eose-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-39291

EOS ENERGY ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)


Delaware			84-4290188
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

3920 Park Avenue	Edison	NJ	08820
(Address of Principal Executive Offices)			(Zip Code)

(732) 225-8400

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	EOSE	The Nasdaq Stock Market LLC
Warrants, each exercisable for one share of common stock	EOSEW	The Nasdaq Stock Market LLC

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 and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒ No ☐

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


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

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 Act). Yes ☐ No ☒

The registrant had outstanding 208,127,550 shares of common stock as of May 8, 2024.

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		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	4
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023	6
	Unaudited Condensed Consolidated Statements of Shareholders’ Deficit for the Three Months Ended March 31, 2024 and 2023	7
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	8
	Notes to the Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1a.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		41

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FORWARD-LOOKING INFORMATION

All statements included in this Quarterly Report on Form 10-Q (“Quarterly Report”), other than statements or characterizations of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions, as they relate to us, are intended to identify forward-looking statements. These statements appear in a number of places in this Quarterly Report and include statements regarding the intent, belief or current expectations of Eos Energy Enterprises, Inc. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. Factors which may cause actual results to differ materially from current expectations include, but are not limited to:

•changes adversely affecting the business in which we are engaged;

•our ability to forecast trends accurately;

•our ability to generate cash, service indebtedness and incur additional indebtedness;

•our ability to raise financing in the future;

•our customer’s ability to secure project financing;

•the amount of final tax credits available to our customers or to Eos Energy Enterprises, Inc. pursuant to the Inflation Reduction Act;

•uncertainties around our ability to meet the applicable conditions precedent and secure final approval of a loan in a timely manner or at all from the Department of Energy, Loan Programs Office, or the timing of funding and the final size of any loan that is approved;

•the possibility of a government shutdown while we work to meet the applicable conditions precedent and finalize loan documents with the U.S. Department of Energy Loan Programs Office or while we await notice of a decision regarding the issuance of a loan from the Department of Energy Loan Programs Office;

•our ability to continue to develop efficient manufacturing processes to scale and to forecast related costs and efficiencies accurately;

•fluctuations in our revenue and operating results;

•competition from existing or new competitors;

•our ability to convert firm order backlog and pipeline to revenue;

•risks associated with security breaches in our information technology systems;

•risks related to legal proceedings or claims;

•risks associated with evolving energy policies in the United States and other countries and the potential costs of regulatory compliance;

•risks associated with changes to the U.S. trade environment;

•risks resulting from the impact of global pandemics, including the novel coronavirus, Covid-19;

•our ability to maintain the listing of our shares of common stock on NASDAQ;

•our ability to grow our business and manage growth profitably, maintain relationships with customers and suppliers and retain our management and key employees;

•risks related to adverse changes in general economic conditions, including inflationary pressures and increased interest rates;

•risk from supply chain disruptions and other impacts of geopolitical conflict;

•changes in applicable laws or regulations; and

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•other factors detailed under the section entitled “Risk Factors” herein.

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. See also Part I, Item 1A, “Risk Factors” disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for additional discussion of the risks and uncertainties that could cause the Company’s actual results to differ materially from those expressed or implied in its forward-looking statements.

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Part I - Financial Information


EOS ENERGY ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)


	March 31, 2024		December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents	$	31,773	$	69,473
Restricted cash	2,625		3,439
Accounts receivable, net	3,953		3,387
Inventory, net	14,393		17,070
Vendor deposits	6,513		7,161

Contract assets, current	11,075		6,386
Prepaid expenses	1,278		1,082
Grant receivable	4,798		3,256
Other receivables	7,500		7,500
Other current assets	3,110		3,577
Total current assets	87,018		122,331

Property, plant and equipment, net	42,742		37,855
Intangible assets, net	282		295
Goodwill	4,331		4,331


Operating lease right-of-use asset, net	3,735		4,033
Long-term restricted cash	11,858		11,755
Other assets, net	5,716		5,892
Total assets	$	155,682	$	186,492


LIABILITIES
Current liabilities:
Accounts payable	$	18,339	$	20,540
Accrued expenses	38,614		32,332
Operating lease liability, current	1,574		1,496
Long-term debt, current	3,458		3,332

Contract liabilities, current	2,828		3,070
Other current liabilities	108		100
Total current liabilities	64,921		60,870

Long-term liabilities:
Operating lease liability	2,922		3,350
Long-term debt	88,222		88,002
Convertible notes payable - related party	113,950		112,525
Interest payable - related party	2,892		—
Contract liabilities, long-term	4,283		3,540
Warrants liability	24,561		27,461
Other liabilities	1,604		1,544
Total long-term liabilities	238,434		236,422
Total liabilities	303,355		297,292

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EOS ENERGY ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)


	March 31, 2024		December 31, 2023

COMMITMENTS AND CONTINGENCIES (NOTE 15)

SHAREHOLDERS' DEFICIT
Common stock, $0.0001 par value, 300,000,000 shares authorized, 206,779,447 and 199,133,827 shares outstanding on March 31, 2024 and December 31, 2023, respectively	22		21
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, no shares outstanding on March 31, 2024 and December 31, 2023	—		—
Additional paid in capital	774,857		765,018
Accumulated deficit	(922,554)		(875,846)
Accumulated other comprehensive income	2		7
Total shareholders' deficit	(147,673)		(110,800)
Total liabilities and shareholders' deficit	$	155,682	$	186,492

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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EOS ENERGY ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2024		2023
Revenue
Total revenue	$	6,601	$	8,835

Costs and expenses
Cost of goods sold	28,229		26,940
Research and development expenses	5,200		5,445
Selling, general and administrative expenses	14,242		13,955
Loss from write-down of property, plant and equipment	65		760

Total costs and expenses	47,736		47,100

Operating loss	(41,135)		(38,265)

Other (expense) income
Interest expense, net	(4,267)		(4,829)
Interest expense - related party	(4,851)		(13,755)
Change in fair value of warrants	2,900		(156)
Change in fair value of derivatives - related parties	534		(12,934)

Loss on debt extinguishment	—		(1,634)
Other income (expense)	136		(17)
Loss before income taxes	$	(46,683)	$	(71,590)
Income tax expense	25		10
Net loss	$	(46,708)	$	(71,600)

Other comprehensive income
Foreign currency translation adjustment, net of tax	(5)		1
Comprehensive loss	$	(46,713)	$	(71,599)

Basic and diluted loss per share attributable to common shareholders
Basic	$	(0.23)	$	(0.82)
Diluted	$	(0.23)	$	(0.82)

Weighted average shares of common stock
Basic	201,306,905		86,797,669
Diluted	201,306,905		86,797,669

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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EOS ENERGY ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
(In thousands, except share and per share amounts)


	Common Stock			Additional Paid in capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount

Balances on December 31, 2022	82,653,781	$	9	$	513,614	$	6	$	(646,340)	$	(132,711)
Stock-based compensation	—	—		3,363		—		—		3,363

Release of restricted stock units	915,206	—		—		—		—		—
Cancellation of shares used to settle payroll tax withholding	(246,717)	—		(345)		—		—		(345)
Issuance of common stock	11,900,400	1		25,694		—		—		25,695

Foreign currency translation adjustment	—	—		—		1		—		1
Net loss	—	—		—		—		(71,600)		(71,600)
Balances on March 31, 2023	95,222,670	$	10	$	542,326	$	7	$	(717,940)	$	(175,597)

Balances on December 31, 2023	199,133,827	$	21	$	765,018	$	7	$	(875,846)	$	(110,800)
Stock-based compensation	—	—		2,941		—		—		2,941

Release of restricted stock units	657,605	—		—		—		—		—
Cancellation of shares used to settle payroll tax withholding	(251,967)	—		(308)		—		—		(308)
Issuance of common stock	7,239,982	1		7,206		—		—		7,207

Foreign currency translation adjustment	—	—		—		(5)		—		(5)
Net loss	—	—		—		—		(46,708)		(46,708)
Balances on March 31, 2024	206,779,447	$	22	$	774,857	$	2	$	(922,554)	$	(147,673)

The accompanying notes are an integral part of these Unaudited Condensed Consolidated Financial Statements.

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EOS ENERGY ENTERPRISES, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities
Net loss	$	(46,708)	$	(71,600)
Adjustment to reconcile net loss to net cash used in operating activities
Stock-based compensation	2,941		3,363
Depreciation and amortization	1,197		2,686
Loss on debt extinguishment	—		1,634
Loss from write-down of property, plant and equipment	65		760
Amortization of right-of-use assets	298		233
Non-cash interest expense	885		915
Non-cash interest expense - related party	1,549		11,338
Change in fair value of warrants	(2,900)		156
Change in fair value of derivatives - related parties	(534)		12,934



Changes in operating assets and liabilities:
Prepaid expenses	(196)		406
Inventory	2,677		9,185
Accounts receivable	(566)		(1,984)
Vendor deposits	(204)		(917)
Contract assets	(4,572)		(1,914)
Grant receivable	(1,542)		(780)
Accounts payable	(2,593)		(208)
Accrued expenses	6,159		4,991

Interest payable - related party	2,892		2,417
Operating lease liabilities	(350)		(262)
Contract liabilities	501		(3,450)

Other	527		(381)
Net cash used in operating activities	(40,474)		(30,478)

SEC Form 10-Q filed by Eos Energy Enterprises Inc.