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Photo: Ina Fassbender/picture alliance via Getty Images

When fuel cell maker Bloom Energy went public back in July, its IPO prospectus included at least 35 mentions of a utility-scale deployment of Bloom "boxes" in Delaware, the company's largest single project.

Yes, but: None of them noted that those boxes need to be replaced, at a cost to the company that Axios has learned will be between $100 million and $150 million.

  • On November 6, Bloom announced its third quarter earnings, including around a $79 million net loss on $190 million in revenue. It didn't mention the Delaware replacement needs either in its release nor in the earnings call.
  • On November 11, Bloom quietly filed a construction permit request in Delaware for the replacements.
  • On November 13, Bloom filed its 10-Q with the SEC. Again, no word of the upcoming expenditure.

It is hard to argue that this isn't material information that Bloom should have shared with investors, particularly given how it could impact shareholder liquidity and the company's path to profitability.

  • Bloom would consider this $100-$150 million to eventually fall within its "cost of service" line item, which totaled just $79 million for the first nine months of 2018, and just $84 million for all of 2017.
  • Even if Bloom keeps it to $100 million and spreads the cost out over six to eight quarters, it would still come out to a minimum of $12 million in costs per quarter, or over half of its Q3 2018 cost of service expenses. If it's $150 million for six quarters, the quarterly hit more than doubles to $25 million a pop.

There continue to be no official rules governing what is or isn't material, when it comes to corporate disclosure, neither quantitative nor qualitative. But three experts I contacted believe Bloom's upcoming expenses are material, at least from an accounting perspective, and add that the "soft" test for public disclosure is about if it's a known expense that a "reasonable investor would want to know."

Bloom thinks I'm way off base. Per a spokesman:

"There will be incremental cost for replacing these systems. However, there will also be a savings in future service cost for these newer generation systems will cover the incremental cost. We’re very confident that there will be no material adverse cost to the company from the upgrade. It’s part of the normal process of our business.”

The bottom line: Bloom is a high-powered company, with a board of directors that includes Colin Powell, John Doerr and John Chambers. It defied some skeptics by raising $270 million in its July IPO at $15 per share, having its stock pop 67% on its first day of trading and then peak at $35.80 in late September.

  • But now the shares are almost back down to the IPO price — sinking 10% yesterday, apparently on California wildfire concerns — and investors have a right to be nervous. They also have a right to know about the company's future financial challenges.

Go deeper

Scoop: Gina Haspel almost resigned over plan to install Kash Patel as CIA deputy

Photo: Win McNamee/Getty Images

CIA Director Gina Haspel almost resigned in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelations stunned national security officials and almost blew up the leadership of the world's most powerful spy agency.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

NRA declares bankruptcy, says it will reincorporate in Texas

Wayne LaPierre of the National Rifle Association (NRA) speaks during CPAC in 2016. Photo: Saul Loeb/AFP via Getty Images

The National Rifle Association said Friday it has filed for Chapter 11 bankruptcy and will seek to reincorporate in Texas, calling New York, where it is currently registered, a "toxic political environment."

The big picture: The move comes just months after New York Attorney General Letitia James filed a lawsuit to dissolve the NRA, alleging the group committed fraud by diverting roughly $64 million in charitable donations over three years to support reckless spending by its executives.