Eos Energy Enterprises Inc at Stifel Cross Sector Insight Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Okay. Let's get it. So [30,000-foot] view, really quick, you are a grid-scale energy storage company. You've developed a battery based on zinc-halide chemistry. That's what gets you to Google. Let's go into specifically where you fit and what you're developing right now. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 6:25PM, EOSE.OQ - Eos Energy Enterprises Inc at Stifel Cross Sector Insight Conference

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Perfect. And so Joe, you're a PhD material scientist? What was your background?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Perfect. So if I think about how Eos compares to other technology sets, I think it's mirrored in how your management team is structured and where R&D lies versus -- well, really, where R lies versus where D lies. So let's talk through, one, what attracted you to come to Eos? And two, when you think about what the last hurdles are from bringing your battery to full market potential, how much of that is things like the chemistry versus getting it out the door?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : So because there's nobody here representing lithium to punch back, we'll probably skip over the inherent advantages and why the grid needs this. Because I think the backlog, about, what, [580 million] of booked backlog, about [1 billion] of LOI or LOI equivalents, I think that speaks for itself for the time being. But if we can get into it here and now, I look at this and I've seen the 2.3 as well. And I've read every patent several times. This is unbelievably simple; the Gen 2.3 was not. But right now, we're in a transition period, right? The Gen 2.3 is done aside from replacement capacity; Gen three, [God willing] and the creek don't rise, ramps up by year-end. Where -- walk us through the change in the cost structure at a unit level and then as much as you're willing to go into a little bit more of the details of what the transition will look like for actually scaling up your first phase of capacity?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Sure. And that's fine. We've got our number.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : But if we think about the path to that number, that run rate number, how much is incremental growth? Because the pipeline behind this 580 million of backlog is enormous. So one line is not going to be enough. Two lines isn't going to be enough. So how much does that delay the visibility of the unit margins that everybody's so laser focused on.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Got you. No, go ahead.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : More like five months, depending on how you (multiple speakers)

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Yeah. I noticed Nathan left out the $30 a kilowatt hour credit that you'll be getting back and running through COGS.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : I said wasn't going to pick on lithium. I'm going to pick on lithium. So your battery is better than lithium for the grid. And I'll -- we can talk about it offline for anybody who's interested in that. You can go on to Tesla's website and get a quote for his lithium iron phosphate megapack like everybody's got. [Faures] -- not Faures, sorry. We're not going to name any other names. But they're dime a dozen. He's quoting -- the website quotes something like $600 a kilowatt hour. I don't think you can get a lithium set up right now for under $450, give or take, and you're still booking at, what, [250, 275]. So walk me through just how you think about pricing. It makes sense to price two lithium in the early days, but now you're even lagging that. And then on top of that, the domestic content rules that just came out. So walk me through how you look at the top line as you go to market, assuming all the manufacturing falls into place. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 6:25PM, EOSE.OQ - Eos Energy Enterprises Inc at Stifel Cross Sector Insight Conference

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : And what is, just briefly -- in your experience in this industry and once things normalizes, what would be a normal book to build -- target in terms of what -- I would say you're not cautious (inaudible) REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 6:25PM, EOSE.OQ - Eos Energy Enterprises Inc at Stifel Cross Sector Insight Conference

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Okay, that's actually quicker than I would have expected, to be honest. So you might have to (multiple speakers) any faster --

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Right. No, I know.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : And those -- yeah.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : All right. So unfortunately, we're going to have to bring it back to the short term again. Nathan's a very popular man on this topic.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Is the cap -- let's start with -- so is everything you need -- or, I guess, how much of what you need to get the first line up and running by year end already ordered?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Yeah.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Perfect. Now let's -- just, all over again, the DOE loan.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : I know you can't disclose. But framing it -- because there's so much outside noise, the DOE has done themselves no favors. There's a lot of confusion over exactly what the process looks like from, I think -- even from just a public understanding perspective. So where are you or where were you most recently that you updated this?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : So for anybody who's not -- you were through every level of diligence. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 07, 2023 / 6:25PM, EOSE.OQ - Eos Energy Enterprises Inc at Stifel Cross Sector Insight Conference

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : And as I understand it, we've always been sitting here waiting for the conditional approval, the conditional commitment, which isn't the money, but it's close enough.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : As I understand it, the DOE has actually moved away from the conditional commitment announcement prior to treasury review.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : And what that would mean is that -- so that's what (multiple speakers) formalize that?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Which -- that makes no sense to me. But what that means is that you could be further along than maybe you're able to -- you're allowed to say relative to how the process was communicated in the past. But when an announcement comes, it will be much closer to done, cash on hand. Is that correct?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Well, it's the government we're talking about.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : It was very lonely.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Sure. And I don't want to put you on the spot too much. But let's say we get it. Obviously, it's for CapEx, can't use it to [refine duck]. We can't do it -- anything like that. But it would, in my mind, immediately de-risk your balance sheet for somebody to come out with maybe a different lending package that isn't convertible into equity. And so how much -- do you have a rough idea, a sense, of how much of your outstanding convertible debt could be retired without dilution into more traditional? Is that something that's on the table or something that's being contemplated?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : Fair enough. Fair enough. We got four minutes for questions. I know we didn't really get into the base technology. I think -- I'm sorry. Go ahead, George. Unidentified Participant (inaudible) as a generalist. I mean, there are a lot of people going after this market. And it's hard for a generalist to understand. Everybody's got the greatest technology (inaudible) so I guess which ones are the technologies that (inaudible) I guess making your competitive (inaudible) when it matters (inaudible) where is it?

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : I was just going to repeat. Joe, the question was, there's a lot of competitive technologies, but it's also a very bifurcated market. Who'd you actually see as competitive and, more specifically, in the subset of grid storage that you plan to compete in? Close enough.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : And nothing moves in that.

Question: Vincent Anderson - Stifel Nicolaus - Stifel Financial Corp - Analyst : All right. That's time. Thank you, everyone. Thank you, gentlemen.