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 June 30, 2024
or
| 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: 001-40209
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||
Registrant's telephone number, including area code: (626 ) 720-4530
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| OTCQX | ||||||||||||||
| OTCPK | ||||||||||||||
| OTCQX | ||||||||||||||
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 x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | Accelerated filer | o | ||||||||
| x | 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. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
As of July 31, 2024, the registrant had 6,005,967 shares of common stock, par value $0.0001 per share outstanding.
Table of Contents
2
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this Quarterly Report regarding our future financial performance, as well as our strategy, future operations, financial position, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. Any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” or the negative of such terms or other similar expressions. These forward-looking statements are based on management’s current expectations, assumptions, hopes, beliefs, intentions and strategies regarding future events and are based on currently available information as to the outcome and timing of future events. Although we believe such expectations and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. All readers are cautioned that the forward-looking statements contained in this Quarterly Report are not guarantees of future performance and we cannot assure any reader that such statements will be realized or that the forward-looking events and circumstances will occur.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
•our ability to fund our future cash obligations and continue as a going concern;
•our ability to access sources of capital to finance our operations and future capital requirements;
•our financial and business performance, including risk of uncertainty in our financial projections and business metrics and any underlying assumptions thereunder;
•the delisting of our common stock and public warrants from the New York Stock Exchange (the “NYSE”) and the commencement of trading of our common stock and public warrants in the over-the-counter (“OTC”) market;
•changes in our business and strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
•our ability to execute our business model, including market acceptance of our planned products and services and achieving sufficient production volumes at acceptable quality levels and prices;
•changes in domestic and foreign business, market, financial, political, legal conditions and applicable laws and regulations;
•our ability to grow market share in our existing markets or any new markets we may enter;
•our ability to achieve and maintain profitability in the future;
•our ability to maintain and enhance our products and brand, and to attract and retain customers;
•our ability to find new partners for product offerings;
•the success of our strategic relationships with third parties;
•our ability to scale in a cost-effective manner;
•developments and projections relating to our competitors and industry;
•supply chain disruptions;
•our ability to protect our intellectual property (“IP”);
3
•the actions of our stockholders and the related impact on the price of our common stock;
•expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act of 2012, as amended;
•our ability to find and retain critical employee talent and key personnel;
•our ability to successfully manage changes in our executive team;
•the possibility that we may be adversely impacted by other economic, business, and/or competitive factors;
•future exchange and interest rates;
•the outcome of any known and unknown litigation and regulatory proceedings; and
•other risks and uncertainties, including those disclosed under “Item 1A. Risk Factors” contained in Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”) filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2024, as supplemented by the risk factor disclosed in Part II, Item 1A. Risk Factors in our Quarterly Report for the period ended March 31, 2024 and the risk factors and other cautionary statements contained in other filings that have been made or will be made with the SEC by the Company.
Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Should one or more of the risks or uncertainties described in this Quarterly Report, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements. Our SEC filings are available publicly on the SEC’s website at www.sec.gov.
You should read this Quarterly Report with the understanding that our actual future results, levels of activity and performance as well as other events and circumstances may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
4
Part I - Financial Information
Item 1. Financial Statements
Heliogen, Inc.
Consolidated Balance Sheets
($ in thousands, except share data)
(Unaudited)
| June 30, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
| Short-term restricted cash | |||||||||||
Investments | |||||||||||
Receivables, net | |||||||||||
Inventories, net | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Operating lease right-of-use assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Long-term restricted cash | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
Trade payables | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Contract liabilities | |||||||||||
| Contract loss provisions | |||||||||||
Total current liabilities | |||||||||||
Operating lease liabilities, non-current | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 15) | |||||||||||
| Stockholders’ equity (deficit) | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity (deficit) | ( | ( | |||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
5
Heliogen, Inc.
Consolidated Statements of Operations
($ in thousands, except per share and share data)
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Services revenue | $ | $ | $ | $ | |||||||||||||||||||
| Grant revenue | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of services revenue (including depreciation) | |||||||||||||||||||||||
| Cost of grant revenue | |||||||||||||||||||||||
| Contract loss provisions | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Gross loss | ( | ( | ( | ( | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Impairment and other charges | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating loss | ( | ( | ( | ( | |||||||||||||||||||
| Interest income, net | |||||||||||||||||||||||
| Gain (loss) on warrant remeasurement | ( | ||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Net loss before taxes | ( | ( | ( | ( | |||||||||||||||||||
| Provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Loss per share: | |||||||||||||||||||||||
Loss per share – Basic and Diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average number of shares outstanding – Basic and Diluted (1) | |||||||||||||||||||||||
(1)Periods presented have been adjusted to reflect the 1-for-35 reverse stock split on August 31, 2023. See Note 1—Organization and Basis of Presentation—Reverse Stock Split, for additional information.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
6
Heliogen, Inc.
Consolidated Statements of Comprehensive Loss
($ in thousands)
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive income (loss), net of taxes: | |||||||||||||||||||||||
| Unrealized gains on available-for-sale securities | |||||||||||||||||||||||
| Cumulative translation adjustment | ( | ( | ( | ( | |||||||||||||||||||
| Total other comprehensive income (loss), net of taxes | ( | ( | |||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
7
Heliogen, Inc.
Consolidated Statements of Stockholders’ Equity (Deficit)
($ in thousands, except share data)
(Unaudited)
| Three Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Tax withholding related to vesting of restricted stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Vesting of warrants issued in connection with customer agreements | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock (1) | Additional Paid-in Capital (1) | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of warrants issued in connection with customer agreements | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
(1)Periods presented have been adjusted to reflect the 1-for-35 reverse stock split on August 31, 2023. See Note 1—Organization and Basis of Presentation—Reverse Stock Split, for additional information.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
8
Heliogen, Inc.
Consolidated Statements of Stockholders’ Equity (Deficit) (continued)
($ in thousands, except share data)
(Unaudited)
| Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Tax withholding related to vesting of restricted stock units | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Vesting of warrants issued in connection with customer agreements | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||
| Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
Common Stock (1) | Additional Paid-in Capital (1) | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | |||||||||||||||||||||||||||||||
| Share-based compensation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Issuance of common stock under employee stock purchase plan | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of warrants issued in connection with customer agreements | — | — | — | — | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
(1)Periods presented have been adjusted to reflect the 1-for-35 reverse stock split on August 31, 2023. See Note 1—Organization and Basis of Presentation—Reverse Stock Split, for additional information.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
9
Heliogen, Inc.
Consolidated Statements of Cash Flows
($ in thousands)
(Unaudited)
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
| Impairment charges | |||||||||||
| Provision for inventory reserve | |||||||||||
Share-based compensation | ( | ||||||||||
Change in fair value of warrants | ( | ( | |||||||||
| Change in fair value of contingent consideration | |||||||||||
| Deferred income taxes | |||||||||||
| Non-cash operating lease expense | |||||||||||
Other non-cash operating activities | ( | ( | |||||||||
Changes in assets and liabilities: | |||||||||||
Receivables, net | |||||||||||
Inventories, net | ( | ||||||||||
Prepaid and other current assets | ( | ( | |||||||||
| Trade payables and accrued liabilities | ( | ||||||||||
Contract liabilities | |||||||||||
| Change in contract loss provisions, net | ( | ( | |||||||||
| Other non-current assets and liabilities | ( | ||||||||||
| Net cash used in operating activities | ( | ( | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Capital expenditures | ( | ( | |||||||||
| Proceeds from sale of property, plant and equipment | |||||||||||
Purchases of available-for-sale securities | ( | ||||||||||
Maturities of available-for-sale securities | |||||||||||
| Net cash provided by investing activities | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Proceeds from exercise of stock options | |||||||||||
Proceeds from issuance of common stock under employee stock purchase plan | |||||||||||
| Payment related to taxes for net-share settlement of share-based compensation | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | |||||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
10
Heliogen, Inc.
Consolidated Statements of Cash Flows (continued)
($ in thousands)
(Unaudited)
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
| 2024 | 2023 | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term restricted cash | |||||||||||
| Long-term restricted cash | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Non-cash investing and financing activities: | |||||||||||
| Fair value of Project Warrants and Collaboration Warrants recognized in equity | $ | $ | |||||||||
Capital expenditures incurred but not yet paid | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
11
Note 1—Organization and Basis of Presentation
Background
Heliogen, Inc. and its subsidiaries (collectively, “Heliogen” or the “Company”), is involved in the development and commercialization of next-generation concentrated solar energy. We are developing a modular, artificial intelligence enabled, concentrated solar energy plant that will use an array of mirrors to reflect sunlight and capture, concentrate, store and convert it into cost-effective energy on demand. Unless otherwise indicated or the context requires otherwise, references in our consolidated financial statements to “we,” “us,” or “our” and similar expressions refer to Heliogen.
Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, these unaudited consolidated financial statements do not include all information or notes required by GAAP for annual financial statements. In the opinion of management, the unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary for fair statement.
The results reported in these unaudited consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These unaudited consolidated financial statements should be read in conjunction with the annual financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 26, 2024.
Certain immaterial prior period amounts, such as severance costs and share-based compensation for vendor warrants, have been reclassified to conform to current period presentation. These changes did not have a material impact on our financial position or results of operations.
Reverse Stock Split
On August 31, 2023, the Company effected a 1-for-35 reverse stock split of the Company’s common stock. As a result of the reverse stock split, every 35 shares of the Company’s issued and outstanding common stock as of 5:00 p.m. (Eastern Time) on August 31, 2023 was automatically combined into one issued and outstanding share of common stock, with no change in par value per share. No fractional shares of common stock were issued as a result of the reverse stock split. Any fractional shares in connection with the reverse stock split were rounded down to the nearest whole share and cash payments were made to the stockholders. The reverse stock split had no impact on the number of shares of common stock or preferred stock that the Company is authorized to issue pursuant to its certificate of incorporation. Proportional adjustments were made to the number of shares of common stock issuable upon exercise or conversion of the Company's equity awards and warrants, as well as the applicable exercise price. All share and per share information included in this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the impact of the reverse stock split.
Liquidity and Going Concern
These financial statements have been prepared assuming the Company will continue as a going concern. This basis of accounting contemplates continuity of operations, realization of assets and satisfaction of liabilities and commitments in the normal course of business. These financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
12
As of June 30, 2024, the Company had liquidity of $51.8 million, consisting of cash and cash equivalents and no debt. During the six months ended June 30, 2024, the Company incurred a net loss of $34.5 million and used cash in operations of $23.6 million. The Company expects to continue to generate operating losses and have significant cash outflows from operating activities for at least the next few years. Based on these factors, the Company anticipates that it may not have sufficient resources to fund its cash obligations for the next 12 months after the issuance date of the consolidated financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern.
The Company has evaluated the conditions discussed above and is taking various steps in an effort to alleviate them. The Company is exploring various cost saving opportunities and intends to continue seeking opportunities to generate additional revenue through its commercialization of engineering services. The Company has also engaged a financial advisor and is actively assessing various avenues to secure additional capital, including, but not limited to, the issuance of debt, equity or both. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company.
On May 16, 2024, the Company made the strategic decision to implement a targeted plan, which included a workforce reduction, the closing of the Company’s manufacturing facility in Long Beach, California, (the “Manufacturing Facility”) and a reduction in third-party costs. These actions are intended to further reduce structural costs and operating expenses and better align the Company’s operating structure for commercialization with a technology-centric and capital light model, as the Company continues to explore and evaluate strategic alternatives with its third-party financial advisor.
The Company estimates it could incur the following charges in connection with the targeted plan; $3.4 million to $4.0 million of asset write-off costs, including impairment charges, $0.6 million to $0.8 million of employee transition, severance payments and related benefits, and $0.2 million to $2.0 million of costs associated with closing the manufacturing facility, including lease termination costs and other related costs. The Company has incurred $4.2 million of these costs through June 30, 2024, which were recorded as impairment and other charges on our consolidated statements of operations. We expect to incur the remainder of these costs through the end of 2024. Refer to Note 12—Impairment and Other Charges for additional information.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and the accompanying notes. Despite our intention to establish accurate estimates and reasonable assumptions, actual results could differ materially from such estimates and assumptions.
Note 2—Revenue
Disaggregated Revenue
The following table provides information about disaggregated revenue:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Project revenue | $ | $ | $ | $ | |||||||||||||||||||
| Engineering services revenue | |||||||||||||||||||||||
| Total services revenue | |||||||||||||||||||||||
| Grant revenue | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
13
Services Revenue
Project revenue consists of amounts recognized under contracts with customers for the development, construction and delivery of commercial-scale concentrated solar energy facilities. The Company’s recognized project revenue is associated with a commercial-scale demonstration agreement (“CSDA”) executed with Woodside Energy (USA) Inc. (“Woodside”) in March 2022 for the engineering, procurement and construction of a new 5 MWe concentrated solar energy facility to be built in Mojave, California (the “Capella Project”) for the customer’s use in research, development and testing.
Engineering services revenue consists of amounts recognized under contracts with customers for the provision of engineering, research and development (“R&D”), or other similar services in our field of expertise. The Company’s recognized engineering services revenue is associated with engineering studies and projects in the United States (“U.S.”) and Europe.
Grant Revenue
The Company’s grant revenue is primarily related to the Company’s award (the “DOE Award”) from the U.S. Department of Energy (the “DOE”) for costs incurred during such periods that are reimbursable under the DOE Award. During the second quarter of 2024, the proposed budget modification was approved by the DOE for the Capella Project, which did not change the DOE Award amount but resulted in updated cost sharing ratios and indirect rates.
Contract Estimates
In the fourth quarter of 2023, the Company adjusted its Capella Project estimate after completing the front-end engineering design phase. Our current cost estimates for the Capella Project are subject to further refinement as we continue value engineering, exploring additional cost savings opportunities and continue to negotiate an executable engineering, procurement and construction (“EPC”) contract. As a result, the actual cost for the Capella Project could vary from our current estimate.
During the three and six months ended June 30, 2023, we recognized total provision for contract losses of $20 thousand and $0.4 million, respectively, associated with our projects in Germany. No
We amortized $(0.2 ) million and $0.6 million during the three and six months ended June 30, 2024, respectively, and $0.9 million and $1.3 million during the three and six months ended June 30, 2023, respectively, of the previously recognized contract loss provisions as a reduction to cost of services revenue incurred during the periods based on percentages of completion.
Performance Obligations
Revenue recognized under contracts with customers, which excludes amounts to be received from government grants, relates solely to the performance obligations satisfied during the three and six months ended June 30, 2024 and 2023 with no
As of June 30, 2024, we had approximately $37.2 million of transaction prices allocated to remaining performance obligations from our customer contracts. Based on our current forecast, we expect to recognize approximately 42 % of the remaining transaction prices as revenue over the next 12 months and the remainder to be recognized thereafter through 2027.
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Receivables
Receivables consisted of the following:
| $ in thousands | June 30, 2024 | December 31, 2023 | |||||||||
| Trade receivables | $ | $ | |||||||||
| Grant receivables: | |||||||||||
| Billed | |||||||||||
| Unbilled | |||||||||||
| Total grant receivables | |||||||||||
| Other receivables | |||||||||||
Total receivables | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Total receivables, net | $ | $ | |||||||||
Contract Liabilities
The following table outlines the activity related to contract liabilities:
| $ in thousands | |||||
Balance as of December 31, 2023 | $ | ||||
| Payments received in advance of performance | |||||
| Revenue recognized | ( | ||||
| Recognition of consideration payable associated with Project Warrants | ( | ||||
| Other | ( | ||||
Balance as of June 30, 2024 | $ | ||||
During the three and six months ended June 30, 2024, we recognized revenue of $0.4 million and $1.0 million, respectively, that was included in contract liabilities as of December 31, 2023.
Customer Concentrations
The following table shows the customers, including governmental entities, who accounted for greater than 10% of our total revenue:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Customer A | % | % | % | % | |||||||||||||||||||
Customer B | % | % | % | % | |||||||||||||||||||
Customer C | % | % | % | % | |||||||||||||||||||
The following table shows the customers, including governmental entities, who accounted for greater than 10% of our total receivables:
| June 30, 2024 | December 31, 2023 | ||||||||||
| Customer B | % | % | |||||||||
| Customer C | % | % | |||||||||
15
Note 3—Warrants
Public Warrants and Private Warrants
The Company’s warrant liabilities as of June 30, 2024 include public warrants (the “Public Warrants”) and private placement warrants (the “Private Warrants,” and together with the Public Warrants, the “Public and Private Warrants”). The Public Warrants and Private Warrants permit warrant holders to purchase in the aggregate 238,095 shares and 6,667 shares, respectively, of the Company’s common stock at an exercise price of $402.50 per share. The Public and Private Warrants became exercisable on March 18, 2022 and expire on December 30, 2026, or earlier upon redemption or liquidation. The Public and Private Warrants are recorded as liabilities on the consolidated balance sheets and measured at fair value at each reporting date, with the change in fair value included in gain (loss) on warrant remeasurement on the consolidated statements of operations.
Project Warrants
In connection with the execution of the CSDA with Woodside in March 2022, the Company issued warrants permitting Woodside to purchase 26,068 shares of the Company’s common stock at an exercise price of $0.35 per share (the “Project Warrants”). The Project Warrants expire upon the earlier of a change in control of the Company or March 28, 2027 and vest pro rata with certain payments required to be made by Woodside under the CSDA. The fair value of the Project Warrants upon issuance was $173.60 per warrant based on the closing price of the Company’s common stock on March 28, 2022, less the exercise price. The Project Warrants are recorded as equity on the consolidated balance sheets.
During the three and six months ended June 30, 2024, $43 thousand and $0.1 million, respectively, was recognized as additional paid-in capital related to the vesting of Project Warrants. During the three and six months ended June 30, 2023, $63 thousand and $0.1 million, respectively, was recognized as additional paid-in capital related to the vesting of Project Warrants. As of June 30, 2024, vested Project Warrants were exercisable for 14,457 shares of the Company’s common stock.
Collaboration Warrants
In connection with the execution of a collaboration agreement (the “Collaboration Agreement”) with Woodside in March 2022, the Company issued warrants permitting Woodside to purchase 104,275 shares of the Company’s common stock at an exercise price of $0.35 per share (the “Collaboration Warrants”). Under the Collaboration Agreement, Woodside will assist us in defining product offerings that use our modular technology for potential customers. The Collaboration Warrants expire upon the earlier of a change in control of the Company or March 28, 2027. Of these warrants, (i) half of the warrants vested immediately upon execution of the Collaboration Agreement, to purchase 52,138 shares of the Company’s common stock and (ii) the remaining warrants will vest based on certain specified performance goals under the Collaboration Agreement. The fair value of the Collaboration Warrants upon issuance was $173.60 per warrant based on the closing price of the Company’s common stock on March 28, 2022, less the exercise price.
The Collaboration Warrants are recorded as equity on the consolidated balance sheets and the related expense is recognized ratably as selling, general and administrative (“SG&A”) expense for marketing services to be provided over the estimated service period. The Company recognized SG&A expense, related to the vesting of the Collaboration Warrants, of $0.5 million and $1.0 million, respectively, during the three and six months ended June 30, 2023, respectively. During the fourth quarter of 2023, we fully impaired the Collaboration Warrants and recognized the remaining expense as an impairment charge on our consolidated statements of operations.
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Note 4—Fair Value of Financial Instruments
The Company’s assets and liabilities measured at fair value on a recurring basis are summarized in the following table by fair value measurement level:
| $ in thousands | Level | June 30, 2024 | December 31, 2023 | |||||||||||||||||
Assets: | ||||||||||||||||||||
| Investments | 1 | $ | $ | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
Public Warrants (1) | 1 | $ | $ | |||||||||||||||||
Private Warrants (1) | 2 | |||||||||||||||||||
(1)Included in other long-term liabilities on the consolidated balance sheets.
Private Warrants. The fair value of the Private Warrants approximates the fair value of the Public Warrants due to the existence of similar redemption provisions. As a result, the Company has determined that the fair value of the Private Warrants at a specific date would be similar to that of the Public Warrants, and thus the fair value is determined by using the closing price of the Public Warrants, which was $0.01 as of June 30, 2024.
Contingent Consideration. In connection with the acquisition of HelioHeat GmbH in September 2021, part of the fair value of the consideration transferred was contingent consideration. The contingent consideration was classified as Level 3 in the fair value hierarchy and measured at fair value using a probability-weighted discounted cash flow model utilizing estimated timing for the commissioning and required operational period of a commercial facility using the acquired particle receiver technology.
As of June 30, 2024 and December 31, 2023, the fair value of the contingent consideration was zero The following table summarizes the activities of our Level 3 fair value measurement for the three and six months ended June 30, 2023:
| Three Months Ended | Six Months Ended | ||||||||||
| $ in thousands | June 30, 2023 | June 30, 2023 | |||||||||
| Beginning balance | $ | $ | |||||||||
Change in fair value (1) | |||||||||||
| Ending balance | $ | $ | |||||||||
(1)The changes in the fair value of the contingent consideration are included in other income, net on our consolidated statements of operations.
Note 5—Inventories
Inventories consisted of the following:
| $ in thousands | June 30, 2024 | December 31, 2023 | |||||||||
| Raw materials | $ | $ | |||||||||
| Finished goods | |||||||||||
| Work in process | |||||||||||
Reserve for excess and obsolete inventory | ( | ( | |||||||||
Total inventories, net | $ | $ | |||||||||
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During the three and six months ended June 30, 2024, we recorded an inventory reserve of $1.7
Note 6—Property, Plant & Equipment
Major classes of property, plant and equipment, consisted of the following:
| $ in thousands | Estimated Useful Lives in Years | June 30, 2024 | December 31, 2023 | ||||||||||||||
Leasehold improvements | $ | $ | |||||||||||||||
Computer equipment | |||||||||||||||||
Machinery, vehicles and other equipment | |||||||||||||||||
Furniture and fixtures | |||||||||||||||||
Construction in progress | |||||||||||||||||
Total property, plant and equipment | |||||||||||||||||
Accumulated depreciation | ( | ( | |||||||||||||||
Total property, plant and equipment, net | $ | $ | |||||||||||||||
Depreciation expense for property, plant and equipment was $0.3 million and $0.6 million for the three months ended June 30, 2024 and 2023, respectively, and $0.7 million and $1.2 million for the six months ended June 30, 2024 and 2023, respectively, and is recorded in SG&A expense with a portion allocated to cost of services revenue.
During the three and six months ended June 30, 2024, we recorded an impairment of property, plant and equipment of $3.4
Asset Sales
During the three months ended June 30, 2024, we began to sell assets located at our Manufacturing Facility as a result of the decision to close the facility. Refer to Note 1—Organization and Basis of Presentation—Liquidity and Going Concern for additional information. During the three months ended June 30, 2024, we received $0.5 million in proceeds from the sale of property, plant and equipment and recognized a gain of $21 thousand from disposal of assets, which is recorded in SG&A expense with a portion allocated to cost of services revenue.
Note 7—Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
| $ in thousands | June 30, 2024 | December 31, 2023 | |||||||||
Payroll and other employee benefits | $ | $ | |||||||||
Professional fees | |||||||||||
Research, development and project costs | |||||||||||
| Inventory in-transit | |||||||||||
Operating lease liabilities, current portion | |||||||||||
Other accrued expenses | |||||||||||
Total accrued expenses and other current liabilities | $ | $ | |||||||||
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Note 8—Leases
The Company has operating leases, primarily for real estate. There are no material residual value guarantees associated with any of the Company’s operating leases.
As discussed in Note 1—Organization and Basis of Presentation—Liquidity and Going Concern, on May 16, 2024, the Company made the decision to implement a targeted plan, which included a workforce reduction, the closing of its Manufacturing Facility and a reduction in third-party costs. Due to the decision to close the Manufacturing Facility, the Company no longer anticipates utilizing the five-year renewal option for the manufacturing space in Long Beach, California (the “Long Beach Lease”). As a result, during the three months ended June 30, 2024, our right-of-use asset and operating lease liabilities for the Long Beach Lease were both decreased by $6.4 million. As of June 30, 2024, the Company still has a $1.5 million standby letter of credit outstanding associated with the Long Beach lease, included in restricted cash on the consolidated balance sheet. No amounts have been drawn under the standby letter of credit.
The following table provides information on the amounts of our right-of-use assets and liabilities included on our consolidated balances sheets:
| $ in thousands | Financial Statement Line | June 30, 2024 | December 31, 2023 | ||||||||||||||
Operating lease right-of-use assets | Operating lease right-of-use assets | $ | $ | ||||||||||||||
| Accrued expenses and other current liabilities | |||||||||||||||||
Operating lease liabilities, non-current | Operating lease liabilities, non-current | ||||||||||||||||
The following table summarizes the components of lease costs:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Sublease income | ( | ( | ( | ( | |||||||||||||||||||
Total lease cost | $ | $ | $ | $ | |||||||||||||||||||
The Company has variable and other related lease costs which were not considered material for the three and six months ended June 30, 2024 and 2023.
The weighted-average remaining lease terms and discount rates for the Company’s operating leases were as follows:
| June 30, 2024 | December 31, 2023 | ||||||||||
Weighted-average remaining lease term (years) | |||||||||||
| Weighted-average discount rate | % | % | |||||||||
The following table summarizes the supplemental cash flow information related to leases:
| Six Months Ended | |||||||||||
| June 30, | |||||||||||
$ in thousands | 2024 | 2023 | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | |||||||||||
Decrease in right-of-use asset and operating lease liabilities due to lease remeasurement | |||||||||||
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As of June 30, 2024, the maturities of our future undiscounted cash flows associated with our operating lease liabilities were as follows:
| $ in thousands | |||||
| 2024 (remaining months) | $ | ||||
| 2025 | |||||
| 2026 | |||||
| 2027 | |||||
| 2028 | |||||
Thereafter | |||||
| Total future lease payments | $ | ||||
Less: Imputed interest | ( | ||||
| Present value of future lease payments | $ | ||||
Note 9—Equity
Stockholder Matters
As previously reported, on November 7, 2023, the NYSE notified the Company that it had determined to commence proceedings to delist the Company’s common stock and Public Warrants from the NYSE. Trading in these securities was immediately suspended. The NYSE reached its decision to delist these securities pursuant to Section 802.01B of the NYSE Listed Company Manual. On April 15, 2024, the Company notified the NYSE that the Company intended to withdraw its appeal of the delisting determination and on June 10, 2024, the NYSE filed with the SEC a Notification of Removal From Listing and/or Registration under Section 12(b) of the Exchange Act on Form 25 in order to delist the Company’s common stock and Public Warrants from the NYSE and deregister the Company’s common stock and Public Warrants under Section 12(b) of the Exchange Act. The delisting became effective on June 20, 2024.
The Company’s common stock is currently quoted on the OTCQX, the highest market tier operated by the OTC Markets Group, Inc. The Company intends to continue to comply with public company SEC regulations and other NYSE listing requirements, including filing quarterly financial statements, having independently audited financials, and maintaining an independent board of directors with corporate governance rules and oversight committees.
Stockholders Rights Plan
On April 16, 2023, the Company’s Board of Directors (the “Board”) declared a dividend of one preferred share purchase right (“Right”) for each outstanding share of the Company’s common stock to the stockholders of record as of the close of business on April 28, 2023, and adopted a limited duration stockholder rights plan, as set forth in the Rights Agreement, dated as of April 16, 2023 (the “Rights Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as rights agent. The Rights will be exercisable only if a person or group (an “acquiring person”) acquires or launches a tender or exchange offer to acquire beneficial ownership (which includes certain synthetic equity interests) of 12.5 % or more of the Company’s outstanding common stock (20 % for certain passive institutional investors as described in the Rights Agreement) without the approval of the Board. Under the original terms of the Rights Agreement, once the Rights become exercisable, each Right will entitle its holder (other than the acquiring person, whose rights will become void) to purchase for $122.50 , subject to adjustment, additional shares of our common stock having a market value of twice such exercise price. In addition, the Rights Agreement has customary flip-over and exchange features.
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On April 16, 2024, we entered into Amendment No. 1 (the “Amendment”) to the Rights Agreement. The Amendment extends the final expiration date of the Rights Agreement by one year such that the Rights will now expire on April 17, 2025. The Amendment also changes the definition of “Exercise Price” from $122.50 to $26.40 and amends the definition of “acquiring person” to reflect the terms and conditions of the limited waiver previously granted by us to Nant Capital, LLC and certain of its affiliates, as previously disclosed on the Company’s Current Report on Form 8-K dated February 15, 2024. The Rights Agreement otherwise remains unmodified and in full force and effect in accordance with its terms.
The Rights Agreement will reduce the likelihood that any entity, person or group gains control of Heliogen through open market accumulation without paying all stockholders an appropriate control premium or without providing our Board sufficient time to make informed judgments and take actions that are in the best interests of all stockholders.
Note 10—Loss per Share
Basic and diluted losses per share (“EPS”) were as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands, except share and per share data | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||||||
Weighted-average impact of warrants (1) | |||||||||||||||||||||||
Denominator for basic EPS – weighted-average shares | |||||||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Denominator for diluted EPS – weighted-average shares | |||||||||||||||||||||||
EPS – Basic and Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1)Warrants that have a $0.35
21
The following securities were excluded from the calculation of losses per share as their impact would be anti-dilutive:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Shares issuable under the employee stock purchase plan | |||||||||||||||||||||||
| Unvested restricted stock units | |||||||||||||||||||||||
| Restricted shares issued upon the early exercise of unvested stock options | |||||||||||||||||||||||
| Unvested warrants | |||||||||||||||||||||||
| Vested warrants | |||||||||||||||||||||||
Note 11—Share-based Compensation
The Heliogen, Inc. 2021 Equity Incentive Plan aims to incentivize employees, directors and consultants who render services to the Company through the granting of stock awards, including stock options, stock appreciation right awards, restricted stock awards, restricted stock unit (“RSU”) awards, performance awards, and other stock-based awards.
The following table summarizes our share-based compensation expense by the affected line on our consolidated statements of operations:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Cost of services revenue | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative | ( | ||||||||||||||||||||||
Research and development | ( | ||||||||||||||||||||||
Total share-based compensation expense | $ | $ | $ | $ | ( | ||||||||||||||||||
The following table summarizes our share-based compensation expense by grant type:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Stock options | $ | $ | $ | $ | ( | ||||||||||||||||||
Restricted stock units | |||||||||||||||||||||||
| Employee stock purchase plan | |||||||||||||||||||||||
Vendor Warrants | |||||||||||||||||||||||
Total share-based compensation expense | $ | $ | $ | $ | ( | ||||||||||||||||||
22
Stock Options
The following table summarizes the Company’s stock option activity:
| $ in thousands, except share and per share data | Number of Shares | Weighted Average Exercise Price ($) | Weighted Average Remaining Contractual Life (Years) | Aggregate Intrinsic Value ($) | |||||||||||||||||||
Outstanding balance as of December 31, 2023 | $ | $ | |||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
| Expired | ( | ||||||||||||||||||||||
Outstanding balance as of June 30, 2024 | $ | $ | |||||||||||||||||||||
Exercisable as of June 30, 2024 | $ | $ | |||||||||||||||||||||
As of June 30, 2024, the unrecognized compensation cost related to stock options was $0.3 million which is expected to be recognized over a weighted-average period of 0.8 years.
Restricted Stock Units
The following table summarizes the Company’s RSU award activity:
| Number of Shares | Weighted Average Grant Date Fair Value ($) | ||||||||||
Unvested as of December 31, 2023 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Unvested as of June 30, 2024 | $ | ||||||||||
As of June 30, 2024, the unrecognized compensation cost related to unvested RSU awards was $5.8 million which is expected to be recognized over a weighted-average period of 2.3 years.
Note 12—Impairment and Other Charges
Impairment and other charges consisted of the following:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Property, plant and equipment | $ | $ | $ | $ | |||||||||||||||||||
Goodwill | |||||||||||||||||||||||
| Severance costs | |||||||||||||||||||||||
| Manufacturing Facility closing costs | |||||||||||||||||||||||
Total impairment and other charges | $ | $ | $ | $ | |||||||||||||||||||
23
Impairments
As discussed in Note 1—Organization and Basis of Presentation—Liquidity and Going Concern, on May 16, 2024, the Company made the strategic decision to implement a targeted plan, which included a workforce reduction, the closing of its Manufacturing Facility and a reduction in third-party costs. Management concluded that these actions constituted a triggering event and as a result, we performed an impairment assessment for our long-lived assets, including right-of-use assets. During the three and six months ended June 30, 2024, we recorded impairments of $3.4
During the first quarter of 2023, we assessed our goodwill for impairment due to a sustained decrease in the Company’s market capitalization. The Company concluded that it was more likely than not that the fair value of its reporting unit was less than its carrying amount as of March 31, 2023. As a result, we fully impaired goodwill and recorded an impairment of $1.0 million during the first quarter of 2023.
Reorganization Costs
Costs and charges related to the implementation of the Company’s targeted plan, are accrued when probable and reasonably estimable or at the time of program announcement. The Company expects to incur the costs associated with its targeted plan over the course of 2024, however the ultimate amount and timing of total costs and charges in connection with the Company’s targeted plan may vary due to a variety of factors, including the finalization of the closure of the Manufacturing Facility and continued sales of property, plant and equipment located at the Manufacturing Facility.
During the three and six months ended June 30, 2024, we recorded severance costs of $0.6 0.2
In February 2023, the Company initiated a strategic plan to respond to market feedback, streamline our operations, and improve our financial condition. As a result, during the six months ended June 30, 2023, we recorded severance costs of $0.5 million for employee severance and related benefits.
Note 13—Income Taxes
24
Note 14—Related Party Transactions
NantG Power, LLC
On March 24, 2023, Heliogen entered into an agreement with NantG Power, LLC (“NantG”), an affiliated sister-company to Nant Capital LLC, a holder of more than 5% of Heliogen’s outstanding voting stock, to provide front-end concept design and R&D engineering services. During the three and six months ended June 30, 2024, the Company recognized $0.1 million and $0.2 million, respectively, of services revenue from NantG. The Company did not 0.1 million and $0.1 million, respectively, with NantG.
Note 15—Commitments and Contingencies
25
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following management’s discussion and analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion includes forward-looking statements that involve risks, uncertainties and assumptions, including those described in “Cautionary Note Regarding Forward-Looking Statements” included in the fore-part in this Quarterly Report on Form 10-Q (our “Quarterly Report”) and included in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”), as filed with the SEC on March 26, 2024.
The following MD&A should be read in conjunction with our consolidated financial statements and related notes included in Part I Item 1 in this Quarterly Report and our audited consolidated financial statements as of December 31, 2023, included in our Annual Report.
Overview
Heliogen, Inc. and its subsidiaries (collectively, “Heliogen,” the “Company,” “we,” “us,” or “our”) is a leader in next generation concentrated solar energy. We are developing a modular, artificial intelligence enabled, concentrated solar energy plant that uses an array of mirrors to reflect sunlight and capture, concentrate, store and convert it into cost-effective energy on demand. Our product offering will deliver industrial process steam or power, dispatchable around the clock using thermal energy storage based on proven technology. Our next-generation system will be able to cost-effectively generate and store thermal energy at very high temperatures, enabling more cost-effective production of electricity at a smaller scale. The inclusion of a thermal energy storage system distinguishes our solution from clean energy provided by typical photovoltaic and wind installations which do not produce thermal energy and are only able to produce energy intermittently unless battery storage is added. The system will be configurable for several applications, including carbon-free industrial-grade heat and steam (for use in industrial processes), and clean power (electricity) for a variety of applications, based on a customer’s needs.
Recent Developments
In May 2024, we implemented a targeted plan, which included a workforce reduction, the closing of our manufacturing facility in Long Beach, California, (the “Manufacturing Facility”) and a reduction in third-party costs. These actions are intended to further reduce structural costs and operating expenses and better align our operating structure for commercialization with a technology-centric and capital light model, as we continue to explore and evaluate strategic alternatives with our third-party financial advisor.
We estimate that we could incur the following charges in connection with the targeted plan; $3.4 million to $4.0 million of asset write-off costs, including impairment charges, $0.6 million to $0.8 million of employee transition, severance payments and related benefits, and $0.2 million to $2.0 million of costs associated with closing the manufacturing facility, including lease termination costs and other related costs. We have incurred $4.2 million of these costs through June 30, 2024, which were recorded as impairment and other charges on our consolidated statements of operations. We expect to incur the remainder of these costs through the end of 2024. Refer to Note 12—Impairment and Other Charges for additional information.
How We Generate Revenue
We primarily generate revenue by contracting with owner-operators to build turnkey facilities that deploy Heliogen’s technology. Our services revenue which is derived from customer contracts, is primarily recognized over time using the incurred costs method for our contracts with customers that include projects under development and engineering and design services. Engineering service contracts can be short-term or span several years and we recognize revenue over time as customers receive and consume the benefit of such services. Additionally, we have government grants which are accounted for as grant revenue and are recognized only when there is reasonable assurance that the entity will comply with any conditions attached to the grant and the grant funds will be received.
26
In March 2022, we secured a contract to engineer and construct a 5 MWe commercial-scale concentrated solar energy facility (the “Capella Project”) with Woodside Energy (USA) Inc. (“Woodside”) in Mojave, California with a total transaction price of $45.5 million and received an award from the U.S. Department of Energy (the “DOE”) of $39.0 million (the “DOE Award”) to support the Capella Project, of which $3.9 million will be paid directly by the DOE to another party providing services under the DOE Award at our direction.
Cost of Conducting Our Business
Cost of revenue consists primarily of direct material, labor and subcontractor costs related to our revenue contracts. Additionally, we have indirect costs related to contract performance, such as indirect labor, supplies, tools and allocated depreciation.
Results of Operations
Comparison of the Three Months Ended June 30, 2024 and 2023
| Three Months Ended | |||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | % Change | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Services revenue | $ | 786 | $ | 912 | $ | (126) | (14) | % | |||||||||||||||
| Grant revenue | 1,475 | 482 | 993 | 206 | % | ||||||||||||||||||
| Total revenue | 2,261 | 1,394 | 867 | ||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of services revenue (including depreciation) | 2,454 | 1,060 | 1,394 | 132 | % | ||||||||||||||||||
| Cost of grant revenue | 1,475 | 442 | 1,033 | 234 | % | ||||||||||||||||||
| Contract loss provisions | — | 20 | (20) | (100) | % | ||||||||||||||||||
| Gross loss | (1,668) | (128) | (1,540) | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 9,505 | 17,652 | (8,147) | (46) | % | ||||||||||||||||||
| Research and development | 4,751 | 4,946 | (195) | (4) | % | ||||||||||||||||||
| Impairment and other charges | 4,128 | — | 4,128 | n/m | |||||||||||||||||||
| Operating loss | (20,052) | (22,726) | 2,674 | ||||||||||||||||||||
| Interest income, net | 675 | 270 | 405 | 150 | % | ||||||||||||||||||
| Gain (loss) on warrant remeasurement | 45 | (52) | 97 | (187) | % | ||||||||||||||||||
| Other income, net | 52 | 827 | (775) | (94) | % | ||||||||||||||||||
| Net loss before taxes | (19,280) | (21,681) | 2,401 | ||||||||||||||||||||
| Provision for income taxes | (2) | (2) | — | — | % | ||||||||||||||||||
| Net loss | $ | (19,282) | $ | (21,683) | $ | 2,401 | |||||||||||||||||
n/m — not meaningful.
Revenue and Gross Loss
During the three months ended June 30, 2024, we recognized total revenue of $2.3 million, an increase of $0.9 million compared to total revenue of $1.4 million for the three months ended June 30, 2023.
We recognized services revenue of $0.8 million during the three months ended June 30, 2024, a decrease of $0.1 million compared to services revenue of $0.9 million for the three months ended June 30, 2023. The decrease in services revenue is primarily due to a reduction in revenue recognized on the Capella Project during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, resulting from a decrease in the cost incurred on the project. The decrease was offset by an increase in engineering services performed during the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
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We recognized grant revenue of $1.5 million during the three months ended June 30, 2024, an increase of $1.0 million compared to grant revenue of $0.5 million for the three months ended June 30, 2023. The increase was primarily driven by the approval of the proposed budget modification by the DOE for the Capella Project, which did not change the DOE Award amount but resulted in more favorable cost sharing ratios and indirect rates for the three months ended June 30, 2024.
During the three months ended June 30, 2024, we recognized a gross loss of $1.7 million, a change of $1.5 million compared to gross loss of $0.1 million for the three months ended June 30, 2023. The change was primarily driven by an inventory reserve of $1.7 million recorded during the three months ended June 30, 2024 to adjust for excess and obsolete inventories based on our current future project needs.
Selling, General and Administrative
The following table summarizes selling, general and administrative (“SG&A”) expenses:
| Three Months Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | ||||||||||||||
| Employee compensation, excluding share-based compensation | $ | 3,310 | $ | 5,637 | $ | (2,327) | |||||||||||
| Share-based compensation | 793 | 2,210 | (1,417) | ||||||||||||||
| Collaboration Warrants | — | 495 | (495) | ||||||||||||||
| Other selling, general and administrative | 5,402 | 9,310 | (3,908) | ||||||||||||||
| Total selling, general and administrative | $ | 9,505 | $ | 17,652 | $ | (8,147) | |||||||||||
During the three months ended June 30, 2024, we recognized SG&A expense of $9.5 million, a decrease of $8.1 million compared to SG&A expense of $17.7 million for the three months ended June 30, 2023. The decrease was primarily driven by a decrease of $3.1 million in professional and consulting fees as we focused on reducing third-party costs, a decrease of $2.3 million in employee compensation primarily driven by headcount reductions and a reduction of $1.4 million in share-based compensation expense due to forfeitures.
Research and Development
The following table summarizes research and development (“R&D”) expenses:
| Three Months Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | ||||||||||||||
| Employee compensation, excluding share-based compensation | $ | 2,513 | $ | 2,985 | $ | (472) | |||||||||||
| Share-based compensation | (173) | 441 | (614) | ||||||||||||||
| Other research and development | 2,411 | 1,520 | 891 | ||||||||||||||
| Total research and development | $ | 4,751 | $ | 4,946 | $ | (195) | |||||||||||
During the three months ended June 30, 2024, we recognized R&D expense of $4.8 million, a decrease of $0.2 million compared to R&D expense of $4.9 million for the three months ended June 30, 2023. The decrease was primarily driven by a decrease of $0.5 million in employee compensation primarily due to headcount reductions and a decrease of $0.6 million in share-based compensation expense due to forfeitures, partially offset by an increase in other R&D costs associated with our Texas Steam Plant, located in Plains, Texas.
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Impairment and Other Charges
During the three months ended June 30, 2024, we recognized impairment and other charges of $4.1 million, consisting of $3.4 million to property, plant and equipment related to leasehold improvements, machinery and equipment and other fixed assets located at our Manufacturing Facility, $0.6 million of employee severance and related benefits associated with a workforce reduction and $0.2 million of reorganization costs associated with closing our Manufacturing Facility. We had no impairment and other charges for the three months ended June 30, 2023. Refer to Note 12—Impairment and Other Charges for additional information.
Interest Income, Net
During the three months ended June 30, 2024, we recognized interest income of $0.7 million, an increase of $0.4 million compared to interest income of $0.3 million for the three months ended June 30, 2023. The increase is primarily attributable to the rising interest rate environment for our investments, partially offset by the decrease in our average investment balance.
Other Income, Net
During the three months ended June 30, 2024, we recognized other income of $52 thousand, a decrease of $0.8 million compared to other income of $0.8 million for the three months ended June 30, 2023. The decrease is primarily attributable to a decrease of $0.9 million in accretion income related to our investments in available-for-sale securities.
Comparison of the Six Months Ended June 30, 2024 and 2023
| Six Months Ended | |||||||||||||||||||||||
| June 30, | |||||||||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | % Change | |||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Services revenue | $ | 1,740 | $ | 1,778 | $ | (38) | (2) | % | |||||||||||||||
| Grant revenue | 2,049 | 1,553 | 496 | 32 | % | ||||||||||||||||||
| Total revenue | 3,789 | 3,331 | 458 | ||||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of services revenue (including depreciation) | 3,357 | 2,001 | 1,356 | 68 | % | ||||||||||||||||||
| Cost of grant revenue | 2,049 | 1,513 | 536 | 35 | % | ||||||||||||||||||
| Contract loss provisions | — | 390 | (390) | (100) | % | ||||||||||||||||||
| Gross loss | (1,617) | (573) | (1,044) | ||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 21,860 | 21,345 | 515 | 2 | % | ||||||||||||||||||
| Research and development | 8,542 | 10,206 | (1,664) | (16) | % | ||||||||||||||||||
| Impairment and other charges | 4,160 | 1,480 | 2,680 | 181 | % | ||||||||||||||||||
| Operating loss | (36,179) | (33,604) | (2,575) | ||||||||||||||||||||
| Interest income, net | 1,358 | 553 | 805 | 146 | % | ||||||||||||||||||
| Gain (loss) on warrant remeasurement | 21 | 252 | (231) | (92) | % | ||||||||||||||||||
| Other income, net | 297 | 574 | (277) | (48) | % | ||||||||||||||||||
| Net loss before taxes | (34,503) | (32,225) | (2,278) | ||||||||||||||||||||
| Provision for income taxes | (4) | (2) | (2) | 100 | % | ||||||||||||||||||
| Net loss | $ | (34,507) | $ | (32,227) | $ | (2,280) | |||||||||||||||||
Revenue and Gross Loss
During the six months ended June 30, 2024, we recognized total revenue of $3.8 million, an increase of $0.5 million compared to total revenue of $3.3 million for the six months ended June 30, 2023.
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We recognized services revenue of $1.7 million during the six months ended June 30, 2024, a decrease of $38 thousand compared to services revenue of $1.8 million for the six months ended June 30, 2023. The decrease in services revenue is primarily due to a reduction in revenue recognized on the Capella Project during the six months ended June 30, 2024 compared to the six months ended June 30, 2023, resulting from a decrease in the cost incurred on the project. The decrease was offset by an increase in engineering services performed during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
We recognized grant revenue of $2.0 million during the six months ended June 30, 2024, an increase of $0.5 million compared to grant revenue of $1.6 million for the six months ended June 30, 2023. The increase was primarily driven by the approval of the proposed budget modification by the DOE for the Capella Project, which did not change the DOE Award amount but resulted in more favorable cost sharing ratios and indirect rates for the six months ended June 30, 2024.
During the six months ended June 30, 2024, we recognized a gross loss of $1.6 million, a change of $1.0 million compared to gross loss of $0.6 million for the six months ended June 30, 2023. The change was primarily driven by an inventory reserve of $1.7 million recorded during the six months ended June 30, 2024 to adjust for excess and obsolete inventories based on our current future project needs. The decrease was partially offset by the recognition of a contract loss provision during the six months ended June 30, 2023 of $0.4 million primarily related to our German operations.
Selling, General and Administrative
The following table summarizes SG&A expenses:
| Six Months Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | ||||||||||||||
| Employee compensation, excluding share-based compensation | $ | 7,521 | $ | 10,759 | $ | (3,238) | |||||||||||
| Share-based compensation | 1,671 | (7,543) | 9,214 | ||||||||||||||
| Collaboration Warrants | — | 990 | (990) | ||||||||||||||
| Other selling, general and administrative | 12,668 | 17,139 | (4,471) | ||||||||||||||
| Total selling, general and administrative | $ | 21,860 | $ | 21,345 | $ | 515 | |||||||||||
During the six months ended June 30, 2024, we recognized SG&A expense of $21.9 million, an increase of $0.5 million compared to SG&A expense of $21.3 million for the six months ended June 30, 2023. The increase was primarily driven by a $9.2 million increase in share-based compensation primarily due to a one-time reversal of share-based compensation of $12.5 million during the first quarter of 2023, as a result of stock options forfeited in connection with the termination of our former Chief Executive Officer, as well as an overall reduction in share-based compensation expense due to forfeitures. The increase was partially offset by a decrease of $3.2 million in employee compensation primarily driven by headcount reductions and a decrease of $3.6 million in professional and consulting fees as we focused on reducing third-party costs.
Research and Development
The following table summarizes R&D expenses:
| Six Months Ended | |||||||||||||||||
| June 30, | |||||||||||||||||
| $ in thousands | 2024 | 2023 | $ Change | ||||||||||||||
| Employee compensation, excluding share-based compensation | $ | 5,006 | $ | 6,772 | $ | (1,766) | |||||||||||
| Share-based compensation | 188 | 915 | (727) | ||||||||||||||
| Other research and development | 3,348 | 2,519 | 829 | ||||||||||||||
| Total research and development | $ | 8,542 | $ | 10,206 | $ | (1,664) | |||||||||||
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During the six months ended June 30, 2024, we recognized R&D expense of $8.5 million, a decrease of $1.7 million compared to R&D expense of $10.2 million for the six months ended June 30, 2023. The decrease was driven by a decrease of $1.8 million in employee compensation primarily due to headcount reductions and a decrease of $0.7 million in share-based compensation expense due to forfeitures, partially offset by an increase in other R&D costs associated with our Texas Steam Plant, located in Plains, Texas.
Impairment and Other Charges
During the six months ended June 30, 2024, we recognized impairment and other charges of $4.2 million, consisting of $3.4 million to property, plant and equipment related to leasehold improvements, machinery and equipment and other fixed assets located at our Manufacturing Facility, $0.6 million of employee severance and related benefits associated with a workforce reduction and $0.2 million of reorganization costs associated with closing our Manufacturing Facility. Refer to Note 12—Impairment and Other Charges for additional information.
During the six months ended June 30, 2023, we recognized impairment and other charges of $1.5 million, consisting of an impairment charge of $1.0 million to fully impair goodwill due to a sustained decrease in our market capitalization and $0.5 million expense for employee severance and related benefits.
Interest Income, Net
During the six months ended June 30, 2024, we recognized interest income of $1.4 million, an increase of $0.8 million compared to interest income of $0.6 million for the six months ended June 30, 2023. The increase is primarily attributable to the rising interest rate environment for our investments, partially offset by the decrease in our average investment balance.
Other Income, Net
During the six months ended June 30, 2024, we recognized other income of $0.3 million, a decrease of $0.3 million compared to other income of $0.6 million for the six months ended June 30, 2023. The decrease is primarily attributable to a decrease of $1.7 million in accretion income related to our investments in available-for-sale securities, partially offset by a gain of $1.2 million for the six months ended June 30, 2023 in the estimated fair value of the contingent consideration associated with the acquisition of HelioHeat GmbH based on the revised probability of payment.
Liquidity and Capital Resources
Our principal sources of liquidity are cash and investments on hand, which are short-term in duration and highly liquid, and cash receipts from customers and government grants. Our principal uses of cash are expenditures related to project development and completion, as well as R&D and SG&A expenditures in support of our technology development and operational support.
As of June 30, 2024, the Company had liquidity of $51.8 million, consisting of cash and cash equivalents and no debt. As of July 31, 2024, the Company had liquidity of $48.2 million, consisting of cash and cash equivalents and no debt.
Going Concern
The accompanying financial statements have been prepared assuming we will continue as a going concern. As of June 30, 2024, our liquidity was $51.8 million and we had an accumulated deficit of $472.7 million. During the six months ended June 30, 2024, we incurred a net loss of $34.5 million and used cash in operations of $23.6 million. We expect to continue to generate operating losses and have significant cash outflows from operating activities for at least the next few years. Based on our liquidity position as of June 30, 2024 and our current forecast of operating results and cash flows, we anticipate that we may not have sufficient resources to fund our cash obligations for the next 12 months after the issuance date of this Quarterly Report. These factors raise substantial doubt about our ability to continue as a going concern.
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We have evaluated the conditions discussed above and we are taking various steps in an effort to alleviate them. We are exploring various cost saving opportunities and intend to continue seeking opportunities to generate additional revenue through our commercialization of engineering services. We have also engaged a financial advisor and we are actively assessing various avenues to secure additional capital, including, but not limited to, the issuance of debt, equity or both. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to us. If we are unable to effectively implement additional cost reductions, generate additional revenue or raise additional funding, we may be forced to delay, reduce or eliminate some or all of our commercialization efforts, product expansion or R&D programs and our business, financial condition and results of operations could be materially and adversely affected. Assuming no additional funding and based on our current operating and development plans, we expect that existing liquidity as of the date of this filing will be sufficient to fund currently anticipated operating expenses through the first half of 2025.
On May 16, 2024, the Company made the strategic decision to implement a targeted plan, which included a workforce reduction, the closing of the Manufacturing Facility, and a reduction in third-party costs. These actions are intended to further reduce structural costs and operating expenses and better align the Company’s operating structure for commercialization with a technology-centric and capital light model, as the Company continues to explore and evaluate strategic alternatives with its third-party financial advisor.
Summary of Cash Flows
The following table provides a summary of our cash flows:
| Six Months Ended | ||||||||||||||
| June 30, | ||||||||||||||
| $ in thousands | 2024 | 2023 | ||||||||||||
| Net cash used in operating activities | $ | (23,598) | $ | (38,357) | ||||||||||
| Net cash provided by investing activities | 12,737 | 34,158 | ||||||||||||
| Net cash provided by (used in) financing activities | (15) | 1,323 | ||||||||||||
Net Cash from Operating Activities. Net cash used in operating activities was $23.6 million for the six months ended June 30, 2024 compared to net cash used in operating activities of $38.4 million for the six months ended June 30, 2023. The $14.8 million decrease in the net cash used in operating activities was primarily driven by reductions in headcount and discretionary spending as we focused on cost saving opportunities.
Net Cash from Investing Activities. Net cash provided by investing activities was $12.7 million for the six months ended June 30, 2024 compared to net cash provided by investing activities of $34.2 million for the six months ended June 30, 2023. For the six months ended June 30, 2024, we received proceeds from the maturities of available-for-sale securities of $12.5 million to fund our operations and proceeds from the sale of property, plant and equipment of $0.5 million, partially offset by capital expenditures of $0.2 million. For the six months ended June 30, 2023, we received net proceeds from the maturities of available-for-sale securities of $35.0 million, partially offset by capital expenditures of $0.9 million.
Net Cash from Financing Activities. Net cash used in financing activities was $15 thousand for the six months ended June 30, 2024 compared to net cash provided by financing activities of $1.3 million for the six months ended June 30, 2023. For the six months ended June 30, 2024, we paid $28 thousand related to taxes for net-share settlement of share-based compensation, partially offset by proceeds of $13 thousand associated with our employee stock purchase plan. For six months ended June 30, 2023, we received proceeds of $1.2 million from stock option exercises and proceeds of $0.2 million associated with our employee stock purchase plan.
Cash Requirements
Our material cash requirements from known contractual and other obligations consist of our long-term operating leases, which are primarily for real estate. Refer to Note 8—Leases for additional information regarding maturity analysis of our operating leases.
32
Critical Accounting Estimates
There have been no material changes to our discussion of critical accounting estimates from those set forth in our Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, and as a result of the material weaknesses in our internal control over financial reporting described in our Annual Report, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2024, our disclosure controls and procedures were not effective.
Changes in Internal Control over Financial Reporting
In January 2024, we had changes to our executive team. Our Chief Financial Officer resigned effective January 11, 2024 and the Board appointed an Interim Chief Financial Officer. In addition, our Chief Accounting Officer resigned effective January 26, 2024 and a new Chief Accounting Officer was appointed at the same time. In March 2024, the Board appointed a new Chief Financial Officer effective April 1, 2024. Other than in connection with changes in personnel and executing upon the implementation of the remediation measures described in our Annual Report and the associated changes to our internal control over financial reporting, there were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
Information relating to various commitments and contingencies is described in Note 15—Commitments and Contingencies to our consolidated financial statements in Part I, Item 1 of this Quarterly Report.
Item 1A. Risk Factors
There are no material changes from the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our Annual Report, as supplemented by the risk factor previously disclosed in Part II, Item IA. Risk Factors in our Quarterly Report for the period ended March 31, 2024, other than set forth below.
Actions that we are taking to reorganize our business in alignment with our strategic priorities may not be as effective as anticipated.
In May 2024, the Company made the strategic decision to implement a targeted plan, which included a workforce reduction, the closing of the Company’s manufacturing facility in Long Beach, California, and a reduction in third-party costs. We may encounter challenges in the execution of these efforts, and these challenges could impact our financial results.
Although we believe that these actions will reduce structural costs and operating expenses and better align the Company’s operating structure for commercialization with a technology-centric and capital light model as the Company continues to explore and evaluate strategic alternatives, we cannot guarantee that the targeted plan will achieve or sustain the targeted benefits, or that the benefits, even if achieved, will be adequate to meet our operational expectations. As a result of these actions, we will incur additional costs in the near term, including cash expenditures for employee severance payments and related benefits. Additional risks associated with the continuing impact of the targeted plan include employee attrition beyond our intended workforce reduction, diversion of management attention and potential failure or delays to meet operational and growth targets due to the loss of qualified employees. If we do not realize the expected benefits of our targeted plan on a timely basis or at all, our business, results of operations and financial condition could be adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
None.
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Item 6. Exhibits
| Exhibit Number | Description | Incorporated by Reference | ||||||||||||||||||||||||||||||
| Form | File No. | Exhibit | Filing Date | |||||||||||||||||||||||||||||
| 3.1 | 8-K | 001-40209 | 3.1 | January 6, 2022 | ||||||||||||||||||||||||||||
| 3.2 | 8-K | 001-40209 | 3.1 | August 31, 2023 | ||||||||||||||||||||||||||||
| 3.3 | 10-Q | 001-40209 | 3.2 | November 8, 2022 | ||||||||||||||||||||||||||||
| 3.4 | 8-K | 001-40209 | 3.1 | April 17, 2023 | ||||||||||||||||||||||||||||
| 4.1 | 8-K | 001-40209 | 4.1 | April 17, 2023 | ||||||||||||||||||||||||||||
| 4.2 | 8-K | 001-40209 | 4.1 | April 16, 2024 | ||||||||||||||||||||||||||||
| 31.1* | ||||||||||||||||||||||||||||||||
| 31.2* | ||||||||||||||||||||||||||||||||
| 32.1** | ||||||||||||||||||||||||||||||||
| 32.2** | ||||||||||||||||||||||||||||||||
| 101 | The following information from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Loss, (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Unaudited Consolidated Financial Statements. | |||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||||||||||||||||||||||||||
* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on August 6, 2024.
| Heliogen, Inc. | ||||||||
| By: | /s/ Christiana Obiaya | |||||||
| Christiana Obiaya | ||||||||
Chief Executive Officer (Principal Executive Officer) | ||||||||
| By: | /s/ Phelps Morris | |||||||
Phelps Morris | ||||||||
Chief Financial Officer (Principal Financial Officer) | ||||||||
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