Business Context and Reporting Period
Company: Bloom Energy Corp
Filing Type: Form 8-K (Current Report)
Date of Report: June 25, 2021
Event: Entry into a Material Definitive Agreement regarding the sale of a portfolio of energy projects.
Key Financial Metrics and Transaction Details
- Transaction Scope: Sale of five subsidiary project companies (the "Portfolio") containing 32.85 megawatts of Bloom Energy Servers.
- Counterparties: RAD Bloom Project Holdco, LLC (a partnership of RAD Energy Solutions, LLC and Bank of America Corporation/Merrill Lynch Credit Products, LLC).
- Deployment Schedule: Commencing June 2021, continuing over 18 months.
- Financial Impact: The transaction completed financing required for scheduled acceptances in the second quarter of 2021.
- Liability Caps:
- Delay liquidated damages capped at $500/kw.
- General liability capped at the purchase price of the applicable Project (excluding third-party indemnification).
- Output guarantee liquidated damages capped at 6% of the Portfolio purchase price.
Material Changes and Agreements
The filing details the execution of two primary agreements:
- EPC Agreement: Covers the acquisition of the Portfolio and purchase of servers. Includes repurchase obligations if mechanical completion is not reached by September 30, 2022. Failure to achieve full commissioning (COO) by December 31, 2022, results in waived COO payments and daily liquidated damages.
- O&M Agreement: Bloom provides operations and maintenance services. Includes warranties on output and efficiency.
Outlook, Risks, and Contingencies
- Performance Risk (FCCR): Bloom must maintain a Fixed Charge Coverage Ratio (FCCR) of 1.15x in each 12-month period (assessed quarterly starting December 31, 2022).
- Consequence of Breach: If FCCR falls below 1.15x, Bloom must establish a reserve account funded by Project service fees payable over the following 12 months.
- Release Conditions: Funds are partially released for major maintenance costs and fully released if Bloom achieves a 2.0x FCCR for two consecutive periods or upon the fifth anniversary of the final project placement.
- Indemnification: Bloom indemnifies investors for environmental risks, tax recapture events, O&M performance failures, and project delays.
Investor Verification Checklist
- Verify the specific purchase price of the Portfolio, which is referenced as a cap for damages but not explicitly stated in this filing.
- Monitor Bloom's ability to meet the September 30, 2022, mechanical completion deadline to avoid repurchase obligations.
- Track the December 31, 2022, full commissioning (COO) deadline to assess potential revenue loss from waived payments.
- Review future quarterly reports for FCCR compliance starting December 31, 2022, to determine if reserve account funding will be triggered.