Greetings. Welcome to the Eos Energy Enterprises, Inc. Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Laura Ellis, VP of Investor Relations. Thank you. You may begin. Thank you. Good morning, everyone, and thank you for joining us for Eos's Financial Results Conference Call for The Third Quarter Ending September 30th, 2021. On the call today, we have Eos CEO Joe Mastrangelo and CFO Sagar Kurada. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company, which are subject to certain risks, uncertainties and assumptions. Should any of these risks materialize or should our assumptions prove to be incorrect, our actual results may differ materially from our projections or those implied by these forward-looking statements. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Our remarks during today's discussion should be considered to incorporate this information by reference. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events, except as required by law. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release. Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with US GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies. This conference call will be available for replay via webcast through Eos's investor relations website at investors.eose.com. Joe and Sagar will walk you through the company highlights, financial results, and business priorities before we proceed to Q&A. With that, I'll now turn the call over to Joe. Thanks, Laura, and thanks everyone for joining us today for the third quarter operating results of Eos Energy Enterprises. It's another quarter of great accomplishments for the team, starting off with the page we use every quarter. You know, the technology, we continue to discharge energy and run operating cycles and prove out not only the robustness, but also the operating flexibility of what we bring to market. We've announced this morning the largest order in the company's history. You know, we're at booked orders of over 0.5 gigawatt with a backlog now at $150 million. We're very excited about the project that we've announced with Blue Ridge Power and Pine Gate Renewables. It's an exciting opportunity for us, but also the follow-on order from Duke Energy and a new order from Ameresco. Our opportunity pipeline continues to be robust with over 22 GWh. You know, what we're seeing as we look in the market is continued growth on the opportunity front. You know, we're navigating a little choppiness and also some uncertainty on when orders will close, but we continue to see customers coming to us to want to understand how our technology can deliver on their needs. The factory and the team in Turtle Creek had a very strong quarter. You know, I'll go through some of the improvements that we've made in the operation. We're standing at $3.4 million of sales of shipments year to date, and we have $144 million of cash on hand to continue to execute on our operating strategy. Overall, a solid performance by the team and continuing to position the company for future growth. If we move to slide four, you know, just overall the environment, like many other companies, you know, we are going through the headwinds of what's happening on the supply chain, both on the labor, material, and logistics side. You know, when you look at where we are and how that's impacting us, we're running our factory at two shifts versus three shifts. We continue to hire and want to build out over time, but we have been experiencing some labor shortages, but have been able to manage through that. At the same time, you know, one of our biggest items that we managed through is the actual container that we use for our system. You know, we've come up and now have three sources of supply for that and are managing through the logistical ability to be able to receive those containers in our factories to ship them to customers. We still have the same challenges on the semiconductor side of having availability, but given the ramp and the planning that we've been able to do, we should be able to manage through that as we go through the rest of the year. On the inflation side, you know, the biggest thing that we're managing through is just on the resin that we use for our battery module itself, is just managing that overall equation and how we hit our cost curves moving forward. I talked about on the previous page, you know, there's certainty around the growth in the market. There's uncertainty around the timing of that. We see that from the upfront opportunity through the sales process all the way through to the startup of our equipment out in the field. The team, we continue to manage our way through that. That really, when you take these three together, you know, what it really requires as a leadership team is we manage the company tightly as we go through and solve our issues that come up on a day-to-day basis. On the tailwind side, you know, continue to see strong demand for storage. You know, the market is going to grow. BNEF, it continues to forecast over the near term a 23% CAGR. The market, as you start to see it now, is starting to shift to needing flexible duration discharge. You know, moving from a static two-hour, four-hour to systems that can do anything from two to upwards to 15 hours, and, you know, our technology fits the bill there. I think you're going to see, you know, a new technology mix as we come in, and the market grows and evolves for the future. I think another big one for us, I talked about on the previous page, is that we continue to improve our operational capability. You know, we have a higher output coming out of the factory. We have better yields. I'll show you some of the data on how we're getting consistent battery and system performance as we ship out into the field. Really, a lot of work and a lot of focus from the team on this aspect, and results starting to show through here as we look at what we did in the third quarter. On the next page five, you know, here's what we're talking about for where we are versus our business priorities for the year. You know, as I mentioned before, we booked our largest order in company history in October. We are starting to build up a blue-chip portfolio of customers that we're working with. I talked about the names earlier. We like what we see, and we also like the work that we're doing with some major power developers and utilities as we go through their qualification process and making a lot of progress as we move forward for future growth for the company as we move forward. On the revenue side, you know, we're on track. We're managing the risks that we talked about to our $5 million revenue target. You know, our second half revenue is six times what we did in the first half of this year, and will continue to grow over time as we continue to debottleneck our factory and add capacity. On the capacity adding, you know, we will scale our manufacturing capacity by year-end next year to 800 MWh on our footprint in Turtle Creek, Pennsylvania. It's a $35 million planned investment, and we saw the announcement of us getting an equipment financing deal to be able to manage our capital. I'll walk through in more detail later on. We like our asset-light CapEx manufacturing model because it will allow us to grow as the market grows. On our next-generation technology, you know, we have a working prototype that's been on test. We've got first-piece parts coming in, and we'll start the manufacturability tests here over the next couple weeks. We're planning our first commercial shipments for the product at the end of next year. You know, it's an exciting time. I'll go through some details as we wrap up the presentation around the next-gen product. We like the product that we have today and how that's performing. I'll show that as well. Again, I think overall, strong performance by the team, and I'll turn it over to Sagar now to walk us through the financials and upfront discussion around the commercial aspects of the business. Thanks, Joe. Good morning, everyone. In the next two pages, I will talk you through the third quarter financials. Let's start with the income statement. We delivered $718,000 in revenue from the quarter. As you know, Motor Oil was one of our first commercial orders, third quarter revenue recognized with the second shipment to Greece. Revenue for the first shipment was recognized in the second quarter financial statement. We also successfully delivered on two other orders this quarter, River Valley in Massachusetts for 1 MWh and ReNew in India for 0.5 MWh. Our cost of sales in the quarter were $12.9 million. This included $2.8 million of expense related to fair market value adjustments to inventory attributable to future booked orders. Additionally, $3.6 million in expenses related to improving our current manufacturing yield. $4.1 million of costs were incurred as we bring the factory up to capacity and entitlement. Lastly, $1.2 million in logistics, freight, and other transportation costs. Moving on. Our R&D expenses were $1.5 million higher versus Q2, related to ongoing investment in our Z3 product here in 2022. General and administrative expenses were $2.5 million lower, driven by staff-related accruals and outside service spend. Moving to interest expense, the primary driver of interest expense is related to the accounting for the convertible notes specific to the $100 million in investment from Koch Industries earlier in the year. Lastly, other income includes $9.9 million for the change in fair value of existing derivatives and $0.7 million on fair value for our private warrants, both of which are attributable to Eos's share price in the third quarter. Moving on to the next page on our cash balance. As of 9:30, we have $144 million in cash. We finalized a $25 million strategic partnership with Trinity Capital to finance our investment in equipment purchases as we increase our manufacturing capacity here in 2022. An initial tranche of $6 million inflow is as a result of that. We additionally received $4 million in warrants exercised during this quarter. From business operations, we expended $41 million this quarter. 20 of that is directly related to the cost of sale, $6 million in general administrative expenses, $4 million in capital expenditure, $3 million in R&D, $1 million in customer financing, and an additional $1 million in commercial operations. Lastly, we had $6 million in one-time transaction expenses. Let's move on to the next section. We'll review our progress on commercial pipeline and booked orders to deliver on our 2021 and beyond financial commitments. Page nine is a snapshot of our commercial activity as of October 2021. This is a page you're now familiar with from previous presentations. Let's start with lead gen. Lead generation is where we work with our customers to materialize ideas and assess the feasibility, regulations, project plans, and economics related to specific projects. We today have $2.9 billion or 18 GWh in review within this bucket. Our commercial pipeline is $3.7 billion or 22 GWh. This constitutes of two key segments, active proposals for $3.2 billion, and customers with whom we have a firm commitment of another $0.5 billion. Like we have discussed on previous calls, only a project or a customer with a clear mandate on requirements, technical specifications, and only a use case that satisfies Eos specification will be included in our pipeline. In this stage, we actively present our commercial and technical proposals to customers. Our experience is about 30% of our pipeline over the long run translates into booked orders. In specific circumstances where we have reached an agreement on commercial terms with select customers and have agreed to terms with a letter of intent supported by clearly defined next steps that require actions on behalf of the customer, we categorize these projects as an LOI or firm commitment. Our experience indicates that on average, 60% within this category translates into booked orders. Now lastly, we have to the rightmost of the page, $137.4 million in booked orders. We consider a project a booked order where there is an agreement for Eos to procure material, manufacture, and deliver storage solutions. We see a strong momentum in demand. Booked orders have increased $58 million since the Second Quarter Earnings Call. On the next page, here's a snapshot of our orders backlog, which is now a reflection of our 2021 year-to-date booked orders, plus 2020 year-end backlog, minus of any shipments to meet customer commitments. This backlog comprises of 30 projects with 16 customers and 613 MWh. As of Second Quarter Earnings presentation, we reported orders and backlog of $95.6 million. Since then, we have recorded $58.3 million in new booked orders. We have also successfully shipped $2.1 million, resulting in a total of $151.8 million in backlog. Delivery on these commitments is expected to be in 2021, 2022, and beyond. Equipment sales constitute $118 million of our backlog and $34 million in long-term service revenue. Our backlog, as it increased in third quarter, is 100% driven by cash sales and service revenue. I'll hand the conversation back to Joe now on page 11. Thanks, Sagar. Just want to build off of the comments Sagar talked about on our commercial how we're managing our pipeline and closing orders in the backlog we have. To just talk about the over $150 million of backlog that we have on hand with 16 different customers, really how that segregates itself out from type of project. We have a lot of our backlog is on the front of the meter side. We're starting to grow in the size of those projects, and I'll talk about that. Also on the behind the meter, you see that being a smaller segment for us in our backlog today. That really comes down to us experimenting and finding out where the technology works the best and then developing a strategy to address that market as we go forward. Although you see a high concentration on front of the meter, we believe with the operating aspects of our technology behind the meter will be important to us, and now we're working on getting the right partners to be able to address that market. On the use case side, you know, the technology from day one was designed for integrating solar into the grid and helping to enable solar to not only power when the sun is shining, but also provide reliable power, when the sun is not shining in the evening hours to manage what is classically called the duck curve. We've also talked about the fact that we see more and more locational capacity to be able to do firming of the grid, and you can see that that's how our technology splits out. Then the microgrid other really ties back to that behind the meter that I talked about earlier. You know, one of the proof points for us as a, as a company is that the backlog and size of project on the far right is starting to grow. It just shows the credibility that we're having as we bring customers into our facility in Edison and show them one of North America's largest test facilities and how we've been operating this technology for over a decade. Then bring them out to our factory in Turtle Creek and show them product being manufactured and tested and coming off the line and being shipped to customers. You know, we are, and one of our goals when we went public, was to become an operating company. I think when you look at this page and the things I'm gonna talk about here, you see that we have become an operating company that now needs to grow and improve itself as we move forward, and we have a team that's ready for that challenge. When you flip forward to page 13 and really start talking about manufacturing capacity and how we're delivering, you know, we have a fantastic team in our factory in Turtle Creek. You could see some of our operators there building equipment on the shop floor. As I talked about earlier, you know, we improved our yields by 10%. You can see the breakdown of that on the right-hand side of the page. Our current production capacity is at 250 MWh per year. You know, as I talked earlier and Sagar discussed, you know, we have 3.4 million of year-to-date shipments. We've seen improvement across the board in all four of our main manufacturing processes with great quality. I think the biggest one for us when you really look at this is, you know, we've really started to hone in and improve the process of infrared welding our battery modules together, and then getting the throughput on battery assembly, and then really getting a higher yield as we ship product out in the field. You know, we've done a lot of testing as we go through this manufacturing process to make sure that the product that hits the field is product that's going to operate to specification. We're starting to see a lot of the hard work that we've been doing on the shop floor pay dividends in how we do output. Now it's not about getting the quality right, it's about scaling the great quality as we go forward to grow the company in the future. I think we've laid a good foundation out in Turtle Creek to be able to do that. We move to page 14. What I've just talked about, these graphs show the improvement over time. You know, the top three graphs are current coming out of containers on test, and the bottom three graphs are voltage coming out of containers at different points in time. When you see those lines and those variations in lines, that's really variations in how you can operate and how our equipment performs. When we were testing and honing in 12 months ago on how we want to manufacture and bringing our operators up to speed on how to build the equipment, you saw a lot of variation, particularly in that lower, left-hand chart, where you look at the far right-hand side of the lower left chart, where you see all those lines diverging, that's not being able to get full power out of a system. You then look six months later, we've made tremendous amount of progress. You still see variation in both of the charts, but there's less variation. Then you look at where we are today. Where we are today is when we finish manufacturing and ship, we have a very consistent performance coming out of the container. You know, the batteries in a container are within 2% of one another in how they perform coming off the manufacturing line. This is really getting to, you know, what we've talked about as our strategy as we ramped up manufacturing was get the individual processes right and then optimize the overall process. The output that we're seeing coming off the manufacturing line and the first-pass yield that we're getting shows that we're getting that process right, and now we've got to think about productivity and scaling the business for growth in the future. When you move to page 15, what that consistency allows you to do is bring flexibility, operating flexibility to your customers. So this chart is one we've talked about before, and I think is critical for us to talk about again today. This is a battery on consecutive days running four very different operating cycles of charge and discharge. The far left, excuse me, is taking one battery and discharging it over 12.7 hours. The next one is doing that same battery the next day at 6.3, then 4.1, and 2.9. When you take those kilowatts per container and you do that on a kilowatt-hour basis, you see very consistent performance across a very wide discharge time. What that means is when we talk about intermittency in renewables and what happens with putting more renewables on the grid, you can't have static storage assets to be able to react to the intermittency and the variability of renewables. We have a technology that performs and can really offset on different days and different conditions that intermittency that's being brought into the grid to bring stabilization, reliable power at a great cost point. When we do this, unlike other technologies, doing this does not degrade the product's performance or reduce its product life cycle. We get higher round-trip efficiency depending on how you want to cycle and how you manage your state of charge. What we're doing now with our technology team around our software and our battery management system is gonna add incremental performance. What we're finding, and you think about the previous page, what we're finding in our technology is that as we become more consistent in our manufacturing process, we can get more performance out of the battery through software than we can through making changes on hardware. More to come as we think about this, but I also think it's very important that when you look at our technology, you think about this operating flexibility and consistency that we can bring to the challenge of bringing reliable storage to the grid, to our energy value chain. If we move to page 16, this is a key page for us because one of the things that we talked about when we went public almost a year ago was that we had a very asset-light, CapEx model to be able to scale manufacturing. Really, we've proven this out as we've invested and operated our facility in Turtle Creek. You know, you look at the different phases of our development and where we are now and what we're doing and being able to get on a $60 million investment in 60,000 sq ft, 260 MWh of output out of our factory. As we look forward to 2022, we're gonna add some square footage to what we have today, but for 110,000 sq ft, we will do 800+ MWh, a total investment of around $50 million. It proves that we have a highly scalable model. We can deploy this in 9-12 months, depending on where we start from a building readiness, and we can get to around 1 GWh capacity for that $50 million, which is what we said when we went public a year ago. We've now proven it with data and actual square footage where we walk people through and show them what's happening on the shop floor. Very exciting for us as we start thinking about what's gonna happen as the market grows, is being able to expand our capacity relatively quickly and inexpensively for the future. We go to page 17. I do wanna hit on what's next and show everyone here, you know, on the left-hand side of this page, our first pieces coming off of the line with our molders for the Z3 battery. If you remember, we talk about our battery today has a form factor like a window air conditioner. We're moving to the size of a computer server, and really, when you think about our form factor going forward, we'll have the same form factor as a lithium-ion battery as we move forward with all the safety and operating flexibility that we just talked about. When you look at the middle of this page, we are improving our manufacturing capabilities. That's our next-generation infrared welders to be able to put those batteries together. We're qualifying both those first pieces and this manufacturing process and targeting to be able to bring a battery that's one-third of the size of what we have today, so less material input to be able to manufacture. We're gonna reduce the total system and operating cost because we can manage our thermal footprint a lot easier and come up with variable system configurations. As we come out of 2021 and go into 2022, it's about optimizing the overall system that we provide to the customers for better performance and improved footprint density, and continue to work on the software of how we run this equipment from the customer standpoint to allow them to get better operating flexibility and higher output from the assets that they deploy out in the field. Very encouraging on the work of what the technology team has done here over the last four months, with more to come as we go into 2022 and continue to move forward on progress of bringing this new technology to the field. To wrap up for today, as you think about what we're gonna do here for the rest of the fourth quarter going into 2022, you know, we're going to continue to grow our pipeline with a focus on utility scale projects, going back to that mix that both Sagar and I talked about earlier. You know, we have to manage, you know, uncertainty around the project timing of when things are gonna close. You know, when we look at that timing and think about quarter points, you know, we're saying that, you know, we feel very confident in the growth of the company. There is uncertainty on the timing. What we're saying on our orders range is that we could be at a range of anywhere from $175 million-$300 million of booked orders, you know, as the year closes. As we go into 2022, I think we'll go into it with a much stronger pipeline. Delivering our $5 million of revenue, we've got to continue to manage the supply chain risks. You know, this is every day being in the details and reading and reacting what's happening and overcoming the challenges. I think the team has done a great job, so far. Then we really have to continue to work and prepare for shipping that backlog as we work with our customers and look at how the shipment profile will be for 2022 and 2023. On the capacity front, you know, we're gonna continue to scale out our facility in Turtle Creek, and we'll have an update on that as we come into January. Really, again, proud of what the team is doing and proud of where we're going and proud of the output that's coming out of our factory, and we'll continue to grow that and refine that as time goes on. Launching the Z3 product, you know, we'll do the validation and the builds of the first prototypes here as we go through the end of this year into the beginning of next year. We'll deliver our first commercial project, as we talked about, in the second half of next year. The big thing for us now with the form factor that we have with the battery is to really come up with multiple configurations to meet additional use cases as we move forward. Overall, when you look at the third quarter, really strong operating results in an uncertain environment. The team continues to be focused on creating the best stationary energy storage company in the market, and we'll continue to work together with our customers to deliver and create shareholder value as we move forward. I want to thank everybody for their time and listening in today and turn it over to the operator for question and answers. Thanks. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Chris Souther with B. Riley. Please proceed with your question. Hey, guys. Thanks for taking my question here. Congrats on the 300 MWh order with Blue Ridge and adding Ameresco and the Duke follow-on here. I wanted to talk a little bit about kind of the pipeline here. You know, seeing kind of the decline in the current pipeline for active proposals and late-stage LOIs, you know, obviously a portion of that is coming from booked orders, which is great. I'm curious on the projects that you're taking out. Is it a factor of, you know, lithium-ion winning a few that you were going after? Is it projects that are getting scrapped for, you know, supply chain costs or interconnection issues? I'm just kind of curious, you know, where you're seeing some of those later stage ones that are falling out. Hey, Chris, good morning. Thanks. I think you see there's a natural progression of active pipeline into LOIs and both of those feeding into orders. Part of that is just moving through the life cycle of projects. I think when you look at the LOIs, you know, a part of that is projects that haven't moved forward for interconnection and also just looking at what the revenue models would be from the customer standpoint. On the active pipeline piece, you know, it's a snapshot in time. You know, we do run a pretty strict process of what goes into that number. You know, we took some things out. It was a mix of what you brought up, you know, there are projects that we've lost. Large projects, you know, as you see, we're starting to go after bigger and bigger projects. There's one large project that the customer went with lithium-ion as their preferred choice. It was a shorter duration project, so not unexpected, and we were going after it. We went after it to really, as a learning process to see where we're gonna be. Then in kind of the lead generation, you'll see more of that move into active pipeline as we refine the use cases going forward. For the point in time of where we're at, you're just seeing the different moves between the buckets and regular market activity, as far as we see. We feel really good about what we have in there and about seeing the activity in the market coming more and more to longer duration, flexible duration storage. Got it. Okay. No, that's fair. That's a wide range of, you know, $175 million-$300 million target for booked orders by year-end. You know, how many. As projects are getting larger here, you know, how many large potential orders could swing things from the low end to the high end there? I'm just, you know, curious how many similar, you know, size to like Blue Ridge we'd be looking at there that could, you know, really swing things kind of one, you know, from, you know, booked at the end of this year to, you know, potentially booked early next year, you know? Yeah. What are kind of the moving pieces? Yeah. It's a great question, Chris. You know, there's three or four larger projects, you know, ranging up to where, you know, Blue Ridge/ Pine Gate is and a little bit smaller than where they are. You know, we're given that big range because, you know, it is lumpy, right? You know, from the standpoint of closing by the end of the calendar year, you know, we see challenges just as you've been working through, you know, running the process of closing and negotiating, closing out the transactions and just saying that, look, there could be that lumpiness where things are gonna happen after a quarter point, but still will move forward, and we're just trying to, you know, signal everybody that we feel confident on what we have, you know, as far as what we're working on, but there could be some timing risk in there. Okay. No, that makes a lot of sense. Looking at the manufacturing capacity, it makes sense you kind of pushed the ramp of additional lines up to that 800 MWh in Pittsburgh, given the push out in some of the project timing. Could you walk through the cadence of those additional lines coming online, you know, between now and year-end 2022? You know, you mentioned kind of the scale up to 1.5 GWh. I'm curious, you know, what the plans are, you know, as we stand today and, you know, timing expectations that we should look at there? Yeah. Chris, what you'll see is, you know, we'll go in the first quarter with a similar run rate of when we come out of Q4 from a production standpoint, and then gradually ramp up as we go through the year. I think we're doing this in phases. We're gonna add welder capacity as we get to the end of the first quarter, bring up. You know, that will then bring up the production of battery modules, and then from that standpoint, we'll then go in and add, you know, container where you form and test the container before you ship, as you get into third quarter to be ramped up into the first quarter, to that 800 megawatt-hour annual run rate. Now the second part of your question on the $1.5, you know, it's gonna be a mix of two things, right? What we've learned as we've gone through here over the last three, four months is that we are starting to get more and more throughput out of our existing assets. If you remember, you know, what we've always said about how we want to run manufacturing is we wanna get the process of the actual process of manufacturing the part right, then go for productivity or automation. We're at the point now where we consistently get the process right, and you see that in our yields. Now it's how do you get better throughput through the asset base that you have. That being said, you know, when we look at where Turtle Creek is, you know, you're gonna run into entitlement of the facility as you get into the end of next year, beginning of following year in 2023. We will be out looking for where factory number two will be located as we get into the middle of next year to get to the target that we have for gigawatt hour production. Got it. Okay. No, that's really helpful. Maybe just last one. Can you talk a little bit about the OpEx trajectory? Any additional costs we should be expecting in the fourth quarter or the first half of next year as, you know, we're validating launching Z3, ramping up sales activity. Just kind of, you know, the capital plan, you know, as far as CapEx, very helpful, but I'm just curious, you know, where we see kind of operating business kind of going, you know, over the next couple of quarters here in cash burn and money. Sagar, you wanna start, then I can jump in? Yeah. Hi, Chris. The OpEx for next year will be right in line with where we are for this year, plus maybe 5%-10% to mark up for the incremental growth. That's more so specific to your point on research and development and commercial operations as we ramp up both internationally as well as to Joe's point, balance out front of the meter and behind the meter. Chris, one thing I would say on your specific question on the Z3 ramp, right? You know, when you look at what we did on the current product, you know, we were validating, industrializing, and commercializing simultaneously in one facility. What we're doing with the Z3 is that, you know, we will have a partial production line in our facility in Edison, which will allow us to do all the work on the industrialization and validation of the product outside of a production, you know, where we need to produce product to ship to customers. Feather that into the production capacity that we have in Turtle Creek or in Factory 2 to deliver the first commercial units at the end of next year. It should be a smoother process where we take the lessons that we've learned for the Gen 2.3, apply that to Z3, and do it in our facility here in Edison side by side with the technology team to be able to ramp up that production process and validate the product itself. Got it. That's helpful. I'll hop in the queue. Thanks, guys. Thanks. Thanks, Chris. Our next question comes from the line of Tom Curran with Seaport Research Partners. Please proceed with your question. Good morning. Hey, Tom. You know, when it comes to educating both investors and prospective customers, you've done a great job of articulating the advantages of Eos' proprietary aqueous zinc chemistry over lithium-ion alternatives for long-duration storage solutions. If we shift the frame of comparison from the Znyth™ versus LIBs, you know, lithium-ion batteries, to the Znyth™ versus other non-LIB storage technologies, which strengths would you emphasize? Specifically, how would you compare and contrast the Znyth™ with iron-air technology and then with liquid metal and molten salt technology? Yeah, Tom. I always start off with the framework of the energy value chain is always going to be a mix, and no one technology can meet all the use cases of what that mix requires. The examples that you're talking about, those technologies, those are longer duration discharge technologies than the market segment that we would go after. What I would say, like, when you compare to them side by side, I go back to the CapEx light model to add capacity to be able to manufacture product. The operating flexibility that we have to go down into, you know, we can run cycles down into the short duration, and we can run cycles that go beyond 12 hours. We're this bridge technology, which is a very important market segment as you think about firming up the grid as more renewables come in and giving it the flexibility it needs to handle the intermittency. To compare one to one on some of the technologies that you brought up difficult to do just because they're going for much longer duration storage discharge than what we are. What I would say is we have a much simpler system that you know what holds when we talk about lithium-ion holds when you look at those technologies as well. You know, earth abundant, readily available raw materials, a very simple system design with a competitive upfront investment and very low operating cost to maintain the system and ease of use. Which I think when you look at where we want to apply the technology and how we want to use it, that's a key differentiator for us against either side of the spectrum that you look at, either short or long duration. Great. As the long-duration non-LIB, you know, utility storage market matures and we do end up seeing room for several technologies rather than, you know, gravitate towards any one silver bullet or dominant solution, you think about that future demand pie consisting of several slices, which single use criterion is most likely to determine the size of each piece? Should it be duration range? Well, I think it's the total cycle that you're looking at. How fast do you wanna charge? How long do you wanna wait between discharge? Get up to whatever your charging is, and then how long or short do you want to discharge? It's that total cycle. I think, you know, what the industry needs to think about and the way that I think about it, you know, having been in the industry 30 years and worked in different technologies is we talk a generic cycle to make it easy for people to understand. In the real world, you very rarely run at that generic cycle, right? When I look at what we do as a technology, there is no generic cycle for us. We showed it in that one chart that shows the battery on consecutive days running different discharge times. There's a tremendous amount of volume there because the whole purpose of wanting to bring energy storage into the energy mix is to give the system flexibility. You want assets that can be flexible. When we operate like that across that flexible range, different power ratings, different discharge and charge times, you don't damage the battery, you don't reduce its useful life, it doesn't degrade faster, and it gives you great performance. It's kinda like, "Hey, what is your use case? How do you wanna use it?" We know, and I know after 30 years, that no one day is gonna be exactly the same as the next day, and you need to be able to meet the demands of those days. That's what we love about our technology in the market. That's very helpful. Thanks for that, Joe. Sagar, turning to the initial expectation that you would realize the $45 of the initial expected $50 million in revenue for 2021 over the first half of 2022, can you update us on how much of that remaining $45 you now expect to recognize over the first half? Turning to the Blue Ridge Power order, how much of the Blue Ridge Power order revenue should we see recognized over the first half? Yeah. I'll start, and then Joe will jump in. Got you. Look, first off, we expect at this point to provide a better perspective on 2022 when we report our fourth quarter earnings in February, largely driven by some of the near-term secular headwinds that Joe alluded to when he started out the conversation with the trends in the marketplace. Clearly, all of the backlog is expected to be delivered sometime between 2022 and 2023. Both based on customer readiness and our ramp up, which is fragmented to the demand at this point, we'll be taking a look at what the first half looks like. As Joe said, the first quarter will look similar to the fourth quarter, and that's really what our starting point for 2022 will be. Tom, I would just add on timing of when you see Blue Ridge Power and Pine Gate Renewables coming into revenue. These are projects, and when you think of the project cycle from order to kind of discharge on the grid, usually median timeframe around a year. It could be as short as nine months and as long as 18 months. Now, inside the order that we announced are multiple projects, so this will come in over time. I think when you look at our revenue coming in the first half of next year, that revenue is gonna be delivering on the existing backlog that we have and then going into the second half of the year to start delivering not only this 300 MWh order for Pine Gate, but the original order that we have with them coming into the quarter. As Sagar said, we'll come back with what that plan looks like as we get together with customers and understand where they are and it's from a timing standpoint to lay out what the revenue profile will look like throughout 2022. Great. Thank you for taking my questions. Yep. Thanks, Tom. Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Martin Malloy with Johnson. Please proceed with your question. Good morning. Hey, Martin. Hi. The Duke order. I think it's great to see a repeat order from a customer like that. Can you maybe talk a little bit more about how they're using the batteries and kind of feedback from them on what they saw that they liked? Yeah. We ran a pilot project with them, you know, over the course of, you know, 24 months, basically, at their test facility, outside Charlotte, North Carolina. What they really, you know, what consistent feedback from the team at Duke has always been, you know, we don't know when the system is running because you don't draw any power to be able to run. The fact that we don't require HVAC to keep the system within a narrow temperature band. We also don't know because you don't make any noise. It's a very quiet system compared to other technologies. What they really liked was consistently being able to deliver cycles around six hours for the use case that they were looking at, but the flexibility of going down to two and above six as required. That's what led us to this next follow-on order, which is, you know, a full commercial order with them, and then will hopefully lead to other orders in the future as we deliver and continue to prove out the technology. Great. Thank you for that. I was wondering, and I don't know if you're willing to share this, but when we look forward to the 3.0, you know, it looks like what's in your backlog is about $244/kWh. Can you maybe help us with pricing for 3.0 and how you expect it to trend over time, and also gross profit margins? What I would say specifically, you know, I would go back to the model that we've laid out, you know, when we went public. What I would say, Martin, is what we are trying to do is deliver more power per container, and to require fewer containers and a smaller footprint to deliver on customer requirements. As the market, you know, as the market evolves and grows and accelerates, you know, we will continue to compete on price, but it's hard to really give a forward forecast just 'cause you just don't know where the market would be. I think giving any guidance on that would be difficult for us to hold to it. We're gonna continue with our model that we have today and the growth trajectory that we have to be able to make the company gross margin positive and cash flow positive in the future. Okay. On round-trip efficiency for 3.0 and the range, any help you can give us there? Yeah. Again, depending on the use case, you know, and how you use it, we have seen, you know, and have run even with our current technology, right? You just have to remember on the round-trip efficiency, Martin. This is a really interesting question, and I'll try to keep it, you know, it's nuanced, but I'll try to keep it as simple as possible. You know, we run our batteries. We charge to 100, and we discharge down to 0. When we say round-trip efficiency, it's that full operating cycle of a battery. Now, the Gen 3 product should be anywhere from the high 70s% to low 80s% on total round-trip efficiency. Now, what we do is if we do like what lithium-ion does, which lithium-ion, when they quote their round-trip efficiency, they go from 80 to 20 usually on their operating cycle. If we go from a 100 charge down to 20% left in the battery, so don't discharge down to zero, our round-trip efficiency then goes up to the mid-80s. We've run cycles in our factory where the current technology has been in the mid-80s. Now, the specifics of being able to give you a more pinpointed number around the next generation product, give us a little time to get these first production run units on test here towards the end of the year, beginning of next year, and we'll come back with more details. We like what we see out of the prototypes that we're running today. Okay. What are the raw materials specifically that are both scarce or difficult to come by, or is it just the logistics issues that are plaguing everybody? Is that what's causing issues? Yeah. For us, it's logistics and availability. You have to remember, you know, earth abundant raw materials going into the battery, so, you know, plastic resins being molded into frames, titanium, carbonized graphite felt, and zinc bromide electrolyte. Materials are available. It's managing the delivery of those materials to our production schedule. Honestly, like, the biggest challenge for us as a team has been around shipping containers. You know, this went from a market where you know, they couldn't give you enough of them to you can't find them, and you've got to advance buy, and that's what we're doing just to make sure that we have those on hand. It's, you know, it's like everyone else. You know, you're dealing with the port issues, and that's the one thing, you know, one of two parts that we import that we just have to manage the timing on when they arrive and getting into the factory. It's a day by day. You need to be in the details. We do production calls on a daily basis to figure out what's happening, and then you chase them down and try to get better just to keep the material flowing into the factory. Okay. My last question, on the software side, I thought I heard in the call that you're seeing some improvements in efficiency as a result of improvements in the software. Could you maybe talk a little bit about the software that you're developing and how that integrates with the customer's software? Sure. for controlling storage or solar units and using them in conjunction with each other as examples? Great question, Martin. When we came out and developed our system, the entire system is on a building block basis. We are DC systems, so our software controls the battery modules and the overall container, right? That software is agnostic to the EMS, the energy management system that the customer uses. We did that on purpose because we knew coming in as a new entrant to market, we didn't want to go to customers and say, "In order to use our equipment, you have to retrain your workforce on a new software that they interface with." We have taken our system and integrated it into multiple energy management systems that customers use today. What we are learning on our software today and where we're getting performance, you know, if you go back to that, if you think back to that chart where I showed batteries off the line in July of last year, in December last year, and today. Our battery management system is managing that variation that we showed to smooth it out. What we're seeing now is that as we improve upon the manufacturing consistency and first pass yield off the line, we're able to get more performance out of the battery. 'Cause really the way our system works, it's very simple. The lowest common denominator in the container determines the performance of the container. What we're doing now is seeing that, hey, all the work that our engineers have done and our R&D team have done to improve the battery gets better performance, and now we're adapting the software to give customers those multiple use cases that I talked about so that they can operate the battery any way they want. Great. Thank you very much for your time. Thanks, Martin. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Joe Mastrangelo for closing remarks. Thanks. Thanks, Ashley. Thanks everyone for joining today. You know, extremely exciting time to be part of the company and really, you know, very exciting, you know, to be either when you go through our labs here in Edison, where I am today, or on the factory floor in Turtle Creek. You know, this is a dedicated workforce that every day comes in and realizes that we have an opportunity to change the way the world powers itself, making it cleaner and greener as we move forward with a product that can deal with the robustness and the real-world demand. We're gonna continue to build a great operating company and look forward to coming back, beginning of next year to update you on the fourth quarter. Thanks again for listening in. This concludes today's conference, and you may disconnect your lines at this time.