10-K previously filed with the SEC. The results of operations for the interim periods presented are not necessarily indicative of results that may be expected for any other interim period or for the full fiscal year.

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. ~~Actual results could differ from those estimates.~~ Estimates are used in accounting for, among other things, revenue recognition, contract loss accruals, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, ~~fair values,~~ allowance for doubtful accounts, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), lease liabilities and right-of-use (“ROU”) assets and contingencies. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates.

~~The Company’s future liquidity will be dependent on its ability to (i) timely complete current projects in process within budget, including approved amounts that~~Our principal sources of cash have been ~~financed,~~sales of our common stock through public equity offerings, proceeds from third party debt such as borrowings under our credit facilities, project financing ~~does not cover overages, (ii) increase cash flows~~and tax monetization transactions, proceeds from ~~its generation portfolio, including by meeting conditions required to timely commence operations~~the sale of ~~new~~our projects and operating its generation portfolio in compliance with minimum performance guarantees, (iii) obtain approval of and receive funding for project construction under its Credit Agreement with Orion Energy Partners Investment Agent, LLC and its affiliated lenders and meet conditions for release of funds, (iv) increase order and contract volumes, which would lead to additional product sales and services agreements, (v) obtain funding for and receive payment foras well as research and development ~~under current~~ and ~~future~~service and license agreements with third parties. We have utilized this cash to develop and construct power plants, perform research and development on Advanced ~~Technology contracts, including achieving a $5~~Technologies, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs.

As of January 31, 2021, unrestricted cash and cash equivalents totaled $178.6 million ~~technological performance milestone under its Joint Development Agreement with ExxonMobil Research and Engineering~~compared to $149.9 million as of October 31, 2020.

In December 2020, the Company (“EMRE”) during calendar year 2020, and (vi) implement the cost reductions necessary to achieve profitable operations. Our business model requires substantial outside financing arrangements and satisfactionclosed an underwritten offering of 25.0 million shares of the ~~conditions of such financing arrangements~~Company’s common stock. Net proceeds to ~~deploy our projects~~the Company were approximately $156.4 million after deducting underwriting discounts and ~~facilitate the growth of our business. If financing is not available to us on acceptable terms if~~commissions and when needed, if we do not satisfy the conditions of our financing arrangements or if we spend more than the financing approved for projects, we may be required to reduce planned spending, sell assets, seek alternative financing and take other ~~measures, which could~~offering expenses. Proceeds from this offering have ~~a material adverse effect on our financial condition and operations.~~

~~The key definitive agreements which support the Company’s future liquidity position include:~~been utilized as follows:

As of January 31, ~~2020,~~2021, we had ~~14,034,171~~15,093,242 shares of common stock available for issuance, excluding treasury stock, of which ~~10,275,873~~5,185,674 shares were reserved for issuance under various ~~convertible securities, options,~~warrants and ~~warrants,~~equity awards, upon conversion of preferred stock, and under our employee stock purchase and equity incentive ~~plans, and under our at-the-market sales plan.~~plans. The limited number of shares of our common stock available for issuance ~~limits~~will limit our ability to raise capital in the equity markets and satisfy obligations with shares instead of cash, which could adversely ~~impact our ability to fund~~affect our business and operations. We ~~must obtain~~are seeking stockholder approval to increase the number of shares of common stock we are authorized to issue under our Certificate of Incorporation, as amended. In our definitive proxy statement, which was filed on February 14, 2020, the Board of Directors has requested that our stockholders vote to approve a 112,500,000 increase in the number of authorized shares of common stock, which would bring the total number of authorized shares of common stock to 337,500,000.

~~While there can be no assurances, we anticipate raising additional required capital from new and existing investors and lenders.~~ ~~We expect to~~ work with lenders and financial institutions to secure long-term debt, tax equity and sale-leasebacks for our project asset portfolio as we achieve the commercial operation dates for these projects. This financing, if received, may allow the Company to recycle capital from these projects by reinvesting the capital in other projects (subject to the approval of the lenders and the Agent under the Orion Facility) and to pay down the Orion Facility over time. There can be no assurance that the Company can obtain such financing on terms acceptable to the Company or that the lenders and the Agent under the Orion Facility will consent to such financing. ~~If the Company is unable to obtain such financing or raise additional capital, the Company may reduce its expenditures or slow its project spending.~~ ~~If the Company cannot obtain such financing, cannot obtain such financing on terms acceptable to the Company, or cannot obtain the necessary consents to such financing under the Orion Facility, it would negatively impact~~at the Company’s ~~business model, operations, and liquidity. It should also~~Annual Meeting of Stockholders on April 8, 2021, but such approval may not be noted that the lenders and the Agent under the Orion Facility have broad approval rights over our ability to draw, allocate and use funds from the Orion Facility, including funds in our unrestricted cash and cash equivalents accounts that are expected to be spent for project asset development and to satisfy service and maintenance obligations.obtained.

We believe that our cash flows from our existing backlog, including PPAs, service agreements and Advanced Technology contracts, combined with our current unrestricted cash and cash equivalents, cash which is expected to become unrestricted upon our performance of certain milestones under our financing agreements with PNC Energy Capital, LLC (“PNC”), and available borrowings under the Orion Facility will be sufficient to meet our anticipated cash needs for at least the next 12 months.

The Company adopted Accounting Standards Update Codification (“ASC”), “Leases” (“Topic 842” or “ASC 842”) on November 1, 2019. ASC 842, including all the related amendments subsequent to its issuance, supersedes the prior guidance for lease accounting and requires lessees to recognize a ROU asset representing the right to use an underlying asset and a lease liability representing the obligation to make lease payments over the lease term for substantially all leases, as well as disclose key quantitative and qualitative information about leasing arrangements. Upon adoption, the Company recognized an operating lease liability of approximately $10.3 million and corresponding operating lease ROU assets of approximately $10.1 million. There was no cumulative effect of the adoption recorded to accumulated deficit. There was no significant net effect on the Consolidated Statements of Operations. Refer to Note 11. “Leases” for additional information on the Company’s adoption of ASC 842.

In ~~May 2014,~~June 2016, the Financial Accounting Standards Board ~~(the “FASB”)~~ issued Accounting Standards Update ~~2014-09, “Revenue from Contracts~~No. 2016-13 (ASU 2016-13), “Measurement of Credit Losses (Topic 326) on Financial Instruments,” which replaces the existing incurred impairment model for trade receivables with ~~Customers (Topic 606)”.~~an expected loss model which requires the use of forward-looking information to calculate expected credit loss estimates. The ~~adoption~~Company adopted ASU 2016-13 as of ~~Topic 606 by the Company on~~ November 1, ~~2018 using~~2020, which had no impact on the ~~modified retrospective transition method resulted in a cumulative effect adjustment that increased Accumulated deficit by $6.7 million.~~Company’s Consolidated Financial Statements.

There is no recent accounting guidance not yet effective that is expected to have a material impact on the Company’s financial statements when adopted.

Contract assets as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 were ~~$10.7~~$20.4 million and ~~$11.3~~$16.9 million, respectively. The contract assets relate to the Company’s rights to consideration for work completed but not billed. These amounts are included on a separate line item as Unbilled receivables, and balances expected to be billed later than one year from the balance sheet date are included within Other assets on the accompanying Consolidated Balance Sheets. The net change in contract assets ~~represent~~represents amounts ~~recorded~~recognized as revenue offset by customer billings.

Contract liabilities as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 were ~~$45.1~~$44.3 million and ~~$40.2~~$41.9 million, respectively. The contract liabilities relate to the advance billings to customers for services that will be recognized over time and in some instances for deferred revenue relating to license performance obligations that will be recognized at a future point in time. ~~These amounts are~~The Company has discontinued revenue recognition of the deferred license revenue related to the terminated POSCO Energy License Agreements (as defined elsewhere herein) given the pending arbitration and will continue to evaluate this deferred revenue in future periods (for more information, refer to Note 18. “Commitment and Contingencies”). As of January 31, 2021, $22.2 million related to the terminated POSCO Energy License Agreements is included within ~~Deferred revenue and~~ Long-term deferred revenue on the accompanying Consolidated Balance Sheets. The net change in contract liabilities represents customer billings offset by revenue ~~recorded.~~recognized.

Remaining performance obligations are the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. As of January 31, ~~2020,~~2021, the Company’s total remaining performance obligations for service agreements were $141.7 million, for license agreements were $22.2 million and for Advanced Technologies contracts were ~~$202.0 million. License revenue recognized over time will be recognized over~~$44.1 million in the remaining term of the applicable license agreement. License revenue recognized at a point in time will be recognized when the first specified upgrade that has been developed is delivered and when the second specified upgrade is developed and delivered.aggregate. Service revenue in periods in which there are no module replacements is expected to be relatively consistent from period to period, whereas module replacements will result in an increase in revenue when replacements occur. ~~Advanced technologies revenue will be recognized as costs are incurred.~~

The Company has elected practical expedients in the accounting guidance that allow for revenue to be recorded in the amount that the Company has a right to invoice, if that amount corresponds directly with the value to the customer of the Company's performance to date, and not to disclose related unsatisfied performance obligations. Generation sales, to the extent the related power purchase agreements are within the scope of Topic 606, fall into this category, as these sales are recognized as revenue in the period the Company provides the electricity and completes the performance obligation, which is the same as the monthly amount billed to customers. Revenue recognition for the Joint Development Agreement with EMRE also falls into this category where revenue is recorded consistent with the amounts invoiced for research performed.

Accounts receivable, net and Unbilled receivables as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 consisted of the ~~following:~~following (in thousands):

We bill customers for power platform and power platform component sales based on certain contractual milestones being reached. We bill service agreements based on the contract price and billing terms of the contracts. Generally, our Advanced Technologies contracts are ~~presented net of an allowance for doubtful accounts. There was no~~billed based on actual revenues recorded, typically in the subsequent month. Some Advanced Technologies contracts are billed based on contractual milestones or costs incurred. Unbilled receivables relate to revenue recognized on customer contracts that have not been billed.

The Company had 0 allowance for doubtful accounts as of January 31, ~~2020~~2021 and October 31, ~~2019.~~2020. Uncollectible accounts receivable are charged against the allowance for doubtful accounts when all collection efforts have failed and it is deemed unlikely that the amount will be recovered.

Inventories (short and long-term) as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 consisted of the ~~following:~~following (in thousands):

~~Additional long-term inventory of $6.8 million as of January 31, 2020 includes modules that are contractually required~~9

Notes to be segregated for use as replacement modules for two specific project assets, which are expected to be utilized beyond twelve months from January 31, 2020. Long-term inventory of $2.2 million as of October 31, 2019 was for a module segregated for use as a replacement module for the Bridgeport Fuel Cell Project.Consolidated Financial Statements

Raw materials consist mainly of various nickel powders and steels, various other components used in producing cell stacks and purchased components for balance of plant. Work-in-process inventory is comprised of material, labor, and overhead costs incurred to build fuel cell stacks and modules, which are subcomponents of a power plant.

The Company incurred costs associated with excess plant capacity and manufacturing variances of ~~$1.7~~$2.0 million and ~~$3.2~~$1.7 million for the three months ended January 31, ~~2020~~2021 and ~~2019,~~2020, respectively, which were included within product cost of revenues on the Consolidated Statements of ~~Operations.~~Operations and Comprehensive Loss.

Project assets as of January 31, ~~2020~~2021 and October 31, ~~2019 were $147.9 million and $144.1 million, respectively.~~ 2020 consisted of the following (in thousands):

Project assets as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 included ~~seven~~8, completed, commissioned installations generating power with respect to which the Company has a ~~PPA~~power purchase agreement (“PPA”) with the end-user of power and site host or utility with an aggregate ~~carrying~~ value of ~~$56.3~~$70.6 million and ~~$71.8~~$70.5 million as of January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, respectively. Certain of these assets are the subject of sale-leaseback arrangements with PNC ~~which are accounted for under the financing method.~~Energy Capital, LLC (“PNC”) and Crestmark Equipment Finance (“Crestmark”). Project asset depreciation was approximately ~~$2.6~~$4.0 million and ~~$1.1~~$3.0 million for the three months ended January 31, 2021 and 2020, ~~and 2019,~~ respectively.

~~The~~ Project assets ~~balance~~ as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 also ~~includes~~include installations with ~~an aggregate value~~carrying values of ~~76.1~~$94.0 million and ~~$84.9~~$91.3 million, respectively, which are being developed and constructed by the Company ~~under existing~~in connection with projects for which we have entered into PPAs ~~that~~or projects for which we expect to secure PPAs or otherwise recover the asset value and which have not yet been placed in service. Of these totals, as of January 31, 2021 and October 31, 2020, approximately $4.9 million and $4.8 million, respectively, relates to projects for which we expect to secure long-term contracts and/or otherwise recover the asset value and which have not yet been placed in service.

Project construction costs incurred for long-term project assets are reported as investing activities in the Consolidated Statements of Cash Flows. The proceeds received from the sale and subsequent leaseback of project assets are classified as “Cash flows from financing activities” within the Consolidated Statements of Cash Flows and are classified as a financing obligation within “Current portion of long-term debt” and “Long-term debt and other liabilities” on the Consolidated Balance Sheets (refer to Note 16. ~~“Debt and Financing Obligation”~~“Debt” for more information).

As of January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, the Company had goodwill of $4.1 million and intangible assets of $19.6 million and $20.0 million, respectively, that ~~was~~were recorded in connection with the Company’s 2012 acquisition of Versa Power Systems, Inc. (“Versa”) and ~~intangible assets of $20.9 million and $21.3 million, respectively, that were recorded in connection with the 2012 Versa acquisition and~~ the 2019 Bridgeport Fuel Cell Project acquisition. The Versa acquisition intangible asset ~~consists of~~is an indefinite-lived in-process research and development intangible ~~assets (“IPR&D”)~~asset for cumulative research and development efforts associated with the development of solid oxide fuel ~~cells~~cell stationary power generation. The Company recorded $12.3 million as an intangible asset during fiscal year 2019 in connection with the Bridgeport Fuel Cell Project acquisition in May 2019 related to an acquired PPA that had favorable terms. The balance for the PPA intangible asset was $11.3 million and $11.7 million as of January 31, 2020 and October 31, 2019, respectively. Amortization expense for the Bridgeport Fuel Cell Project ~~related intangible~~PPA asset for each of the three months ended January 31, 2021 and 2020 was $0.3 million.

The following tables summarize the Company’s intangible assets as of January 31, 2021 and October 31, 2020 (in thousands):

Other current assets as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 consisted of the ~~following:~~following (in thousands):

Other assets as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 consisted of the ~~following:~~following (in thousands):

Accrued liabilities as of January 31, ~~2020~~2021 and October 31, ~~2018~~2020 consisted of the ~~following:~~following (in thousands):

The Company adopted ASC 842 and its related amendments (collectively, the “New Lease Accounting Standard”) effective November 1, 2019 and elected the modified retrospective approach in which results and disclosures for periods before 2019 were not adjusted for the new standard and the cumulative effect of the change in accounting, if applicable, is recognized through accumulated deficit at the date of adoption.

The New Lease Accounting Standard establishes a right-of-use model that requires a lessee to record a ROU asset and a lease liability on the Consolidated Balance Sheet for all leases. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statement of Operations. In addition, this standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor does not convey risks and rewards or control, the lease is treated as operating.

The New Lease Accounting Standard provides entities with several practical expedient elections. Among them, the Company elected the package of practical expedients that permits the Company to not reassess prior conclusions related to its leasing arrangements, lease classifications and initial direct costs. In addition, the Company has elected the practical expedients to not separate lease and non-lease components, to use hindsight in determining the lease terms and impairment of ROU assets, and to not apply the New Lease Accounting Standard’s recognition requirements to short-term leases with a term of 12 months or less.

The adoption of the New Lease Accounting Standard did not have a material effect on the Company’s Consolidated Statement of Operations or Consolidated Statement of Cash Flows. Upon adoption, the Company recorded a $10.1 million operating lease ROU asset and a $10.3 million operating lease liability. The adoption of the New Lease Accounting Standard had no impact on accumulated deficit.

The Company enters into operating and finance lease agreements for the use of real estate, ~~space,~~ vehicles, information technology equipment, and certain otherequipment. We determine if an arrangement contains a lease at inception, which is the date on which the terms of the contract are agreed to and the agreement creates enforceable rights and obligations. Operating leases are included in Operating lease right-of-use assets, net, Operating lease liabilities, and Long-term operating lease liabilities in the Company’s Consolidated Balance Sheet. Finance leases are not considered significant to the Company’s Consolidated Balance Sheet or Consolidated Statement of ~~Operations.~~Operations and Comprehensive Loss. Finance lease ROU assets at January 31, 2021 and October 31, 2020 of ~~$0.1~~$0.03 million and $0.04 million, respectively, are included in Property, plant and equipment, net in the Company’s ~~Consolidated Balance Sheet.~~consolidated balance sheet. Finance lease liabilities at January 31, 2021 and October 31, 2020 of ~~$0.1~~$0.02 million and $0.04 million, respectively, are included in Current portion of ~~long term~~long-term debt and ~~Long term~~Long-term debt and other liabilities in the Company’s Consolidated Balance Sheet.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the present value of the Company’s obligation to make lease payments arising from the lease over the lease term at the commencement date of the ~~lease (or November 1, 2019 for leases existing upon the adoption of ASC 842).~~lease. As most of the Company’s leases do not provide an implicit rate, the Company estimated the incremental borrowing rate based on the information available at the date of adoption in determining the present value of lease payments and used the implicit rate when readily determinable. The Company determined incremental borrowing rates through market sources for secured borrowings including relevant industry rates. The Company’s operating lease ROU assets also include any lease pre-payments and exclude lease incentives. Certain of the Company’s leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. The Company excludes variable payments from lease ROU assets and lease liabilities, to the extent not considered in-substance fixed, and instead, expenses variable payments as incurred. Variable lease expense and lease expense for short term contracts are not material components of lease expense. The Company’s leases generally have remaining lease terms of 1 to 26 years, some of which include options to extend leases. The exercise of lease renewal options is at the Company’s sole discretion and the Company’s lease ROU assets and liabilities reflect only the options the Company is reasonably certain that it will exercise. We do not have leases with residual value guarantees or similar covenants.

Operating lease expense for the three months ended January 31, 2021 and 2020 was $0.4 million and $0.2 ~~million.~~million, respectively. As of January 31, ~~2020,~~2021, the weighted average remaining lease term (in years) was approximately 20 years and the weighted average discount rate was ~~6.2%~~7.5%. Lease payments made ~~for~~during the three months ended January 31, 2021 and 2020 were $0.3 million and $0.2 ~~million.~~million, respectively.

Undiscounted maturities of operating lease and finance lease liabilities are as follows:

Prior to the adoption of the New Lease Accounting Standard, rental commitments on an undiscounted basis were approximately $19.9 million under long-term non-cancelable operating leases and were payable as follows: $1.1 million in fiscal year 2020, $1.4 million in fiscal year 2021, $1.3 million in fiscal year 2022, $0.9 million in fiscal year 2023, $0.7 million in fiscal year 2024 and $14.6 million thereafter. Rent expense for the three months ended January 31, 2019 was $0.2 million.

In December of 2020, the Company and Orion Energy Credit Opportunities Fund II, L.P., Orion Energy Credit Opportunities Fund II GPFA, L.P., Orion Energy Credit Opportunities Fund II PV, L.P., and Orion Energy Credit Opportunities FuelCell Co-Invest, L.P. (the lenders under the Credit Agreement among the Company, certain of its affiliates as guarantors, Orion Energy Partners Investment Agent, LLC (the “Orion Agent”) and such lenders (as amended, the “Orion Credit Agreement”) for a $200.0 million senior secured credit facility (the “Orion Facility”)) (the “Selling Stockholders”) completed a public offering of the Company’s common stock. In connection with this public offering, the Company and the Selling Stockholders entered into an ~~At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc. (the “Sales Agent”)~~underwriting agreement pursuant to ~~create an at-the-market equity program under~~ which (i) the Company ~~may, from time~~agreed to ~~time, offer~~issue and sell to the underwriters 19,822,219 shares of the Company’s common stock, plus up to ~~38.0 million~~5,177,781 shares of ~~its~~ common stock ~~through~~pursuant to an option to purchase additional shares, and (ii) the ~~Sales Agent. However,~~Selling Stockholders agreed to ~~ensure that the Company had sufficient shares available for reservation and issuance upon exercise of all of the warrants to be issued~~sell to the ~~lenders under~~underwriters 14,696,320 shares of common stock, in each case at a price to the ~~Orion Facility (as discussed~~public of $6.50 per share. The underwriters exercised their option to purchase additional shares, resulting in ~~further detail below),~~ the ~~Company, effective as of October 31, 2019, reduced the number of shares reserved for future~~ issuance and sale ~~under~~by the ~~Sales Agreement~~ ~~from 27.9 million shares to 7.9 million shares (thus allowing for total aggregate issuances (past and future) of up to 18.0 million shares under~~ Company at the ~~Sales Agreement) and reserved 20.0 million shares for issuance upon exercise~~closing of the ~~warrants~~. ~~Under the Sales Agreement, the Sales Agent is entitled to a commission in an amount equal to 3.0%~~offering of ~~the gross proceeds from each sale of shares under the Sales Agreement.~~

~~During the three months ended January 31, 2020, the Company issued and sold~~ a total of ~~approximately 7.9 million~~25,000,000 shares of ~~its~~common stock. The offering closed on December 4, 2020.

Gross proceeds from the sale of common stock ~~under~~by the ~~Sales Agreement at prevailing market prices, with an average~~Company in the offering were $162.5 million. The Company did not receive any proceeds from the sale ~~price~~ of ~~$0.46~~common stock in the offering by the Selling Stockholders.

The Company and the Selling Stockholders paid underwriting discounts and commissions of $0.2275 per share, and raised aggregate gross proceeds of approximately $3.6 million, before deducting expenses and commissions. Commissions of $0.1 million were paid to the Sales Agent in connection with these sales, resulting in net proceeds to the Company ofwere approximately ~~$3.5 million.~~$156.4 million after deducting such underwriting discounts and commissions and other estimated offering expenses.

In connection with the closing of the Orion ~~Facility~~Credit Agreement and the ~~Initial Funding,~~Company’s initial draw down under the Orion Credit Agreement of $14.5 million (the “Initial Funding”), on October 31, 2019, the Company issued warrants to the lenders under the Orion ~~Facility~~Credit Agreement to purchase up to a total of 6,000,000 shares of the Company’s common stock, at an exercise price of $0.310 per share (the “Initial Funding Warrants”). In addition, ~~pursuant to~~under the Orion ~~Facility,~~Credit Agreement, on November 22, 2019, the date on which the Company made a second draw of $65.5 million under the ~~Second Funding (November 22, 2019)~~Orion Credit Agreement (the “Second Funding”), the Company issued warrants to the lenders under the Orion ~~Facility~~Credit Agreement to purchase up to a total of 14,000,000 shares of the Company’s common stock, with an exercise price with respect to 8,000,000 of such shares of $0.242 per share and with an exercise price with respect to 6,000,000 of such shares of ~~$0.620~~$0.62 per share (the “Second Funding Warrants”, and together with the Initial Funding Warrants, the “Orion Warrants”).

~~The Orion Warrants have an 8-year term from the date of issuance, are exercisable immediately beginning on the date of issuance, and include provisions permitting cashless exercises.~~

~~On January 9,~~During fiscal year 2020, the lenders exercised ~~on a cashless basis,~~all of the Orion Warrants, ~~(with cash exercise prices of $0.310 per share and $0.62 per share) representing the right~~except for Orion Warrants to purchase ~~in the aggregate, 12,000,000~~2,700,000 shares of ~~the Company’s~~ common stock. ~~Because these warrants~~On December 7, 2020, all remaining Orion Warrants were exercised on a cashless basis pursuant to the formula set forth in the warrants, the lenders received, in the aggregate 9,396,320 shares of the Company��s common stock upon the cashless exercise of Initial Funding Warrants representing the right to purchase ~~6,000,000~~a total of 2,700,000 shares of the Company’s common stock ~~and Second Funding~~for an aggregate exercise price of $653,400 (or $0.242 per share).

The Orion Warrants ~~representing~~that were converted on December 7, 2020 were remeasured to fair value immediately preceding the ~~right to purchase 6,000,000 shares~~conversion based upon volatility of ~~the Company’s common stock. The cashless exercise resulted in 2,603,680 shares no longer being required to be reserved for issuance upon exercise~~117.02%, a risk free rate of ~~the Orion Warrants. Following this exercise, warrants to purchase 8,000,000 shares of~~0.70% and the Company’s common stock ~~with an exercise~~ price of ~~$0.242 per share, remain outstanding.~~$7.95 on December 4, 2020, which resulted in a $16.0 million charge for the three months ended January 31, 2021. The estimated fair value of the converted warrants as of the date of conversion of $21.2 million was reclassified to Additional paid in capital.

~~The estimated fair value of~~During the three months ended January 31, 2020, the lenders exercised, on a cashless basis, Orion Warrants ~~upon issuance was based on a Black-Scholes model using Level 2 inputs, including volatility~~representing the right to purchase 12,000,000 shares of ~~96%, a risk free rate of 1.63%,~~ the Company’s common ~~stock price as of October 31, 2019 of $0.24 per share and the term of 8 years which resulted in a total value of $3.9 million. The~~stock. Because these Orion Warrants ~~will be remeasured to fair value each reporting period.~~

were exercised on a cashless basis, the Company issued in the aggregate 9,396,320 shares of the Company’s common stock. The Orion Warrants that were converted were remeasured to fair value immediately preceding the conversion based upon volatility of 103.7%, a risk free rate of 1.81% and the Company’s common stock price of $2.29 on January 8, 2020, which resulted in a $23.7 million charge for the three months ended January 31, 2020. The revised estimated fair value of the converted warrants as of the date of conversion of $26.0 million was reclassified to Additional paid in capital. The remaining warrants as of January 31, 2020 were remeasured to estimated fair value based upon a volatility of 104.9%, a risk free rate of 1.45% and the Company’s common stock price at January 31, 2020 of $1.59 per share, which resulted in a charge for the three months ended ~~of $10.5 million. The remaining warrants outstanding are valued at $12.1 million as of~~ January 31, 2020 ~~and are classified as long-term liabilities.~~of $10.5 million.

On May 3, 2017, the Company completed an underwritten public offering ofthat included the offering and sale of: (i) 1,000,000 shares of its common stock, and (ii) Series C warrants to purchase 1,000,000 shares of its common stock ~~and (iii) Series D warrants to purchase 1,000,000 shares of its common stock. The Series C warrants~~that have an exercise price of $19.20 per share and a term of five years. ~~The Series D warrants were exercised previously and are no longer outstanding. No~~NaN Series C warrants were exercised during the three months ended January 31, ~~2020.~~2021. The Series C warrants contain provisions regarding adjustments to their exercise price and the number of shares of common stock issuable upon exercise.

The following table summarizes outstanding warrant activity during the three months ended January 31, ~~2020:~~2021:

The Company is authorized to issue up to 250,000 shares of preferred stock, par value $0.01 per share, in one or more series, of which 105,875 shares were designated as 5% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) in March 2005.

As of January 31, ~~2020,~~2021, the Company had 105,875 shares of Series B Preferred Stock, with a liquidation preference of $1,000.00 per share, authorized for issuance. As of January 31, ~~2020~~2021 and October 31, ~~2019,~~2020, there were 64,020 shares of Series B Preferred Stock issued and outstanding, with a carrying value of $59.9 million. Dividends of ~~$2.4~~$0.8 million and ~~$0.8~~$2.4 million were paid in cash during the ~~three month~~three-month periods ended January 31, ~~2020~~2021 and ~~2019,~~2020, respectively. The payment of $2.4 million made in the fiscal quarter ended January 31, 2020 represented the dividends payable with respect to the May 15, 2019 and August 15, 2019 dividend dates and the dividends payable with respect to the November 15, 2019 dividend ~~date.~~date that were declared on October 30, 2019.

As of ~~January~~October 31, 2020, FCE FuelCell Energy, Ltd. (“FCE Ltd.”) had 1,000,000 Class A ~~Cumulative Redeemable Exchangeable~~ Preferred Shares (the “Series 1 Preferred Shares”) issued and outstanding, which ~~are~~were held by Enbridge Inc. (“Enbridge”). Dividends and return of capital payments ~~are~~were due quarterly based on calendar quarters. The Company made payments of Cdn. $1.2 million ~~and Cdn. $0.3 million~~ during the ~~three month periods~~three-month period ended January 31, ~~2020 and 2019, respectively.~~2020. The Company’s payments made during the fiscal quarter ended January 31, 2020 included the payments which were not made previously for the calendar quarters ended on March 31, 2019, June 30, 2019 and September 30, 2019. The Company recorded interest expense, which reflects the amortization of the fair value discount of approximately Cdn. $0.6 million ~~and Cdn. $0.7 million~~ for the three months ended January 31, ~~2020~~2021 and ~~2019, respectively.~~2020. As of ~~January~~October 31, 2020, ~~and October 31, 2019,~~ the carrying value of the Series 1 Preferred Shares was Cdn. ~~$23.4~~$25.6 million (U.S. ~~$17.7~~$19.2 million) and ~~Cdn. $22.7 million (U.S. $17.2 million), respectively, and is~~was classified as a preferred stock obligation of a subsidiary on the Consolidated Balance Sheets. Under the terms of the January 2020 Letter Agreement (as defined and described below) relating to the amendment of the terms of the Series 1 Preferred Shares, the Company is still required to make (i) annual dividend payments of Cdn. $500,000 and (ii) annual return of capital payments of Cdn. $750,000. Dividend and return of capital payments are to be made on a quarterly basis and are scheduled to end on December 31, 2021 unless these obligations are satisfied in advance of such date.

On January 20, 2020, the Company, FCE Ltd. and Enbridge entered into a letter agreement (the “January 2020 Letter Agreement”), pursuant to which they agreed to amend the articles of FCE Ltd. relating to and setting forth the terms of the Series 1 Preferred Shares to: (i) remove the provisions of the articles permitting or requiring the issuance of shares of the Company’s common stock in exchange for the Series 1 Preferred Shares or as payment of amounts due to the holders of the Series 1 Preferred Shares, (ii) remove certain provisions of the articles relating to the redemption of the Series 1 Preferred Shares, (iii) increase the annual dividend rate, commencing on January 1, 2020, to 15%, (iv) extend the final payment date for all accrued and unpaid dividends and all return of capital payments (i.e., payments of the principal redemption price) from December 31, 2020 to December 31, 2021, (v) clarify when dividend and return of capital payments are to be made in the future and extend the quarterly dividend and return of capital payments through December 31, 2021 (which were previously to be paid each quarter through December 31, 2020), (vi) remove certain terms and provisions of the articles that are no longer applicable, and (vii) make other conforming changes to the articles. In addition, the parties agreed to amend the Company’s guarantee in favor of Enbridge (the “Guarantee”) as necessary or as the parties may mutually agree, in either case, in order to be consistent with such amended articles and to maintain the Company’s guarantee of FCE Ltd.’s obligations under the Series 1 Preferred Shares.

~~After taking into account~~ The articles of FCE Ltd. were amended and filed in accordance with the ~~amendments to~~provisions of the January 2020 Letter Agreement on March 26, 2020. Under the terms of ~~the Series 1 Preferred Shares described in~~ the January 2020 Letter Agreement, the ~~aggregate amount~~Company was still required to make (i) annual dividend payments of ~~all accrued~~Cdn. $500,000 and ~~unpaid dividends~~(ii) annual return of capital payments of Cdn. $750,000. Dividend and return of capital payments were to be ~~paid~~made on ~~the Series 1 Preferred Shares~~a quarterly basis and were scheduled to end on December 31, 2021 ~~is expected to be Cdn. $26.5 million and the balance~~unless these obligations were satisfied in advance of ~~the principal redemption price to be paid on December 31, 2021 with respect to all of the Series 1 Preferred Shares is expected to be Cdn. $3.5 million.~~ such date.

The amendment to the Series 1 Preferred Shares resulted in an extinguishment of the prior Series 1 Preferred Shares for accounting purposes. A revised fair value was ~~calculated~~estimated using a discounted cash flow model resulting in a revised carrying value being recorded for the amended Series 1 Preferred Shares ~~of Cdn. $23.4 million (U.S. $17.7 million) as of January 31, 2020,~~ which resulted in a loss of Cdn. $0.2 million (U.S. $0.2 million) recorded in Other (expense) income, net on the Consolidated Statements of Operations and Comprehensive Loss during the three months ended January 31, 2020.

Prior to the ~~modification,~~amendment, the Company bifurcated embedded derivatives related to the conversion feature and a variable dividend feature. As a result of the ~~extinguishment,~~January 2020 Letter Agreement, both features were removed from the Series 1 Preferred Shares ~~and~~which resulted in the Company ~~recognized~~recognizing a gain of U.S. $0.6 million related to the extinguishment of the embedded derivatives during the three months ended January 31, 2020.

In December 2020, the Company, FCE Ltd., and Enbridge entered into a payoff letter, pursuant to which the Company paid all amounts owed to Enbridge under the terms of the Series 1 Preferred Shares. As of the date of the payoff letter, the amount owed to Enbridge under the Series 1 Preferred Shares totaled Cdn. $27.4 million, which included Cdn. $4.3 million of principal and Cdn. $23.1 million of accrued dividends.

On December 18, 2020, the Company remitted payment totaling Cdn. $27.4 million, or approximately $21.5 million U.S. dollars, to Enbridge. Upon making the payment, the Company recorded a loss on extinguishment for the Series 1 Preferred Shares of $0.9 million. Concurrent with receipt of the payment from the Company, Enbridge surrendered its Series 1 Preferred Shares in FCE Ltd., and the Guarantee and the January 2020 Letter Agreement were terminated. All obligations related to the Series 1 Preferred Shares were extinguished upon payment.

As of January 31, 2021 and October 31, 2020, there was $31.0 million and $42.2 million, respectively, of restricted cash and cash equivalents pledged as performance security, reserved for future debt service requirements, reserved for letters of credit for certain banking requirements and contracts, and reserved to pay down the Orion Facility or be redeployed into other project financing at the option of the Orion Agent and the lenders under the Orion Facility. Refer to Note 16. “Debt” for additional information on the release of the restricted cash under the Orion Facility. The allocation of restricted cash is as follows (in thousands):

As of January 31, 2020 and October 31, 2019, there was $35.7 million and $30.3 million, respectively, of restricted cash and cash equivalents pledged as performance security and for letters of credit for certain banking requirements and contracts. As of January 31, 2020 and October 31, 2019, outstanding letters of credit totaled $5.7 million and $5.7 million, respectively. The letters of credit outstanding as of January 31, 2020 expire on various dates through August 2028. Under the terms of certain contracts, we will provide performance security for future contractual obligations. The restricted cash balance as of January 31, 2020 and October 31, 2019 includes $18.1 million and $17.9 million, respectively, to support obligations under the power purchase and service agreements related to the PNC sale-leaseback transactions and $5.9 million and $4.9 million, respectively, relating to future obligations associated with the Bridgeport Fuel Cell Project. The restricted cash balance as of January 31, 2020 also includes a $5.0 million reserve established in accordance with the Orion Facility. This balance may become unrestricted upon the achievement of certain performance milestones related to the Groton project, including achievement of the project’s expected performance upon commercial operations and sourcing of third party debt and tax equity financing in excess of $30 million.

Debt as of January 31, ~~2020~~2021 and October 31, ~~2019~~2020 consisted of the ~~following:~~following (in thousands):

	January 31,			October 31,			January 31,			October 31,
	2020			2019			2021			2020
Orion Energy Partners Credit Facility		80,000			14,500		$	—		$	80,000
Connecticut Green Bank Loans		10,388			7,555
Liberty Bank Term Loan Agreement (BFC Loan)		11,111			11,632
Fifth Third Bank Term Loan Agreement (BFC Loan)		11,111			11,632
Connecticut Green Bank Loan								4,800			4,800
Connecticut Green Bank Loan (Bridgeport Fuel Cell Project)								4,884			5,065
Liberty Bank Term Loan Agreement (Bridgeport Fuel Cell Project)								9,028			9,549
Fifth Third Bank Term Loan Agreement (Bridgeport Fuel Cell Project)								9,028			9,549
Finance obligation for sale-leaseback transactions		44,849			45,219			49,253			49,274
State of Connecticut Loan		9,864			10,000			9,248			9,454
New Britain Renewable Energy Term Loan		—			497
Enhanced Capital Term Loan and Security Agreement		—			1,500
Fifth Third Bank Construction Loan Agreement		—			11,072
Capitalized lease obligations		111			141
Liberty Bank Promissory Note (PPP Note)								6,515			6,515
Finance lease obligations								23			38
Deferred finance costs		(4,506	)		(3,180	)		(1,529	)		(3,737	)
Unamortized debt discount		(5,704	)		(4,251	)		—			(5,152	)
Total debt and financing obligations	$	157,224		$	106,317		$	91,250		$	165,355
Current portion of long-term debt and financing obligations		(8,660	)		(21,916	)		(14,594	)		(21,366	)
Long-term debt and financing obligations	$	148,564		$	84,401		$	76,656		$	143,989

16On November 30, 2020, the Company, its subsidiary guarantors, and the Orion Agent entered into a payoff letter with respect to the Orion Credit Agreement (the “Orion Payoff Letter”). Pursuant to the Orion Payoff Letter, on December 7, 2020, the Company paid a total of $87.3 million to the Orion Agent, representing the outstanding principal, accrued but unpaid interest, prepayment premium, fees, costs and other expenses due and owing under the Orion Facility and the Orion Credit Agreement and related loan documents, in full repayment of the Company’s outstanding indebtedness under the Orion Facility and the Orion Credit Agreement and related loan documents. In accordance with the Orion Payoff Letter, the aggregate prepayment premium set forth in the Orion Credit Agreement was reduced from approximately $14.9 million to $4.0 million and the Orion Agent, on behalf of itself and the lenders, agreed that any portion of the prepayment premium that would otherwise be required to be paid pursuant to the Orion Credit Agreement in excess of $4.0 million was waived by the Orion Agent and the lenders. The Company expensed the remaining deferred finance costs and debt discount of $7.1 million. The Company has classified the $4.0 million prepayment premium and the deferred finance costs and debt discount expense as Loss on extinguishment of debt on the Consolidated Statements of Operations and Comprehensive Loss.

Concurrently with the Orion Agent’s receipt of full payment pursuant to the Orion Payoff Letter, the Orion Agent released all of the collateral from the liens granted under the security documents associated with the Orion Facility (which included the release of $11.2 million of restricted cash to the Company, which became unrestricted cash), and the Company and its subsidiaries were unconditionally released from their respective obligations under the Orion Credit Agreement (and related loan documents) and the Orion Facility without further action. With the termination of the Orion Facility and the Orion Credit Agreement and related loan documents, the lenders no longer have the right to appoint representatives to attend the Company’s Board of Director meetings as observers.

On April 20, 2020, the Company entered into the PPP Note, dated April 16, 2020, evidencing a loan to the Company from Liberty Bank, under the CARES Act, administered by the SBA. Pursuant to the PPP Note, the Company received total proceeds of approximately $6.5 million on April 24, 2020.

Refer to Note. 19. “Subsequent Events” for information regarding the withdrawal of the application for forgiveness and the repayment of the PPP Note.

We have stockholder approved equity incentive plans, a stockholder approved Employee Stock Purchase Plan and an employee tax-deferred savings plan. During the three months ended January 31, 2021, the Company approved a sub-plan to its 2018 Omnibus Incentive Plan, as amended and restated, which is described in more detail below:

~~Orion Energy Partners Investment Agent, LLC Credit Agreement~~2018 Omnibus Incentive Plan

~~On October 31, 2019, the Company and certain of its subsidiaries as guarantors entered into a Credit Agreement~~

The Company’s 2018 Omnibus Incentive Plan (as amended and restated from time to time, the ~~“Orion Credit Agreement”~~“2018 Incentive Plan”) ~~with Orion Energy Partners Investment Agent, LLC, as Administrative Agent and Collateral Agent (the “Agent”~~authorizes grants of stock options, stock appreciation rights (“SARs”), ~~and certain lenders affiliated with the Agent for a $200.0 million senior secured credit facility (the “Orion Facility”~~restricted stock awards (“RSAs”), ~~structured~~restricted stock units (“RSUs”), performance shares, performance units and incentive awards to employees, directors, consultants and advisors. Stock options, RSAs and SARs have restrictions as ~~a delayed draw term loan,~~ to ~~be provided~~transferability. Stock option exercise prices are fixed by the ~~lenders, subject to certain lender approvals. Under~~Company’s Board of Directors but shall not be less than the ~~Orion Credit Agreement, each lender will fund its commitments~~fair market value of our common stock on ~~each funding~~the date ~~in an amount equal to the principal amount~~ of the ~~loans to~~grant. SARs may be ~~funded by such lender on such date, less 2.50% of the aggregate principal amount of the loans funded by such lender on such date (the “Loan Discount).~~

~~On October 31, 2019, the Company drew down $14.5 million (the “Initial Funding”) and received $14.1 million after taking into account a Loan Discount of $0.4 million.~~ granted in conjunction with stock options.

On November ~~22, 2019,~~24, 2020, the Company’s Board of Directors approved a ~~second draw~~Long Term Incentive Plan (the ~~“Second Funding”~~“LTI Plan”) as a sub-plan consisting of ~~$65.5 million, funded by~~ Orion Energy Credit Opportunities Fund II, L.P., Orion Energy Credit Opportunities Fund II GPFA, L.P., Orion Energy Credit Opportunities Fund II PV, L.P., and Orion Energy Credit Opportunities FuelCell Co-Invest, L.P. (the “Orion Lenders”), ~~was~~awards made ~~to fully repay certain outstanding third party debt of~~under the Company, including the outstanding construction loan from Fifth Third Bank with respect to the Groton Project and the outstanding loan from Webster Bank with respect to the CCSU Project, as well as to fund remaining going forward construction costs and anticipated capital expenditures relating to the Groton Project (a 7.4 MW project), the LIPA Yaphank Solid Waste Management Project (a 7.4 MW project), and the Tulare BioMAT Project (a 2.8 MW project).2018 Incentive Plan. The ~~Company received $63.9 million~~participants in the ~~Second Funding after taking into account a Loan Discount~~LTI Plan are members of ~~$1.6 million as described above. Also in conjunction with the Second Funding, the Company issued to the Orion Lenders the Second Funding Warrants to purchase up to a total of 14.0 million shares of~~senior management and include the Company’s common stock, with an initial exercise price with respect to 8.0 million of such shares of $0.242 per share and with an initial exercise price with respect to 6.0 million of such shares of $0.620 per share.

~~The Company may draw~~named executive officers (as identified in the remainder of the Orion Facility, $120.0 million, over the first 18 months following the Initial Funding and subject to the Agent’s approval to fund: (i) construction costs, inventory and other capital expenditures of additional fuel cell projects with contracted cash flows (under PPAs with creditworthy counterparties) that meet or exceed a mutually agreed coverage ratio; and (ii) inventory, working capital, and other costs that may be required to be delivereddefinitive proxy statement filed by the Company on ~~purchase orders, service agreements, or other binding customer agreements with creditworthy counterparties.~~

~~Under~~February 19, 2021). The LTI Plan consists of three award components: (1) relative total shareholder return (“TSR”) performance shares, (2) absolute TSR performance shares, and (3) time-vesting restricted stock units. The performance shares granted during the ~~Orion Credit Agreement, cash interest of 9.9% per annum~~three months ended January 31, 2021 will be ~~paid quarterly. In addition to~~earned over the ~~cash interest, payment-in-kind interest of 2.05% per annum will accrue which will be added to the outstanding principal balance of the Orion Facility~~performance period ending on October 31, 2023, but will be paid quarterly in cash to the extent of available cash after payment of the Company’s operating expenses and the funding of certain reserves for the payment of outstanding indebtedness to the State of Connecticut and Connecticut Green Bank. The Orion Credit Agreement contains representations, warranties and other covenants.

Outstanding principal under the Orion Facility will be amortized on a straight-line basis over a seven year term in quarterly payments beginning one year after the Initial Funding, with the initial payment due 21 business days after the end of the first quarter of fiscal 2021; provided that, if the Company does not have sufficient cash on hand to make any required quarterly amortization payments, such amounts shall be deferred and payable at such time as sufficient cash is available to make such paymentsremain subject to ~~all outstanding principal being due and payable on~~a continued service-based vesting requirement until the ~~maturity date, which is the date that is eight years after~~third anniversary of the date of grant. The performance measure for the ~~Initial Funding or~~relative TSR performance shares is the TSR of the Company relative to the TSR of the Russell 2000 from November 1, 2020 through October 31, ~~2027.~~

2023. The ~~issuance~~performance measure for the absolute TSR performance shares is an increase in the Company’s stock price during the performance period of ~~the Initial Funding Warrants and recognition of the Second Funding Warrants resulted in $3.9 million being recorded as a liability as of~~November 1, 2020 through October 31, 2019 with the offset recorded as a debt discount. Refer to Note 12. “Stockholders’ Equity and Warrant Liabilities” for additional information regarding the Initial Funding Warrants and Second Funding Warrants, including the accounting, terms and conversions2023. The time-vesting RSUs granted during the ~~quarter~~three months ended January 31, ~~2020.~~

In conjunction with the Second Funding, the Company and the other loan parties entered into the First Amendment to the Orion Credit Agreement (the “First Orion Amendment”), which required the Company to establish a $5.0 million debt reserve, with such reserve to be released on the first date following the date of the Second Funding on which all of the following events shall have occurred: (a) each of (x) the commercial operation date for the Tulare BioMAT project shall have occurred and (y) a disposition, refinancing or tax equity investment in the Tulare BioMAT project of at least $5 million is consummated; (b) each of (x) the Groton Project shall have achieved its business plan in accordance with the Groton Construction Budget (as defined in the Orion Credit Agreement), (y) the commercial operation date for the Groton Project shall have occurred and (z) the Groton Project shall have met its annualized output and heat rate guarantees for three months; and (c) a disposition, refinancing or tax equity investment of at least $30 million shall have occurred with respect to the Groton Project. ~~The First Orion Amendment further requires the Company (i) to provide, no later than December 31, 2019, a biogas sale and purchase agreement through December 31,~~ 2021 for the Tulare BioMAT project, which was obtained as of such date, (ii) to obtain by December 31, 2019, a fully executed contract for certain renewable energy credits for the Groton Project, which was obtained as of such date, and (iii) to provide by January 31, 2020 certain consents and estoppels from the Connecticut Municipal Electric Energy Cooperative (“CMEEC”) related to the Groton Project and an executed, seventh modification to the lease between CMEEC and the United States Government, acting by and through the Department of the Navy, both of which were obtained as of such date.

In addition, in connection with the January 2020 Letter Agreement among the Company, FCE Ltd. and Enbridge described above, on January 20, 2020, in order to obtain the Orion Lenders’ consent to the January 2020 Letter Agreement as required under the Orion Credit Agreement, the Company, the Agent, the Orion Lenders, and the other loan parties entered into the Second Amendment to the Orion Credit Agreement (the “Second Orion Amendment”), which added a new affirmative covenant to the Orion Credit Agreement that obligates the Company to, and to cause FCE Ltd. to, on or prior to November 1, 2021, either (i) pay and satisfy in full all of their respective obligations in respect of, and fully redeem and cancel, all of the Series 1 Preferred Shares of FCE Ltd., or (ii) deposit in a newly created account of FCE Ltd. or the Company cash in an amount sufficient to pay and satisfy in full all of their respective obligations in respect of, and to effect a redemption and cancellation in full of, all of the Series 1 Preferred Shares of FCE Ltd. The Second Orion Amendment also provides that the articles of FCE Ltd. setting forth the modified terms of the Series 1 Preferred Shares will be considered a “Material Agreement” under the Orion Credit Agreement. Under the Second Orion Amendment, a failure to satisfy this new affirmative covenant or to otherwise comply with the terms of the Series 1 Preferred Shares will constitute an event of default under the Orion Credit Agreement, which could result in the acceleration of any amounts outstanding under the Orion Credit Agreement.

~~Refer to Note 18. “Subsequent Events” for information regarding the Third Amendment to the Orion Credit Agreement.~~

As of October 31, 2019, the Company had a long-term loan agreement with the Connecticut Green Bank, providing the Company with a loan of $1.8 million (the “Green Bank Loan Agreement”). On and effective as of December 19, 2019, the Company and Connecticut Green Bank entered into an amendment to the Green Bank Loan Agreement (the “Green Bank Amendment”). Upon the execution of the Green Bank Amendment on December 19, 2019, Connecticut Green Bank made an additional loan to the Company in the aggregate principal amount of $3.0 million (the “December 2019 Loan”), which is to be used (i) first, to pay closing fees related to the May 9, 2019 acquisition of the Bridgeport Fuel Cell Project and the Subordinated Credit Agreement (as defined below), other fees, and accrued interest from May 9, 2019, totaling $0.4 million (“Accrued Fees”), and (ii) thereafter, for general corporate purposes as determined by the Company, including, but not limited to, expenditures in connection with the project being constructed by Groton Station Fuel Cell, LLC (“Groton Fuel Cell”). Pursuant to the terms of the Green Bank Amendment, Connecticut Green Bank will have no further obligation to make loans under the Green Bank Loan Agreement and the Company will have no right to make additional draws under the Green Bank Loan Agreement. The Green Bank Amendment provides that, until such time as the loan (which includes both the outstanding principal balance of the original loan under the Green Bank Loan Agreement and the outstanding principal amount of the December 2019 Loan) has been repaid in its entirety, interest on the outstanding balance of the loan shall accrue monthly in arrears from the date of the Green Bank Amendmentvest at a rate of ~~5% per annum until May 8, 2019 and at a rate of 8% per annum thereafter, payable by the Company on a monthly basis in arrears. The Green Bank Amendment further provides that the payment by the Company~~one-third of the ~~Accrued Fees (as described above) includes any shortfall~~total number of ~~interest due but unpaid by~~RSUs on each of the ~~Company through and including November 30, 2019. Interest payments made by the Company after~~first three anniversaries of the date of ~~the Green Bank Amendment are to be applied first to interest that has accrued on the outstanding principal balance~~grant. None of the original loan under the Green Bank Loan Agreement and then to interest that has accrued on the December 2019 Loan. The Green Bank Amendment also modifies the repayment and mandatory prepayment terms and extends the maturity date set forth in the original Green Bank Loan Agreement. Under the Green Bank Amendment, to the extent that excess cash flow reserve funds under the BFC Credit Agreement (as defined below) are eligible for disbursement to Bridgeport Fuel Cell, LLC pursuant to Section 6.23(c) of the BFC Credit Agreement, such funds are to be paid to Connecticut Green Bank, to be applied first to repay the outstanding principal balance of the original loan under the Green Bank Loan Agreement and thereafter to repay the outstanding principal amount of the December 2019 Loan, until repaid in full. The Green Bank Amendment further provides that the entire unpaid balance of the loan and all other obligations due under the Green Bank Loan Agreement will be due and payable on May 9, 2026 if not paid sooner in accordance with the Green Bank Loan Agreement. Finally, with respect to mandatory prepayments, the Green Bank Amendment provides that, when the Company has closed on the subordinated project term loan pursuant to the Commitment Letter, dated February 6, 2019, issued by Connecticut Green Bank to Groton Fuel Cell to provide a subordinated project term loan to Groton Fuel Cell in the amount of $5.0 million, the Company will be required prepay to Connecticut Green Bank the lesser of any then outstanding amount of the December 2019 Loan and the amount of the subordinated project term loan actually advanced by Connecticut Green Bank. The balance as of January 31, 2020 was $4.8 million.

On May 9, 2019, in connection with the closing of the purchase of the membership interests of Bridgeport Fuel Cell, LLC (“BFC”) (and the 14.9 MW Bridgeport Fuel Cell Project), BFC entered into a subordinated credit agreement with the Connecticut Green Bank whereby Connecticut Green Bank provided financing in the amount of $6.0 million (the “Subordinated Credit Agreement”). This $6.0 million consisted of $1.8 million in incremental funding that was received by BFC and $4.2 million of funding previously received by FuelCell Energy, Inc. with respect to which BFC became the primary obligor. As security for the Subordinated Credit Agreement, Connecticut Green Bank received a perfected lien, subordinated and second in priority to the liens securing the $25.0 million loaned under the BFC Credit Agreement (as defined below), in all of the same collateral securing the BFC Credit Agreement. The interest rate under the Subordinated Credit Agreement is 8% per annum. Principal and interest are due monthly in amounts sufficient to fully amortize the loan over an 84 month period ending in May 2026. The Subordinated Credit Agreement contains representations, warranties and covenants. The balance under the Subordinated Credit Agreement as of January 31, 2020 was $5.6 million.

On May 9, 2019, in connection with the closing of the purchase of BFC, FuelCell Energy Finance, LLC (“FuelCell Finance”) (a subsidiary of the Company) entered into a Credit Agreement with Liberty Bank, as administrative agent and co-lead arranger, and Fifth Third Bank as co-lead arranger and swap hedger (the “BFC Credit Agreement”), whereby (i) Fifth Third Bank provided financing in the amount of $12.5 million towards the purchase price for the BFC acquisition; and (ii) Liberty Bank provided financing in the amount of $12.5 million towards the purchase price for the BFC acquisition. As security for the BFC Credit Agreement, Liberty Bank and Fifth Third Bank wereawards granted a first priority lien in (i) all assets of BFC, including BFC’s cash accounts, fuel cells, and all other personal property, as well as third party contracts including the Energy Purchase Agreement between BFC and Connecticut Light and Power Company dated July 10, 2009, as amended; (ii) certain fuel cell modules that are intended to be used to replace the Bridgeport Fuel Cell Project’s fuel cell modules as part of ~~routine operation and maintenance; and (iii) FuelCell Finance’s ownership interest~~the LTI Plan include any dividend equivalent or other stockholder rights. To the extent the awards are earned, they may be settled in ~~BFC. The maturity date~~shares or cash of an equivalent value at the Company’s option.

On November 24, 2020, 848,078 RSUs were awarded under the ~~BFC Credit Agreement is May 9, 2025.~~ ~~Monthly principal~~LTI Plan, which include 551,252 performance awards and ~~interest are~~296,826 time-based awards. Should the Company’s share price achieve the 200% performance level, awardees will receive up to ~~be paid in arrears in an amount sufficient to fully amortize the term loan over a~~ ~~72 month period. FuelCell Finance has the right to make~~551,252 additional principal payments or pay the balance due under the BFC Credit Agreement in full provided that it pays any associated breakage fees with regard to the interest rate swap agreements fixing the interest rate.RSUs. The ~~interest rate under the BFC Credit Agreement fluctuates monthly at the 30-day LIBOR rate plus 275 basis points on an initial total notional value of $25.0 million, reduced for principal payments.~~

An interest rate swap agreement was required to be entered into with Fifth Third Bank in connection with the BFC Credit Agreement to protect against movements in the floating LIBOR index. Accordingly, on May 16, 2019, an interest rate swap agreement (the “Swap Agreement”) was entered into with Fifth Third Bank in connection with the BFC Credit Agreement for the term of the loan. The net interest rate across the BFC Credit Agreement and the swap transaction results in a fixed rate of 5.09%. The ~~interest rate swap will be adjusted to fair value~~performance awards were valued based on a ~~quarterly basis. The~~Monte-Carlo Simulation, and the estimated fair value ~~is based on Level 2 inputs including primarily the forward LIBOR curve available to swap dealers. The valuation methodology involves comparison of (i) the sum~~ of the ~~present~~275,626 relative TSR performance shares are $14.41 per share and the estimated fair value of ~~all monthly variable rate payments based on a reset rate using~~ the ~~forward LIBOR curve~~275,626 absolute TSR performance shares are $15.36 per share. The performance shares and ~~(ii)~~time-based awards will be expensed over the ~~sum~~three-year service period.

Share-based compensation was reflected in the Consolidated Statements of ~~the present value of all monthly fixed rate payments on the notional amount, which is equivalent to the outstanding principal amount of the loan.~~ Operations and Comprehensive Loss as follows (in thousands):

Restricted Stock Awards and Restricted Stock Units Including Performance Based Awards

The ~~fair value adjustments~~following table summarizes our RSA and RSU activity for the three months ended January 31,~~, 2020 resulted in a $0.03 million charge.~~ 2021:

Several of the Company’s project finance subsidiaries previously entered into sale-leaseback agreements with PNC for commissioned projects where the Company had entered into a PPA with the site host/end-user of produced power. Under the financing method of accounting for a sale-leaseback, the Company did not recognize as income any of the sale proceeds received from the lessor that contractually constitute payments to acquire the assets subject to these arrangements. Instead, the sale proceeds received were accounted for as financing obligations. The outstanding financing obligation balance as of January 31, 2020 was $44.8 million and the decrease from $45.2 million on October 31, 2019 includes lease payments offset by the recognition of interest expense. The outstanding financing obligation includes an embedded gain which will be recognized at the end of each 10-year lease term.

In October 2015, the Company closed on a definitive Assistance Agreement with the State of Connecticut (the “Assistance Agreement”) and received a disbursement of $10.0 million, which was used for the first phase of the expansion of the Company’s Torrington, Connecticut manufacturing facility. In conjunction with this financing, the Company entered into a $10.0 million promissory note and related security agreements securing the loan with equipment liens and a mortgage on its Danbury, Connecticut location. Interest accrues at a fixed interest rate of 2.0%, and the loan is repayable over 15 years from the date of the first advance, which occurred in October of 2015. Principal payments were deferred for four years from disbursement and began on December 1, 2019. Under the Assistance Agreement, the Company was eligible for up to $5.0 million in loan forgiveness if the Company created 165 full-time positions and retained 538 full-time positions for two consecutive years (the “Employment Obligation”) as measured on October 28, 2017 (the “Target Date”). The Assistance Agreement was subsequently amended in April 2017 to extend the Target Date by two years to October 28, 2019.

In January 2019, the Company and the State of Connecticut entered into a Second Amendment to the Assistance Agreement (the “Second Amendment”). The Second Amendment extends the Target Date to October 31, 2022 and amends the Employment Obligation to require the Company to continuously maintain a minimum of 538 full-time positions for 24 consecutive months. Based on the Company’s current headcount and plans for fiscal year 2020, it will be short of meeting this requirement. If the Company meets the Employment Obligation, as modified by the Second Amendment, and creates an additional 91 full-time positions, the Company may receive a credit in the amount of $2.0 million to be applied against the outstanding balance of the loan. The Second Amendment deletes and cancels the provisions of the Assistance Agreement related to the second phase of the expansion project and the loans related thereto, but the Company had not drawn any funds or received any disbursements under those provisions. A job audit will be performed within 90 days of the Target Date. If the Company does not meet the Employment Obligation, then an accelerated payment penalty shall be assessed at a rate of $18,587.36 times the number of employees below the number of employees required by the Employment Obligation. Such penalty is immediately payable and will be applied first to accelerate the payment of any outstanding fees or interest due and then to accelerate the payment of outstanding principal.

In November 2016, the Company assumed debt with Webster Bank, National Association (“Webster Bank”) in the amount of $2.3 million as a part of a project asset acquisition transaction. The term loan interest rate was 5.0% per annum and payments, which commenced in January 2017, were due on a quarterly basis. The balance outstanding as of October 31, 2019 was $0.5 million. The loan was paid off and extinguished during the three months ended January 31, 2020.

On January 9, 2019, the Company, through its indirect wholly-owned subsidiary TRS Fuel Cell, LLC, entered into a Loan and Security Agreement (the “Enhanced Capital Loan Agreement”) with Enhanced Capital Connecticut Fund V, LLC (“Enhanced”) in the amount of $1.5 million The collateral for this loan included any project assets, accounts receivable and inventory owned by TRS Fuel Cell, LLC. Interest accrued at a rate of 6.0% per annum and was paid on the first business day of each month. The loan maturity date was three years from the date of the Enhanced Capital Loan Agreement, upon which the outstanding principal and any accrued interest would be due and payable. Under the terms of the Enhanced Capital Loan Agreement, the Company was required to close on tax equity financing by January 14, 2020. Given that the Company did not secure tax equity financing for this project, on January 13, 2020, TRS Fuel Cell, LLC and Enhanced entered into a payoff letter pursuant to which the loan was paid off and extinguished on January 14, 2020.

On February 28, 2019, the Company, through its indirect wholly-owned subsidiary, Groton Station Fuel Cell, LLC (“Groton Borrower”), entered into a Construction Loan Agreement (as amended from time to time, the “Groton Agreement”) with Fifth Third Bank pursuant to which Fifth Third Bank agreed to make available to Groton Borrower a construction loan facility in an aggregate principal amount of up to $23.0 million (the “Groton Facility”) to fund the manufacture, construction, installation, commissioning and start-up of the 7.4 MW fuel cell power plant for the CMEEC located on the U.S. Navy submarine base in Groton, Connecticut (the “Groton Project”). Groton Borrower made an initial draw under the Groton Facility on the date of closing of $9.7 million and made an additional draw of $1.4 million in April 2019. The original maturity date of the Groton Facility was the earlier of (a) October 31, 2019, (b) the commercial operation date of the Groton Project, or (c) one business day after receipt of proceeds of debt financing (i.e., take out financing) in an amount sufficient to repay the outstanding indebtedness under the Groton Facility.

~~The total outstanding balance under the Groton Facility as of October 31, 2019 was $11.1 million.~~ ~~This balance was paid off, the loan was extinguished, and the Groton Facility was terminated during the three months ended January 31, 2020.~~

Deferred finance costs relate primarily to (i) sale-leaseback transactions entered into with PNC which are being amortized over the 10-year terms of the lease agreements, (ii) payments under the loans obtained to purchase the membership interests in BFC which are being amortized over the 8-year term of the loans and (iii) payments to enter into the Orion Facility which will be amortized over the 8 year term of the facility.

Under the provisions of its service agreements, the Company provides services to maintain, monitor, and repair customer power plants to meet minimum operating levels. Under the terms of such service agreements, the particular power plant must meet a minimum operating output during defined periods of the term. If minimum output falls below the contract requirement, the Company may be subject to performance penalties and/or may be required to repair or replace the customer’s fuel cell module(s).

Under the terms of the Company’s PPAs, customers agree to purchase power from the Company’s fuel cell power plants at negotiated rates. Electricity rates are generally a function of the customers’ current and estimated future electricity pricing available from the grid. As owner or lessee of the power plants, the Company is responsible for all operating costs necessary to maintain, monitor and repair the power plants. Under certain agreements, the Company is also responsible for procuring fuel, generally natural gas or biogas, to run the power plants. In addition, under the terms of some of the ~~PPA agreements,~~PPAs, the Company ismay be subject to a performance ~~penalty.~~ penalty if the Company does not meet certain performance requirements.

As of January 31, ~~2020,~~2021, the Company had unconditional purchase commitments aggregating ~~$34.0~~$64.4 million, for materials, supplies and services in the normal course of business.

From approximately 2007 through 2015, we relied on POSCO Energy to develop and grow the South Korean and Asian markets for our products and services. We received upfront license payments and were entitled to receive royalty income from POSCO Energy pursuant to certain manufacturing and technology transfer agreements, including the Alliance Agreement dated February 7, 2007 (and the amendments thereto), the Technology Transfer, License and Distribution Agreement dated February 7, 2007 (and the amendments thereto), the Stack Technology Transfer and License Agreement dated October 27, 2009 (and the amendments thereto), and the Cell Technology Transfer and License Agreement dated October 31, 2012 (and the amendments thereto), which are collectively referred to herein as the “License Agreements”. The License Agreements provided POSCO Energy with the exclusive technology rights to manufacture, sell, distribute and service our SureSource 300, SureSource 1500 and SureSource 3000 fuel cell technology in the South Korean and broader Asian markets. Due to certain actions and inactions of POSCO Energy, the Company has not realized any new material revenues, royalties or new projects developed by POSCO Energy since late 2015.

In November 2019, POSCO Energy spun-off its fuel cell business into a new entity, Korea Fuel Cell Co., Ltd. (“KFC”), without the Company’s consent. As part of the spin-off, POSCO Energy transferred manufacturing and service rights under the License Agreements to KFC, but retained distribution rights and severed its own liability under the License Agreements. The Company formally objected to POSCO Energy’s spin-off, and POSCO Energy posted a bond to secure any liabilities to the Company arising out of the spin-off. In September 2020, the Korean Electricity Regulatory Committee found that POSCO Energy’s spin-off of the fuel cell business to KFC may have been done in violation of South Korean law.

On February 19, 2020, the Company notified POSCO Energy in writing that it was in material breach of the License Agreements by (i) its actions in connection with the spin-off of the fuel cell business to KFC, (ii) its suspension of performance through its cessation of all sales activities since late 2015 and its abandonment of its fuel cell business in Asia, and (iii) its disclosure of material nonpublic information to third parties and its public pronouncements about the fuel cell business on television and in print media that have caused reputational damage to the fuel cell business, the Company and its products. The Company also notified POSCO Energy that, under the terms of the License Agreements, it had 60 days to fully cure its breaches to the Company’s satisfaction and that failure to so cure would lead to termination of the License Agreements. Further, on March 27, 2020, the Company notified POSCO Energy of additional instances of its material breach of the License Agreements based on POSCO Energy’s failure to pay royalties required to be paid in connection with certain module replacements.

On April 27, 2020, POSCO Energy initiated a series of three arbitration demands against the Company at the International Court of Arbitration of the International Chamber of Commerce seated in Singapore alleging certain warranty defects in a sub-megawatt conditioning facility at its facility in Pohang, South Korea and seeking combined damages of approximately $3.3 million. Prior to filing the arbitrations, POSCO Energy obtained provisional attachments from the Seoul Central District Court attaching certain revenues owed to the Company by Korea Southern Power Company (“KOSPO”) as part of such warranty claims, which has delayed receipt of certain payments owed to the Company. POSCO Energy subsequently sought additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on unspecified warranty claims not yet filed in an additional amount of approximately $7 million, and additional provisional attachments on KOSPO revenues from the Seoul Central District Court based on its alleged counterclaims in the license termination arbitration described below in an additional amount of approximately $110 million. As of January 31, 2021, outstanding accounts receivable due from KOSPO were $6.4 million.

On June 28, 2020, the Company terminated the License Agreements with POSCO Energy and filed a demand for arbitration against POSCO Energy and KFC in the International Court of Arbitration of the International Chamber of Commerce based on POSCO Energy’s (i) failure to exercise commercially reasonable efforts to sell the Company’s technology in the South Korean and Asian markets, (ii) disclosure of the Company’s proprietary information to third parties, (iii) attack on the Company’s stock price and (iv) spin-off of POSCO Energy’s fuel cell business into KFC without the Company’s consent. The Company has requested that the arbitral tribunal (a) confirm through declaration that POSCO Energy’s exclusive license to market the Company’s technology and products in South Korea and Asia is null and void as a result of the breaches of the License Agreements and that the Company has the right to pursue direct sales in these markets, (b) order POSCO Energy and KFC to compensate the Company for losses and damages suffered in the amount of more than $200 million, and (c) order POSCO Energy and KFC to pay the Company’s arbitration costs, including counsel fees and expenses. The Company has retained outside counsel on a contingency basis to pursue its claims, and outside counsel has entered into an agreement with a litigation finance provider to fund the legal fees and expenses of the arbitration. In October 2020, POSCO Energy filed a counterclaim in the arbitration (x) seeking approximately $880 million in damages based on allegations that the Company misrepresented the capabilities of its fuel cell technology to induce POSCO Energy to enter into the License Agreements and failed to turn over know-how sufficient for POSCO Energy to successfully operate its business; (y) seeking a declaration that the License Agreements remain in full force and effect and requesting the arbitral tribunal enjoin the Company from interfering in POSCO Energy’s exclusive rights under the License Agreements and (z) seeking an order that the Company pay POSCO Energy’s arbitration costs, including counsel fees and expenses.

The Company has discontinued revenue recognition of the deferred license revenue related to the terminated POSCO Energy License Agreements given the pending arbitration and will continue to evaluate this deferred revenue in future periods.

On August 28, 2020, POSCO Energy filed a complaint in the Court of Chancery of the State of Delaware (the “Court”) purportedly seeking to enforce its rights as a stockholder of the Company to inspect and make copies and extracts of certain books and records of the Company and/or the Company’s subsidiaries pursuant to Section 220 of the Delaware General Corporation Law and/or Delaware common law. POSCO Energy alleges that it is seeking to inspect these documents for a proper purpose reasonably related to its interests as a stockholder of the Company, including investigating whether the Company’s Board of Directors and its management breached their fiduciary duties of loyalty, due care, and good faith. POSCO Energy seeks an order of the Court permitting POSCO Energy to inspect and copy the demanded books and records, awarding POSCO Energy reasonable costs and expenses, including reasonable attorney’s fees incurred in connection with the matter, and granting such other and further relief as the Court deems just and proper.

On September 14, 2020, POSCO Energy filed a complaint in the United States District Court for the Southern District of New York alleging that the Company delayed the removal of restrictive legends on certain share certificates held by POSCO Energy in 2018, thus precluding POSCO Energy from selling the shares and resulting in claimed losses in excess of $1,000,000.

The Company does not believe that any of the arbitrations or legal proceedings brought against the Company by POSCO Energy are for a proper purpose. Further, the Company believes that all such arbitrations and legal proceedings are in fact simply fulfillment of POSCO Energy’s prior threats to file a series of actions against the Company and are attempts to obtain leverage over the Company and, in certain proceedings, gain advantage in the pending arbitration filed by the Company against POSCO Energy. The Company will vigorously defend itself against POSCO Energy’s claims in all forums and believes it will be apparent at the conclusion of each matter that each action was filed for an improper purpose.

From time to time, the Company is involved in other legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation, arising out of the ordinary ~~conduct~~course of its ~~business.~~business (“Other Legal Proceedings”). Although the Company cannot assure the outcome of such Other Legal Proceedings, management presently believes that the result of such ~~legal proceedings,~~Other Legal Proceedings, either individually, or in the aggregate, will not have a material adverse effect on the Company’s consolidated financial statements, and no material amounts have been accrued in the Company’s consolidated financial statements with respect to these matters.

~~Crestmark Sale-Leaseback Transaction~~Repayment of Paycheck Protection Program Promissory Note

~~On February 11,~~As disclosed in Note 16. Debt, on April 20, 2020, ~~a wholly owned subsidiary of~~ the Company entered into the PPP Note, dated April 16, 2020, evidencing a Purchase and Sale Agreement (the “Purchase Agreement”) and an Equipment Lease Agreement (the “Lease”) with Crestmark Equipment Finance, a division of MetaBank (“Crestmark”). Under these agreements,loan to the ~~Company’s subsidiary, Central CA Fuel Cell 2, LLC (“CCFC2”), sold~~Company from Liberty Bank under the 2.8 MW fuel cell power plant (the “Plant”) located at the Tulare wastewater treatment plant in Tulare, California to Crestmark and then leased the Plant back from Crestmark through this sale-leaseback transaction. The Plant was designed, manufactured and installedCARES Act, administered by the SBA. Pursuant to the PPP Note, the Company ~~and commercial operations began on December 27, 2019. In operating the Plant, CCFC2 purchases biogas from the City~~received total loan proceeds of ~~Tulare and will sell the power produced by the Plant to Southern California Edison under a twenty year PPA under the California Bioenergy Market Adjusting Tariff, which was separately entered into~~approximately $6.5 million on April ~~20, 2018~~24, 2020 (the ~~“Tulare PPA”~~“PPP Loan”).

~~Under~~As required by Orion Energy Partners Investment Agent, LLC and its affiliated lenders (collectively, “Orion”) under the ~~terms~~Company’s (now former) senior secured credit facility, the Company applied for forgiveness of the ~~Purchase Agreement, Crestmark paid CCFC2 an aggregate purchase price~~PPP Loan in October 2020. However, with the repayment in full of $14.4 million. A portion of these proceeds were used by CCFC2 to make a down payment and an initial rental payment under the Lease totaling $2.9 million to Crestmark, and to pay taxes, to pay transaction costs and to fund a debt service reserve totaling approximately $1.0 million, resulting in net proceeds to CCFC2 of approximately $10.5 million. These net proceeds (also discussed under “Third Amendmentall amounts owed to Orion ~~Credit Agreement” below) were allocated as follows:~~

The Lease has an initial term of ten years but may be extended at the option of CCFC2. As noted above, an initial rental down payment and one month’s rent totaling $2.9 million was paid using the proceeds from the sale of the Plant. Rental payments are due on a monthly basis in the amount of $0.1 million. Lease payments are expected to be funded with proceeds from the sale of power under the Tulare PPA. Following the sale-leaseback transaction, the remaining rental payments due over the term of the Lease total approximately $8.5 million.

CCFC2 and Crestmark entered into an Assignment Agreement on February 11, 2020 (the “Assignment Agreement”) and FuelCell Finance (the direct parent of CCFC2) and Crestmark entered into a Pledge Agreement on February 11, 2020 (the “Pledge Agreement”) pursuant to which collateral was provided to Crestmark to secure CCFC2’s obligations under the Lease. Specifically, CCFC2 and FuelCell Finance have granted Crestmark a security interest in (i) certain agreements relating to the sale-leaseback transaction, (ii) the revenues CCFC2 receives with respect to the Plant, (iii) two fuel cell modules to be maintained by CCFC2 as replacement modules for the Plant, and (iv) FuelCell Finance’s equity interest in CCFC2. CCFC2 and the Company also entered into a Technology License and Access Agreement with Crestmark on February 11, 2020, which provides Crestmark with certain intellectual property license rights to have access to the Company’s proprietary fuel cell technology, but only for the purpose of maintaining and servicing the project in certain circumstances where the Company is not satisfying its obligations under its service agreement with regard to the maintenance and servicing of the Plant.

Pursuant to the Lease, CCFC2 has an obligation to indemnify Crestmark for the amount of any actual reduction in the U.S. Investment Tax Credit anticipated to be realized by Crestmark in connection with the foregoing sale-leaseback transaction. Such obligations would arise as a result of reductions to the value of the underlying fuel cell project as assessed by the U.S. Internal Revenue Service (“IRS”). The Company does not believe that any such obligation is likely based on the facts known as of March 16, 2020. The maximum potential future payments that CCFC2 could have to make under these obligations would depend on the difference between the fair values of the fuel cell projects sold or financed and the values the IRS would determine as the fair value for the systems for purposes of claiming the Investment Tax Credit. The value of the Investment Tax Credit in the sale-leaseback agreements is based on guidelines provided by the statutory regulations from the IRS. The Company and Crestmark used fair values determined with the assistance of an independent third-party appraisal.

The Purchase Agreement and the Lease contain representations and warranties, affirmative and negative covenants, and customary events of default that entitle Crestmark to cause CCFC2’s indebtedness under the Lease to become immediately due and payable.

Pursuant to a Guaranty Agreement executed on February 11, 2020 by the Company for the benefit of Crestmark (the “Guaranty”), the Company has guaranteed the payment and performance of CCFC2’s obligations under the Lease.

In order to obtain the Orion Lenders’ consent to the Crestmark sale-leaseback transaction described above and to the use of certain proceeds from the Crestmark sale-leaseback transaction (the “Crestmark Proceeds”) as described below, the Company, the Agent, the Orion Lenders and the other loan parties entered into the Third Amendment to the Orion Credit Agreement (the “Third Orion Amendment”) dated February 11, 2020, and a Consent and Waiver dated February 11, 2020 (the “Consent and Waiver”). Pursuant to the Third Orion Amendment, TRS Fuel Cell, LLC was added as an Additional Covered Project Company (as defined in the Orion Credit Agreement), requiring the Company to pledge all of the assets of TRS Fuel Cell, LLC under the Orion Credit Agreement. In addition, pursuant to the Orion Credit Agreement (as modified by the Third Orion Amendment), all of the proceeds received by the Company from the Crestmark sale-leaseback transaction described above, after the payment of transaction costs, were deposited in the Company’s Project Proceeds Account, which account is restricted, with withdrawals permitted only with consent of the Agent for use to (i) prepay the loans under the Orion Credit Agreement or (ii) fund (x) construction costs, inventory or other capital expenditures for an Additional Covered Project (as defined in the Orion Credit Agreement) whose contracted cash flows (as determined in the Orion Lenders’ sole discretion) meet or exceed a coverage ratio acceptable to the Orion Lenders, and (y) inventory, working capital and other costs required in connection with the performance of purchase orders, service agreements and other binding customer agreements (as determined in the Orion Lenders’ sole discretion); provided, however, that, pursuant to the Third Orion Amendment, certain portions of the funds deposited in the Project Proceeds Account were used as follows: (a) $1.1 million of the Crestmark Proceeds were transferred to the Module Reserve Account (as defined in the Orion Credit Agreement) to fund module replacement costs for Covered Projects (as defined in the Orion Credit Agreement); (b) $0.1 million of the Crestmark Proceeds were transferred to the Debt Reserve Account; (c) $1.7 million of the Crestmark Proceeds were used to fund the quarterly cash interest due to the Orion Lenders under the Orion Credit Agreement; and (d) $1.1 million of the Crestmark Proceeds were used to fund the aggregate amount of the dividends on the Company’s Series B Preferred Stock and the Series 1 Preferred Shares of FCE Ltd. required to be paid in the second quarter of fiscal 2020. The remaining approximately $6.5 million of the Crestmark Proceeds will remain as restricted cash in the Project Proceeds Account and the Company expects to request the Orion Lenders’ consent to draw down all or a portion of such amount for future projects as permitted under the Orion Credit Agreement or use the funds to repay principal due under the Orion Credit Agreement over time. Pursuant to the Consent and Wavier, subject to the terms and conditions described above in the Third Orion Amendment, the Orion Lenders consented to the release of liens on those assets that were the subject of the Crestmark sale-leaseback transaction and to the Company’s entering into the Guaranty.PPP Note.

This Quarterly Report on Form 10-Q contains both historical and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks, uncertainties and assumptions. The statements contained in this report that are not purely historical are forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, including statements regarding our expectations, beliefs, intentions and strategies for the future. When used in this report, the words “expects,” “anticipates,” “estimates,” “goals,” “projects,” “intends,” “plans,” “believes,” “predicts,” “should,” “will,” “could,” “would,” “may,” “forecast,” and similar expressions and variations of such words are intended to identify forward-looking statements. Such statements relate to, among other things, the following: (i) the development and commercialization by FuelCell Energy, Inc. and its subsidiaries of fuel cell technology and products and the market for such products; (ii) expected operating results such as revenue growth and earnings; (iii) our belief that we have sufficient liquidity to fund our business operations for the next 12 months; (iv) future funding under Advanced Technologies contracts; (v) future financing for projects, including equity and debt investments by investors and commercial bank ~~financing;~~financing, as well as overall financial market conditions; (vi) the expected cost competitiveness of our technology; and (vii) our ability to achieve our sales plans, market access and market expansion goals, and cost reduction targets.

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 ~~contained~~described in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2019~~2020 and in the section below entitled “Item 1A. Risk Factors,” and the following risks and uncertainties: general risks associated with product development and manufacturing; general economic conditions; changes in the utility regulatory environment; changes in the utility industry and the markets for distributed generation, distributed hydrogen, and ~~carbon capture configured~~ fuel cell power ~~plants;~~plants configured for carbon capture or carbon sequestration; potential volatility of energy prices; availability of government subsidies and economic incentives for alternative energy technologies; our ability to remain in compliance with U.S. federal and state and foreign government laws and regulations and the listing rules of The Nasdaq Stock Market (“Nasdaq”); rapid technological change; competition; the risk that our ~~dependence on strategic relationships;~~bid awards will not convert to contracts or that our contracts will not convert to revenue; market acceptance of our products; changes in accounting policies or practices adopted voluntarily or as required by accounting principles generally accepted in the United States; factors affecting our liquidity position and financial condition; government appropriations; the ability of the government and third parties to terminate ~~its~~their development contracts at any time; the ability of the government to exercise “march-in” rights with respect to certain of our patents; the ~~situation~~arbitration and other legal proceedings with POSCO Energy ~~which has limited and continues to limit our efforts to access the South Korean and Asian markets and could expose us to costs of arbitration or litigation proceedings;~~Co., Ltd. (“POSCO Energy”); our ability to implement our strategy; our ability to reduce our levelized cost of energy and our cost reduction strategy generally; our ability to protect our intellectual property; litigation and other proceedings; the risk that commercialization of our products will not occur when anticipated; our need for and the availability of additional financing; our ability to generate positive cash flow from operations; our ability to service our long-term debt; our ability to increase the output and longevity of our power ~~plants;~~plants and to meet the performance requirements of our contracts; our ability to expand our customer base and maintain relationships with our largest customers and strategic business ~~allies.~~allies; changes by the U.S. Small Business Administration (the “SBA”) or other governmental authorities to, or with respect to the implementation or interpretation of, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Paycheck Protection Program or related administrative matters; and concerns with, threats of, or the consequences of, pandemics, contagious diseases or health epidemics, including the novel coronavirus (“COVID-19”), and resulting supply chain disruptions, shifts in clean energy demand, impacts to our customers’ capital budgets and investment plans, impacts to our project schedules, impacts to our ability to service existing projects, and impacts on the demand for our products.

We cannot assure you that: we will be able to meet any of our development or commercialization schedules; ~~we will be able to remain in compliance with the minimum bid price requirement of the Nasdaq listing rules;~~ any of our new products or ~~technology,~~technologies, once developed, will be commercially successful; our ~~existing~~ SureSource power plants will ~~remain~~be commercially successful; we will be able to obtain financing or raise capital to achieve our business plans; the government will appropriate the funds anticipated by us under our government contracts; the government will not exercise its right to terminate any or all of our government contracts; or we will be able to achieve any other result anticipated in any other forward-looking statement contained herein.

Investors are cautioned that ~~any such~~ forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond our ability to control, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors discussed herein. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Management’s Discussion and Analysis of Financial Condition and Results of Operations is provided as a supplement to the accompanying financial statements and footnotes to help provide an understanding of our financial condition, changes in our financial condition and results of operations. The preparation of financial statements and related disclosures requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and ~~liabilities.~~liabilities, as well as management’s assessment of the Company’s ability to meet its obligations as they come due over the next twelve months. Actual results could differ from those estimates. Estimates are used in accounting for, among other things, revenue recognition, contract loss accruals, excess, slow-moving and obsolete inventories, product warranty accruals, ~~loss accruals on service agreements,~~ share-based compensation expense, fair value measurements, allowance for doubtful accounts, depreciation and amortization, impairment of goodwill and ~~in-process research and development~~ intangible assets, impairment of long-lived assets (including project assets), ~~income taxes~~lease liabilities and ~~contingencies.~~right-of-use (“ROU”) assets and contingencies, and in management’s assessment of the Company’s ability to meet its obligations as they come due over the next twelve months. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates. The following discussion should be read in conjunction with information included in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2019~~2020 filed with the Securities and Exchange Commission (“SEC”). Unless otherwise indicated, the terms “Company”, “FuelCell Energy”, “we”, “us”, and “our” refer to FuelCell Energy, Inc. and its subsidiaries. All tabular dollar amounts are in thousands.

FuelCell Energy is a global leader in sustainable clean energy technologies that address some of the world’s most critical challenges around energy, safety, and global urbanization. As a leading global manufacturer of proprietary fuel cell technology platforms, we are uniquely positioned to serve customers worldwide with sustainable products and solutions for businesses, utilities, governments, and municipalities. Our solutions are designed to enable a world empowered by clean energy, enhancing the quality of life for people around the globe. We target large-scale power users with our megawatt-class installations globally, and currently offer sub-megawatt solutions for smaller power consumers in Europe. To provide a frame of reference, one megawatt is adequate to continually power approximately 1,000 average sized U.S. homes. Our customer base includes utility companies, municipalities, universities, hospitals, government entities/military bases and a variety of industrial and commercial enterprises. Our leading geographic markets are currently the United States and South Korea, and we are pursuing opportunities in other countries around the world.

FuelCell Energy, based in Connecticut, was founded ~~more than 50 years ago~~ in ~~1969.~~1969 as a New York corporation to provide applied research and development services on a contract basis. We completed our initial public offering in 1992 and reincorporated in Delaware in 1999. We began selling stationary fuel cell power plants commercially in 2003. ~~With more than 9.5~~

As disclosed in Note 16. “Debt” to the Consolidated Financial Statements, on April 20, 2020, we entered into a Paycheck Protection Program Promissory Note, dated April 16, 2020 (the “PPP Note”), evidencing a loan to the Company from Liberty Bank under the CARES Act, administered by the SBA. Pursuant to the PPP Note, the Company received total loan proceeds of approximately $6.5 million ~~megawatt hours~~on April 24, 2020 (the “PPP Loan”).

The PPP Note was scheduled to mature on April 16, 2022, had a 1.00% per annum interest rate, and was subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of clean electricity produced, FuelCell Energy is now a global leader in delivering environmentally-responsible distributed baseload power solutions through our proprietary, molten-carbonate fuel cell technology. Today, we develop turn-key distributed power generation solutions2020 (the “PPP Flexibility Act”). Monthly principal and ~~operate and~~interest payments, less the amount of any potential forgiveness, commenced on November 16, 2020. The Company did not provide ~~comprehensive service~~any collateral or guarantees for the ~~life~~PPP Note, nor did the Company pay any facility charge to obtain the PPP Note. The PPP Note could be prepaid at any time with no prepayment penalties.

Under the requirements of the ~~power plant.~~ ~~We are working to expand~~CARES Act, as amended by the ~~proprietary technologies that we~~PPP Flexibility Act, the proceeds could only be used for the Company’s eligible payroll costs (with salary capped at $100,000 on an annualized basis for each employee), rent, mortgage interest and utilities, in each case paid during the 24-week period following disbursement. The PPP Loan may have ~~developed over the past five decades into new products, markets and geographies.~~

Fiscal year 2019 was one of transformation for FuelCell Energy. We restructured our management team and our operations in ways that are intended to support our growth and achieve our profitability and sustainability goals. We raised capital under our at-the-market sales plan, which allowed usbeen fully forgiven if (i) proceeds were used to pay ~~down our accounts payable~~eligible payroll costs, rent, mortgage interest and ~~stay current on our forbearance agreements. We repaid a substantial portion of our short-term debt, retired our Series C~~utilities and ~~Series D Convertible Preferred Stock obligations,~~(ii) full-time employee headcount and refocused on our core competencies in an effort to drive top-line revenue. We believe we have emerged from a difficult fiscal 2019 as a stronger company, better positioned to execute on our business plan. Our recent achievements, accomplishedsalaries were either maintained during ~~one~~the 24-week period following disbursement or restored by December 31, 2020. If not so maintained or restored, any forgiveness of the ~~most stressful times~~PPP Loan would have been reduced in accordance with the ~~Company’s history, include: (a) closing on a new $200 million credit facility~~regulations issued by the SBA. All of the proceeds of the PPP Note were used by the Company to pay eligible payroll costs, and the Company maintained its headcount and otherwise complied with the terms of the PPP Note.

As required by Orion Energy Partners Investment Agent, LLC and its affiliated lenders ~~(b) executing a new Joint Development Agreement with ExxonMobil Research and Engineering Company (“EMRE”~~(collectively, “Orion”), with anticipated revenues of up to $60 million, (c) restructuring our business to realize annualized operating savings of approximately $15 million, (d) making progress in constructing certain projects in our backlog, including under the Connecticut Municipal Electric Energy Cooperative (“CMEEC”) project at the U.S. Navy base in Groton, Connecticut and the commissioning and startup of the 2.8 MW Tulare BioMAT project in California, (e) relaunching our sub-megawatt product in Europe, (f) executing a strategic relationship with E.On Business Solutions, an affiliate of one of the largest utilities in the world, to market and distribute our products beyond the two FuelCell Energy operating plants E.On already owns, (g) extending the maturity of the Class A Cumulative Redeemable Exchangeable Preferred Shares (the “Series 1 Preferred Shares”) issued by FCE FuelCell Energy Ltd. (“FCE Ltd.”) by one year, and (h) concluding our engagement with Huron Consulting Services, LLC after successful restructuring and payoff of our priorCompany’s (now former) senior secured credit ~~facility.~~

~~We will use this new focus coming out~~facility (which is referred to elsewhere herein as the Orion Facility), the Company applied for forgiveness of ~~our restructuring~~the PPP Loan in October 2020. However, with the repayment in full of all amounts owed to ~~advance our core goals of:~~

~~Our mission and~~ ~~purpose remains~~ to utilize our proprietary, state-of-the-art fuel cell power plants to reduce the global environmental footprint of baseload power generation by providing environmentally responsible solutions for reliable electrical power, hot water, steam, chilling, hydrogen, microgrid applications, and carbon capture and, in so doing, drive demand for our products and services, thus realizing positive stockholder returns.

On February 11, ~~2020, a wholly owned subsidiary of~~2021, the Company ~~entered into a Purchase~~withdrew its application for forgiveness and Sale Agreement (the “Purchase Agreement”) and an Equipment Lease Agreement (the “Lease”) with Crestmark Equipment Finance, a division of MetaBank (“Crestmark”). Under these agreements, the Company’s subsidiary, Central CA Fuel Cell 2, LLC (“CCFC2”), sold the 2.8 MW fuel cell power plant (the “Plant”) located at the Tulare wastewater treatment plant in Tulare, California to Crestmark and then leased the Plant back from Crestmark through this sale-leaseback transaction. The Plant was designed, manufactured and installed by the Company, and commercial operations began on December 27, 2019. In operating the Plant, CCFC2 purchases biogas from the City of Tulare and will sell the power produced by the Plant to Southern California Edison under a twenty year power purchase agreement under the California Bioenergy Market Adjusting Tariff, which was separately entered into on April 20, 2018 (the “Tulare PPA”).

Under the terms of the Purchase Agreement, Crestmark paid CCFC2 an aggregate purchase price of $14.4 million. A portion of these proceeds were used by CCFC2 to make a down payment and an initial rental payment under the Lease totaling $2.9 million to Crestmark, and to pay taxes, to pay transaction costs and to fund a debt service reserve totaling approximately $1.0 million, resulting in net proceeds to CCFC2 of approximately $10.5 million. These net proceeds (also discussed under “Third Amendment to Orion Credit Agreement” below) were allocated as follows:

~~Pursuant to the Lease, CCFC2 has an obligation to indemnify Crestmark for the amount of any actual reduction in the U.S. Investment Tax Credit anticipated to be realized by Crestmark~~limited public exposure in connection with the ~~foregoing sale-leaseback transaction. Such obligations would arise as a result of reductions~~COVID-19 pandemic. All employees that were not able to work from home during the ~~value of the underlying fuel cell project as assessed by the U.S. Internal Revenue Service (“IRS”).~~manufacturing facility shutdown due to their job function received full wages and benefits during such time. We did not implement any furlough, layoff or shared work program during such time. The Company ~~does not believe that any such obligation is likely~~resumed manufacturing in June 2020 and the Torrington, Connecticut manufacturing facility employees returned to work. We have established a phased-in return to work schedule commencing March 15, 2021 for those employees working from home. We continue to evaluate our ability to operate in light of recent resurgences of COVID-19 and the advisability of continuing operations based on federal, state and local guidance, evolving data concerning the facts known as of March 16, 2020. The maximum potential future payments that CCFC2 could have to make under these obligations would depend on the difference between the fair values of the fuel cell projects sold or financedpandemic and the ~~values the IRS would determine as the fair value for the systems for purposes~~best interests of ~~claiming the Investment Tax Credit. The value of the Investment Tax Credit in the sale-leaseback agreements is based on guidelines provided by the statutory regulations from the IRS. The Company~~our employees, customers and ~~Crestmark used fair values determined with the assistance of an independent third-party appraisal.~~stockholders.

Management evaluates our results of operations and cash flows using a variety of key performance indicators, including revenues compared to prior periods and internal forecasts, costs of our products and results of our cost reduction initiatives, and operating cash use. These are discussed throughout the “Results of Operations” and “Liquidity and Capital Resources” sections. Results of Operations are presented in accordance with accounting principles generally accepted in the United States (“GAAP”).

Our revenues and cost of revenues for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Total revenues for the three months ended January 31, ~~2020~~2021 of ~~$16.3~~$14.9 million reflects a decrease of ~~$1.5~~$1.4 million from ~~$17.8~~$16.3 million ~~during~~for the same period in the prior year. Cost of revenues for the three months ended January 31, ~~2020~~2021 of ~~$13.0~~$18.5 million reflect a ~~$7.0~~$5.5 million ~~decrease~~increase from ~~$20.0~~$13.0 million ~~during~~for the same period in the prior year. A discussion of the changes in product revenues, service and license revenues, generation revenues and Advanced Technologies contract revenues follows.

Our product revenues, cost of product revenues and gross loss from product revenues for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

There was no product revenue during the three months ended January 31, ~~2020~~2021 and ~~2019.~~ 2020.

Cost of product revenues ~~decreased $1.4~~increased $0.4 million for the three months ended January 31, ~~2020~~2021 to ~~$2.0~~$2.4 million, compared to ~~$3.4~~$2.0 million in the same period in the prior year. Both periods were impacted by the under-absorption of fixed overhead costs due to low production ~~volumes, but there were lower overall manufacturing costs for the three months ended January 31, 2020 due to the Company’s reduction in workforce that was implemented during 2019.~~volumes. Manufacturing variances, primarily related to low production volumes and ~~other charges,~~unabsorbed overhead costs, totaled approximately $2.0 million for the three months ended January 31, 2021 compared to approximately $1.7 million for the three months ended January 31, ~~2020 compared to approximately $3.2 million for the three months ended January 31, 2019.~~ 2020.

For the three months ended January 31, ~~2020,~~2021, we operated at an annualized production rate of approximately ~~20 MW~~22.4 megawatts (“MW”), which is ~~a reduction~~an increase from the ~~prior year annual~~annualized production rate of ~~25 MW.~~

20 MW for the three months ended January 31, 2020. As of January 31, 2021 and January 31, 2020, there was no product sales ~~backlog compared to $1,000 of product sales backlog as of January 31, 2019.~~backlog.

Service agreements and license revenues and related costs for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Revenues for the three months ended January 31, ~~2020~~2021 from service agreements and license fee and royalty agreements decreased ~~$6.2~~$0.7 million to ~~$5.6~~$4.9 million from ~~$11.8~~$5.6 million for the three months ended January 31, ~~2019. Service~~2020. The service and license revenues decreased primarily as a result of the fact that there was no revenue recorded in connection with module replacements during the three months ended January 31, 2020. In addition, the three months ended January 31, 2019 included revenue recorded for the Bridgeport Fuel Cell Project service agreement. As a result of the purchase by the Company of the Bridgeport Fuel Cell Project on May 9, 2019, revenue under this service agreement is no longer being recognized. Service and license revenue for the three months ended January 31, 2021 include revenues recorded for module replacements and routine maintenance activities. For the three months ended January 31, 2020, service and license revenues primarily includes license revenues of $4.0 million associated with the Joint Development Agreement entered into with ~~EMRE~~ExxonMobil Research and Engineering Company (“EMRE”) on November 5, ~~2019.~~2019 (the “EMRE Joint Development Agreement”) and $1.6 million associated with routine monitoring and maintenance activities for the three months ended January 31, 2020 for projects under service agreements.

Cost of service agreements and license revenues ~~decreased $10.7~~increased $3.5 million to $5.1 million for the three months ended January 31, 2021 from $1.6 million for the three months ended January 31, 2020, resulting from ~~$12.3 million for~~module replacements in the three months ended January 31, ~~2019, due~~2021 compared to ~~the fact that there were~~ no module replacements in the three months ended January 31, 2020. Cost of service agreements includes maintenance and operating costs and module exchanges.

Overall gross ~~profit~~loss from service agreements and license revenues was $0.2 million for the three months ended January 31, 2021, which represents a decrease of $4.2 million from a gross profit of $4.0 million for the three months ended January 31, ~~2020, which represents an increase of $4.5 million from a~~2020. The overall gross ~~loss of $0.5 million~~margin percentage was (3.8)% for the three months ended January 31, ~~2019. This increase is primarily~~2021 compared to a ~~result of the license revenues associated with the Joint Development Agreement entered into with EMRE. The overall~~ gross margin ~~percentage was~~of 71.2% in the prior year period. Gross margin decreased during the three months ended January 31, 2021 primarily because gross margin for the three months ended January 31, 2021 included residual value charges for certain plants which had reached the end of their service term and an increase in performance guarantees whereas gross margin for the three months ended January 31, 2020 ~~compared to a gross loss of 4.6%~~included license revenues associated with the EMRE Joint Development Agreement which resulted in ~~the prior year period.~~ positive margins.

As of January 31, ~~2020,~~2021, service and license backlog totaled approximately ~~$190.5~~$163.9 million, compared to ~~$291.2~~$190.5 million as of January 31, ~~2019. Service and license backlog does not include future variable royalties.~~2020. This backlog relates to service agreements of up to twenty years and is expected to generate positive margins and cash flows based on current estimates. The decrease in service backlog is primarily due to the acquisition of the Bridgeport Fuel Cell Project, as the service backlog of $30.4 million previously remaining for such project was eliminated. This acquisition resulted in additional revenue to be recorded under the power purchase agreement (“PPA”) as compared to the service agreement. Service backlog also includes future license revenue.

Generation revenues and related costs for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Revenues from generation for the three months ended January 31, ~~2020~~2021 totaled ~~$5.4~~$4.9 million, which represents ~~an increase~~a decrease of ~~$3.9~~$0.6 million from revenue recognized of ~~$1.5~~$5.4 million for the three months ended January 31, ~~2019.~~2020, which is primarily a result of several of the Bridgeport Fuel Cell Project plants having been temporarily shut-down during the three month period ending January 31, 2021 for scheduled module exchanges. Generation revenues for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 reflect revenue from electricity generated under our PPAs. Generation revenues increased for the three months ended January 31, 2020 compared to the same period in the prior year due to additional revenue recorded for the PPA associated with the Bridgeport Fuel Cell Project, which was acquired on May 9, 2019.power purchase agreements (“PPAs”). Cost of generation revenues totaled ~~$5.6~~$7.1 million in the three months ended January 31, ~~2020,~~2021, which represents an increase from the comparable prior year ~~period.~~period primarily due to an increase in depreciation and amortization expense. Cost of generation revenues included depreciation and amortization of approximately ~~$2.6~~$4.4 million and ~~$1.0~~$3.3 million for the three months ended January 31, 2021 and 2020, ~~and 2019,~~ respectively.

We had ~~28.9~~32.6 MW of operating power plants in our portfolio as of January 31, ~~2020,~~2021, compared to ~~11.2~~28.9 MW as of January 31, ~~2019.~~2020. This increase is ~~primarily~~ a result of the ~~acquisition~~commencement of operations at the ~~Bridgeport Fuel Cell Project.~~Triangle Street plant during the second quarter of fiscal year 2020.

As of January 31, ~~2020,~~2021, generation backlog totaled approximately $1.1 billion ~~compared to $982.4 million~~which changed slightly from generation backlog as of January 31, ~~2019.~~ 2020 as a result of revenue recognition.

Advanced Technologies contract revenues and related costs for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Advanced Technologies contract revenues ~~for the three months ended January 31, 2020 were $5.2 million, which reflects an increase of $0.7 million when compared~~decreased 3% to $4.5 million of revenues for the three months ended January 31, 2019. Advanced Technologies contract revenues were higher for the three months ended January 31, 2020 due to the timing of activity under existing contracts as well as the addition of the Company’s Joint Development Agreement with EMRE (which was executed during the first quarter of fiscal 2020). Cost of Advanced Technologies contract revenues increased $1.2 million to $3.8$5.1 million for the three months ended January 31, 2021 from $5.2 million for the three months ended January 31, 2020. Compared to the three months ended January 31, 2020, Advanced Technologies contract revenues recognized under the EMRE Joint Development Agreement were approximately $0.3 million higher during the three months ended January 31, 2021, reflecting continued advancement of our joint research with EMRE on fuel cell carbon capture solutions during the quarter. However, the increased revenues under the EMRE Joint Development Agreement were offset by the $0.4 million less revenue recognized under government contracts during the three months ended January 31, 2021 than during the three months ended January 31, 2020. Cost of Advanced Technologies contract revenues increased $0.1 million to $3.9 million for the three months ended January 31, 2021, compared to ~~$2.6~~$3.8 million for the same period in the prior year. Advanced Technologies contracts for the three months ended January 31, ~~2020~~2021 generated a gross margin of ~~$1.4~~$1.2 million compared to a gross margin of ~~$1.9~~$1.4 million for the three months ended January 31, ~~2019.~~2020. The slight decrease in Advanced Technologies contract gross margin is related to the ~~timing and~~ mix of government contracts which ~~were more heavily weighted to~~resulted in a higher cost share ~~agreements performed during~~incurred by the Company on such contracts in the three months ended January 31, ~~2020,~~2021 compared to the ~~same period in the prior year.~~three months ended January 31, 2020.

As of January 31, ~~2020,~~2021, Advanced Technologies backlog totaled approximately ~~$64.6~~$44.1 million, compared to ~~$37.0~~$64.6 million as of January 31, ~~2019.~~2020. This ~~increase was primarily a result of~~decrease relates to revenue recognized on existing contracts including the EMRE Joint Development ~~Agreement with EMRE.~~ Agreement.

Administrative and selling expenses were ~~$5.3~~$8.9 million and ~~$6.8~~$5.3 million for the three months ended January 31, 2021 and 2020, respectively. The three months ended January 31, 2021 included additional expense for stock compensation of $0.8 million due to the grants made in August 2020 and ~~2019, respectively. The decrease from~~November 2020 under our new Long Term Incentive Plans (the “LTI Plans”) (refer to Note 17. “Benefit Plans” to the ~~same period~~Consolidated Financial Statements for more information on the November 2020 grants) and an increase in the value of a deferred director compensation liability due to an increase in the Company’s share price. The comparable prior year ~~primarily relates to~~period included a legal settlement of $2.2 million ~~received during the three months ended January 31, 2020,~~ which was recorded as an offset to administrative and selling expenses.

Research and development expenses ~~decreased~~increased to ~~$1.2~~$1.8 million for the three months ended January 31, ~~2020~~2021 compared to ~~$6.3~~$1.2 million during the three months ended January 31, ~~2019.~~2020. The ~~decrease related~~increase relates to an increase in spending on the Company’s hydrogen commercialization initiatives compared to the ~~reduction in spending resulting from the~~comparable prior year period, which prior year period was also impacted by restructuring initiatives implemented in 2019 ~~and the reduction in the resources being allocated to research and development (as~~as resources were instead allocated to ~~funded~~fund Advanced Technologies ~~projects).~~projects. During the quarter ended January 31, 2021, the Company successfully commenced operation and testing of a prototype solid oxide electrolysis hydrogen platform in Danbury, Connecticut.

Loss from operations for the three months ended January 31, ~~2020~~2021 was ~~$3.1~~$14.4 million compared to ~~$15.2~~$3.1 million for the three months ended January 31, ~~2019.~~2020. The ~~decrease in the~~ loss from operations for the three months ended January 31, 2021 was primarily a result of ~~higher~~the gross ~~profit~~loss recorded, which was driven primarily by (i) the fact that there were no license revenues recorded in the three months ended January 31, 2021 compared to the three months ended January 31, 2020 which included $4.0 million recognized under our License Agreement with EMRE, and ~~lower operating~~(ii) unfavorable margins associated with generation as a result of additional depreciation and amortization recognized for the three months ended January 31, 2021. In addition, loss from operations for the three months ended January 31, 2020 included a $2.2 million legal settlement that offset administrative and selling expenses, whereas administrative and selling expenses for the three months ended January 31, ~~2020.~~2021 included additional stock compensation expense under the LTI Plans and an increase in the value of the deferred director compensation liability due to an increase in the Company’s share price.

Interest expense for the three months ended January 31, 2021 and 2020 ~~and 2019~~ was ~~$3.3~~$2.5 million and ~~$2.5~~$3.3 million, respectively. Interest expense for both periods presented includes interest ~~expense~~ related to sale-leaseback transactions and on the loans outstanding associated with the Bridgeport Fuel Cell Project. Interest expense for both periods also includes interest for the amortization of the redeemable preferred stock of subsidiary fair value discount. Amounts owed pursuant to the terms of the redeemable preferred stock were paid, in full, in December 2020. The ~~increase~~decrease in interest expense ~~during~~for the three months ended January 31, ~~2020 represents additional interest on~~2021 is primarily due to the repayment of the $80.0 million principal balance outstanding under ~~our~~the Orion Credit Agreement, ~~with Orion Energy Partners Investment Agent, LLC and its affiliated lenders and interest~~which was fully repaid in December 2020.

Loss on ~~the loans made by Fifth Third Bank and Liberty Bank in connection~~extinguishment of debt

The loss on extinguishment of debt represents costs associated with the ~~acquisition~~repayment of the ~~Bridgeport Fuel Cell Project.~~$80.0 million principal balance outstanding under the Orion Credit Agreement. The ~~interest expense during~~amount includes an early prepayment penalty of $4.0 million and the ~~three months ended January 31, 2019 included interest on outstanding amounts under our loan~~write-off of debt discounts and ~~security agreement with Hercules Capital, Inc.~~deferred finance costs of $7.2 million.

A charge of $0.9 million was recorded for the extinguishment of preferred stock obligation of subsidiary to adjust for the difference between the amount of the payoff of the obligation and ~~outstanding amounts under our construction loan agreement with Generate Lending, LLC.~~the carrying amount of the Series 1 Preferred Share obligation.

The $16.0 million expense for the three months ended January 31, 2021 represents an adjustment to the estimated fair value of the remaining Orion Warrants which were exercised, in full, during the three months ended January 31, 2021. The $34.2 million expense for the three months ended January 31, 2020 represents an adjustment to the estimated fair value of the warrants issued to the lenders under our Credit Agreement with Orion Energy Partners Investment Agent, LLC and its affiliated lenders based on a Black-Scholes model. The adjustment included $23.7 million for ~~warrants~~Orion Warrants that were converted during the ~~quarter~~period and $10.5 million for ~~warrants~~Orion Warrants that were still outstanding as of January 31, 2020. ~~The expense is primarily a result of an increase in the stock price during the quarter compared to the stock price used in the Black-Scholes model upon issuance of the warrants.~~

Other (expense) income, net was ($1.0) million and other (expense) income, net was $0.5 ~~million and $0.2~~ million for the three months ended January 31, ~~2020~~2021 and ~~2019,~~2020, respectively. Other (expense) income, net for the three months ended January 31, 2021 primarily relates to a foreign exchange loss of $0.8 million related to the remeasurement of the Canadian Dollar denominated preferred stock obligation of our U.S. Dollar functional currency Canadian subsidiary prior to the payoff of the preferred share obligation in December 2020. Other (expense) income, net for the three months ended January 31, 2020 primarily relates to a net non-cash gain on the extinguishment accounting related to the modification of the Series 1 Preferred ~~Stock~~Shares and the extinguishment related to the embedded derivatives. ~~Refer to Note 13. Redeemable Preferred Stock for additional information.~~

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. ~~Income tax recorded for the three months ended January 31, 2020 was $0.02 million.~~ There was no provision for income tax recorded for the three months ended January 31, ~~2019.~~2021 compared to $0.02 million for the three months ended January 31, 2020.

Dividends recorded on our 5% Series B Cumulative Convertible Perpetual Preferred Stock (“Series B Preferred Stock”) were ~~$0.9~~$0.8 million and ~~$0.8~~$0.9 million for the ~~three month~~three-month periods ended January 31, 2021 and 2020, ~~and 2019,~~ respectively.

~~During the three months ended January 31, 2019, conversions of our Series C Convertible Preferred Stock (“Series C Preferred Stock”)~~ ~~resulted~~ in a variable number of shares of our common stock being issued to settle the conversion amounts and were treated as a partial redemption of our Series C Preferred Stock. Conversions during the three months ended January 31, 2019 that were settled in a variable number of shares and treated as partial redemptions resulted in deemed dividends of $0.5 million. The deemed dividends represent the difference between the fair value of the common shares issued to settle the conversion amounts and the carrying value of the Series C Preferred Stock. A charge to common stockholders of $8.6 million was recorded during the three months ended January 31, 2019 because of equity conditions failures under the Certificate of Designations for the Series C Preferred Stock. The last outstanding shares of Series C Preferred Stock were converted into common stock on May 23, 2019, so there were no shares of Series C Preferred Stock outstanding during the three months ended January 31, 2020.

~~During the three months ended January 31, 2019, conversions of our Series D Convertible Preferred Stock (“Series D Preferred Stock”) in which the conversion price~~ ~~was below the initial conversion price (as adjusted for the reverse stock split) of $16.56 per share resulted~~ in a variable number of shares of our common stock being issued to settle the conversion amounts and are treated as a partial redemption of the shares of our Series D Preferred Stock. Conversions during the three months ended January 31, 2019 that were settled in a variable number of shares and treated as redemptions resulted in deemed dividends of $1.9 million. The deemed dividends represent the difference between the fair value of the common shares issued to settle the conversion amounts and the carrying value of the Series D Preferred Stock. Redemption accretion was recorded during the three months ended January 31, 2019 of $3.8 million. The last outstanding shares of Series D Preferred Stock were converted into common stock on October 1, 2019, so there were no shares of Series D Preferred Stock outstanding during the three months ended January 31, 2020.

Net loss attributable to common stockholders for the quarter ended January 31, 2021 represents the net loss for the period less the preferred stock dividends on the Series B Preferred ~~Stock, the preferred stock deemed dividends and redemption value adjustment on the Series C Preferred Stock and the Series D Preferred Stock deemed dividends and redemption accretion.~~Stock. For the ~~three month~~three-month periods ended January 31, ~~2020~~2021 and ~~2019,~~2020, net loss attributable to common stockholders was ~~$41.1~~$46.8 million and ~~$33.0~~$41.1 million, respectively, and loss per common share was ~~$0.20~~$0.15 and ~~$3.97,~~$0.20, respectively. The increase in the net loss attributable to common stockholders for the three months ended January 31, 2021 is primarily due to incurring (i) a gross loss for the period compared to a gross profit for the corresponding period in fiscal year 2020, (ii) higher operating expenses for the period due to the fact that there were no offsets comparable to the $2.2 million legal settlement received during the corresponding period in fiscal year 2020, which offset administrative and selling expenses, (iii) higher operating expenses for the period including additional stock compensation expenses under the LTI Plans and an increase in the value of the deferred director compensation liability due to an increase in the Company’s share price, (iv) an $11.2 million loss recorded on the extinguishment of the Orion Facility, and (v) a $1.5 million charge for the extinguishment of the preferred stock obligation of subsidiary. These amounts were offset by lower interest expense as a result of the repayment of the Orion Facility and a lower charge for the change in fair value of common stock warrant liability. The lower loss per common share for the three months ended January 31, 2021 as compared to the three months ended January 31, 2020 is ~~primarily~~ due to the ~~change in fair value of the common stock warrant liability discussed above, partially offset by higher gross profit and lower operating expenses. The lower loss per common share is due to~~ higher weighted average shares outstanding ~~due to~~as of January 31, 2021 as a result of share issuances since January 31, ~~2019.~~

Our principal sources of cash ~~equivalents,~~have been sales of our common stock through public equity offerings, proceeds from third party debt such as borrowings under our credit facilities, project financing and ~~restricted~~tax monetization transactions, proceeds from the sale of our projects as well as research and development and service and license agreements with third parties. We have utilized this cash ~~totaled $73.9 million as~~to develop and construct power plants, perform research and development on Advanced Technologies, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs.

As of January 31, ~~2020~~2021, unrestricted cash and cash equivalents totaled $178.6 million compared to ~~$39.8~~$149.9 million as of October 31, ~~2019, consisting of:~~2020.

In December 2020, the Company closed an underwritten offering of 25.0 million shares of the Company’s common stock. Net proceeds to the Company were approximately $156.4 million after deducting underwriting discounts and commissions and other offering expenses. Proceeds from this offering have been utilized as follows:

We believe that our unrestricted cash and cash equivalents, expected receipts from our contracted backlog, and release of ~~$38.3 million as of January 31, 2020 compared to $9.4 million as of October 31, 2019.~~

To date, we have not achieved profitable operations or sustained positive cash flow from operations. The Company’s future liquidity will ~~be dependent~~depend on its ability to (i) timely complete current projects in process within budget, ~~including approved amounts that have been financed, as financing does not cover overages,~~ (ii) increase cash flows from its generation portfolio, including by meeting conditions required to timely commence ~~operations~~operation of new projects, ~~and~~ operating its generation portfolio in compliance with minimum performance guarantees and operating its generation portfolio in accordance with revenue expectations, (iii) obtain ~~approval of and receive funding~~financing for project construction, ~~under~~(iv) obtain permanent financing for its ~~Credit Agreement with Orion Energy Partners Investment Agent, LLC and its affiliated lenders and meet conditions for release of funds, (iv)~~projects once constructed, (v) increase order and contract volumes, which would lead to additional product sales, service agreements and ~~services agreements, (v)~~generation revenues, (vi) obtain funding for and receive payment for research and development under current and future Advanced ~~Technology~~Technologies contracts and to successfully commercialize our Advanced Technologies platforms, including ~~achieving a $5 million technological performance milestone under its Joint Development Agreement with EMRE during calendar year 2020, and (vi)~~our solid oxide platform, (vii) implement the product cost reductions necessary to achieve profitable ~~operations.~~ operations, (viii) manage working capital and the Company's unrestricted cash balance and (ix) access the capital markets to raise funds through the sale of equity securities, convertible notes, and other equity-linked instruments, all of which will require an increase in authorized shares, and/or other debt instruments.

Our business model requires substantial outside financing arrangements and satisfaction of the conditions of such financing arrangements to construct and deploy our projects and facilitate the growth of our business. The Company expects to seek lower-cost long-term debt and tax equity (e.g., sale-leaseback and partnership transactions) for its project asset portfolio as these projects commence commercial operations. The proceeds of any such financing, if obtained, may allow the Company to fund other projects. We may also seek to obtain additional financing in both the debt and equity markets in the future. If financing is not available to us on acceptable terms if and when needed, or on terms acceptable to us or our lenders, if we do not satisfy the conditions of our financing arrangements, or if we spend more than the financing approved for projects, if project costs exceed an amount that the Company can finance, or if we do not generate sufficient revenues or obtain capital sufficient for our corporate needs, we may be required to reduce or slow planned spending, reduce staffing, sell assets, seek alternative financing and take other measures, any of which could have a material adverse effect on our financial condition and operations.

~~The key definitive agreements which support the Company’s future liquidity position include:~~

As of January 31, ~~2020,~~2021, we had ~~14,034,171~~15,093,242 shares of common stock available for issuance, excluding treasury stock, of which ~~10,275,873~~5,185,674 shares were reserved for issuance under various ~~convertible securities, options,~~warrants and ~~warrants,~~equity awards, upon conversion of preferred stock, and under our employee stock purchase and equity incentive ~~plans, and under our at-the-market sales plan.~~plans. The limited number of shares of our common stock available for issuance ~~limits~~will limit our ability to raise capital in the equity markets and satisfy obligations with shares instead of cash, which could adversely ~~impact our ability to fund~~affect our business and operations. We ~~must obtain~~are seeking stockholder approval to increase the number of shares of common stock we are authorized to issue ~~under our Certificate~~at the Company’s Annual Meeting of ~~Incorporation, as amended. In our definitive proxy statement, which was filed~~Stockholders on February 14, 2020, the Board of Directors has requested that our stockholders vote to approve a 112,500,000 increase in the number of authorized shares of common stock, which would bring the total number of authorized shares of common stock to 337,500,000.April 8, 2021, but such approval may not be obtained.

~~While there can be no assurances, we anticipate raising additional required capital from new and existing investors and lenders.~~ ~~We expect to~~ work with lenders and financial institutions to secure long-term debt, tax equity and sale-leasebacks for our project asset portfolio as we achieve the commercial operation dates for these projects. This financing, if received, may allow the Company to recycle capital from these projects by reinvesting the capital in other projects (subject to the approval of the lenders and the Agent under the Orion Facility) and to pay down the Orion Facility over time. There can be no assurance that the Company can obtain such financing on terms acceptable to the Company or that the lenders and the Agent under the Orion Facility will consent to such financing. ~~If the Company is unable to obtain such financing or raise additional capital, the Company may reduce its expenditures or slow its project spending.~~ ~~If the Company cannot obtain such financing, cannot obtain such financing on terms acceptable to the Company~~, or cannot obtain the necessary consents to such financing under the Orion Facility, it would negatively impact the Company’s business model, operations, and liquidity. It should also be noted that the lenders and the Agent under the Orion Facility have broad approval rights over our ability to draw, allocate and use funds from the Orion Facility, including funds in our unrestricted cash and cash equivalents accounts that are expected to be spent for project asset development and to satisfy service and maintenance obligations.

To grow our generation portfolio, the Company will invest in developing and building turn-key fuel cell projects which will be owned by the Company and classified as project assets on the balance sheet. This strategy requires liquidity and the Company expects to continue to have increasing liquidity requirements as project sizes increase and more projects are added to backlog. We may commence building project assets upon the award of a project or execution of a multi-year PPA with an end-user that has a strong credit profile. Project development and construction cycles, which span the time between securing a PPA and commercial operation of the plant, vary substantially and can take years. As a result of these project cycles and strategic decisions to finance the construction of certain projects, we may need to make significant up-front investments of resources in advance of the receipt of any cash from the sale or long-term financing of such projects. ~~These~~To make these up-front investments, we may ~~include using~~use our working capital, ~~availability under our construction financing facilities~~seek to raise funds through the sale of equity or debt securities, or seek other financing arrangements. Delays in construction progress and completing current projects in process within budget, or in completing financing or the sale of our projects may impact our liquidity in a material way.

Our operating portfolio ~~(28.9~~(32.6 MW as of January 31, ~~2020)~~2021) contributes higher long-term cash flows to the Company than if these projects had been sold. These projects currently generate approximately ~~$22.0~~$19.9 million per year in annual revenue, but this amount may fluctuate from year to year depending on plant output, ~~operations~~operational performance and management and site conditions. The Company plans to continue to grow this portfolio while also selling projects to investors. As of January 31, ~~2020,~~2021, the Company had projects representing an additional ~~44.3~~40.7 MW ~~under~~in various stages of development and construction, which projects are expected to generate operating cash flows in future ~~periods.~~periods, if completed. Retaining long-term cash flow positive projects, combined with our service fleet, is expected to result in reduced reliance on new project sales to achieve cash flow positive operations, however, operations and performance issues could impact results. The Company expects to finance the construction of the projects still under development and construction using proceeds from the Orion Facility, subject to lender approval, satisfaction of conditions for release of funding, including third party consents, and keeping project costs within approved budgets. We have worked with and are continuing to work with ~~other~~ lenders and financial institutions to secure construction financing, long-term debt, tax equity and sale-leasebacks for our project asset portfolio, but there can be no assurance that such financing can be attained, or that, if attained, it will be retained and sufficient.

As of January 31, ~~2020, we have financed four projects through sale-leaseback transactions.~~

~~As of January 31, 2020, total financing obligations and~~2021, net debt outstanding related to project assets ~~under the sale lease-back transactions~~ was ~~$44.8~~$70.7 million. Future required payments totaled ~~$16.3~~$62.7 million as of January 31, ~~2020.~~2021. The outstanding financing obligation under ~~the~~our sale-leaseback transactions, which totaled $49.3 million as of January 31, 2021, includes an embedded gain of $30.1 million, which will be recognized at the end of ~~each respective~~the applicable lease ~~term.~~terms. As noted above, in December 2020, the Company repaid all amounts outstanding under the Orion Credit Agreement and terminated the Orion Facility.

Our operating portfolio provides us with the full benefit of future cash flows, net of any debt service requirements.

The following table summarizes our operating portfolio as of January 31, ~~2020:~~2021:

Project Name

Location

Power Off-Taker

Rated

Capacity

(MW)

Actual

Commercial

Operation Date

(FuelCell Energy

Fiscal Quarter)

PPA Term

(Years)

Location

Power Off-Taker

Rated

Capacity

(MW)

Actual

Commercial

Operation Date

(FuelCell Energy

Fiscal Quarter)

PPA Term

(Years)

Central CT State University

(“CCSU”)

New Britain, CT

CCSU (CT University)

1.4

Q2 ‘12

New Britain, CT

CCSU (CT University)

1.4

Q2 ‘12

UCI Medical Center (“UCI”)

Orange, CA

UCI (CA University Hospital)

1.4

Q1 '16

Orange, CA

UCI (CA University Hospital)

1.4

Q1 '16

Riverside Regional Water

Quality Control Plant

Riverside, CA

City of Riverside (CA Municipality)

1.4

Q4 '16

Riverside, CA

City of Riverside (CA Municipality)

1.4

Q4 '16

Pfizer, Inc.

Groton, CT

Pfizer, Inc.

5.6

Q4 '16

Groton, CT

Pfizer, Inc.

5.6

Q4 '16

Santa Rita Jail

Dublin, CA

Alameda County, California

1.4

Q1 '17

Dublin, CA

Alameda County, California

1.4

Q1 '17

Bridgeport Fuel Cell Project

Bridgeport, CT

Connecticut Light and Power Company (CT Utility)

14.9

Q1 '13

Bridgeport, CT

Connecticut Light and Power Company (CT Utility)

14.9

Q1 '13

Tulare BioMAT

Tulare, CA

Southern California Edison (CA Utility)

2.8

Q1 '20

Tulare, CA

Southern California Edison (CA Utility)

2.8

Q1 '20

Triangle Street

Danbury, CT

Tariff - Eversource (CT Utility)

3.7

Q2 '20

Tariff

Total MW Operating:

28.9

Total MW Operating:

32.6

The following table summarizes projects in process, ~~including those~~all of which are in backlog, ~~and awards,~~ as of January 31, ~~2020:~~2021:

The projects listed in the above table are in various stages of development or on-site construction and installation. ~~The Triangle Street~~Current project ~~is undergoing~~updates are as follows:

Subsequent to the end of the quarter, the Company entered into a 20 year PPA with United Illuminating for a 2.8 MW project in Derby, CT, which was awarded to the Company as part of the state-sponsored Shared Clean Energy Facility program. This FuelCell Energy power plant will supply 2.8 MW of clean power to the Connecticut electric grid. This contract is not included in the Company’s backlog as of January 31, 2021, but is expected to ~~reach commercial operations~~add $59.4 million in ~~our second fiscal quarter of 2020.~~future revenue to the Company’s reported generation backlog going forward. The ~~Groton Sub Base~~clean baseload power generated by this 2.8 MW platform will be enough to power approximately 3,000 homes with continuous clean energy. The next steps in developing the project ~~is under construction. The Company expects to begin the construction process during fiscal 2020 for the San Bernardino, LIPA 1~~include obtaining siting approvals and ~~CT RFP-2 projects in order to achieve the estimated commercial operations dates.~~interconnection agreements, and finalizing site engineering.

Backlog represents definitive agreements executed by the Company and our customers. Projects for which we have a PPA are included in generation backlog, which represents future revenue under long-term PPAs. Projects sold to customers (and not retained by the Company) are included in product sales and service agreements and license backlog and the related generation backlog is removed upon sale.

Factors that may impact our liquidity in fiscal year ~~2020~~2021 and beyond include:

Cash and cash equivalents and restricted cash and cash equivalents totaled ~~$73.9~~$209.6 million as of January 31, ~~2020~~2021 compared to ~~$39.8~~$192.1 million as of October 31, ~~2019.~~2020. As of January 31, ~~2020,~~2021, restricted cash and cash equivalents was ~~$35.7~~$31.0 million, of which ~~$8.2~~$12.2 million was classified as current and ~~$27.5~~$18.8 million was classified as non-current, compared to ~~$30.3~~$42.2 million in restricted cash and cash equivalents as of October 31, ~~2019,~~2020, of which ~~$3.5~~$9.2 million was classified as current and ~~$26.9~~$33.0 million was classified as non-current.

Operating Activities – Net cash used in operating activities was ~~$6.5~~$30.3 million during the three months ended January 31, ~~2020,~~2021, compared to ~~$12.0~~$6.5 million of net cash used in operating activities during the three months ended January 31, ~~2019.~~ 2020.

Net cash used in operating activities for the three months ended January 31, 2021 was primarily a result of the net loss of $46.0 million, increases in inventories of $8.6 million, unbilled receivables of $3.5 million, other assets of $1.0 million, and accounts receivable of $0.5 million and decreases in accrued liabilities of $5.6 million and accounts payable of $1.9 million offset by an increase in deferred revenue of $2.4 million and non-cash adjustments of $34.5 million.

Net cash used in operating activities for the three months ended January 31, 2020 was primarily a result of the net loss of $40.2 million, increases in inventory of $5.8 million, accounts receivable of $2.3 million and other assets of $1.1 million and decreases in accounts payable of $2.5 million and accrued liabilities of $0.8 million, offset by an increase in deferred revenue of $5.0 million and net non-cash adjustments of $40.6 million including a $34.2 million charge related to the change in fair value of common stock warrant liabilities.

Net cash used in operating activities for the three months ended January 31, 2019 was primarily a result of the net loss of $17.5 million and a decrease of $1.3 million in accounts receivable offset by increases in unbilled receivables of $7.8 million, deferred revenue of $5.8 million and accrued liabilities of $2.5 million and net non-cash adjustments of $5.0 million.

Investing Activities – Net cash used in investing activities was ~~$8.3~~$4.6 million for the three months ended January 31, ~~2020,~~2021, compared to net cash used in investing activities of ~~$14.2~~$8.3 million during the three months ended January 31, ~~2019.~~ 2020.

Net cash used in investing activities for the three months ended January 31, 2021 included $4.4 million of project asset expenditures and $0.2 million of capital expenditures.

Net cash used in investing activities for the three months ended January 31, 2020 included $7.6 million of project ~~assets~~asset expenditures and a $0.6 million payment for a working capital adjustment for the acquisition of the Bridgeport Fuel Cell Project in May 2019.

Net cash used in investing activities for the three months ended January 31, 2019 included a $12.6 million investment in project assets to expand our operating portfolio and $1.6 million in capital expenditures.

Financing Activities – Net cash provided by financing activities was $52.4 million during the three months ended January 31, 2021, compared to net cash provided by financing activities of $49.0 million during the three months ended January 31, ~~2020, compared to net~~2020.

Net cash provided by financing activities ~~of $14.2 million~~ during the three months ended January 31, ~~2019.~~ 2021 resulted from $156.4 million of proceeds from common stock sales, net of fees and expenses and $0.7 million of proceeds received from warrant conversions, offset by debt repayments of $82.3 million primarily relating to the payoff of amounts owed under the Orion Credit Agreement, payment of preferred dividends and return of capital of $0.8 million, and payment of $21.5 million to satisfy our obligations under the terms of the Series 1 Preferred Shares.

Net cash provided by financing activities during the three months ended January 31, 2020 resulted from the receipt of $65.5 million of debt proceeds from the Orion Facility, net of a debt discount of $1.6 million, ~~and~~ $3.0 million of debt proceeds from Connecticut Green Bank and proceeds from common stock sales of $3.5 million net of fees and expenses, offset by debt repayment of $15.5 million, the payment of deferred financing costs of $2.5 million and the payment of preferred dividends and return of capital of $3.4 ~~million.~~

Net cash provided by financing activities during the three months ended January 31, 2019 resulted from the receipt of $17.3 million of debt proceeds which included $10.0 million received under our loan agreement with Generate Lending, LLC, $5.8 million received under our loan agreement with NRG Energy, Inc. and $1.5 million received under our loan agreement with Enhanced Capital Connecticut Fund V, LLC, offset by the debt repayment of $1.6 million and the payment of preferred dividends and the return of capital of $1.0 million.

In order to consistently produce positive cash flow from operations, we need to increase order flow to support higher production levels, leading to lower costs on a per unit basis. We also continue to invest in new product and market development and, as a result, we are not ~~consistently~~ generating positive cash flow from our operations. Our operations are funded primarily through cash generated from product sales, service contracts, generation assets and Advanced Technologies contracts, as well as sales of equity and equity linked securities, issuances of corporate and project level debt, and monetization of technology through licenses. During fiscal year 2019, we implemented a series of restructuring activities aimed at reducing operating costs and streamlining operations while targeting cash generation and long-term financial stability.

A summary of our significant commitments and contractual obligations as of January 31, ~~2020~~2021 and the related payments by fiscal year are as follows:

	Payments Due by Period										Payments Due by Period
(dollars in thousands)	Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years		Total		Less than 1 Year		1 – 3 Years		3 – 5 Years		More than 5 Years
Purchase commitments⁽¹⁾	$	34,016	$	31,383	$	2,626	$	7	$	—	$	64,410	$	62,799	$	1,611
Series 1 Preferred obligation⁽²⁾		24,331		945		23,386		—		—
Term and Construction loans (principal and interest)		174,149		16,953		55,772		50,021		51,403
Capital and operating lease commitments⁽³⁾		20,048		1,208		2,702		1,557		14,581
Sale-leaseback financing obligation ⁽⁴⁾		16,300		3,493		5,103		4,529		3,175
Term loans (principal and interest)												47,445		12,318		16,909		12,330		5,888
Capital and operating lease commitments⁽²⁾												19,728		1,265		2,327		1,452		14,684
Sale-leaseback financing obligation ⁽³⁾												19,076		3,488		5,414		5,403		4,771
Natural gas supply contract ⁽⁴⁾												13,782		492		3,938		3,938		5,414
Option fee ⁽⁵⁾		300		150		150		—		—		150		150		—		—		—
Series B Preferred dividends payable ⁽⁶⁾		—		—		—		—		—		—		—		—		—		—
Totals	$	269,144	$	54,132	$	89,739	$	56,114	$	69,159	$	164,591	$	80,512	$	30,199	$	23,123	$	30,757

On October 31, 2019, the Company and certain of its ~~subsidiaries~~affiliates as guarantors entered into a Credit Agreement (as amended, ~~from time to time,~~ the “Orion Credit Agreement”) with Orion Energy Partners Investment Agent, LLC, as Administrative Agent and Collateral Agent (the ~~“Agent”~~“Orion Agent”), and certain lenders affiliated with the Orion Agent for a $200.0 million senior secured credit facility (the “Orion Facility”), structured as a delayed draw term loan to be provided by the lenders ~~subject~~primarily to fund certain ~~lender approvals.~~of the Company’s construction and related costs for fuel cell projects meeting the requirements of the Orion Facility. Under the Orion Credit Agreement, each lender ~~will fund~~funded its commitments ~~on each funding date in an amount equal to the principal amount of the loans to be funded by such lender on such date,~~ less 2.50% of the aggregate principal amount of the loans funded by such lender ~~on such date~~ (the “Loan Discount).

On October 31, 2019, the Company drew down $14.5 million (the “Initial Funding”) and received $14.1 million after taking into account a Loan Discount of $0.4 million. On October 31, 2019, in connection with the Initial Funding, the Company issued warrants to the lenders under the Orion Credit Agreement to purchase up to a total of 6,000,000 shares of the Company’s common stock, at an exercise price of $0.310 per share (which are referred to herein as the “Initial Funding Warrants”).

On November 22, 2019, a second draw (the “Second Funding”) of $65.5 million, funded by Orion Energy Credit Opportunities Fund II, L.P., Orion Energy Credit Opportunities Fund II GPFA, L.P., Orion Energy Credit Opportunities Fund II PV, L.P., and Orion Energy Credit Opportunities FuelCell Co-Invest, L.P. ~~(the “Orion Lenders”)~~(as the lenders under the Orion Credit Agreement), was made to fully repay certain outstanding third party debt of the Company, including the outstanding construction loan from Fifth Third Bank with respect to the Groton Project and the outstanding loan from Webster Bank, National Association (“Webster Bank”) with respect to the CCSU Project, as well as to fund remaining ~~going forward~~ construction costs and anticipated capital expenditures relating to ~~the Groton Project (a 7.4 MW project), the LIPA Yaphank Solid Waste Management Project (a 7.4 MW project), and the Tulare BioMAT Project (a 2.8 MW project).~~certain projects. The Company received $63.9 million in the Second Funding after taking into account a Loan Discount of $1.6 million as described above. Also in conjunction with the Second Funding, the Company issued to the ~~Orion Lenders~~lenders warrants to purchase up to a total of 14.0 million shares of the Company’s common stock, with an initial exercise price with respect to 8.0 million of such shares of $0.242 per share and with an initial exercise price with respect to 6.0 million of such shares of $0.620 per share ~~(the~~(which are referred to herein as the “Second Funding Warrants”).

~~The Company may draw the remainder of the Orion Facility, $120.0 million, over the first 18 months following~~ and, together with the Initial Funding Warrants, as the “Orion Warrants”). (See Note 12. “Stockholders’ Equity and ~~subject to~~Warrant Liabilities” for additional information regarding the Agent’s approval to fund: (i) construction costs, inventory and other capital expenditures of additional fuel cell projects with contracted cash flows (under PPAs with creditworthy counterparties) that meet or exceed a mutually agreed coverage ratio; and (ii) inventory, working capital, and other costs that may be required to be delivered by the Company on purchase orders, service agreements, or other binding customer agreements with creditworthy counterparties.Orion Warrants.)

Under the Orion Credit Agreement, cash interest of 9.9% per annum ~~will be~~was paid quarterly. In addition to the cash interest, payment-in-kind interest of 2.05% per annum ~~will accrue~~accrued which ~~will be~~was added to the outstanding principal balance of the Orion Facility but ~~will be~~was paid quarterly in cash to the extent of available cash after payment of the Company’s operating expenses and the funding of certain reserves for the payment of outstanding indebtedness to the State of Connecticut and Connecticut Green Bank. ~~The Orion Credit Agreement contains representations, warranties and other covenants.~~

Outstanding principal under the Orion Facility ~~will~~was to be amortized on a straight-line basis over a ~~seven year~~seven-year term, ~~in quarterly payments beginning one year after the Initial Funding,~~ with the initial payment due 21 business days after the end of the first quarter of fiscal 2021; provided that, if the Company does not have sufficient cash on hand to make any required quarterly amortization payments, such amounts shall be deferred and payable at such time as sufficient cash is available to make such payments subject to all outstanding principal being due and payable on theyear 2021. The maturity ~~date, which is the date that is eight years after the~~ date of the ~~Initial Funding or~~Orion Facility was October 31, 2027.

The ~~issuance~~Orion Facility contained an administrative fee of ~~the warrants issued in connection with the Initial Funding to purchase~~$0.1 million per year paid on a quarterly basis and also included a prepayment premium of up to ~~a total~~35%. Such prepayment fee was to be reduced over time based on the aggregate amount of ~~6.0 million shares of the Company’s Common Stock (which are referred to herein as the “Initial Funding Warrants”)~~principal and recognition of the Second Funding Warrants resulted in $3.9 million being recorded as a liability as of October 31, 2019 with the offset recorded as a debt discount. Refer to Note 12. “Stockholders’ Equity and Warrant Liabilities” for additional information regarding the Initial Funding Warrants and Second Funding Warrants, including the accounting, terms and conversions during the quarter ended January 31, 2020.interest paid.

~~In conjunction with the Second Funding,~~On November 30, 2020, the Company, its subsidiary guarantors, and the ~~other loan parties~~Orion Agent entered into ~~the First Amendment~~a payoff letter with respect to the Orion Credit Agreement (the ~~“First~~“Orion Payoff Letter”). Pursuant to the Orion ~~Amendment”), which required~~Payoff Letter, on December 7, 2020, the Company paid a total of $87.3 million to ~~establish a $5.0 million debt reserve, with such reserve to be released on~~ the ~~first date following~~Orion Agent, representing the ~~date~~outstanding principal, accrued but unpaid interest, prepayment premium, fees, costs and other expenses due and owing under the Orion Facility and the Orion Credit Agreement and related loan documents, in full repayment of the ~~Second Funding on which all of~~Company’s outstanding indebtedness under the ~~following events shall have occurred: (a) each of (x)~~Orion Facility and the ~~commercial operation date for the Tulare BioMAT project shall have occurred~~Orion Credit Agreement and ~~(y) a disposition, refinancing or tax equity investment in the Tulare BioMAT project of at least $5 million is consummated; (b) each of (x) the Groton Project shall have achieved its business plan in~~related loan documents. In accordance with the ~~Groton Construction Budget (as defined~~Orion Payoff Letter, the aggregate prepayment premium set forth in the Orion Credit ~~Agreement), (y)~~Agreement was reduced from approximately $14.9 million to $4.0 million and the ~~commercial operation date for~~Orion Agent, on behalf of itself and the ~~Groton Project shall have occurred and (z)~~lenders, agreed that any portion of the Groton Project shall have met its annualized output and heat rate guarantees for three months; and (c) a disposition, refinancing or tax equity investment of at least $30 million shall have occurred with respectprepayment premium that would otherwise be required to be paid pursuant to the ~~Groton Project.~~ Orion Credit Agreement in excess of $4.0 million was waived by the Orion Agent and the lenders. The ~~First~~Company expensed the remaining deferred finance costs and debt discount of $7.1 million.

Concurrently with the Orion ~~Amendment further requires~~Agent’s receipt of full payment pursuant to the Orion Payoff Letter, the Orion Agent released all of the collateral from the liens granted under the security documents associated with the Orion Facility (which included the release of $11.2 million of restricted cash to the Company, ~~(i) to provide, no later than December 31, 2019, a biogas sale and purchase agreement through December 31, 2021 for the Tulare BioMAT project,~~ which was obtained as of such date, (ii) to obtain by December 31, 2019, a fully executed contract for certain renewable energy credits for the Groton Project, which was obtained as of such date, and (iii) to provide by January 31, 2020 certain consents and estoppels from CMEEC related to the Groton Project and an executed, seventh modification to the lease between CMEECbecame unrestricted cash), and the ~~United States Government, acting by~~Company and ~~through the Department of the Navy, both of which~~its subsidiaries were ~~obtained as of such date.~~

In addition, in connection with the Letter Agreement, dated January 20, 2020, among the Company, FCE Ltd. and Enbridge Inc. (the “January 2020 Letter Agreement”), pursuant to which such parties agreed to amend the articles of FCE Ltd. setting forth the terms of the Series 1 Preferred Shares, on January 20, 2020, in order to obtain the Orion Lenders’ consent to the January 2020 Letter Agreement as requiredunconditionally released from their respective obligations under the Orion Credit Agreement ~~the Company, the Agent,~~(and related loan documents) and the Orion ~~Lenders,~~Facility without further action. With the termination of the Orion Facility and ~~the other loan parties entered into the Second Amendment to~~ the Orion Credit Agreement ~~(the “Second Orion Amendment”), which added~~ ~~a new affirmative covenant~~and related loan documents, the lenders no longer have the right to appoint representatives to attend the ~~Orion Credit Agreement that obligates the Company to, and to cause FCE Ltd. to, on or prior to November 1, 2021, either (i) pay and satisfy in full all~~Company’s Board of their respective obligations in respect of, and fully redeem and cancel, all of the Series 1 Preferred Shares of FCE Ltd., or (ii) deposit in a newly created account of FCE Ltd. or the Company cash in an amount sufficient to pay and satisfy in full all of their respective obligations in respect of, and to effect a redemption and cancellation in full of, all of the Series 1 Preferred Shares of FCE Ltd. The Second Orion Amendment also provides that the articles of FCE Ltd. setting forth the modified terms of the Series 1 Preferred Shares will be considered a “Material Agreement” under the Orion Credit Agreement. Under the Second Orion Amendment, a failure to satisfy this new affirmative covenant or to otherwise comply with the terms of the Series 1 Preferred Shares will constitute an event of default under the Orion Credit Agreement, which could result in the acceleration of any amounts outstanding under the Orion Credit Agreement.Director meetings as observers.

~~Refer to Note 18. “Subsequent Events” for information regarding the Third Amendment to the Orion Credit Agreement.~~

The Green Bank Amendment provides that, until such time as the loan (which includes both the outstanding principal balance of the original loan under the Green Bank Loan Agreement and the outstanding principal amount of the December 2019 Loan) has been repaid in its entirety, interest on the outstanding balance of the loan shall accrue ~~monthly in arrears from the date of the Green Bank Amendment at a rate of 5% per annum until May 8, 2019 and~~ at a rate of 8% per annum, ~~thereafter,~~ payable by the Company on a monthly basis in arrears. The Green Bank Amendment further provides that the payment by the Company of the Accrued Fees (as described above) includes any shortfall of interest due but unpaid by the Company through and including November 30, 2019. Interest payments made by the Company after the date of the Green Bank Amendment are to be applied first to interest that has accrued on the outstanding principal balance of the original loan under the Green Bank Loan Agreement and then to interest that has accrued on the December 2019 Loan.

The Green Bank Amendment also modifies the repayment and mandatory prepayment terms and extends the maturity date set forth in the original Green Bank Loan Agreement. Under the Green Bank Amendment, to the extent that excess cash flow reserve funds under the BFC Credit Agreement (as defined below) are eligible for disbursement to Bridgeport Fuel Cell, LLC pursuant to Section 6.23(c) of the BFC Credit Agreement, such funds are to be paid to Connecticut Green Bank ~~to be applied first to repay~~until the ~~outstanding principal balance of the original loan under the Green Bank Loan Agreement and thereafter to repay the outstanding principal amount of the December 2019 Loan, until~~loans are repaid in full. The Green Bank Amendment further provides that ~~the entire~~any unpaid balance of the loan and all other obligations due under the Green Bank Loan Agreement will be due and payable on May 9, ~~2026 if not paid sooner in accordance with the Green Bank Loan Agreement.~~2026. Finally, with respect to mandatory prepayments, the Green Bank Amendment provides that, when the Company has closed on the subordinated project term loan pursuant to the Commitment Letter, dated February 6, 2019, issued by Connecticut Green Bank to Groton Station Fuel Cell, LLC (“Groton Fuel Cell”) to provide a subordinated project term loan to Groton Fuel Cell in the amount of $5.0 million, the Company will be required to prepay to Connecticut Green Bank the lesser of any then outstanding amount of the December 2019 Loan and the amount of the subordinated project term loan actually advanced by Connecticut Green Bank. The balance under the original Green Bank Loan Agreement and the December 2019 Loan as of January 31, ~~2020~~2021 was $4.8 million.

On May 9, 2019, in connection with the closing of the purchase of the membership interests of Bridgeport Fuel Cell, LLC (“BFC”) (and the 14.9 MW Bridgeport Fuel Cell Project), BFC entered into a subordinated credit agreement with the Connecticut Green Bank whereby Connecticut Green Bank provided financing in the amount of $6.0 million (the “Subordinated Credit Agreement”). This $6.0 million consisted of $1.8 million in incremental funding that was received by BFC and $4.2 million of funding previously received by FuelCell Energy, Inc. with respect to which BFC became the primary obligor. As security for the Subordinated Credit Agreement, Connecticut Green Bank received a perfected lien, subordinated and second in priority to the liens securing the $25.0 million loaned under the BFC Credit Agreement (as defined below), in all of the same collateral securing the BFC Credit Agreement. The interest rate under the Subordinated Credit Agreement is 8% per annum. Principal and interest are due monthly in amounts sufficient to fully amortize the loan over an ~~84 month~~84-month period ending in May 2026. The Subordinated Credit Agreement contains customary representations, warranties and covenants. The Subordinated Credit Agreement contains a debt coverage ratio which is required to be maintained and may not be less than 1.10 as of the end of each fiscal quarter, beginning with the quarter ended July 31, 2020.The balance under the Subordinated Credit Agreement as of January 31, ~~2020~~2021 was ~~$5.6~~$4.9 million.

On May 9, 2019, in connection with the closing of the purchase of ~~BFC, FuelCell Energy Finance, LLC (“FuelCell Finance”) (a subsidiary of~~ the ~~Company)~~Bridgeport Fuel Cell Project, BFC entered into a Credit Agreement with Liberty Bank, as administrative agent and co-lead arranger, and Fifth Third Bank as co-lead arranger and swap hedger (the “BFC Credit Agreement”), whereby (i) Fifth Third Bank provided financing in the amount of $12.5 million towards the purchase price for the BFC acquisition; and (ii) Liberty Bank provided financing in the amount of $12.5 million towards the purchase price for the BFC acquisition. As security for the BFC Credit Agreement, Liberty Bank and Fifth Third Bank were granted a first priority lien in (i) all assets of BFC, including BFC’s cash accounts, fuel cells, and all other personal property, as well as third party contracts including the Energy Purchase Agreement between BFC and Connecticut Light and Power Company dated July 10, 2009, as amended; (ii) certain fuel cell modules that are intended to be used to replace the Bridgeport Fuel Cell Project’s fuel cell modules as part of routine operation and maintenance; and (iii) FuelCell ~~Finance’s~~Energy Finance, LLC’s (“FuelCell Finance”) (a wholly-owned subsidiary of the Company and the direct parent of BFC) ownership interest in BFC. The maturity date under the BFC Credit Agreement is May 9, 2025. Monthly principal and interest are to be paid in arrears in an amount sufficient to fully amortize the term loan over a ~~72 month~~72-month period. ~~FuelCell Finance~~BFC has the right to make additional principal payments or pay the balance due under the BFC Credit Agreement in full, provided that it pays any associated breakage fees with regard to the interest rate swap agreements fixing the interest rate. The interest rate under the BFC Credit Agreement fluctuates monthly at the 30-day LIBOR rate plus 275 basis ~~points on an initial total notional value of $25.0 million, reduced for principal payments.~~points.

An interest rate swap agreement was required to be entered into with Fifth Third Bank in connection with the BFC Credit Agreement to protect against movements in the floating LIBOR index. Accordingly, on May 16, 2019, an interest rate swap agreement (the “Swap Agreement”) was entered into with Fifth Third Bank in connection with the BFC Credit Agreement for the term of the loan. The net interest rate across the BFC Credit Agreement and the swap transaction results in a fixed rate of 5.09%. The interest rate swap ~~will be~~is adjusted to fair value on a quarterly basis. The estimated fair value is based on Level 2 inputs including primarily the forward LIBOR curve available to swap dealers. The valuation methodology involves comparison of (i) the sum of the present value of all monthly variable rate payments based on a reset rate using the forward LIBOR curve and (ii) the sum of the present value of all monthly fixed rate payments on the notional amount, which is equivalent to the outstanding principal amount of the loan. The fair value adjustments for the three months ended January 31, 2021 and January 31, 2020 resulted in a $0.1 million gain and a $0.03 million ~~charge.~~charge, respectively. The fair value of the interest rate swap liability at January 31, 2021 and October 31, 2020 was $0.9 million.

The BFC Credit Agreement requires BFC to maintain a debt service reserve. Each of Liberty Bank and Fifth Third Bank also has an operation and module replacement reserve (“O&M Reserve”) under the BFC Credit Agreement. BFC is required to deposit $100,000 per month into each O&M Reserve for the first five years of the BFC Credit Agreement, with such funds to be released at the sole discretion of Liberty Bank and Fifth Third Bank, as applicable. BFC is also required to maintain excess cash flow reserve accounts at each of Liberty Bank and Fifth Third Bank. Excess cash flow consists of cash generated by BFC from the Bridgeport Fuel Cell Project after payment of all expenses (including after payment of intercompany service fees to the Company), debt service to Liberty Bank and Fifth Third Bank, the funding of all required reserves, and payments to Connecticut Green Bank for the subordinated facility. BFC is also required to maintain a debt service coverage ratio of not less than 1.20, measured for the trailing year based on fiscal quarters beginning with the quarter ended July 31, 2020. The Company has certain quarterly and annual financial reporting requirements under the BFC Credit Agreement. The annual financial statements to be provided pursuant to such requirements are to be audited and accompanied by a report of an independent certified public accountant, which report shall not include a “going concern” matter of emphasis or any qualification as to the scope of such audit.

In January 2019, the Company and the State of Connecticut entered into a Second Amendment to the Assistance Agreement (the “Second Amendment”). The Second Amendment ~~extends~~extended the Target Date to October 31, 2022 and ~~amends~~amended the Employment Obligation to require the Company to continuously maintain a minimum of 538 full-time positions for 24 consecutive months. ~~Based on the Company’s current headcount and plans for fiscal year 2020, it will be short of meeting this requirement.~~ If the Company meets the Employment Obligation, as modified by the Second Amendment, and creates an additional 91 full-time positions, the Company may receive a credit in the amount of $2.0 million to be applied against the outstanding balance of the loan. ~~The Second Amendment deletes~~However, based on the Company’s current headcount and ~~cancels the provisions of the Assistance Agreement related to the second phase of the expansion project~~plans for fiscal year 2021 and ~~the loans related thereto, but the Company had~~beyond, it will not ~~drawn any funds~~meet this requirement or ~~received any disbursements under those provisions.~~receive this credit. A job audit will be performed within 90 days of the Target Date. If the Company does not meet the Employment Obligation, then an accelerated payment penalty ~~shall~~will be assessed at a rate of $18,587.36 ~~times~~multiplied by the number of employees below the number of employees required by the Employment Obligation. Such penalty is immediately payable and will be applied first to accelerate the payment of any outstanding fees or interest due and then to accelerate the payment of outstanding principal.

In ~~addition~~April of 2020, as a result of the COVID-19 pandemic, the State of Connecticut agreed to ~~the commitments listed in the table~~defer three months of principal and interest payments under the ~~heading “Commitments~~Assistance Agreement, beginning with the May 2020 payment. These deferred payments will be added at the end of the loan, thus extending out the maturity date by three months.

For information regarding the PPP Note and ~~Significant Contractual Obligations,~~the repayment of amounts owed under the PPP Note, see “-OVERVIEW AND RECENT DEVELOPMENTS—Recent Developments—Repayment of Paycheck Protection Program Promissory Note” ~~we have the following outstanding obligations:~~above.

We have pledged approximately ~~$35.7~~$31.0 million of our cash and cash equivalents as performance security and for letters of credit for certain banking requirements and contracts. As of January 31, ~~2020,~~2021, outstanding letters of credit totaled ~~$5.7~~$6.5 million. These expire on various dates through August 2028. Under the terms of certain contracts, we will provide performance security for future contractual obligations. The restricted cash balance as of January 31, ~~2020~~2021 also included ~~$18.1~~$14.9 million primarily to support obligations under the power purchase and service agreements related to the PNC sale-leaseback transactions and ~~$7.7~~$10.5 million relating to future obligations associated with the Bridgeport Fuel Cell Project.

~~As of October 31, 2018, we had uncertain tax positions aggregating $15.7 million and have reduced our net operating loss (“NOL”) carryforwards by this amount. Because~~ Refer to Note 15. “Restricted Cash” for a detailed discussion of the ~~level of NOLs and valuation allowances, unrecognized tax benefits, even if not resolved in our favor, would not result in any~~Company’s restricted cash ~~payment or obligation and therefore have not been included in the contractual obligation table under the heading “Commitments and Significant Contractual Obligations.”~~balance.

Under the terms of our PPAs, customers agree to purchase power from our fuel cell power plants at negotiated rates. Electricity rates are generally a function of the customers’ current and estimated future electricity pricing available from the grid. We are responsible for all operating costs necessary to maintain, monitor and repair our fuel cell power plants. Under certain agreements, we are also responsible for procuring fuel, generally natural gas or ~~Biogas,~~biogas, to run our fuel cell power plants. In addition, under certain agreements, we are required to produce minimum amounts of power under our PPAs and we have the right to terminate PPAs by giving written notice to the customer, subject to certain exit costs. As of January 31, ~~2020,~~2021, our operating portfolio was ~~28.9~~32.6 MW.

We warranty our products for a specific period of time against manufacturing or performance defects. Our standard U.S. warranty period is generally 15 months after shipment or 12 months after acceptance of the product. In addition to the standard product warranty, we have contracted with certain customers to provide services to ensure the power plants meet minimum operating levels for terms of up to 20 years. Pricing for service contracts is based upon estimates of future costs, which could be materially different from actual expenses. Refer to “Critical Accounting Policies and Estimates” for additional details.

We have contracted with various government agencies and certain companies from private industry to conduct research and development as either a prime contractor or sub-contractor under multi-year, cost-reimbursement and/or cost-share type contracts or cooperative agreements. Cost-share terms require that participating contractors share the total cost of the project based on an agreed upon ratio. In many cases, we are reimbursed only a portion of the costs incurred or to be incurred on the contract. While government research and development contracts may extend for many years, funding is often provided incrementally on a year-by-year basis if contract terms are met and Congress authorizes the funds. As of January 31, ~~2020,~~2021, Advanced Technologies ~~contracts~~contract backlog totaled ~~$64.6~~$44.1 million, of which ~~$64.4~~$34.0 million is ~~funded~~non-U.S. Government-funded, $9.9 million is U.S. Government-funded and $0.2 million ~~which~~ is ~~related to government contracts,~~U.S. Government-unfunded. The amount that is ~~unfunded. Should~~non-U.S. Government-funded includes $10.0 million of milestone payments under the EMRE Joint Development Agreement that are contingent upon achieving technical milestones. If funding beis terminated or delayed or if business initiatives change, we may choose to devote resources to other activities, including internally funded research and development. ~~The funded backlog includes approximately $10 million of milestone payments that are contingent upon achieving technical milestones.~~

We have no off-balance sheet debt or similar obligations which are not classified as debt. We do not guarantee any third-party debt. See Note 17. “Commitments and Contingencies” to our ~~consolidated financial statements~~Consolidated Financial Statements for the three months ended January 31, ~~2020~~2021 included in this Quarterly Report on Form 10-Q for further information.

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. ~~Actual results could differ from those estimates.~~ Estimates are used in accounting for, among other things, revenue recognition, contract loss accruals, excess, slow-moving and obsolete inventories, product warranty accruals, loss accruals on service agreements, share-based compensation expense, allowance for doubtful accounts, depreciation and amortization, impairment of goodwill and in-process research and development intangible assets, impairment of long-lived assets (including project assets), lease liabilities and right-of-use (“ROU”) assets and contingencies. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the consolidated financial statements in the period they are determined to be necessary. Due to the inherent uncertainty involved in making estimates, actual results in future periods may differ from those estimates.

Our critical accounting policies are those that are both most important to our financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a complete description of our critical accounting policies that affect our more significant judgments and estimates used in the preparation of our condensed consolidated financial statements, refer to our Annual Report on Form 10-K for the year ended October 31, ~~2019~~2020 filed with the ~~Securities and Exchange Commission.~~

Effective November 1, 2019, we adopted Accounting Standards Update 2016-02, “Leases” (“Topic 842”). See “Note 11, Leases” included in our Notes to Consolidated Financial Statements for changes to our critical accounting policies as a result of adopting Topic 842. Other than changes to our accounting for leases as a result of adopting Topic 842, there have been no significant changes to the critical accounting policies disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended October 31, 2019.SEC.

See Note 2,2. “Recent Accounting Pronouncements,” to our Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a summary of recently adopted accounting ~~guidance, as well as recent accounting guidance that is not yet effective.~~guidance.

Cash is invested overnight with high credit quality financial institutions and therefore we are not exposed to market risk on our cash holdings from changing interest rates. Based on our overall interest rate exposure as of January 31, ~~2020,~~2021, including all interest rate sensitive instruments, a change in interest rates of 1% would not have a material impact on our results of operations.

As of January 31, ~~2020,~~2021, approximately ~~0.3%~~1.0% of our total cash and cash equivalents were in currencies other than U.S. dollars (primarily the Euro, Canadian dollars and South Korean Won) and we have no plans of repatriation. We make purchases from certain vendors in currencies other than U.S. dollars. Although we have not experienced significant foreign exchange rate losses to date, we may in the future, especially to the extent that we do not engage in currency hedging activities. The economic impact of currency exchange rate movements on our operating results is complex because such changes are often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, may cause us to adjust our financing and operating strategies.

On May 16, 2019, an interest rate swap agreement (the “Swap Agreement”) was entered into with Fifth Third Bank in connection with the BFC Credit Agreement for the term of the loan. The net interest rate across the BFC Credit Agreement and the swap transaction results in a fixed rate of 5.09%. The interest rate swap will be adjusted to fair value on a quarterly basis. The estimated fair value is based on Level 2 inputs including primarily the forward LIBOR curve available to swap dealers. The valuation methodology involves comparison of (i) the sum of the present value of all monthly variable rate payments based on a reset rate using the forward LIBOR curve and (ii) the sum of the present value of all monthly fixed rate payments on the notional amount, which is equivalent to the outstanding principal amount of the loan. The fair value adjustments for the ~~quarter~~ three months ended January 31, 2021 and 2020 resulted in a gain of $0.1 million and a charge of $0.03 million, ~~of charges.~~respectively.

The Company maintains disclosure controls and procedures, which are designed to provide reasonable assurance that information required to be disclosed in the Company’s periodic SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Company’s principal executive officer and principal financial officer have concluded that ~~due to the material weakness described below,~~ the Company’s disclosure controls and procedures were ~~ineffective~~effective as of the end of the period covered by this report to provide reasonable assurance that information required to be disclosed in the Company’s periodic SEC reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Notwithstanding the material weakness described below, management~~There has concluded that our consolidated financial statements included in this Form 10-Q for the quarter ended January 31, 2020 are fairly stated in all material respects in accordance with generally accepted accounting principles in the United States of America for each of the periods presented and that they may be relied upon.

~~Previously identified~~ ~~material weakness in internal control over financial reporting~~

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.

~~We previously disclosed in our Form 10-Qs for the quarters ended April 30, 2019 and July 31, 2019 that t~~he Company did not have resources to sufficiently address asset impairments on a timely basis or the accounting considerations and disclosures related to the Company’s amended credit facilities. As a result, we concluded that there was a material weakness in internal control over financial reporting, as we did not maintain effective controls over the accounting for and disclosures in the consolidated financial statements related to asset impairments and credit facilities. As disclosed in our 2019 Form 10-K, this control deficiency had not been remediated as of October 31, 2019 and the Company further identified that it did not have resources to sufficiently address certain other non-routine transactions and disclosures. This material weakness resulted in material misstatements that were corrected in the consolidated financial statements prior to issuance. This control deficiency has not been remediated as of January 31, 2020.

Subsequent to the evaluation made in connection with filing our Form 10-Q for the quarter ended April 30, 2019, our management, with the oversight of the Audit and Finance Committee of the Board of Directors, began the process of remediating the material weakness. Progress to date includes engagement of a third party resource to help evaluate the accounting and disclosure for significant matters each quarter. Management also plans to add additional experienced accounting staff. In addition, under the oversight of the Audit and Finance Committee, management will continue to review and make necessary changes to the overall design of our internal control environment to improve the overall effectiveness of internal control over financial reporting.

We have made progress in accordance with our remediation plan and our goal is to remediate this material weakness in fiscal year 2020. However, the material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures, however, there can be no ~~assurance that this will occur within 2020~~.

Beginning on November 1, 2019, we adopted ASC 842, Leases. As a result of the adoption of this standard, we implemented changes to our processes related to leasing and the related internal controls. These changes included the development of new policies based on the leasing standard and the implementation of a leasing software tool to track and account for our leases. Other than the changes relating to the adoption of ASC 842, there were no changeschange in our internal ~~control~~controls over financial reporting that occurred during ~~our~~the last fiscal quarter ~~(ended January 31, 2020)~~ that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

From time to time, the Company is involved in other legal proceedings, including, but not limited to, regulatory proceedings, claims, mediations, arbitrations and litigation, arising out of the ordinary ~~conduct~~course of ~~our business.~~its business (“Other Legal Proceedings”). Although wethe Company cannot assure the outcome of such Other Legal Proceedings, management presently believes that the result of such ~~legal proceedings,~~Other Legal Proceedings, either individually, or in the aggregate, will not have a material adverse effect on ~~our~~the Company’s consolidated financial statements, and no material amounts have been accrued in ~~our~~the Company’s consolidated financial statements with respect to these matters.

Part I, Item 1A, “Risk Factors” of our most recently filed Annual Report on Form 10-K for the fiscal year ended October 31, ~~2019,~~2020, filed with the Securities and Exchange Commission on January ~~22, 2020,~~21, 2021, 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. The following risk ~~factor is~~factors are being provided to supplement and to update the risk factors set forth in Part I, Item 1A, “Risk Factors” of our most recently filed Annual Report on Form 10-K for the fiscal year ended October 31, ~~2019.~~2020.

Our business and operations have been and may continue to be adversely affected by the ~~recent~~ 2019 ~~Novel Coronavirus~~novel coronavirus (COVID-19) outbreak or other similar outbreaks.

Any outbreaks of contagious diseases, including the recent outbreak of the 2019 novel coronavirus (“COVID-19”) that was first detected in Wuhan, China in December 2019 and has since developed into a global pandemic, and other adverse public health developments in countries where we and our suppliers operate, could have a material and adverse effect on our business, financial condition and results of operations. These effects could include disruptions to or restrictions on our employees’ ability to travel, as well as temporary closures of our facilities or the facilities of our customers, suppliers, or other vendors in our supply chain. In addition, ~~the coronavirus may result~~COVID-19 has resulted in a widespread health crisis that ~~could~~has adversely affected, and may continue to adversely affect, the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products or our ability to obtain financing for our business or projects. COVID-19 may impact the health of our team members, directors or customers, reduce the availability of our workforce or those of companies with which we do business, or otherwise cause human impacts that may negatively impact our business. Any of these events, which may result in disruptions to our supply chain or customer demand, could materially and adversely affect our business and our financial results. The extent to which ~~the coronavirus~~COVID-19 will impact our business and our financial results will depend on future developments, which are highly uncertain and cannot be predicted. Such developments may include the geographic spread of ~~the virus,~~COVID-19, the severity of the disease, the duration of the outbreak, the actions that may be taken by various governmental authorities in response to the outbreak, such as quarantine or “shelter-in-place” orders and business closures imposed by various states within the United States, and the ~~possible~~ impact on the U.S. or global economy. For example, on March 18, 2020, in response to the escalating global COVID-19 outbreak, we temporarily suspended operations at our Torrington, Connecticut manufacturing facility, and also ordered those employees that could work from home to do so. While we resumed operations in the manufacturing facility on June 22, 2020, and we have established a phased-in return to work schedule commencing March 15, 2021 for those employees working from home, we continue to evaluate our ability to operate in light of recent resurgences of COVID-19 and the advisability of continuing operations, based on federal, state and local guidance, evolving data concerning the pandemic and the best interests of our employees, customers and stockholders. Accordingly, there can be no assurance that any of our facilities will remain open (in full or in part), that our employees that have been working remotely will return to the office or that our other operations will continue at full or limited capacity. If we again have to shut down production either due to a worsening of the COVID-19 pandemic or due to an outbreak in one of our facilities, our project schedules and associated financing could be adversely affected. An extended period of remote working by our employees could strain our technology resources and introduce operational risks, including heightened cybersecurity risk. Further, we have experienced, and may continue to experience, increased costs and expenses, including as a result of (i) conducting daily “fitness-for-duty” assessments for employees, including symptom checks and providing personal protective equipment, (ii) the expansion of benefits to our employees, including the provision of additional time off for employees who have contracted COVID-19 or are required to be quarantined or who are unable to obtain childcare to return to work, and the reimbursement of expenses incurred while working from home, (iii) implementing increased health and safety protocols at all of our facilities, including increased cleaning/sanitization of workspaces, restricting visitor access, mandating social distancing guidelines and increasing the availability of sanitization products, and (iv) the increased cost of personal protective equipment. Although we believe the Company is currently considered an “essential” business in its operating markets, if any of the applicable exceptions or exemptions are curtailed or revoked in the future, or any of these exemptions or exceptions do not extend to any of our key suppliers, our business, operating results and financial condition could be adversely impacted. While we have attempted to continue business development activities during the pandemic, state and local shutdowns, shelter-in-place orders and travel restrictions have impeded our ability to meet with customers and solicit new business, and certain bids and solicitations in which we typically participate have been postponed. As a result, at ~~the~~this time, ~~of this filing,~~ it is impossible to predict the overall impact of ~~the coronavirus~~COVID-19 on our business, liquidity, capital resources, supply chain and financial ~~results.~~results or its effect on clean energy demand, capital budgets of our customers, or demand for our products. Additionally, while we have continued to prioritize the health and safety of our team members and customers as we continue to operate during the pandemic, we face an increased risk of litigation related to our operating environments. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession that has occurred or may occur in the future because of the pandemic, or because the pandemic worsens again. Additional public health crises could also emerge in the future, including other pandemics or epidemics. Any such public health crisis could pose further risks to us and could also have a material adverse effect on our business, results of operations and financial position.

Our PPP Loan may subject us to challenges regarding qualification for the PPP Loan, enforcement actions, fines and penalties, and has resulted in an informal SEC inquiry into our financial disclosures.

On April 20, 2020, we entered into a Paycheck Protection Program Promissory Note, dated April 16, 2020 (the “PPP Note”), evidencing a loan to the Company from Liberty Bank under the CARES Act. Pursuant to the PPP Note, we received total proceeds of approximately $6.5 million on April 24, 2020 (the “PPP Loan”). In accordance with the requirements of the CARES Act, as amended by the Paycheck Protection Program Flexibility Act of 2020 (the “PPP Flexibility Act”), the PPP Loan may have been fully forgiven if (i) proceeds were used to pay eligible payroll costs, rent, mortgage interest and utilities and (ii) full-time employee headcount and salaries were either maintained during the 24-week period following disbursement of the PPP Loan or restored by December 31, 2020. If not so maintained or restored, forgiveness of the PPP Loan would have been reduced in accordance with regulations issued by the SBA. In order to obtain the consent of the Orion Agent and the lenders under the Orion Credit Agreement (each as defined elsewhere in this document) to enter into the PPP Note, the Orion Agent and such lenders required us to apply for forgiveness within 30 days after the last day of the loan forgiveness period as designated under regulations in effect as of June 6, 2020. We used 100% of the proceeds of the PPP Loan to pay eligible payroll costs, and on October 29, 2020, we applied for forgiveness of the PPP Loan. However, with the repayment in full of all amounts owed to the Orion Agent and lenders in December, 2020, the Company is no longer required to pursue forgiveness of the PPP Loan. Additionally, since the time of the application for forgiveness, the Company’s financial circumstances have changed substantially, such that the Company is no longer in need of forgiveness of the PPP Loan. While we believe we have met all of the requirements of the CARES Act, as amended by the PPP Flexibility Act, for forgiveness, on February 11, 2021, we withdrew our application for forgiveness and repaid all amounts outstanding under the PPP Note, together with all accrued interest.

In addition, based on guidance from the United States Department of the Treasury, since the total PPP Loan proceeds exceeded $2.0 million, our forgiveness application is subject to audit by the SBA, including with respect to our certification that the economic uncertainty at the time of our application made our request for a PPP Loan necessary to support our ongoing operations. If we are found to have been ineligible to receive the PPP Loan under the PPP Note, or in violation of any of the laws or regulations that may apply to us in connection with the PPP Note, including the False Claims Act, we may be subject to enforcement actions, fines and penalties, including significant civil, criminal and administrative penalties. In addition, our receipt of the PPP Loan, our submission of a forgiveness application, and our withdrawal of our forgiveness application may result in adverse publicity and damage to our reputation, governmental investigations, inquiries, reviews and audits, such as the SEC inquiry described below, which could consume significant financial and management resources. Any of these events could harm our business, results of operations and financial condition.

On or about May 11, 2020, the Division of Enforcement of the SEC sent the Company an inquiry requesting that we voluntarily provide information to the SEC pertaining to our application and resulting PPP Loan and how the need for the PPP Loan compares with our filings, disclosures and financial condition. While this request for information is voluntary and the Company was not obligated to respond, we are cooperating and have provided information to the SEC.

The following table sets forth information with respect to purchases made by us or on our behalf of our common stock during the periods indicated:

Period

Total
Number of
Shares
Purchased ⁽¹⁾

Average
Price Paid
per Share

Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Programs

Maximum
Number of
Shares that
May Yet be
Purchased
Under the
Plans or
Programs

November 1, 2019 – November 30, 2019

—

$
—

—

—

December 1, 2019 – December 31, 2019

288

$
0.59

—

—

January 1, 2020 – January 31, 2020

—

$
—

—

—

Total

288

$
0.59

—

—

Period	Total Number of Shares Purchased ⁽¹⁾		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs
November 1, 2020 – November 30, 2020		—	$	—		—		—
December 1, 2020 – December 31, 2020		—	$	—		—		—
January 1, 2021 – January 31, 2021		81	$	10.91		—		—
Total		81	$	10.91		—		—

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		06-0853042
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3 Great Pasture Road Danbury, Connecticut		06810
(Address of principal executive offices)		(Zip Code)

		Page

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	3

	Consolidated Balance Sheets as of January 31, ~~2020~~2021 and October 31, ~~2019.~~2020.	3

	Consolidated Statements of Operations and Comprehensive Loss for the three months ended January 31, ~~2020~~2021 and ~~2019.~~2020.	4

	Consolidated Statements of Changes in Equity for the three months ended January 31, ~~2020~~2021 and ~~2019.~~2020.	5

	Consolidated Statements of Cash Flows for the three months ended January 31, ~~2020~~2021 and ~~2019~~2020.	6

	Notes to Consolidated Financial Statements.	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	2321

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	3935

Item 4.	Controls and Procedures.	3935

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	4136

Item 1A.	Risk Factors.	4137

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	4238

Item 3.	Defaults Upon Senior Securities.	4239

Item 4.	Mine Safety Disclosures.	4239

Item 5.	Other Information.	4239

Item 6.	Exhibits.	4340

Signatures		4442

	January 31,		October 31,		January 31,		October 31,
	2020		2019		2021		2020
Commercial Customers:
Amount billed	$	3,790	$	2,227	$	8,409	$	7,329
Unbilled receivables⁽¹⁾		5,770		6,139		7,262		7,063
		9,560		8,366		15,671		14,392
Advanced Technologies (including U.S. government⁽²⁾):
Amount billed		1,803		1,065		1,612		2,234
Unbilled receivables		1,753		1,545		981		978
		3,556		2,610		2,593		3,212
Accounts receivable, net and unbilled receivables	$	13,116	$	10,976	$	18,264	$	17,604

	January 31,		October 31,		January 31,			October 31,
	2020		2019		2021			2020
Raw materials	$	23,472	$	25,466	$	25,776		$	21,726
Work-in-process ⁽¹⁾		41,758		31,228		40,711			38,231
Inventories	$	65,230	$	56,694		66,487			59,957
Inventories - short-term						(61,901	)		(50,971	)
Inventories - long-term ⁽²⁾					$	4,586		$	8,986

	January 31,			October 31,			Estimated
	2021			2020			Useful Life
Project Assets - Operating	$	103,452		$	99,351		5-20 years
Project Assets - Construction in progress		93,998			91,276		7-20 years
		197,450			190,627
Accumulated depreciation		(32,857	)		(28,818	)
Project Assets, net	$	164,593		$	161,809

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

As of January 31, 2021	Gross Amount		Accumulated Amortization			Net Amount
In-Process Research and Development	$	9,592	$	-		$	9,592
Bridgeport PPA		12,320		(2,269	)		10,051
Total		21,912		(2,269	)		19,643

As of October 31, 2020	Gross Amount		Accumulated Amortization			Net Amount
In-Process Research and Development	$	9,592	$	-		$	9,592
Bridgeport PPA		12,320		(1,945	)		10,375
Total		21,912		(1,945	)		19,967

	Operating Leases			Finance Leases			Operating Leases			Finance Leases
Due Year 1	$	1,111		$	97		$	1,244		$	21
Due Year 2		1,361			28			1,425			3
Due Year 3		1,313			—			898			—
Due Year 4		852			—			740			—
Due Year 5		705			—			712			—
Thereafter		14,581			—			14,684			—
Total undiscounted lease payments		19,923			125			19,703			24
Less imputed interest		(9,308	)		(14	)		(10,421	)		(1	)
Total discounted lease payments	$	10,615		$	111		$	9,282		$	23

	Series C Warrants		Orion Warrants
Balance as of October 31, 2019		964,114		6,000,000
Warrants issued		—		14,000,000
Warrants converted		—		(12,000,000	)
Balance as of January 31, 2020		964,114		8,000,000

	Series C Warrants		Orion Warrants
Balance as of October 31, 2020		964,128		2,700,000
Warrants exercised		—		(2,700,000	)
Balance as of January 31, 2021		964,128		—

Restricted Stock Awards and Units	Shares			Weighted-Average Fair Value
Outstanding as of October 31, 2020		2,067,140		$	5.06
Granted - performance shares		551,252			14.89
Granted - time-vesting restricted stock units		296,826			3.28
Vested		(221	)		20.40
Outstanding as of January 31, 2021		2,914,997			5.46

	Three Months Ended January 31,						Change						Three Months Ended January 31,						Change
(dollars in thousands)	2020			2019			$			%			2021			2020			$			%
Total revenues	$	16,264		$	17,783		$	(1,519	)		(9	)%	$	14,877		$	16,264		$	(1,387	)		(9	)%
Total costs of revenues	$	12,983		$	19,988		$	(7,005	)		(35	)%	$	18,495		$	12,983		$	5,512			42	%
Gross profit (loss)	$	3,281		$	(2,205	)	$	5,486			249	%
Gross (loss) profit													$	(3,618	)	$	3,281		$	(6,899	)		(210	)%
Gross margin		20.2	%		(12.4	)%								(24.3	)%		20.2	%

Exhibit No.		Description
~~10.1~~3.1		~~Purchase and Sale Agreement, dated February 11, 2020, by and between Central CA Fuel Cell 2, LLC and Crestmark Equipment Finance~~Certificate of Incorporation of the Company, as amended, July 12, 1999 (incorporated by reference to Exhibit ~~10.1~~3.1 to the Company’s Current Report on Form 8-K dated September 21, 1999).
3.2		Certificate of Amendment of the Certificate of Incorporation of the Company, dated November 21, 2000 (incorporated by reference to Exhibit 3.3 to the Company’s Annual Report on Form 10-K dated January 12, 2017).
3.3		Certificate of Amendment of the Certificate of Incorporation of the Company, dated October 31, 2003 (incorporated by reference to Exhibit 3.11 to the Company’s Current Report on Form 8-K dated November 3, 2003).
3.4		Amended Certificate of Designation of Series B Cumulative Convertible Perpetual Preferred Stock, dated March 14, 2005 (incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K dated January 12, 2017).
3.5		Certificate of Amendment of the Certificate of Incorporation of the Company, dated April 8, 2011 (incorporated by reference to Exhibit 3.5 to the Company’s Annual Report on Form 10-K dated January 12, 2017).
3.6		Certificate of Amendment of the Certificate of Incorporation of the Company, dated April 5, 2012 (incorporated by reference to Exhibit 3.6 to the Company’s Annual Report on Form 10-K dated January 12, 2017).
3.7		Certificate of Amendment of the Certificate of Incorporation of the Company, dated December 3, 2015 (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K dated December 3, 2015).
3.8		Certificate of Amendment of the Certificate of Incorporation of the Company, dated April 18, 2016 (incorporated by reference to Exhibit 3.9 to the Company’s Quarterly Report on Form 10-Q for the period ending April 30, 2016).
3.9		Certificate of Amendment of the Certificate of Incorporation of the Company, dated April 7, 2017 (incorporated by reference to Exhibit 3.10 to the Company’s Quarterly Report on Form 10-Q for the period ending April 30, 2017).
3.10		Certificate of Amendment of the Certificate of Incorporation of the Company, dated December 14, 2017 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 14, 2017).
3.11		Certificate of Amendment of the Certificate of Incorporation of FuelCell Energy, Inc., dated May 8, 2019 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on ~~February 13, 2020)~~May 8, 2019).
~~10.2~~3.12		~~Equipment Lease Agreement,~~Certificate of Amendment of the Certificate of Incorporation of FuelCell Energy, Inc., dated ~~February~~May 11, 2020 ~~by and between Central CA Fuel Cell 2, LLC and Crestmark Equipment Finance~~ (incorporated by reference to Exhibit ~~10.2~~3.1 to the Company’s Current Report on Form 8-K filed on ~~February 13,~~May 12, 2020).
~~10.3~~3.13		~~Assignment~~Amended and Restated By-Laws of the Company, dated December 15, 2016 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K dated December 15, 2016).
4.1		Specimen of Common Share Certificate (incorporated by reference to Exhibit 4 to the Company’s Annual Report on Form 10-K for fiscal year ended October 31, 1999).
4.2		Schedule A to Articles of Amendment of FuelCell Energy, Ltd., setting forth the rights, privileges, restrictions and conditions of Class A Cumulative Redeemable Exchangeable Preferred Stock (incorporated by reference to exhibit of the same number contained in the Company’s Quarterly Report on Form 10-Q for the period ended January 31, 2009).
4.3		Letter Agreement, dated ~~February 11, 2020,~~March 31, 2011, and Guarantee, dated April 1, 2011, by ~~a Central CA Fuel Cell 2, LLC in favor~~and between the Company and Enbridge, Inc., and Revised Special Rights and Restrictions attributable to the Class A Preferred Stock of ~~Crestmark Equipment Finance~~FuelCell Energy, Ltd. (incorporated by reference to Exhibits 4.1, 4.2 and 4.3 to the Company’s Current Report on Form 8-K dated March 31, 2011).
4.4		Certificate of Designation for the Company’s 5% Series B Cumulative Convertible Perpetual Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report Form 8-K, dated November 22, 2004).
4.5		Certificate of Designations for the Company’s Series C Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated September 5, 2017).
4.6		Certificate of Designations, Preferences and Rights for the Company’s Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K dated August 27, 2018).
4.7		Specimen Series D Convertible Preferred Stock Certificate. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 27, 2018).
4.8		Form of Series A Warrants to purchase common stock (incorporated by reference to Exhibit 10.3 to the ~~Company’s~~Company's Current Report on Form 8-K ~~filed on February 13, 2020)~~dated July 6, 2016).
~~10.4~~4.9		~~Pledge Agreement, dated February 11, 2020, by and between FuelCell Energy Finance, LLC and Crestmark Equipment Finance~~Form of Series B Warrants to purchase common stock (incorporated by reference to Exhibit 10.4 to the ~~Company’s~~Company's Current Report on Form 8-K ~~filed on February 13, 2020)~~dated July 6, 2016).
~~10.5~~4.10		~~Guaranty Agreement, dated February 11, 2020, by FuelCell Energy, Inc. in favor~~Form of ~~Crestmark Equipment Finance~~ ~~(incorporated~~Series C Warrants to purchase common stock (incorporated by reference to Exhibit ~~10.5~~4.1 to the ~~Company’s~~Company's Current Report on Form 8-K ~~filed on February 13, 2020)~~dated April 27, 2017).
~~10.6~~4.11		~~Technology License and Access Agreement for Tulare Biomat Fuel Cell Power Plant,~~Form of Series D Warrants to purchase common stock (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K dated ~~February 11, 2020, by and among Crestmark Equipment Finance, Central CA Fuel Cell 2, LLC and FuelCell Energy, Inc.~~April 27, 2017).
4.12		Form of Warrant to purchase common stock (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on ~~February 13, 2020)~~November 6, 2019).
~~10.7~~4.13		Third Amendment to Credit Agreement, dated as of February 11, 2020, by and among FuelCell Energy, Inc., each of the Guarantors party to the Credit Agreement, each of the lenders party to the Credit Agreement and Orion Energy Partners Investment Agent, LLC. (incorporated by reference to Exhibit 10.7 to the Company’s Current report on Form 8-K filed on February 13, 2020).
~~10.8~~		Consent and Waiver, dated as of February 11, 2020, by and among FuelCell Energy, Inc., each of the Guarantors party to the Credit Agreement, each of the lenders party to the Credit Agreement and Orion Energy Partners Investment Agent, LLC. (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on February 13, 2020).
~~10.9~~		First Amendment to Credit Agreement, dated as of November 22, 2019, by and among FuelCell Energy, Inc., each of the Guarantors party to the Credit Agreement, each of the lenders party to the Credit Agreement and Orion Energy Partners Investment Agent, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 25, 2019).
~~10.10~~		Payoff Letter, Termination, and Release, dated as of November 22, 2019, by and among Groton Station Fuel Cell, LLC and Fifth Third Bank, National Association (incorporated by reference to Exhibit 10.2 to the Company Current Report on Form 8-K filed on November 25, 2019).
~~10.11~~		Amendment to Loan Agreement, dated as of December 19, 2019, by and among FuelCell Energy, Inc. and Connecticut Green Bank (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 20, 2019).
~~10.12~~		Second Amendment to Credit Agreement, dated as of January 20, 2020, by and among FuelCell Energy, Inc., each of the Guarantors party to the Credit Agreement, each of the lenders party to the Credit Agreement and Orion Energy Partners Investment Agent, LLC (incorporated by reference to Exhibit 10.117 to the Company’s Annual Report on Form 10-K for the year ended October 31, 2019, filed on January 22, 2020).
~~10.13~~		Letter Agreement, dated January 20, 2020, among FuelCell Energy, Inc., FCE FuelCell Energy Ltd., and Enbridge Inc. relating to the amendment of the terms of the Class A Cumulative Preferred Stock of FCE FuelCell Energy Ltd. ~~(incorporated~~(incorporated by reference to Exhibit 4.13 to the Company’s Annual Report on Form 10-K for the year ended October 31, 2019, filed on January 22, 2020).


Exhibit No.		Description
4.14		Schedule A setting forth the amended rights, privileges, restrictions and conditions of the Class A Cumulative Preferred Stock of FCE FuelCell Energy Ltd. (incorporated by reference to Exhibit 4.14 to the Company’s Annual Report on Form 10-K for the year ended October 31, 2019, filed on January 22, 2020).
4.15		Articles of FCE FuelCell Energy Ltd., effective as of January 20, 2020, including in Article 27.2 the Special Rights and Restrictions of the Class A Preferred Shares of FCE FuelCell Energy Ltd.(incorporated by reference to Exhibit 4.15 to the Company’s Quarterly Report on Form 10-Q for the period ending April 30, 2020 filed on June 12, 2020).
10.1*		FuelCell Energy, Inc. Fiscal Year 2021 Long Term Incentive Plan, as approved November 24, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 27, 2020).
10.2*		Form of FuelCell Energy, Inc. 2018 Omnibus Incentive Plan Relative TSR Performance Share Award Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 27, 2020).
10.3*		Form of FuelCell Energy, Inc. 2018 Omnibus Incentive Plan Absolute TSR Performance Share Award Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 27, 2020).
10.4		Payoff Letter, dated November 30, 2020, among FuelCell Energy, Inc., each of the Guarantors party thereto, and Orion Energy Partners Investment Agent, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 1, 2020).
10.5		Underwriting Agreement, dated as of December 1, 2020, by and among FuelCell Energy, Inc., the Selling Stockholders named therein, and J.P. Morgan Securities LLC, as representative of the several Underwriters named therein (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on December 4, 2020).
10.6		Payoff Letter, dated December 16, 2020, between FuelCell Energy, Inc., FCE FuelCell Energy Ltd., and Enbridge Inc. with respect to the Class A Preferred Shares of FCE FuelCell Energy Ltd. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 21, 2020).
10.7*		Second Amendment, dated as of January 19, 2021, to the Employment Agreement, effective as of August 26, 2019, between FuelCell Energy, Inc. and Jason B. Few (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 20, 2021).
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Schema Document
101.CAL		Inline XBRL Calculation Linkbase Document
101.LAB		Inline XBRL Labels Linkbase Document
101.PRE		Inline XBRL Presentation Linkbase Document
~~101.DEF~~104		Cover Page Interactive Data File (formatted as Inline XBRL ~~Definition Linkbase Document~~and contained in Exhibit 101).

		FUELCELL ENERGY, INC.
		(Registrant)

March 16, ~~2020~~2021		/s/ Michael S. Bishop
Date		Michael S. Bishop Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)