Connecticut-based FuelCell Energy (NASDAQ:FCEL) is being investigated by the Securities and Exchange Commission (SEC) over its acceptance of a $6.5 million CARES Act PPP loan. The PPP program allocated up to $349 billion to help small businesses affected by closures due to the COVID-19 pandemic. The intent was to help the businesses maintain employees on the payroll for up to eight weeks, including providing benefits. Companies were also permitted to use the funds for rents, utilities, and mortgages.
FuelCell Energy is now being investigated over its application for, and acceptance of, a $6.5 million loan in April, according to a Financial Times report. The company said the information request from the SEC was voluntary, and that it is cooperating with the investigation, according to the report.
FuelCell provides systems that create clean power generation through a system of supply, recovery, and storage. The company says its systems are designed to meet the on-site power needs of utility companies, municipalities, universities, and a variety of industrial businesses.
In its fiscal second-quarter report released on June 12, 2020, the company said revenue more than doubled versus the year-ago period, but it still reported a loss from operations and a net loss per share. CEO Jason Few said he was pleased with the company performance, adding that "we achieved significant progress in executing our 'Powerhouse' business strategy."
On June 16, 2020, FuelCell announced it was planning to raise up to $75 million in a share sale offering. The intent of the aid provided by the PPP program was to help small businesses that did not have another avenue to raise capital.