0001805077false12-31Q32023http://fasb.org/us-gaap/2023#OtherAssetsCurrenthttp://fasb.org/us-gaap/2023#OtherAssetsNoncurrentP5YP3Y00018050772023-01-012023-09-300001805077us-gaap:CommonStockMember2023-01-012023-09-300001805077us-gaap:WarrantMember2023-01-012023-09-3000018050772023-11-01xbrli:shares00018050772023-09-30iso4217:USD00018050772022-12-31iso4217:USDxbrli:shares00018050772023-07-012023-09-3000018050772022-07-012022-09-3000018050772022-01-012022-09-300001805077us-gaap:NonrelatedPartyMember2023-07-012023-09-300001805077us-gaap:NonrelatedPartyMember2022-07-012022-09-300001805077us-gaap:NonrelatedPartyMember2023-01-012023-09-300001805077us-gaap:NonrelatedPartyMember2022-01-012022-09-300001805077us-gaap:RelatedPartyMember2023-07-012023-09-300001805077us-gaap:RelatedPartyMember2022-07-012022-09-300001805077us-gaap:RelatedPartyMember2023-01-012023-09-300001805077us-gaap:RelatedPartyMember2022-01-012022-09-300001805077us-gaap:CommonStockMember2022-06-300001805077us-gaap:AdditionalPaidInCapitalMember2022-06-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001805077us-gaap:RetainedEarningsMember2022-06-3000018050772022-06-300001805077us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001805077us-gaap:CommonStockMember2022-07-012022-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001805077us-gaap:RetainedEarningsMember2022-07-012022-09-300001805077us-gaap:CommonStockMember2022-09-300001805077us-gaap:AdditionalPaidInCapitalMember2022-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001805077us-gaap:RetainedEarningsMember2022-09-3000018050772022-09-300001805077us-gaap:CommonStockMember2023-06-300001805077us-gaap:AdditionalPaidInCapitalMember2023-06-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001805077us-gaap:RetainedEarningsMember2023-06-3000018050772023-06-300001805077us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001805077us-gaap:CommonStockMember2023-07-012023-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001805077us-gaap:RetainedEarningsMember2023-07-012023-09-300001805077us-gaap:CommonStockMember2023-09-300001805077us-gaap:AdditionalPaidInCapitalMember2023-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001805077us-gaap:RetainedEarningsMember2023-09-300001805077us-gaap:CommonStockMember2021-12-310001805077us-gaap:AdditionalPaidInCapitalMember2021-12-310001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001805077us-gaap:RetainedEarningsMember2021-12-3100018050772021-12-310001805077us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001805077us-gaap:CommonStockMember2022-01-012022-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001805077us-gaap:RetainedEarningsMember2022-01-012022-09-300001805077us-gaap:CommonStockMember2022-12-310001805077us-gaap:AdditionalPaidInCapitalMember2022-12-310001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001805077us-gaap:RetainedEarningsMember2022-12-310001805077us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001805077us-gaap:CommonStockMember2023-01-012023-09-300001805077us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-09-300001805077us-gaap:RetainedEarningsMember2023-01-012023-09-30eose:segment0001805077us-gaap:NotesPayableOtherPayablesMembereose:DOECleanEnergyFinancingProgramMember2023-08-310001805077us-gaap:TransferredAtPointInTimeMember2023-07-012023-09-300001805077us-gaap:TransferredAtPointInTimeMember2022-07-012022-09-300001805077us-gaap:TransferredAtPointInTimeMember2023-01-012023-09-300001805077us-gaap:TransferredAtPointInTimeMember2022-01-012022-09-300001805077us-gaap:TransferredOverTimeMember2023-07-012023-09-300001805077us-gaap:TransferredOverTimeMember2022-07-012022-09-300001805077us-gaap:TransferredOverTimeMember2023-01-012023-09-300001805077us-gaap:TransferredOverTimeMember2022-01-012022-09-300001805077eose:Customer1Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-30xbrli:pure0001805077eose:Customer2Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-300001805077eose:Customer1Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001805077eose:Customer1Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001805077eose:Customer2Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001805077eose:Customer1Memberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001805077us-gaap:SecuredDebtMembereose:SeniorSecuredTermLoanAgreementMember2022-07-29eose:interest_payment0001805077us-gaap:EquipmentMembersrt:MinimumMember2023-09-300001805077us-gaap:EquipmentMembersrt:MaximumMember2023-09-300001805077us-gaap:EquipmentMember2023-09-300001805077us-gaap:EquipmentMember2022-12-310001805077eose:FinanceLeaseMember2023-09-300001805077eose:FinanceLeaseMember2022-12-310001805077us-gaap:FurnitureAndFixturesMembersrt:MinimumMember2023-09-300001805077us-gaap:FurnitureAndFixturesMembersrt:MaximumMember2023-09-300001805077us-gaap:FurnitureAndFixturesMember2023-09-300001805077us-gaap:FurnitureAndFixturesMember2022-12-310001805077us-gaap:LeaseholdImprovementsMember2023-09-300001805077us-gaap:LeaseholdImprovementsMember2022-12-310001805077us-gaap:ToolsDiesAndMoldsMembersrt:MinimumMember2023-09-300001805077us-gaap:ToolsDiesAndMoldsMembersrt:MaximumMember2023-09-300001805077us-gaap:ToolsDiesAndMoldsMember2023-09-300001805077us-gaap:ToolsDiesAndMoldsMember2022-12-310001805077us-gaap:PatentsMember2023-09-300001805077us-gaap:PatentsMember2023-07-012023-09-300001805077us-gaap:PatentsMember2022-07-012022-09-300001805077us-gaap:PatentsMember2023-01-012023-09-300001805077us-gaap:PatentsMember2022-01-012022-09-300001805077eose:SoftwareMember2023-09-300001805077us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2023-09-300001805077us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMember2022-12-310001805077eose:CaliforniaEnergyCommissionMember2023-09-300001805077eose:CaliforniaEnergyCommissionMember2022-12-310001805077eose:ProductionTaxCreditsMember2023-07-012023-09-300001805077eose:ProductionTaxCreditsMember2023-01-012023-09-300001805077eose:ProductionTaxCreditsMember2023-09-300001805077eose:A2021ConvertibleNotesMemberus-gaap:RelatedPartyMember2021-07-310001805077eose:A2021ConvertibleNotesMemberus-gaap:RelatedPartyMember2021-07-012021-07-310001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-310001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2022-12-310001805077us-gaap:SecuredDebtMembereose:SeniorSecuredTermLoanAgreementMember2023-09-300001805077us-gaap:SecuredDebtMembereose:SeniorSecuredTermLoanAgreementMember2022-12-310001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNoteMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNoteMember2022-12-310001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2023-09-300001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2022-12-310001805077us-gaap:ConvertibleDebtMembereose:YorkvilleConvertiblePromissoryNoteMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:YorkvilleConvertiblePromissoryNoteMember2022-12-310001805077us-gaap:ConvertibleDebtMembereose:December2022PromissoryNoteMember2022-12-290001805077us-gaap:ConvertibleDebtMembereose:December2022PromissoryNoteMember2023-01-012023-01-310001805077us-gaap:ConvertibleDebtMembereose:February2023PromissoryNoteMember2023-02-010001805077eose:February2023PromissoryNoteMember2023-02-010001805077us-gaap:ConvertibleDebtMembereose:February2023PromissoryNoteMember2023-02-012023-02-010001805077us-gaap:ConvertibleDebtMembereose:February2023PromissoryNoteMember2023-02-012023-02-280001805077us-gaap:ConvertibleDebtMembereose:March2023PromissoryNoteMember2023-03-170001805077eose:March2023PromissoryNoteMember2023-03-170001805077us-gaap:ConvertibleDebtMembereose:March2023PromissoryNoteMember2023-03-172023-03-170001805077us-gaap:ConvertibleDebtMembereose:March2023PromissoryNoteMember2023-03-012023-04-300001805077us-gaap:ConvertibleDebtMembereose:April2023PromissoryNoteMember2023-04-100001805077eose:April2023PromissoryNoteMember2023-04-100001805077us-gaap:ConvertibleDebtMembereose:April2023PromissoryNoteMember2023-04-102023-04-100001805077us-gaap:ConvertibleDebtMembereose:April2023PromissoryNoteMember2023-04-012023-06-300001805077us-gaap:ConvertibleDebtMembereose:YorkvilleConvertiblePromissoryNoteMember2023-01-012023-09-300001805077eose:EmbeddedDerivativesYorkvilleConvertiblePromissoryNotesRelatedPartyMemberus-gaap:ConvertibleDebtMember2023-01-012023-09-300001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2021-07-060001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2023-07-012023-09-300001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2022-07-012022-09-300001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2023-01-012023-09-300001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2022-01-012022-09-300001805077eose:A2021ConvertibleNotesMemberus-gaap:RelatedPartyMember2023-09-300001805077eose:A2021ConvertibleNotesMemberus-gaap:RelatedPartyMember2022-12-310001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-1800018050772023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-01-182023-01-18eose:trading_day0001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-182023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-07-012023-09-300001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-012023-09-300001805077eose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-180001805077eose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-01-182023-01-180001805077eose:AFGConvertibleNotesMemberus-gaap:RelatedPartyMember2023-09-300001805077us-gaap:SecuredDebtMembereose:SeniorSecuredTermLoanAgreementMember2022-07-292022-07-290001805077eose:SecuredOvernightFinancingRateSOFRMembersrt:MinimumMembereose:SeniorSecuredTermLoanAgreementMember2022-07-292022-07-290001805077eose:FederalReserveBankOfNewYorkFinancingRateNYFRBMembersrt:MinimumMembereose:SeniorSecuredTermLoanAgreementMember2022-07-292022-07-290001805077eose:SOFRLoansMembereose:SeniorSecuredTermLoanAgreementMember2022-07-292022-07-290001805077eose:SeniorSecuredTermLoanAgreementMembereose:ABRLoansMember2022-07-290001805077eose:SOFRLoansMembereose:SeniorSecuredTermLoanAgreementMember2023-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2023-07-012023-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2022-07-012022-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2023-01-012023-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2022-01-012022-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2023-09-300001805077us-gaap:SecuredDebtMemberus-gaap:NonrelatedPartyMembereose:SeniorSecuredTermLoanAgreementMember2022-12-310001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2021-09-300001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2021-09-012021-09-300001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2022-09-012022-09-300001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2022-09-300001805077us-gaap:LineOfCreditMembereose:EquipmentFinancingFacilityMember2021-09-012023-06-300001805077eose:EquipmentFinancingFacilityMember2022-09-300001805077eose:EquipmentFinancingFacilityMember2023-09-300001805077eose:EquipmentFinancingFacilityMember2022-12-310001805077eose:EquipmentFinancingFacilityMember2023-07-012023-09-300001805077eose:EquipmentFinancingFacilityMember2022-07-012022-09-300001805077eose:EquipmentFinancingFacilityMember2023-01-012023-09-300001805077eose:EquipmentFinancingFacilityMember2022-01-012022-09-300001805077eose:IPOWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-09-300001805077eose:IPOWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2022-12-310001805077eose:April2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-04-300001805077eose:May2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-05-310001805077eose:April2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-04-012023-04-300001805077eose:May2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-05-012023-05-310001805077eose:April2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-09-300001805077eose:May2023PrivateWarrantsMemberus-gaap:CommonStockMemberus-gaap:RelatedPartyMember2023-09-300001805077us-gaap:FairValueInputsLevel1Member2023-09-300001805077us-gaap:FairValueInputsLevel2Member2023-09-300001805077us-gaap:FairValueInputsLevel3Member2023-09-300001805077us-gaap:FairValueInputsLevel1Member2022-12-310001805077us-gaap:FairValueInputsLevel2Member2022-12-310001805077us-gaap:FairValueInputsLevel3Member2022-12-310001805077us-gaap:FairValueInputsLevel1Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-09-300001805077us-gaap:FairValueInputsLevel2Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-09-300001805077us-gaap:FairValueInputsLevel3Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-09-300001805077us-gaap:FairValueInputsLevel1Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-12-310001805077us-gaap:FairValueInputsLevel2Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-12-310001805077us-gaap:FairValueInputsLevel3Memberus-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-12-310001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2023-09-300001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2023-04-120001805077us-gaap:MeasurementInputSharePriceMembereose:April2023PrivateWarrantsMember2023-09-300001805077us-gaap:MeasurementInputSharePriceMembereose:April2023PrivateWarrantsMember2023-04-120001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-04-120001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-300001805077eose:April2023PrivateWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-04-120001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2023-09-300001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputExpectedTermMember2023-05-150001805077us-gaap:MeasurementInputSharePriceMembereose:May2023PrivateWarrantsMember2023-09-300001805077us-gaap:MeasurementInputSharePriceMembereose:May2023PrivateWarrantsMember2023-05-150001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-05-150001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-300001805077eose:May2023PrivateWarrantsMemberus-gaap:MeasurementInputPriceVolatilityMember2023-05-150001805077us-gaap:ConvertibleDebtMembereose:A2021ConvertibleNotesMember2022-01-012022-12-310001805077us-gaap:MeasurementInputExpectedDividendRateMembereose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2023-09-300001805077us-gaap:MeasurementInputExpectedDividendRateMembereose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMember2022-12-310001805077eose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001805077eose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2022-12-310001805077eose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-300001805077eose:A2021ConvertibleNotesMemberus-gaap:ConvertibleDebtMemberus-gaap:MeasurementInputPriceVolatilityMember2022-12-310001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-01-012023-09-300001805077us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-09-300001805077us-gaap:MeasurementInputExpectedDividendRateMemberus-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:MeasurementInputPriceVolatilityMember2023-09-300001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMemberus-gaap:MeasurementInputPriceVolatilityMember2023-01-180001805077us-gaap:ConvertibleDebtMembereose:AFGConvertibleNotesMember2023-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-06-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-06-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-12-310001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2021-12-310001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-07-012023-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-07-012022-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-01-012023-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-01-012022-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2023-09-300001805077us-gaap:EmbeddedDerivativeFinancialInstrumentsMember2022-09-300001805077us-gaap:WarrantMember2023-06-300001805077us-gaap:WarrantMember2022-06-300001805077us-gaap:WarrantMember2022-12-310001805077us-gaap:WarrantMember2021-12-310001805077us-gaap:WarrantMember2023-07-012023-09-300001805077us-gaap:WarrantMember2022-07-012022-09-300001805077us-gaap:WarrantMember2023-01-012023-09-300001805077us-gaap:WarrantMember2022-01-012022-09-300001805077us-gaap:WarrantMember2023-09-300001805077us-gaap:WarrantMember2022-09-300001805077us-gaap:NotesReceivableMember2023-09-300001805077us-gaap:FairValueInputsLevel3Memberus-gaap:NotesReceivableMember2023-09-300001805077us-gaap:NotesReceivableMember2022-12-310001805077us-gaap:FairValueInputsLevel3Memberus-gaap:NotesReceivableMember2022-12-310001805077eose:A2021ConvertibleNotesMember2023-09-300001805077us-gaap:FairValueInputsLevel3Membereose:A2021ConvertibleNotesMember2023-09-300001805077eose:A2021ConvertibleNotesMember2022-12-310001805077us-gaap:FairValueInputsLevel3Membereose:A2021ConvertibleNotesMember2022-12-310001805077eose:SeniorSecuredTermLoanAgreementMember2023-09-300001805077us-gaap:FairValueInputsLevel3Membereose:SeniorSecuredTermLoanAgreementMember2023-09-300001805077eose:SeniorSecuredTermLoanAgreementMember2022-12-310001805077us-gaap:FairValueInputsLevel3Membereose:SeniorSecuredTermLoanAgreementMember2022-12-310001805077eose:AFGConvertibleNotesMember2023-09-300001805077us-gaap:FairValueInputsLevel3Membereose:AFGConvertibleNotesMember2023-09-300001805077eose:AFGConvertibleNotesMember2022-12-310001805077us-gaap:FairValueInputsLevel3Membereose:AFGConvertibleNotesMember2022-12-310001805077us-gaap:FairValueInputsLevel3Membereose:EquipmentFinancingFacilityMember2023-09-300001805077us-gaap:FairValueInputsLevel3Membereose:EquipmentFinancingFacilityMember2022-12-310001805077eose:December2022PromissoryNoteMember2023-09-300001805077us-gaap:FairValueInputsLevel3Membereose:December2022PromissoryNoteMember2023-09-300001805077eose:December2022PromissoryNoteMember2022-12-310001805077us-gaap:FairValueInputsLevel3Membereose:December2022PromissoryNoteMember2022-12-310001805077eose:MinimumVolumeCommitmentMember2023-09-3000018050772020-11-110001805077us-gaap:CommonClassAMember2020-11-110001805077us-gaap:CommonClassBMember2020-11-1100018050772020-11-120001805077us-gaap:EmployeeStockOptionMembersrt:MinimumMember2023-01-012023-09-300001805077us-gaap:EmployeeStockOptionMembersrt:MaximumMember2023-01-012023-09-300001805077us-gaap:RestrictedStockUnitsRSUMembersrt:MinimumMember2023-01-012023-09-300001805077us-gaap:RestrictedStockUnitsRSUMembersrt:MaximumMember2023-01-012023-09-300001805077us-gaap:EmployeeStockOptionMembereose:PerformanceConditionsMember2023-06-012023-06-300001805077us-gaap:EmployeeStockOptionMembereose:PerformanceConditionsMember2023-07-012023-09-300001805077us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001805077us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001805077us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001805077us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001805077us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001805077us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001805077us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001805077us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001805077us-gaap:RestrictedStockUnitsRSUMember2023-09-300001805077srt:WeightedAverageMemberus-gaap:EmployeeStockOptionMember2023-01-012023-09-300001805077srt:WeightedAverageMemberus-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-30eose:vote0001805077eose:April2023PrivateWarrantsMemberus-gaap:CommonStockMember2023-04-300001805077eose:May2023PrivateWarrantsMemberus-gaap:CommonStockMember2023-05-3100018050772020-05-220001805077us-gaap:PrivatePlacementMember2022-04-280001805077us-gaap:PrivatePlacementMember2022-04-282022-04-280001805077us-gaap:OtherOperatingIncomeExpenseMember2022-04-282022-04-280001805077us-gaap:PrivatePlacementMember2023-01-012023-09-300001805077us-gaap:PrivatePlacementMember2022-01-012022-09-3000018050772022-08-050001805077eose:AtTheMarketProgramMember2022-08-050001805077eose:AtTheMarketProgramMember2023-08-220001805077eose:AtTheMarketProgramMember2023-08-230001805077eose:AtTheMarketProgramMember2022-08-052022-08-050001805077eose:AtTheMarketProgramMember2023-01-012023-09-300001805077eose:AtTheMarketProgramMember2023-07-012023-09-300001805077eose:AtTheMarketProgramMember2023-09-300001805077us-gaap:StockCompensationPlanMember2023-07-012023-09-300001805077us-gaap:StockCompensationPlanMember2022-07-012022-09-300001805077us-gaap:WarrantMember2023-07-012023-09-300001805077us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001805077us-gaap:StockCompensationPlanMember2023-01-012023-09-300001805077us-gaap:StockCompensationPlanMember2022-01-012022-09-300001805077us-gaap:StockCompensationPlanMember2022-07-012022-09-300001805077us-gaap:WarrantMember2023-01-012023-09-300001805077us-gaap:WarrantMember2022-07-012022-09-300001805077us-gaap:WarrantMember2022-01-012022-09-300001805077us-gaap:ConvertibleDebtSecuritiesMember2023-01-012023-09-300001805077us-gaap:ConvertibleDebtSecuritiesMember2022-01-012022-09-300001805077us-gaap:ConvertibleDebtSecuritiesMember2022-07-012022-09-30

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 September 30, 2023

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 001-39291

EOS ENERGY ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

Delaware									84-4290188
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
3920 Park Avenue			Edison			NJ			08820
(Address of Principal Executive Offices)									(Zip Code)

(732) 225-8400

Registrant’s telephone number, including area code

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

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ☒  No  ☐

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   ☐     No  ☒

The registrant had outstanding 158,064,466 shares of common stock as of November 1, 2023.

---

Table of Contents

Table of Contents

						Page
			PART I - FINANCIAL INFORMATION
Item 1.			Financial Statements			4
			Unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022			4
			Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022			6
			Unaudited Condensed Consolidated Statements of Shareholders’ (Deficit) Equity for the Three and Nine Months Ended September 30, 2023 and 2022			7
			Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022			9
			Notes to the Unaudited Condensed Consolidated Financial Statements			11
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			33
Item 3.			Quantitative and Qualitative Disclosures About Market Risk			43
Item 4.			Controls and Procedures			44
			PART II - OTHER INFORMATION
Item 1.			Legal Proceedings			44
Item 1a.			Risk Factors			44
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			44
Item 3.			Defaults Upon Senior Securities			44
Item 4.			Mine Safety Disclosures			45
Item 5.			Other Information			45
Item 6.			Exhibits			46
Signatures						48

1

---

Table of Contents

FORWARD-LOOKING INFORMATION

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

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

•our ability to forecast trends accurately;

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

•our ability to raise financing in the future;

•our customer’s ability to secure project financing;

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

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

•the possibility of a government shutdown while we remain in the due diligence phase with the U.S. Department of Energy Loan Programs Office or while we await notice of a decision regarding the issuance of a loan from the Department of Energy Loan Programs Office;

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

•fluctuations in our revenue and operating results;

•competition from existing or new competitors;

•the failure to convert firm order backlog and pipeline to revenue;

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

•risks related to legal proceedings or claims;

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

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

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

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

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

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

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

•changes in applicable laws or regulations;

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

2

---

Table of Contents

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. See also Part I, Item 1A, “Risk Factors” disclosures contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 for additional discussion of the risks and uncertainties that could cause the Company’s actual results to differ materially from those expressed or implied in its forward-looking statements.

3

---

Table of Contents

Part I - Financial Information

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

			September 30, 2023						December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents			$	57,970					$	17,076
Restricted cash			3,439						2,725
Accounts receivable, net			1,578						1,666
Inventory, net			20,568						23,260
Vendor deposits			19,368						4,789
Notes receivable, net			64						36
Contract assets, current			2,401						1,859
Prepaid expenses			815						2,289
Other current assets			2,290						1,447
Total current assets			108,493						55,147
Property, plant and equipment, net			20,336						27,169
Intangible assets, net			309						240
Goodwill			4,331						4,331
Notes receivable, long-term, net			799						827
Operating lease right-of-use asset, net			3,942						4,316
Long-term restricted cash			11,652						11,422
Other assets			4,216						3,336
Total assets			$	154,078					$	106,788
LIABILITIES
Current liabilities:
Accounts payable			$	13,827					$	34,669
Accrued expenses			25,070						15,359
Operating lease liability, current			1,298						1,106
Long-term debt, current			3,211						2,872
Convertible notes payable, current - related party			—						2,688
Contract liabilities, current			3,285						3,850
Other current liabilities			93						32
Total current liabilities			46,784						60,576
Long-term liabilities:
Operating lease liability			3,471						4,130
Long-term debt			87,793						87,321
Convertible notes payable - related party			116,260						82,950
Interest payable - related party			2,706						—
Contract liabilities, long-term			956						956
Warrants liability - related party			22,954						78
Other liabilities			1,485						3,488
Total long-term liabilities			235,625						178,923
Total liabilities			282,409						239,499
COMMITMENTS AND CONTINGENCIES (NOTE 15)

4

---

Table of Contents

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

			September 30, 2023						December 31, 2022
SHAREHOLDERS' DEFICIT
Common stock, $0.0001 par value, 300,000,000 and 300,000,000 shares authorized, 156,378,778 and 82,653,781 shares outstanding on September 30, 2023 and December 31, 2022, respectively			16						9
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, no shares outstanding on September 30, 2023 and December 31, 2022			—						—
Additional paid in capital			706,288						513,614
Accumulated deficit			(834,638)						(646,340)
Accumulated other comprehensive income			3						6
Total shareholders' deficit			(128,331)						(132,711)
Total liabilities and shareholders' deficit			$	154,078					$	106,788

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

---

Table of Contents

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

						Three Months Ended September 30,												Nine Months Ended September 30,
						2023						2022						2023						2022
Revenue
Total revenue						$	684					$	6,065					$	9,768					$	15,258
Costs and expenses
Cost of goods sold						21,262						50,025						59,448						122,468
Research and development expenses						3,228						4,462						13,699						14,889
Selling, general and administrative expenses						13,076						14,651						40,169						48,045
Loss from write-down of property, plant and equipment						955						496						7,151						2,501
Grant expense, net						—						—						—						4
Total costs and expenses						38,521						69,634						120,467						187,907
Operating loss						(37,837)						(63,569)						(110,699)						(172,649)
Other (expense) income
Interest expense, net						(4,994)						(2,766)						(14,709)						(3,388)
Interest expense - related party						(4,449)						(2,960)						(32,962)						(7,798)
Gain (loss) on change in fair value of derivatives - related party						61,804						(416)						(25,919)						12,094
Loss on debt extinguishment						—						(942)						(3,510)						(942)
Other income (expense)						421						41						(474)						(472)
Income (loss) before income taxes						$	14,945					$	(70,612)					$	(188,273)					$	(173,155)
Income tax expense						13						110						25						45
Net income (loss)						$	14,932					$	(70,722)					$	(188,298)					$	(173,200)
Other comprehensive income
Foreign currency translation adjustment, net of tax						(6)						(1)						(3)						4
Comprehensive income (loss)						$	14,926					$	(70,723)					$	(188,301)					$	(173,196)
Basic and diluted income (loss) per share attributable to common shareholders
Basic						$	0.11					$	(1.12)					$	(1.65)					$	(3.00)
Diluted						$	(0.05)					$	(1.12)					$	(1.65)					$	(3.00)
Weighted average shares of common stock
Basic						138,005,222						63,065,884						114,209,090						57,705,811
Diluted						156,325,284						63,065,884						114,209,090						57,705,811

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

---

Table of Contents

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

			Common Stock												Additional Paid in capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total
			Shares						Amount
Balances on June 30, 2022			58,519,739						$	6					$	461,165					$	5					$	(519,005)					(57,829)
Stock-based compensation			—						—						3,616						—						—						3,616
Release of restricted stock units			139,846						—						—						—						—						—
Cancellation of shares used to settle payroll tax withholding			(38,534)						—						(77)						—						—						(77)
Issuance of common stock			15,461,238						2						36,672						—						—						36,674
Foreign currency translation adjustment			—						—						—						(1)						—						(1)
Net loss			—						—						—						—						(70,722)						(70,722)
Balances on September 30, 2022			74,082,289						$	8					$	501,376					$	4					$	(589,727)					$	(88,339)
Balances on June 30, 2023			127,309,960						$	14					$	620,006					$	9					$	(849,570)					$	(229,541)
Stock-based compensation			—						—						4,456						—						—						4,456
Exercise of stock options			50,000						—						67						—						—						67
Release of restricted stock units			93,458						—						—						—						—						—
Cancellation of shares used to settle payroll tax withholding			(13,584)						—						(136)						—						—						(136)
Issuance of common stock			28,938,944						2						81,895						—						—						81,897
Foreign currency translation adjustment			—						—						—						(6)						—						(6)
Net income			—						—						—						—						14,932						14,932
Balances on September 30, 2023			156,378,778						$	16					$	706,288					$	3					$	(834,638)					$	(128,331)

7

---

Table of Contents

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

			Common Stock												Additional Paid in capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total
			Shares						Amount
Balances on December 31, 2021			53,786,632						$	5					$	448,969					$	—					$	(416,527)					$	32,447
Stock-based compensation			—						—						10,993						—						—						10,993
Exercise of warrants			600						—						7						—						—						7
Release of restricted stock units			567,453						—						—						—						—						—
Cancellation of shares used to settle payroll tax withholding			(166,690)						—						(929)						—						—						(929)
Issuance of common stock			19,429,177						3						41,275						—						—						41,278
Commitment fee for SEPA settled by common stock			465,117						—						1,061						—						—						1,061
Foreign currency translation adjustment			—						—						—						4						—						4
Net loss			—						—						—						—						(173,200)						(173,200)
Balances on September 30, 2022			74,082,289						$	8					$	501,376					$	4					$	(589,727)					$	(88,339)
Balances on December 31, 2022			82,653,781						$	9					$	513,614					$	6					$	(646,340)					$	(132,711)
Stock-based compensation			—						—						10,123						—						—						10,123
Exercise of stock options			250,000						—						335						—						—						335
Release of restricted stock units			1,606,791						—						—						—						—						—
Cancellation of shares used to settle payroll tax withholding			(303,655)						—						(587)						—						—						(587)
Issuance of common stock			72,171,861						7						182,803						—						—						182,810
Foreign currency translation adjustment			—						—						—						(3)						—						(3)
Net loss			—						—						—						—						(188,298)						(188,298)
Balances on September 30, 2023			156,378,778						$	16					$	706,288					$	3					$	(834,638)					$	(128,331)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

---

Table of Contents

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

			Nine Months Ended September 30,
			2023						2022
Cash flows from operating activities
Net loss			$	(188,298)					$	(173,200)
Adjustment to reconcile net loss to net cash used in operating activities
Stock-based compensation			10,123						10,993
Depreciation and amortization			7,316						3,847
Loss on debt extinguishment			3,510						942
Loss from write-down of property, plant and equipment			7,151						2,501
Amortization of right-of-use assets			737						635
Non-cash interest expense			3,820						704
Non-cash interest expense - related party			25,324						3,121
Loss (gain) on change in fair value of derivatives - related party			25,919						(12,094)
Commitment fee for SEPA agreement settled by common stock - related party			—						1,061
Other			5,554						2,690
Changes in operating assets and liabilities:
Prepaid expenses			1,474						1,677
Inventory			2,692						(10,217)
Accounts receivable			96						(488)
Vendor deposits			(4,044)						3,960
Contract assets			(471)						(2,626)
Accounts payable			(17,770)						22,047
Accrued expenses			12,258						5,949
Accounts payable and accrued expenses - related party			—						(1,200)
Interest payable - related party			2,706						1,590
Operating lease liabilities			(830)						(528)
Contract liabilities			(565)						572
Note payable			—						(19,637)
Other			(4,280)						(1,428)
Net cash used in operating activities			(107,578)						(159,129)
Cash flows from investing activities
Investment in notes receivable			—						(261)
Purchases of property, plant and equipment			(21,186)						(18,778)
Net cash used in investing activities			(21,186)						(19,039)
Cash flows from financing activities
Principal payments on finance lease obligations			(93)						(6)
Proceeds from exercise of options			442						—
Proceeds from exercise of public warrants			—						7
Proceeds from issuance of convertible notes - related party			48,050						7,225
Payment of debt issuance costs - related party			(1,116)						—
Proceeds received from the Term Loan, net of discount			—						92,783

9

---

Table of Contents

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

			Nine Months Ended September 30,
			2023						2022
Payment of debt issuance costs			(3,046)						(12,703)
Proceeds from equipment financing facility			—						4,216
Repayment of equipment financing facility			(2,110)						(1,208)
Proceeds from issuance of common stock			81,897						29,139
Proceeds from issuance of common stock and warrants - related party			49,250						5,000
Payment of equity issuance costs - related party			(2,080)						—
Repurchase of shares from employees for income tax withholding purposes			(587)						(929)
Net cash provided by financing activities			170,607						123,524
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(5)						(1)
Net increase (decrease) in cash, cash equivalents and restricted cash			41,838						(54,645)
Cash, cash equivalents and restricted cash, beginning of the period			31,223						105,692
Cash, cash equivalents and restricted cash, end of the period			$	73,061					$	51,047
Non-cash investing and financing activities
Accrued and unpaid capital expenditures			$	—					$	1,492
Issuance of convertible notes for interest paid in kind			4,915						3,087
Fixed assets acquired with finance lease			125						—
Right-of-use operating lease assets in exchange for lease liabilities			363						2,112
Issuance of common stock upon settlement of Yorkville convertible notes			51,023						7,534
Accrued and unpaid debt issuance costs			—						5,231
Accrued and unpaid capitalized internal-use software			130						—
Supplemental disclosures
Cash paid for interest			$	11,269					$	2,490

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

10

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

1.Overview

Nature of Operations

Eos Energy Enterprises, Inc. (the “Company,” “we,” “us,” “our,” and “Eos”) designs, develops, manufactures, and markets innovative energy storage solutions for utility-scale, microgrid, and commercial & industrial (“C&I”) applications. Eos developed a broad range of intellectual property with multiple patents covering unique battery chemistry, mechanical product design, energy block configuration and a software operating system (Battery Management System). The Company has only one operating and reportable segment.

Liquidity and Going Concern

As a growth company in the early commercialization stage of its lifecycle, Eos is subject to inherent risks and uncertainties associated with the development of an enterprise. In this regard, substantially all of the Company’s efforts to date have been devoted to the development and manufacturing of battery energy storage systems and complimentary products and services, recruitment of management and technical staff, deployment of capital to expand the Company’s operations to meet customer demand and raising capital to fund the Company’s development. As a result of these efforts, the Company has incurred significant losses and negative cash flows from operations since its inception and expects to continue to incur such losses and negative cash flows for the foreseeable future until such time that the Company can reach a scale of profitability to sustain its operations.

In order to execute its development strategy, the Company has historically relied on outside capital through the issuance of equity, debt, and borrowings under financing arrangements (collectively “outside capital”) to fund its cost structure and expects to continue to rely on outside capital for the foreseeable future. While the Company believes it will eventually reach a scale of profitability to sustain its operations, there can be no assurance the Company will be able to achieve such profitability or do so in a manner that does not require its continued reliance on outside capital. Moreover, while the Company has historically been successful in raising outside capital, there can be no assurance the Company will be able to continue to obtain outside capital in the future or do so on terms that are acceptable to the Company.

As of the date the accompanying unaudited condensed consolidated financial statements were issued (the “issuance date”), management evaluated the significance of the following negative financial conditions in accordance with Accounting Standard Codification 205-40, Going Concern:

•Since its inception, the Company has incurred significant losses and negative cash from operations in order to fund its development. During the nine months ended September 30, 2023, the Company incurred a net loss of $188,298, incurred negative cash flows from operations of $107,578, and had an accumulated deficit of $834,638 as of September 30, 2023.

•As of September 30, 2023, the Company had $57,970 of unrestricted cash and cash equivalents available to fund the Company’s operations, no additional borrowings available to fund its operations under pre-existing financing arrangements (see Note 12, Borrowings) and working capital of $61,709, inclusive of $3,211 of outstanding debt that is currently scheduled to mature within the next twelve months beyond the issuance date.

•While the Company has available capacity under certain pre-existing arrangements to issue shares of the Company’s common stock, including the at-the-market (“ATM”) offering program, (see Note 18, Shareholders’ Deficit) to aid in funding the Company’s operations, the Company’s ability to secure such funding is dependent upon certain conditions, such as investors’ willingness to purchase the Company’s common stock and at a price that is acceptable to the Company. Accordingly, as of the issuance date there is no assurance the Company will be able to secure funding under these pre-existing arrangements or on terms that are acceptable to the Company.

11

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

1. Overview (cont.)

•Similarly, while the Company has historically been successful in raising additional outside capital to fund the Company’s operations, as of the issuance date no assurance can be provided the Company will be successful in obtaining additional outside capital or on terms that are acceptable to the Company. In this regard, the Company continues to progress through the Department of Energy (“DOE”) Loan Programs Office’s (“LPO”) process for its Title XVII loan. In August 2023, the DOE issued a Conditional Commitment Letter to the Company for a loan of an aggregate principal amount of up to $398,600 through the DOE’s Clean Energy Financing Program. Certain technical, legal, and financial conditions must be met and due diligence to the satisfaction of the DOE must be completed before the DOE enters into definitive financing documents with the Company and funds the loan. There can be no assurance that the Company will be able to secure such a loan or on terms that are acceptable to the Company.

•The Company is required to remain in compliance with a quarterly minimum financial liquidity covenant under its Senior Secured Term Loan Credit Agreement (“Senior Secured Term Loan”). While the Company was in compliance with this covenant as of September 30, 2023, and expects to remain in compliance as of December 31, 2023, absent the Company’s ability to secure additional outside capital, the Company may be unable to remain in compliance with this covenant beginning on March 31, 2024 and thereafter. In the event the Company is unable to remain in compliance with the minimum financial liquidity covenant and the other nonfinancial covenants required by the Senior Secured Term Loan, and the Company is further unable to cure such noncompliance or secure a waiver, Atlas Credit Partners (ACP) Post Oak Credit I LLC may, at its discretion, exercise any and all of its existing rights and remedies, which may include, among other things, entering into a forbearance agreement with the Company, and/or asserting its rights in the Company’s assets securing the loan. Moreover, the Company’s other lenders may exercise similar rights and remedies under the cross-default provisions of their respective borrowing arrangements with the Company.

•Absent an ability to secure additional outside capital in the near term, the Company will be unable to meet its obligations as they become due over the next twelve months beyond the issuance date.

•In the event the Company’s ongoing efforts to raise additional outside capital prove unsuccessful, management will be required to seek other strategic alternatives, which may include, among others, a significant curtailment in the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent.

These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that the Company will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the accompanying unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its 100% owned, direct and indirect subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany transactions and balances have been eliminated in the preparation of the unaudited condensed consolidated financial statements. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The interim financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, included in our 2022 Annual Report on Form 10-K. These interim results are not necessarily indicative of results for the full year.

12

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

2. Summary of Significant Accounting Policies (cont.)

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.

Government Grants

The Company records grants received or receivable from government agencies as an offset to the related costs for which the grants are intended to compensate the Company. The costs of satisfying the Company’s obligations under the respective grant agreements are recognized as expense when incurred. The Company recognizes grant money once it is reasonably assured that the Company will comply with the conditions of the grant.

Recent Accounting Pronouncements

There were no new accounting standards or updates during the nine months ended September 30, 2023 that would have a material impact on the Company’s unaudited condensed consolidated financial statements.

3. Revenue Recognition

The Company primarily earns revenue from sales of its energy storage systems and services including installation, commissioning, and extended warranty services. Product revenues, which are generally recognized at a point in time, and service revenues, which are generally recognized over time, are as follows:

						For the Three Months Ended September 30,												For the Nine Months Ended September 30,
						2023						2022						2023						2022
Product revenue						$	662					$	6,055					$	9,586					$	15,120
Service revenue						22						10						$	182					$	138
Total revenues						$	684					$	6,065					$	9,768					$	15,258

For the three months ended September 30, 2023, the Company had two customers that accounted for 51.4% and 35.5% of the total revenue and for the nine months ended September 30, 2023, we had one customer that accounted for 91.0% of the total revenue, respectively.

For the three months ended September 30, 2022, the Company had two customers that accounted for 86.5% and 13.4% of the total revenue and for the nine months ended September 30, 2022, we had one customer who accounted for 78.4% of the total revenue, respectively.

Lessor revenue

The Company leases battery energy storage systems to one customer through a sales-type lease with a 20-year term. No revenue was recognized from the sales-type lease for the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2022, the Company recognized revenue of $0 and $1,166 from the sales-type lease, respectively.

13

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

3. Revenue Recognition (cont.)

Contract assets and Contract liabilities

The following table provides information about contract assets and contract liabilities from contracts with customers. Contract assets, current and contract liabilities, current and long-term are included separately on the unaudited condensed consolidated balance sheets and contract assets, long-term are included under other assets.

			September 30, 2023						December 31, 2022
Contract assets			$	2,471					$	2,000
Contract liabilities			$	4,241					$	4,806

The Company recognizes contract assets for certain contracts in which revenue recognition performance obligations have been satisfied but invoicing to the customer has not yet occurred. Contract liabilities primarily relate to consideration received from customers in advance of the Company’s satisfying performance obligations under contractual arrangements. Contract balances are reported in a net contract asset or liability position on a contract-by-contract basis at the end of each reporting period.

Contract assets increased by $471 during the nine months ended September 30, 2023 due to recognition of revenues for which invoicing has not yet occurred. Contract liabilities decreased by $565 during the nine months ended September 30, 2023, reflecting $3,534 of revenue recognized from customers, partially offset by $2,969 in customer advance payments during the nine months ended September 30, 2023 that was included in the contract liability balance at the beginning of the period.

Contract liabilities of $3,285 as of September 30, 2023 are expected to be recognized within the next twelve months and long-term contract liabilities of $956 are expected to be recognized as revenue over approximately the next one to two years. Contract assets of $2,401 as of September 30, 2023 are expected to be recognized within the next twelve months. Long-term contract assets of $70 are expected to be recognized as accounts receivable over approximately the next two years.

4. Cash, Cash Equivalents and Restricted Cash

Restricted cash - current consists of escrow deposits related to U.S. Custom Bonds insurance and escrow deposits related to our credit card program agreements. Additionally, long-term restricted cash relates to interest that is required to be held in escrow per the Senior Secured Term Loan agreement in an amount equal to the aggregate amount of the four immediately following interest payments owed (see Note 12, Borrowings for further discussion).

The following table reconciles reported amounts from the unaudited condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated statements of cash flows:

			September 30, 2023									September 30, 2022
Cash and cash equivalents			$	57,970								$	38,431
Restricted cash (1)			3,439									1,885
Long-term restricted cash			11,652									10,731
Total cash, cash equivalents, and restricted cash			$	73,061								$	51,047

(1) Restricted cash, current.

14

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

5. Inventory

The following table provides information about inventory balances:

			September 30, 2023						December 31, 2022
Raw materials			$	20,093					$	22,899
Work-in-process			475						361
Finished goods			—						—
Total inventory, net			$	20,568					$	23,260

6. Property, Plant and Equipment, Net

The following table provides information about property, plant and equipment, net balances:

			Estimated Useful lives												September 30, 2023						December 31, 2022
Equipment			5 to 10 years												$	20,831					$	23,653
Finance lease			5 years												504						379
Furniture			5 to 10 years												1,944						1,868
Leasehold improvements			Lesser of useful life/ remaining lease												7,285						6,303
Tooling			2 to 3 years												5,392						6,926
Total															35,956						39,129
Less: Accumulated depreciation															(15,620)						(11,960)
Total property, plant and equipment, net															$	20,336					$	27,169

Depreciation expense related to property, plant and equipment was $2,144 and $1,571 for the three months ended September 30, 2023 and 2022, respectively and $7,255 and $3,817 for the nine months ended September 30, 2023 and 2022, respectively.

7. Intangible Assets

Intangible assets include patents valued at $400, which represents the cost to acquire the patents. These patents are determined to have useful lives and are amortized into the results of operations over ten years. The Company recorded amortization expense of $10 for the three months ended September 30, 2023 and 2022, respectively, and $30 for the nine months ended September 30, 2023 and 2022, respectively, related to patents.

During the nine months ended September 30, 2023, the Company capitalized $130 of costs for internal-use software. The software has a useful life and is amortized into the results of operations over 3 years. The Company recorded amortization expense of $11 and $31 for the three and nine months ended September 30, 2023, respectively, related to software.

8. Notes Receivable, Net and Variable Interest Entities (“VIEs”) Consideration

Notes receivable primarily consist of amounts due to the Company related to the financing offered to certain customers. The Company reports notes receivable at the principal balance outstanding less an allowance for losses. The estimate of credit losses is based on historical trends, customers’ financial condition and current economic trends. The Company charges interest at a fixed rate and calculates interest income by applying the effective rate to the outstanding principal balance.

15

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

8. Notes Receivable, Net and Variable Interest Entities (“VIEs”) Consideration (cont.)

The Company had notes receivable, net of $863 and $863 outstanding as of September 30, 2023 and December 31, 2022, respectively. As of September 30, 2023 and December 31, 2022, the Company recorded an allowance for expected credit loss from the notes receivable of $2 and $2, respectively.

The customers to whom the Company offers financing through notes receivables are VIEs. However, the Company is not the primary beneficiary, because the Company does not have power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance. Therefore, the VIEs are not consolidated into the Company’s unaudited condensed consolidated financial statements. The maximum loss exposure is limited to the carrying value of notes receivable as of the balances sheet dates.

9. Accrued Expenses

Accrued expenses were as follows:

			September 30, 2023						December 31, 2022
Accrued payroll			$	4,501					$	2,706
Warranty reserve (1)			4,895						3,836
Accrued legal and professional expenses			3,037						840
Provision for contract losses			4,797						2,561
Insurance premium payable, current			2,438						2,607
Other			5,402						2,809
Total accrued expenses			$	25,070					$	15,359

(1) Refer to the table below for the warranty reserve activity for the three and nine months ended September 30, 2023.

The following table summarizes warranty reserve activity:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Warranty reserve - beginning of period			$	4,421					$	3,636					$	3,836					2,112
Additions for current period deliveries			58						962						455						2,463
Changes in the warranty reserve estimate			416						—						1,124						1,321
Warranty costs incurred			—						(642)						(520)						(1,940)
Warranty reserve - end of period			$	4,895					$	3,956					$	4,895					$	3,956

10. Government Grants

California Energy Commission

From time-to-time, the Company has entered into grant agreements with the California Energy Commission (“CEC”) for conducting studies to demonstrate the benefits of certain energy-saving technologies to utility companies and consumers in the State of California. Under such agreements, the Company is entitled to receive reimbursement of costs incurred by the Company covered by the grants.

For the three and nine months ended September 30, 2023, grant expense, net was $0 for both periods. For the three and nine months ended September 30, 2022, grant (income) expense, net was $0 and $4, respectively.

As of September 30, 2023 and December 31, 2022, the Company had grant receivables related to the CEC in the amounts of $245 and $263, which were included in other current assets on the unaudited condensed consolidated balance sheets, respectively. There was no deferred grant income as of September 30, 2023 and December 31, 2022. Related expenses incurred by the Company are offset against grant income earned or received from the CEC.

16

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

10. Government Grants (cont.)

Inflation Reduction Act of 2022 (“IRA”)

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 into law. The IRA has significant economic incentives for both energy storage customers and manufacturers for projects placed in service after December 31, 2022. Starting in 2023, there are Production Tax Credits under Internal Revenue Code 45X (“PTC”), that can be claimed on battery components manufactured in the U.S. and sold to U.S. or foreign customers. These tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity of battery cells and $10 per kWh of capacity of battery modules. These credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through 2032. In June 2023, the IRS issued temporary and proposed regulations related to applicable tax credit transferability and direct pay provisions of the Inflation Reduction Act. The Company has reviewed these regulations and believes they do not have a material impact on the financial statements.

Since the PTC is a refundable credit (i.e., a credit with a direct-pay option available), the PTC is outside the scope of ASC 740. Therefore, the Company accounts for the PTC under a government grant model. GAAP does not address the accounting for government grants received by a business entity that are outside the scope of ASC 740. The Company’s accounting policy is to analogize to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, under IFRS Accounting Standards. Under IAS 20, once it is reasonably assured that the entity will comply with the conditions of the grant, the grant money should be recognized on a systematic basis over the periods in which the entity recognizes the related expenses or losses for which the grant money is intended to compensate. The Company recognizes grants once it is probable that both of the following conditions will be met: (1) the Company is eligible to receive the grant and (2) the Company is able to comply with the relevant conditions of the grant.

The PTC is recorded as the applicable items are produced and sold. For the three and nine months ended September 30, 2023, the Company recognized PTC of $109 and $953 as a reduction of cost of goods sold on the unaudited condensed consolidated statement of operations and comprehensive income (loss), respectively. As of September 30, 2023, grant receivable related to the PTC in the amount of $953 is recorded in other assets on the unaudited condensed consolidated balance sheets.

11. Related Party Transactions

2021 Convertible Notes Payable

In July 2021, the Company issued $100,000 aggregate principal amount of convertible notes to Spring Creek Capital, LLC, a wholly-owned, indirect subsidiary of Koch Industries, Inc. (the “2021 Convertible Notes”). In connection with these 2021 Convertible Notes, the Company paid $3,000 to B. Riley Securities, Inc., a related party, who acted as a placement agent. Refer to Note 12, Borrowings, for additional information.

AFG Convertible Notes

In January 2023, the Company issued and sold $13,750 of 26.5% Convertible Senior PIK Notes due 2026 (“AFG Convertible Notes”) to Great American Insurance Company, Ardsley Partners Renewable Energy, LP, CCI SPV III, LP, Denman Street LLC, John B. Bending Irrevocable Children’s Trust, John B. Berding, and AE Convert, LLC, a Delaware limited liability company managed by Russell Stidolph, a related party as Mr. Stidolph is a director of the Company (together, the “Purchasers”). In connection with the issuance and sale of the AFG Convertible Notes, the Company entered into an investment agreement (the “Investment Agreement”) with the Purchasers. Refer to Note 12, Borrowings, for additional information.

Warrants Liability

The Company has issued private placement warrants to various counterparties since the initial public offering (“IPO”), some of which are exercisable and outstanding as of September 30, 2023 and December 31, 2022. Refer to Note 13, Warrants Liability - Related Party, for additional information.

17

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

11. Related Party Transactions (cont.)

In April 2023 and May 2023, respectively, the Company issued common stock and private placement warrants (the “April 2023 Transaction” and “May 2023 Transaction”, respectively). Refer to Note 18, Shareholders’ Equity and Note 13, Warrants Liability - Related Party for additional information.

Standby Equity Purchase Agreement

On April 28, 2022, the Company entered into the SEPA. Pursuant to the SEPA, the Company had the right, but not the obligation, to sell to Yorkville shares of its common stock at the Company’s request. On August 23, 2023, the Company and Yorkville terminated the SEPA, as amended, by mutual written consent. See Note 12, Borrowings for pre-advance loans in form of convertible promissory notes and Note 18, Shareholders' Deficit for additional information.

12. Borrowings

The Company’s debt obligations at carrying value consist of the following related and third-party borrowings:

									September 30, 2023												December 31, 2022
			Maturity Date						Borrowing Outstanding						Carrying Value*						Borrowing Outstanding						Carrying Value*
2021 Convertible Notes Payable			June 2026						$	112,442					$	90,169					$	109,167					$	82,950
Senior Secured Term Loan			March 2026						100,000						84,537						100,000						81,616
AFG Convertible Note			June 2026						15,390						26,091						—						—
Equipment financing facility			April 2026						6,467						6,467						8,577						8,577
Yorkville Convertible Promissory Note			June 2023						—						—						2,000						2,688
Total borrowings									234,299						207,264						219,744						175,831
Current portion									3,211						3,211						5,560						5,560
Total borrowings, non-current									$	231,088					$	204,053					$	214,184					$	170,271

*Carrying value includes unamortized deferred financing costs, unamortized discounts, and fair value of embedded derivative liabilities.

Yorkville Convertible Promissory Notes - Related Party

On December 29, 2022, the Company issued and sold a convertible promissory note (the “December 2022 Promissory Note”) with an aggregate principal amount of $2,000 in a private placement to Yorkville under a second supplemental agreement to the SEPA (the “Second Supplemental Agreement”). In January 2023, Yorkville delivered Investor Notices requiring the Company to issue and sell an aggregate of 1,953,612 shares of common stock to Yorkville to offset all outstanding amounts owed to Yorkville under the December 2022 Promissory Note.

On February 1, 2023, the Company issued a convertible promissory note (the “February 2023 Promissory Note”) with an aggregate principal amount of $5,000 in a private placement to Yorkville under the Second Supplemental Agreement. The fair value of the February 2023 Promissory Note at issuance was $5,887, which was greater than the proceeds received. As such, the Company recorded the excess of fair value of the February 2023 Promissory Note over the proceeds received as interest expense in the amount of $987, which is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

18

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

In February 2023, Yorkville delivered Investor Notices requiring the Company to issue and sell an aggregate of 3,879,706 shares of common stock to Yorkville, in order to offset all outstanding amounts owed to Yorkville under the February 2023 Promissory Note.

On March 17, 2023, the Company issued a convertible promissory note (the “March 2023 Promissory Note”) with an aggregate principal amount of $15,000 in a private placement to Yorkville under a third supplemental agreement to the SEPA. The fair value of the March 2023 Promissory Note at issuance was $20,665, which was greater than the proceeds received. As such, the Company recorded the excess of fair value of the March 2023 Promissory Note over the proceeds received as interest expense in the amount of $5,965, which is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

In March and April 2023, Yorkville delivered Investor Notices requiring the Company to issue and sell an aggregate of 8,641,918 shares of common stock to Yorkville, in order to offset all outstanding amounts owed to Yorkville under the March 2023 Promissory Note.

On April 10, 2023, the Company issued a convertible promissory note (the “April 2023 Promissory Note”) with an aggregate principal amount of $15,000 in a private placement to Yorkville under a fourth supplemental agreement to the SEPA. The fair value of the April 2023 Promissory Note at issuance was $25,319, which was greater than the proceeds received. As such, the Company recorded the excess of fair value of the April 2023 Promissory Note over the proceeds received as interest expense in the amount of $10,619, which is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

During the second quarter of 2023, Yorkville delivered Investor Notices requiring the Company to issue and sell an aggregate of 8,471,793 shares of common stock to Yorkville, in order to offset all outstanding amounts owed to Yorkville under the April 2023 Promissory Note.

The Company recognized a loss on debt extinguishment from the issuance of common stock from the Yorkville Convertible Promissory Notes of $3,510 for the nine months ended September 30, 2023, which is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

On August 23, 2023, the Company and Yorkville terminated the SEPA, as amended, by mutual written consent. At the time of termination, there were no outstanding borrowings, advance notices or shares of Common Stock to be issued under the SEPA. In addition, there were no fees due by the Company or Yorkville in connection with the termination of the SEPA.

Embedded derivatives- Yorkville Convertible Promissory Notes - Related party

The conversion feature for each of the Yorkville Convertible Promissory Notes discussed above did not qualify for the scope exception to derivative accounting, therefore bifurcation was required for each issuance. Upon extinguishment of each Yorkville Promissory Note, the embedded derivatives were adjusted to fair value. This remeasurement resulted in net gains of $6,922 for the nine months ended September 30, 2023, which is included in (loss) gain on change in fair value of derivatives - related party on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

At September 30, 2023, there were no outstanding Yorkville Convertible Notes.

19

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

2021 Convertible Notes Payable – Related Party

On July 6, 2021, the Company entered into an investment agreement with Spring Creek Capital, LLC, a wholly-owned, indirect subsidiary of Koch Industries, Inc. The investment agreement provides for the issuance and sale to Koch Industries of the 2021 Convertible Notes in the aggregate principal amount of $100,000. The maturity date of the 2021 Convertible Notes is June 30, 2026, subject to earlier conversion, redemption, or repurchase.

See Note 14, Fair Value Measurement for the assumptions used to determine the fair value of the embedded derivative as of September 30, 2023 and as of December 31, 2022. As of September 30, 2023 and December 31, 2022, the fair value of the embedded conversion feature was $786 and $918, respectively. The gain (loss) from the change in fair value of the embedded derivative conversion feature for the three months ended September 30, 2023 and 2022 amounted to $3,190 and $(369) and for the nine months ended September 30, 2023 and 2022 amounted to $248 and $11,304, respectively.

Interest expense recognized on the 2021 Convertible Notes is as follows:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Contractual interest expense			$	1,686					$	1,590					$	4,960					$	4,677
Amortization of debt discount			1,365						1,065						3,822						2,532
Amortization of debt issuance costs			132						104						371						281
Total			$	3,183					$	2,759					$	9,153					$	7,490

The balances for the 2021 Convertible Notes are as follows:

			September 30, 2023						December 31, 2022
Principal			$	112,442					$	109,167
Unamortized debt discount			(21,027)						(24,733)
Unamortized debt issuance costs			(2,032)						(2,402)
Embedded conversion feature			786						918
Aggregate carrying value			$	90,169					$	82,950

The Company is obligated to repay all contractual interest attributable to the 2021 Convertible Notes in-kind on a semi-annual basis, in accordance with the terms under the Senior Secured Term Loan. Therefore, as of September 30, 2023, and December 31, 2022, interest payable attributable to the 2021 Convertible Notes was $1,686 and $0, respectively.

AFG Convertible Notes - Related Party

On January 18, 2023, the Company entered into the Investment Agreement with the Purchasers relating to the issuance and sale to the Purchasers of $13,750 in aggregate principal amount of the Company’s AFG Convertible Notes.

Contractual Interest Rates - The AFG Convertible Notes bear interest at a rate of 26.5% per annum, which is entirely paid-in-kind. All interest payments are made through an increase in the principal amount of the outstanding AFG Convertible Notes or through the issuance of additional notes (such interest is referred to herein as “PIK Interest”). Interest on the AFG Convertible Notes is payable semi-annually in arrears on June 30 and December 30, commencing on June 30, 2023. It is expected that the Notes will mature on June 30, 2026, subject to earlier conversion, redemption or repurchase.

20

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

Conversion Rights - The AFG Convertible Notes are convertible at the option of the holder (the “Conversion Option”) at any time until the business day prior to the maturity date, including in connection with a redemption by the Company. The AFG Convertible Notes are convertible into shares of the Company’s common stock, par value $0.0001 per share, based on an initial conversion price of approximately $1.67 per share subject to customary anti-dilution and other adjustments. The Company has the right to settle conversions in shares of common stock, cash, or any combination thereof.

Optional Redemption - On or after June 30, 2024, provided that the Company has obtained stockholder approval, the AFG Convertible Notes are redeemable by the Company in the event that the closing sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides the redemption notice. The redemption price will be equal to the then current principal amount of the AFG Convertible Notes (inclusive of all PIK Interest), plus the aggregate amount of all interest payments on the AFG Convertible Notes that the holders of the AFG Convertible Notes to be redeemed would have been entitled to receive had the AFG Convertible Notes remained outstanding to the maturity date.

Contingent Redemption - With certain exceptions, upon the occurrence of certain events and fundamental changes described in the AFG Convertible Notes Agreement, the holders of the AFG Convertible Notes may require that the Company repurchase all or part of the principal amount of the AFG Convertible Notes at a purchase price of 100% of the principal amount of the AFG Convertible Notes, plus accrued and unpaid interest.

Embedded Derivative - The Conversion Option includes an exercise contingency, which requires the Company to obtain shareholder approval for conversions subject to the Exchange Cap. If shareholder approval is not obtained, following commercially reasonable efforts, the Company will be required to settle the conversion in excess of the Exchange Cap in cash. Since settlement in cash may be required in absence of shareholder approval, the embedded conversion feature fails the equity classification guidance in ASC 815 and is thus precluded from being classified in equity. Therefore, the embedded conversion feature is required to be bifurcated from the AFG Convertible Notes and accounted for at fair value at each reporting date, with changes in fair value recognized on the unaudited condensed consolidated statements of operations and comprehensive income (loss).

The embedded derivative is presented on the unaudited condensed consolidated balance sheet as a component of Convertible notes payable - related party. The fair value of the embedded derivative was $14,583 at September 30, 2023. The gain (loss) from the change in fair value of the embedded derivative for the three and nine months ended September 30, 2023 amounted to $24,208 and $(8,132), respectively. See Note 14, Fair Value Measurement for the assumptions used to determine the fair value of the embedded derivative as of September 30, 2023 and as of the date of issuance.

The fair value of the AFG Convertible Notes at issuance was $16,623, which was greater than the proceeds received. The Company recorded the difference of $2,873 as interest expense on the unaudited condensed consolidated statement of operations and comprehensive income (loss).

21

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

Interest expense recognized on the AFG Convertible Notes is as follows:

			Three Months Ended						Nine Months Ended
			September 30, 2023
Contractual interest expense			$	1,020					$	2,659
Amortization of debt discount			192						550
Amortization of debt issuance costs			54						155
Total			$	1,266					$	3,364

The balance for the AFG Convertible Notes is as follows:

			September 30, 2023
Principal			$	15,390
Unamortized debt discount			(3,028)
Unamortized debt issuance costs			(854)
Embedded conversion feature			14,583
Aggregate carrying value			$	26,091

The Company is obligated to repay all contractual interest attributable to the AFG Convertible Notes in-kind on a semi-annual basis, in accordance with the terms of the Investment Agreement. Therefore, as of September 30, 2023, interest payable attributable to the AFG Convertible Notes was $1,020.

Senior Secured Term Loan

On July 29, 2022, the Company entered into a $100,000 Senior Secured Term Loan Credit Agreement with Atlas Credit Partners (ACP) Post Oak Credit I LLC., as administrative agent for the lenders and collateral agent for the secured parties. As of September 30, 2023, the Company had total borrowings of $100,000 under the Senior Secured Term Loan.

The Senior Secured Term Loan is scheduled to mature on the earlier of (i) July 29, 2026, and (ii) 91 days prior to the current maturity date of the 2021 Convertible Notes of June 30, 2026. The Company has the right at any time to prepay any Borrowing in whole or in part in an amount of not less than $500.

The outstanding principal balance of the Senior Secured Term Loan bears interest, at the applicable margin plus, at the Company’s election, either (i) the benchmark secured overnight financing rate (“SOFR”), which is a per annum rate equal to (y) the Adjusted Term SOFR (as defined in the agreement) plus 0.2616%, or (ii) the alternate base rate (“ABR”), which is a per annum rate equal to the greatest of (x) the Prime Rate (as defined in the agreement), (y) the NYFRB Rate (as defined in the agreement) plus 0.5% and (z) the SOFR. The applicable margin under the Credit Agreement is 8.5% per annum with respect to SOFR loans, and 7.5% per annum with respect to ABR loans. Interest on the Senior Secured Term Loan accrues at a variable interest rate, and interest payments are due quarterly. The Company may elect to convert SOFR Loans to ABR (and ABR Loans to SOFR). As of September 30, 2023, the interest rate in effect for the Senior Secured Term Loan for the third quarter of 2023 interest payment was 14.00%.

Any repayment of principal prior to the second anniversary of the issuance date is subject to a call premium. The call premium is equal to the present value of all interest payments due through June 30, 2024, calculated using a discount rate equal to the applicable treasury rate as of the repayment date plus 50 basis points. The Company deemed that the fair value of the embedded derivative features which qualify for bifurcation was de minimis.

22

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

Concurrently, the Company entered into a Guarantee and Collateral Agreement which secures and guarantees the Senior Secured Term Loan with substantially all the assets of the Company and its subsidiaries, other than the Company’s equity interests in Hi-Power and assets of Hi-Power. Additionally, interest is required to be escrowed in an amount equal to the aggregate amount of the four immediately following interest payments owed on the Loans which was $11,652 at September 30, 2023. This escrowed and restricted cash is presented on a separate line item on the unaudited condensed consolidated balance sheets as long-term restricted cash.

The agreements also contain customary affirmative and negative covenants. They limit the Company’s and its subsidiaries’ ability to incur indebtedness, make restricted payments, including cash dividends on its common stock, make certain investments, loans and advances, enter into mergers and acquisitions, sell, assign, transfer or otherwise dispose of its assets, enter into transactions with its affiliates and engage in sale and leaseback transactions, among other restrictions. Furthermore, the limitation on the Company’s ability to incur indebtedness also requires payment of principal and interest in kind on the 2021 Convertible Notes. While the Company was in compliance with this covenant as of September 30, 2023 and currently expects to remain in compliance as of December 31, 2023, absent the Company’s ability to secure additional outside capital, the Company may be unable to remain in compliance with this covenant beginning on March 31, 2024 and thereafter (see Note 1, Overview for further discussion).

The following table summarizes interest expense recognized:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Contractual interest expense			$	3,540					$	1,861					$	10,366					$	1,861
Amortization of debt discount			105						53						297						53
Amortization of debt issuance costs			929						495						2,624						495
Total			$	4,574					$	2,409					$	13,287					$	2,409

The Senior Secured Term Loan balance is as follows:

			September 30, 2023						December 31, 2022
Principal			$	100,000					$	100,000
Unamortized debt discount			(1,569)						(1,866)
Unamortized debt issuance costs			(13,894)						(16,518)
Aggregate carrying value			$	84,537					$	81,616

Equipment Financing facility

The Company entered into an agreement on September 30, 2021 with Trinity Capital Inc. (“Trinity”) for a $25,000 equipment financing facility, the proceeds of which will be used to acquire certain manufacturing equipment, subject to Trinity’s approval. Each draw is executed under a separate payment schedule (a “Schedule”) that constitutes a separate financial instrument. The financing fees included in each Schedule are established through monthly payment factors determined by Trinity. Such monthly payment factors are based on the Prime Rate reported in The Wall Street Journal in effect on the first day of the month in which a Schedule is executed. The Company has drawn a portion of the facility as follows:

Date of Draw			Gross Amount of Initial Draw						Coupon Interest Rate						Debt Issuance Costs
September 2021			$	7,000					14.3%						$	175
September 2022			4,216						16.2%						96
Total Equipment Financing loans			$	11,216											$	271

23

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

12. Borrowings (cont.)

On September 30, 2022, the equipment facility’s unused commitment of $13,784 expired.

As of September 30, 2023 and December 31, 2022, total equipment financing debt outstanding was $6,467 and $8,577, respectively of which $3,211 and $2,872 are recorded as a current liability on the unaudited condensed consolidated balance sheets, respectively. The Company recognized $265 and $190 for the three months ended September 30, 2023 and 2022, and $874 and $615 for the nine months ended September 30, 2023 and 2022 as interest expense attributable to the equipment financing agreement, respectively.

13. Warrants Liability - Related Party

The Company issued private placement warrants to purchase shares of common stock to the sponsor of B. Riley Principal Merger Corp. II (“BMRG”) in conjunction with its initial public offering in 2020 (the “IPO warrants”). As of September 30, 2023 and December 31, 2022, BMRG had 274,400 and 325,000 IPO warrants outstanding, respectively, with fair values of $114 and $78, respectively.

In April 2023, the Company issued 16,000,000 shares of common stock and 16,000,000 private placement warrants to purchase shares of common stock, and in May 2023, the Company issued another 3,601,980 shares of common stock and 3,601,980 private placement warrants to purchase shares of common stock. The proceeds from the April 2023 and May 2023 Transactions were $40,000, and $8,000, respectively. The fair value of the warrants and common stock for the April 2023 and May 2023 Transactions at issuance was $66,366 and $13,267, respectively, which was greater than the proceeds. As such, the Company recorded the excess as losses in the amounts of $26,366 and $5,267, respectively, as a component of (loss) gain on change in fair value of derivatives - related party in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss).

The warrants issued as part of the April 2023 Transaction and May 2023 Transaction (“April 2023 warrants” and “May 2023 warrants”, respectively) are classified as Level 3 financial instruments in the fair value hierarchy (refer to Note 15, Fair Value Measurement). As of September 30, 2023, the April 2023 and May 2023 warrants were outstanding with fair values of $18,415 and $4,425, respectively.

For all warrants in aggregate, the change in fair value for the three and nine months ended September 30, 2023 amounted to decreases in the liability of $34,406 and $6,677, respectively. The change in fair value for the three and nine months ended September 30, 2022 amounted to $(47) and $790, respectively. These changes have been recognized in (loss) gain on change in fair value of derivatives - related party in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss).

14. Fair Value Measurement

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, accounts receivable, notes receivable, contract assets, accounts payable, warrants, convertible notes payable — related party, contract liabilities and long-term debt.

Accounting standards establish a hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The fair value hierarchy gives the highest priority to quoted market prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Accounting standards require financial assets and liabilities to be classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and the exercise of this judgment may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, contract assets, contract liabilities and accounts payable are considered to be representative of their fair value due to the short maturity of these instruments.

24

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

14. Fair Value Measurement (cont.)

The table below summarizes the fair values of certain liabilities that are included within the Company’s accompanying unaudited condensed consolidated balance sheets, and their designations among the three fair value measurement categories:

			September 30, 2023																		December 31, 2022
			Level 1						Level 2						Level 3						Level 1						Level 2						Level 3
Liabilities
Warrants			$	—					$	114					$	22,840					$	—					$	78					$	—
Embedded derivatives			$	—					$	—					$	15,369					$	—					$	—					$	1,945

Warrants Liabilities

The IPO warrants are classified as Level 2 financial instruments in the table above. They are valued on the basis of the quoted price of the Company’s public warrants, adjusted for insignificant difference between the public warrants and the private placement warrants.

The April 2023 warrants and May 2023 warrants are classified as Level 3 financial instruments in the table above. The Company estimated the fair value of the April 2023 warrants and May 2023 warrants using the Black-Scholes model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, risk-free interest rate, volatility, and time to expiration. The volatility involves unobservable inputs classified as Level 3 of the fair value hierarchy. The assumptions used to determine the fair value of the April 2023 and May 2023 warrants are as follows:

April 2023 warrants			September 30, 2023						April 12, 2023
Time to expiration			5.04 years						5.51 years
Common stock price			$	2.15					$	2.61
Risk-free interest rate			4.6		%				3.4		%
Volatility			70.0		%				70.0		%
May 2023 warrants			September 30, 2023						May 15, 2023
Time to expiration			4.79 years						5.17 years
Common stock price			$	2.15					$	2.31
Risk-free interest rate			4.6		%				3.4		%
Volatility			70.0		%				70.0		%

Embedded derivatives

The Company estimated the fair value of the embedded conversion features using a binomial lattice model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, dividend yield, risk-free interest rate, the effective debt yield and expected volatility. The effective debt yield and volatility involve unobservable inputs classified as Level 3 of the fair value hierarchy. The assumptions used to determine the fair value of the embedded derivative liabilities are as follows:

25

---

Table of Contents

EOS ENERGY ENTERPRISES, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share amounts)

14. Fair Value Measurement (cont.)

2021 Convertible Notes Payable			September 30, 2023						December 31, 2022
Term			2.75 years						3.5 years
Dividend yield			—		%				—		%
Risk-free interest rate			4.8		%				4.1		%
Volatility			70.0		%				80.0		%
Effective debt yield			40.0		%				25.0		%
AFG Convertible Notes Payable			September 30, 2023						January 18, 2023
Term			2.75 years						3.5 years
Dividend yield			—		%				—		%
Risk-free interest rate			4.8		%				3.6		%
Volatility			70.0		%				70.0		%
Effective debt yield			40.0		%				40.0		%

Level 3 liabilities are measured at fair value on a recurring basis using significant unobservable inputs. The following table summarizes the changes in the fair value of liabilities that are included within the Company’s accompanying unaudited condensed consolidated balance sheets and are designated as Level 3:

Level 3			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
Embedded derivatives
Balance at beginning of the period			$	42,767					$	707					$	1,945					$	12,359
Additions			—						—						42,191						21
Loss (gain) on change in fair value of derivatives - related party			(27,398)						369						(28,767)						(11,304)
Balance at end of the period			$	15,369					$	1,076					$	15,369					$	1,076
Warrants
Balance at beginning of the period			$	56,905					$	—					$	—					$	—
Additions			—						—						29,553						—
Gain on change in fair value of derivatives - related party			(34,065)						—						(6,713)						—
Balance at end of the period