FuelCell Energy Inc., a leader in the field of electrical industrial apparatus manufacturing, has entered into an expansion and amendment of its existing lease, extending the term and increasing the space of its facilities in Calgary, Alberta, Canada. The agreement, effective as of today, involves the company's wholly owned subsidiary, Versa Power Systems Ltd., and the landlord, 52nd Street Business Centre LP.
The lease, originally established on May 20, 2005, with several amendments and expansions over the years, now includes an additional space known as the Second Additional Premises. This expansion increases the leased area at 4800 – 52nd Street SE, Calgary, which serves as an office, research and development center, and cell stack manufacturing facility for FuelCell Energy's solid oxide platform.
The Lease Expansion and Amendment extends the term through September 30, 2028, for the Second Additional Premises, which measures approximately 18,627 square feet. Starting August 1, 2024, Versa will pay an initial annual base rent of approximately 149,000 CAD for this space, with annual increases expected. In addition to the base rent, Versa is responsible for its share of operating expenses, real estate taxes, and other charges.
As a notable term of the agreement, Versa will benefit from a rent abatement for the first five months of the new lease term for the Second Additional Premises, which means the base rent will not be due until January 1, 2025, provided there are no events of default.
This lease expansion signifies FuelCell Energy's commitment to its operations and growth in the solid oxide fuel cell technology sector. The details of the Lease Expansion and Amendment will be included in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2024.
FuelCell Energy, incorporated in Delaware and headquartered in Danbury, Connecticut, is listed on the Nasdaq Global Market under the ticker symbol NASDAQ:FCEL. This strategic move underlines the company's ongoing efforts to enhance its research and manufacturing capabilities for its clean energy products. The information for this article is based on a press release statement.
In other recent news, FuelCell Energy has made significant strides in its financial and operational performance. The company reported second-quarter fiscal year 2024 revenue of $22.4 million, aligning with analyst expectations and surpassing market consensus. FuelCell Energy also announced a reduction in planned investments for fiscal year 2024 by up to $30 million, with the deferred expenses now expected to occur in fiscal year 2025.
FuelCell Energy's technology will feature in a biogeneration project by Ameresco (NYSE:AMRC), contributing $12 million to the company's product backlog. A noteworthy agreement with Gyeonggi Green Energy (GGE) involves the purchase of 42 upgraded 1.4 megawatt carbonate fuel cell modules, set to add approximately $160 million to the backlog.
The company has also extended its joint development agreement with ExxonMobil (NYSE:XOM) until the end of 2026. Under this partnership, a pilot plant for direct flue gas carbon capture and storage (CCS) using FuelCell's technology is under construction.
B.Riley adjusted its outlook on FuelCell Energy, reducing the stock's price target to $1.50 from $2.00, while maintaining a neutral stance. TD Cowen also reiterated a hold rating on the company, maintaining a price target of $2.00. These are recent developments that are essential for investors to consider.
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