Good morning. Thank you for joining us for day two of TD Cowen's Second Annual Sustainability and Energy Transition Summit. My name is Thomas Boyes. I'm a vice president on the Sustainability and Mobility Technology team, covering long-duration storage and next generation environmental services. Today we have the pleasure of Eos Energy CEO, Joe Mastrangelo joining us. Joe, thank you so much. Thanks, Thomas. Thanks for the invite. Appreciate it. Before we dive into it, I just wanna draw everyone's attention to the top right-hand corner of the screen where there is functionality for you to ask questions. I can then ask those questions anonymously on your behalf. There is a slight delay, so please don't hold them to the end, so that way we have a chance to get to them. First, Joe, maybe it would be very helpful for investors who are not as familiar with Eos to go through just a brief introduction of the company, what problems you're trying to solve. Yeah, great. Thanks, Thomas, and thanks again for the opportunity to speak. You know, here at Eos, we're a 13 year-old company that's been public since November of 2020. You know, we're focused on stationary energy storage with an alternate chemistry to lithium-ion. We use a zinc-bromine aqueous hybrid, the battery technology. Think of a self-contained battery about the size today of a window air conditioner that's used exclusively for stationary storage for either helping on grid congestion or renewables intermittency. The battery in and of itself has been in testing for over 10 years. We have millions of cycles on the technology, and we have installations out in the field, and we're pretty excited about the differentiation that we bring, both from a cost potential and a performance potential for how the battery performs in the market. Perfect. Maybe we can just focus specifically because, you know, there's been a lot more interest in energy storage. It's intensified. You know, a lot more utilities are kind of have their ears perked up. Could you talk about what the drivers are for that uptick in demand? What dynamic is creating the need for this type of solution? Yeah. The shift that you see to more and more renewables coming into the energy mix or into the power sector mix requires the need to manage that intermittency of renewables. You know, like right now you can tell in my office the sun is out as it shines in my face, but that will come and go as clouds come over the top of that sun. You know, when that happens, your rate of power generation from the sun changes. Or if the wind doesn't blow, wind turbines' performance will go down. Also, you know, we know the sun will shine during the day. It'll be dark at night. What we're trying to do is extend the utilization of that asset into the evening hours with energy storage. At the same time, there's a tremendous amount of energy production that occurs, and it's called curtailment, where you actually take assets offline because there isn't demand for that power being produced. Whether that's a traditional fossil fuel power generation or renewable power generation, you need that storage to be able to capture those electrons, store them, and deliver them when needed into the marketplace. As we see this new mix come in, you're requiring different technologies to allow you to smooth out and provide that energy that we all require as the world electrifies. Maybe just looking more broadly on a global basis, certainly in Europe, Russia's invasion of Ukraine, there's just been a lot more activity there. I think we've seen Germany move forward some of its decarbonization targets, Ireland. I was just maybe if you could comment on that market specifically. I just got back last night from a week in Europe. You know, you are starting to see a lot of the countries now thinking about, like, how do we diversify away from the oil and natural gas that come in from Russia? You know, there are very large installed bases of renewable power, and now you're seeing almost every country start to look at how do they increase the utilization of those assets to reduce the reliance on those fossil fuels coming from Russia. It's an opportunity for us and other providers. You know, when you really look at this, like you see Italy looking to reduce their dependence on bringing in natural gas into the power sector. Germany, as you said, Thomas, has really started to accelerate here as we've seen in the last 30-45 days. I think you'll see, like up until now, the U.S. has really been leading the charge here, if you will, on energy storage, and I think you're gonna see Europe be a fast follower now as it starts to want to diversify its supply away from those Russian fossil fuels. Yeah. Perfect. I also wanted to dig a bit into just the Znyth technology, the design of the aqueous electrolyte battery that you have. You know, what types of capacity fade is there, cycle life? Are there specific temperature requirements? And maybe it would be just helpful for investors to contrast that against lithium-ion, which maybe people are more familiar with, where you excel versus that and kind of incumbent shorter duration technology. Yeah. Start with the fundamentals. You know, our core chemistry that we use or the chemical reaction that stores and discharges energy is a widely used industrial process of zinc plating. Actually, the initial patents on our technology were started from ExxonMobil back in the seventies and the eighties, in the energy crisis back then. You know, the inventor of the technology took those patents and came up with a way to use five really simple, commonly available raw materials to create a self-contained battery. Our battery in and of itself, very simply, you've got zinc, bromine, and water that create the electrolyte in the battery. You've got a titanium plate that is carbidized, you have graphitized felt, and think about graphitized felt, they're things that you use for insulation in furnaces, and then four common plastics to make the mechanical shell of the battery. Those are all readily available, earth-abundant, non-toxic materials. The battery and the system in and of itself doesn't require costly fire suppression systems. You know, we're non-flammable, and we've been tested and approved by UL as non-flammable. The life of the battery, you know, we've got batteries running on tests here in our facility as of today in our R&D center here in Edison, New Jersey. You know, we've got batteries on tests here that have been running for over eight years. Really what you see, the number one issue that we've had as we've developed as a company has been mechanical failure around manufacturing defects. Once you get beyond those initial failures and the battery runs, what we found is the battery continues to run very consistently over a long period of time. Because of the way that the chemistry works, you're actually resetting the chemistry with every cycle that you operate. Unlike lithium ion, whereas every time you operate, you have to operate in a very narrow temperature range, we can go from, and have operated from -15 degrees Celsius up to 48-degree ambient temperature Celsius, without any problems and without any performance fade. The battery in and of itself has been designed as very robust. You know, my background, you know, I've spent 30 years in the energy industry, in the core energy industry, 15 of those years in oil and gas. We designed a system that handles those robust environments that I've seen in my career where these technologies need to operate, and really created something that can be a workhorse in the industry around energy storage. Great. Just maybe as a quick follow-on to that, is there a repowering? You know, for lithium-ion, you know, after 6,000 cycles or 8,000 cycles, depending on how the battery is being used, they have to repower that deployment. Certainly, that's actually a large cost in their overall levelized cost of storage. Is this something that also Eos needs to have the electrolytes recharged, or is this really self-contained system that operates in perpetuity? Well, operates up to 15-20 years. 15. Okay. You know, we believe that six-year recharge, depending on the operating conditions and the use case of the customer, there are times where we don't need that six-year kind of upscale the battery, and we can extend that out into further years to reduce total operating costs. Like, so when you look at the system in and of itself on a CapEx basis, because we're using these widely available commodities, we have a tremendous cost curve as we scale the company. At the same time, we have much lower operating costs because you don't have that service interval around the sixth or the seventh year like you see with lithium ion. At the same time, we don't require complex fire suppression or HVAC systems, so the total operating cost of the system over its life is much lower than lithium ion. In fact, we've had customers tell us that, you know, when our system is actually running, it's hard to see that it's running because it doesn't make any noise because there's no HVAC, and it doesn't consume any power, again, because there's no HVAC. You know, it's a quite robust system that offers not only CapEx advantages, but OpEx advantages over the life of the utilization by the customer. Maybe another point to raise just 'cause we've seen this, the cost of raw material inputs for lithium ion batteries has continued to increase this year. It looks like it's gonna go up again next year. Still capacity constrained, given supply. All the targets from auto OEMs pushing towards electrified powertrains. It doesn't seem like that even that would abate longer term. Is that something you're seeing from your customers, where they're coming to you and saying, "I just don't want to be involved in lithium ion. I need a separate solution." You know, what kind of pricing behavior do you see when you look at zinc, bromine, titanium, graphite, the availability there for those types of inputs for your system? Yeah. Tom, it's like everybody, we have seen cost inflation on our raw materials, but nowhere near the level that you see in lithium ion. You know, we've talked about in our last earnings release, you know, the core battery raw materials, you know, up, you know, in the 15%-25% range. The cost of the actual system, the biggest driver has been the cost of the container, the enclosure that we put the batteries into, and then transportation costs for everybody have become, you know, excessive. We managed through those first two buckets by finding alternate materials, driving down costs and volume leverage, and have been able to manage through that. What we see happen, that's kind of on, you know, our, how we deliver and our manufacturing availability. What I would say is, like, in this environment, it requires, you know, daily watching your supply chain to make sure that you're keeping track of the material flows 'cause there are these disruptions in your supply chain of getting materials into the factory. But we just have to manage our way through that. At the same time, on the commercial side or the customer end of this, you know, lithium ion is a great solution for EVs, and a lot of the lithium ion production is going towards EVs. What we're seeing is more and more customers coming to us as we expand capacity in our facility outside of Pittsburgh. You know, we're seeing more and more customers coming to see us and seeing what we're doing and saying, "You know, you guys can deliver in the next 18 and 24 months where the market is constrained for lithium ion. I have projects that I wanna bring online in that timeframe. Let's work together to bring those projects to the market." That's where you see, like a few months ago, we announced our largest order with Bridgelink, where they were really looking to bring assets online in late 2022 throughout 2023, and we're able to deliver for them. That's really one of the main drivers of why we got the order, along with the fact that we're a Made in America technology and the fact that our supply chain is a lot simpler than what you see in other technologies. All right. I appreciate the color there. What is the, you know, if you would levelized cost of energy, levelized cost of storage for the system today, and then maybe what expectations do you have looking out into 2030 or something like that? What levers could you pull to strip out costs? Is the scale simply scaling up or is there something specifically on the technology side that could further be implemented to drive down costs of the system? Yeah. Great question, Tom. What I would say is, you know, levelized cost storage is highly dependent on use case. We see that we are very competitive with lithium-ion when you get above four hours and extremely competitive with an advantage when you're above five hours of energy discharge. We can do anything from as low as three hours to as high as 15 hours. Now, the thing that we've been doing when you think about commercially with customers is showing them how that operating flexibility that our technology provides, how that creates various revenue cases for them. You know, when you talk about, you know, and again, as you watch the clouds go over the sun in my eyes here, you know, it's a great example, not done on purpose of intermittency. Intermittency is not predictable, so you can't really have a static system. We bring the flexibility to be able to do that, and that gives us advantages on levelized cost of storage on a project-by-project basis. Now, when you look at our product costs and bringing the cost and becoming a cost leader in the marketplace, there are many things that we can do. You know, when you look at where our battery was four years ago when I joined the company to where we are today and then where we're gonna go, what we've learned is, you know, focusing on raw material quality got us a 20%-30% performance increase versus the generation of the battery we had four years ago versus today. What we've learned as we've done that is now we're shrinking the size of our battery, you know, down 40% while increasing the output of the battery by 20%. Changing our materials and simplifying our electrolyte design. You know, we are an early cycle technology that has large volume leverage as we start to ramp production and has the ability to continue to simplify its system and take cost out and improve performance as we go forward. I feel really good around the IP portfolio that the technology team is developing and where this technology will go as we get into 2023. It's pretty exciting when you combine that with the market needs and what people are wanting to do with energy storage. I think we have something here that meets a very large market demand that exists not only today and will grow in the future. Maybe, I think a lot of investors maybe are familiar with kind of that Rocky Mountain Institute pie graph and all of the kind of the stacking of value that goes into, you know, making a value proposition for energy storage. Could you just go over maybe some of the applications your technology works best for? Can you engage in voltage regulation and then also do peak shaving just to kind of give a bit more of a perspective there? Yeah. When you look at, you know, the battery and the founding principle of the company was, you know, solar will need energy storage. When Eos was founded 13 years ago, we wanted to be a four-hour discharge battery. The classic, how do we help manage the duck curve? What we've learned as we've gone through and used the battery and tested the battery and installed the battery out in the field is the flexibility of what the system can do. You know, when you look at primarily today, our use cases are two large use cases. One, go back to the core on solar plus storage. Two is standalone storage, where you're basically locating a storage system near a grid interconnect and allowing a customer or utility to smooth the supply and demand curve as they go throughout the day. We've also started to install, you know, commercial and industrial applications alongside industrial processes or, you know, we're installing, you know, for hospitals out in California to give them the ability to do peak shaving, to have backup power in case of a power failure. As we look at what the battery does, what we say to people is like, "If you're looking for something that, you know, if your primary use case is zero to two, three hours, we're not the right technology for you." You know, that's where lithium-ion has the superior technology. What you're starting to see is the demand asking for this 4+ up to 8-10 hours. That's where I think we excel in what we do because of the flexibility that we provide. I don't think you'll find us, you know, where we, you know, would say, like, "Look, beyond 12 hours, we would be superior." I think there are other technologies that as they develop and come to market, that will be better than us. Again, like, you know, what I've learned in my 30 years is that energy is always going to be a mix, and within each type of energy you're going to need a mix of technology. We are going to need, for certain use cases, lithium-ion. We are gonna need, for certain use cases, lead acid. We are gonna need, for certain use cases, pumped hydro storage. We are gonna need, for a large chunk of the market, a technology like Eos to be able to deliver the sustainability that we want in our energy mix. How quickly do you think we get towards the need for six-plus hours of storage? I've seen third-party estimates that kind of show it as an average, global average. Yeah. Getting to about six hours by the end of 2030, and certainly there's pockets or geographies. New York has very long peak demand cycles where the technology is needed today. Just, you know, where are you seeing that kind of progression, specifically? Tom, I think it'll happen faster than 2030, and I think it's happening now because we're seeing more and more people come in and understand the value of being able to provide that duration discharge. More and more of what I would have said, if we were having this conversation, you know, six or eight months ago, we would be talking about, like, us trying to convince that there's a need for more than four hours. Where today, I think customers are coming and saying, "I'd really like to be able to do that, and also on occasion, have use cases that are less than that." That's where we can provide the solution. Because when you really look at beyond six hours, the inflexibility of other technologies requires a much larger system than what we need to do. Like, what we can do is provide the same size system and do three, six, nine, 12-hour discharges. We've done this on consecutive days with our test system here in Edison, New Jersey. Absolutely. Could we also touch on maybe the bankability of the solution? I mean, you've shipped, I believe, over 100 of your, the kind of the Energy Blocks now. Yep. What kind of validation work was done by your customers? Maybe also too, just what is the composition of the customers that you're engaging with primarily? Is it utilities for mostly? Are you seeing a lot of, you know, renewable developers coming and trying to increase the economics of their deployments? Yeah. On the customer mix, it's a mix between developers and utilities. You know, when you look at, like, the order backlog that we have right now, majority of that is around, you know, developers in the California, the ERCOT Texas market, and then in the southeast of the United States is really where the backlog is gonna be delivered and installed. But starting to see much more geographic expansion beyond where we've been on the backlog. The bankability of this is, you know, what we do is we, you know, we bring each customer in here, and we walk them through the testing that we've done, the cycles that are on the technology. The fact that, you know, we're no longer trying to figure out, does the battery work? This is no longer about invention. It's about optimization and showing them how the optimization works. Really like, you know, they're you know what our best selling tool around bankability is either come to Edison or come to Turtle Creek, where our factory is located in Pennsylvania. There's a spot like, you know, almost where I wanna put a red X on the floor, where people walk through, and they go, "All right, this is much different than what I thought coming in. You guys are actually, you know, producing product," you know. You know, yes, we've done our 100th Energy Block out of Turtle Creek, which is a great milestone, but the team is ramping up to get to the 200th a lot faster than we got to the 100th. You know, the way that we're producing and the way that, you know, we can show field data that shows the technology works, and we have a ton of testing data that shows how it works and the different flexibility which gets you over the bankability hurdle. I mean, we didn't touch upon this or talk about this previously, but I'm wondering just on interconnections, you said these are delays in California. Is that something that you're also seeing is just more broadly interconnection delays for the 100 that have been installed, that there's just a little bit of a protracted period of actually getting those grid connected? Yes, there is a backlog. I mean, that was also, you know, one of the reasons why last year we came off our revenue target. You know, we continue. When you think about, like, as we've evolved as an operating company, you know, with our project management team. You know, the guy that leads our project team, Dave Lusk, is a 30-year veteran from Black & Veatch. We're now much more in front of where are the customers on their permitting and grid interconnects, that we're planning around those things. You know, it's a challenge, and it's a challenge for the industry. More, you know, more importantly than I think, like, you know, our revenue, which is, I think, is important to us every day to be able to get through that. Like, when you think about what we're talking about from overall sustainability and the shift is that we've really gotta accelerate this process so that we can get the assets online and producing and really start to lower the carbon footprint of our energy mix faster than what we're doing. We just gotta all work through that to make that happen. Great, great, color there as well. Maybe we just want to talk about kind of manufacturing capabilities. I think you added, you know, 65 MWh of new capacity at Turtle Creek just last quarter. Can you remind us what your total capacity is now? Then, you know, if you're targeting, you know, 800 MWh of total manufacturing capacity, how do you get there? What's the cadence, and what's really the CapEx necessary to kind of execute on meeting all of this future demand? Again, great job by the team out in Turtle Creek. You know, we went from. Again, if you would've come visited us in January, we would've walked you through an empty room. If you were to come today, you'd see batteries being manufactured, filled and completed in that facility. You know, right now between the two buildings, right? There are two buildings within the same, you know, former Westinghouse industrial complex. You know, we're manufacturing buildings in both locations right now. We're gonna be cutting over to manufacturing only batteries in the new building and then testing in the old building. That will happen here in the month of July. You know, what I would say is that we're probably around 350 MWh a year of production right now. The goal is to get to 800 by the end of the year. The total investment to get there is gonna be around $50 million, and that's the way we kinda designed the company is, you know. Again, depending on the building that you go into, right? We need, you know, in order for us to do a gigawatt hour of production, we need a building about the size of a Home Depot or a Lowe's, 110,000 sq ft. We don't need clean rooms. We don't need, you know, this is precise, not complicated manufacturing. We can ramp that up fairly quickly. You know, like, if we're in normal times of supply chain, I'd tell you know, we could do six to nine months to get a factory up and running. Where we are today is probably 9-18 months, depending on where the machinery supply chain is to get the equipment in to actually manufacture. You know, our whole goal is to be able to do this in building blocks as low as 200 MWh or as high as you wanna go, depending on what the need is. The way we've designed our manufacturing process from the beginning was, you know, when you look at where a lot of battery companies have struggled in the past and gotten into trouble, they build the capacity in advance of demand, and we design this so that we expand as the demand comes. Now, look, it's hard work. You know, you're always running full speed, but it's a much better use of investor capital to be able to scale the company as we move forward. We'll grow as fast as the demand grows, and the demand is accelerating for us, and that's why you see us out, you know, trying to position ourselves to get the capital into the company in various different means to be able to expand it and capture this growth. Perfect. Maybe since we talked about, you know, CapEx there, could you just kinda lay out the funding needs that you think you're looking at over the next year or so? You know, what are the potential avenues of financing that you could pursue? Maybe to the degree that you can talk about the DOE loan process, could you articulate what that process is and then where you are in that continuum would be helpful for investors to understand. Yeah. We were, you know, we're in phase two of the DOE loan. We filed our application, you know, fully filed our application and are in the due diligence phase, which we'll be working through here over the next few months. You know, you've gotta go through, you know, various different phases of that, of how they do their due diligence. We're doing those concurrently instead of consecutively, so things like environmental, because we're moving into an existing factory and it's not a greenfield, it allows us to accelerate. Then they go through our business model, and they look at where we are from a backlog standpoint. We're going through, you know, normal, you know, robust due diligence process with them to work to get to a conditional approval in the fall with funding coming towards the end of the year. At the same time, we announced our SEPA with Yorkville that it gives us the flexibility to bring capital in as we need it. Then, you know, Randy Gonzales, who's our CFO, and I are out in the market, you know, constantly looking for different means to be able to fund the company for its growth, and we'll continue to work on those. Nothing really to talk about, you know, publicly right now, but there are a lot of things that we're working on to be able to get the capital that we need in the best way for our shareholders to be able to grow the company. Great. Then we did actually have one question come in. Just we talked about the kind of the backlog their composition on a customer basis. Maybe is there anything you can provide quantitatively on bookings backlog or even the pipeline, just the size of the sort of the pipeline that you're looking at, the discussions that you're having, just to kind of again frame the size of the opportunity that you're looking at? Yeah. I always think it's important, like when, you know, if you go look at our last, you know, earnings announcement, like we've been consistent since we went public about how we talk about pipeline, right? We have a first phase of this which is called lead generation. Lead generation is, you know, a potential customer basically comes to us and says, "I have an idea, and I wanna do a storage project." We don't call that active pipeline because there's, you know, 70% of those that disappear, right, over time because it's just, you know, "Hey, let's see if we can create something," and a lot of those fall by the wayside. You know, look, that in and of itself, you know, is $3 billion-$4 billion. When you look at our active pipeline, an active pipeline has three components. It's. You know, first off, to get into an active pipeline, the customer has to give us a technical use case that we can provide a technical offer back to them. We need to see here's the use case. We then give a commercial offer, and then we have what we call a letter of intent, where what we're trying to do as we go through this process is say to them, "Look, we understand that you have conditions precedent before you get a project going." Going back, Thomas, what you were saying before, like things like grid interconnect, financing around bankability, different things. Like, let's sign an agreement where we say, "Look, if the project goes forward, Eos is your technology. Let's get on the same side of the table, work together to turn that into an order. You know, when you look at where we are today, that's that pipeline, if I remember correctly, you know, it's around 22 gigawatt-hours of potential pipeline. It's around $6 billion when you think about the opportunity. You know, our backlog today is over $200 million. A third of that is long-term service revenue, and the remaining amount are projects that we need to deliver here over the next 12-18 months. When you think about our orders target for the year, you know, look, with a $6 billion pipeline and you're looking to do $400 million of orders, you know, what I always tell the sales team in our, you know, when we do our pipeline reviews is like, you know, we're one of the few instances where we need to be less than 10% successful to be successful. We just gotta keep working through that number and seeing what's happening. Now the accelerators for us around the pipeline are things that we've already talked about, like the shortage of lithium-ion, the growth in six-hour-plus storage demand, the fact that we're Made in America and what we're trying to do to continue to have an American supply chain to shift our energy mix to lower carbon energy sources. I mean, when you look at those three things together, you know, we just have to keep working this day by day and keep winning and proving to customers that this is technology that's reliable and will help them position themselves for the future. Joe, I very much appreciated the discussion. We're actually up on time, unfortunately, but this was great and all the insight really appreciate it. Thanks, Thomas. Thanks. Thanks again for the opportunity. Really appreciate it.