Eos Energy Enterprises, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
EOSE$1.74-7.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001628280-26-052906
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001628280-26-070529
Item 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 104 previous paragraphs and 115 current paragraphs.
47 unchanged; 33 reworded; 30 added; 23 removed; 1 previous and 5 current paragraphs rearranged.
Tables are not compared: 17 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Strategic Energy Management System (“EMS”) Collaboration with WATTMORE, Inc.
Current report
In August 2026, the Company entered into a non-exclusive strategic collaboration agreement with WATTMORE, Inc. to integrate WATTMORE's Intellect Operate energy management and power plant control platform with the Company's Z3 long-duration energy storage systems and DawnOS software. Under the agreement, Eos will deploy WATTMORE's platform on select customer projects, expanding the controls ecosystem for the Company's energy storage solutions and supporting streamlined project deployment.
Current report
Management believes the integrated platform will simplify project deployment, reduce implementation complexity and enhance the overall customer value proposition by offering a more comprehensive energy storage solution.
Current report
Manufacturing Consolidation
Current report
In August 2026, the Company announced plans to consolidate its battery manufacturing operations at its Thorn Hill facility in Warrendale, Pennsylvania. Commercial production at the 432,000-square-foot facility commenced in June 2026, and our battery manufacturing activities have now been centralized into a single location. Both the Thorn Hill and Turtle Creek facilities will continue to support cube assembly, testing, and shipping operations.
Current report
The Thorn Hill facility is expected to provide approximately 4 GWh of annual nameplate manufacturing capacity when both production lines are fully operational, supporting the Company's anticipated growth and expansion of customer deployments.
Current report
This consolidation represents a key component of the Company's ongoing efforts to enhance manufacturing scalability and become profitable. Management believes the consolidation will improve manufacturing efficiency by reducing material handling and streamlining production workflows. Upon completion of the transition, the Company expects to achieve conversion cost reductions, with benefits anticipated to begin in 2027. The Company currently expects to complete the transition without impacting customer delivery commitments.
Current report
DOE Funding
Current report
In September 2026, the Company. received an $87.0 million advance under the DOE Loan Facility, bringing total borrowings under the facility to approximately $178.0 million. The advance reimbursed 80% of eligible costs associated with the Company’s Thorn Hill manufacturing facility and supports the ramp-up of its second manufacturing line, which has a designed annual capacity of approximately 2 GWh.
Current report
For the three months ended September 30, 2026, Total revenue increased by $52.2 million or 171% from $30.5 million. For the nine months ended September 30, 2026, Total revenue increased by $152.3 million or 271% from $56.2 million.
Current report
The increase for the three months ended September 30, 2026 was primarily driven by a 229% increase in deliveries, higher revenue from third-party materials and an increase in service revenue. The increase for the nine months ended September 30, 2026 was primarily driven by a 260% increase in deliveries, an increase in third-party materials and an increase in service revenue.
Current report
The Company's revenue profile is influenced by the timing of project deployments. As a result, revenue and customer concentration may fluctuate significantly between reporting periods, depending on shipment schedules and project execution milestones. For the three months ended September 30, 2026, approximately 83% of the Company’s revenue was attributable to deliveries associated with related party projects. For the nine months ended September 30, 2026, approximately 59% of revenue attributable to deliveries associated with related-party projects.
Current report
The Company expects revenue concentration to vary from period to period as individual projects advance through their delivery schedules. We expect the Company's revenue mix to align generally with the composition of its backlog and the timing of project deliveries. Accordingly, revenue and customer concentration in any given reporting period may be influenced by the timing and scale of specific project deliveries rather than changes in underlying customer demand.
Current report
For the three months ended September 30, 2026, Cost of goods sold increased $62.5 million or 97% compared to the three months ended September 30, 2025. For the nine months ended September 30, 2026, Cost of goods sold increased $200.3 million or 138% compared to the nine months ended September 30, 2025. The increase primarily relates to raw materials and outside labor as the Company continues to ramp production.
Current report
The increase in Cost of goods sold for the three and nine months ended September 30, 2026 was less than the growth of revenue allowing the Company to generate gross margin improvements. For the three months ended September 30, 2026, gross margin improved to approximately (53)% from (111)% from the three months ended September 30, 2025, an improvement of 58 percentage points. For the nine months ended September 30, 2026, gross margin improved to approximately (66)% from (159)% for the nine months ended September 30, 2025, an improvement of 93 percentage points. The Company is currently executing a fully deployed margin improvement program across the organization. For direct material, engineering and procurement are partnering in bundle buy negotiations, product redesign and supplier collaboration programs to deliver cheaper solutions. For conversion costs, the Company is beginning to realize savings from the more efficient lay out and automated process at Thorn Hill as volume is ramping. As the cost structure initiatives are implemented and operational efficiencies continue to improve, management expects further gross margin improvement in future periods.
Current report
The Company has continued to strategically invest in research and development initiatives designed to reduce production costs, improve product performance and further vertically integrate its battery solution. Key areas of investment include simplifying the Z3 battery design, qualifying alternative materials, increasing manufacturing efficiency and enhancing control systems to improve site monitoring capabilities, optimize system performance and improve automated system operation. From a cost category standpoint, the increase in R&D was primarily related to costs of material and supplies, outside services and payroll related costs.
Current report
For the three months ended September 30, 2026 Selling, general and administrative expenses increased $4.0 million or 20% compared to the three months ended September 30, 2025. For the nine months ended September 30, 2026, Selling, general and administrative expenses increased $6.1 million or 9% compared to the nine months ended September 30, 2025. The increases in SG&A was primarily related to an increase in payroll and outside services.
Current report
The Company has invested ahead of expected growth by building the team, systems and capabilities required to support a significantly larger revenue base. As revenue grows, management expects SG&A expenses to grow at a slower pace than revenue, allowing SG&A to become a smaller percentage of revenue over time. As a result, SG&A expenses as a percentage of revenue improved to approximately 29% for the three months ended September 30, 2026, compared to 65% for the same period in the prior year, representing a 36 percentage point improvement. For the nine months ended September 30, 2026, SG&A expenses improved to approximately 35% of revenue compared to 118% of revenue in the prior-year period, representing an 83 percentage point improvement.
Current report
Restructuring expense
Current report
For the three and nine months ended September 30, 2026, Restructuring expense was $0.3 million, primarily attributable to site preparation work for moving the production line from Turtle Creek to the Thorn Hill facility.
Current report
For the three months ended September 30, 2026, the Change in fair value of derivatives of $13.2 million is related to the change in fair value of securities issued as part of the Registered Direct Offering. The change is largely driven by the Company’s common stock price movement for the periods presented.
Current report
On July 21, 2026, upon expiration of the Rights Offering, the Company reclassified the contingently issuable securities liability to equity. As a result, the instrument is no longer subject to remeasurement.
Current report
The Change in fair value of HBC Exchange Right/CCM Call Option was attributable to the HBC Exchange Right and CCM Call Option. The HBC Exchange Right and CCM Call Option do not qualify for equity classification under ASC 815-40 and are measured at fair value at each reporting period. The change is largely driven by the Company's common stock price movement for the periods presented.
Current report
For the three months ended September 30, 2026, Other expense of $0.1 million primarily relates to fees related to the Registered Direct Offering and Rights Offering. For the nine months ended September 30, 2026, Other expense of $0.1 million primarily relates to fees related to the Registered Direct Offering and Rights Offering, partially offset by insurance claims.
Current report
For the three months ended September 30, 2025, Other expense of $0.3 million primarily relates to costs associated with professional fees related to the amendment of the AFG Convertible Notes.
Current report
The Company incurred income tax expense for the three and nine months ended September 30, 2026, was attributable to taxable earnings from the Company’s foreign operations and income tax expense recognized from the Company’s difference in tax basis for the FPUSA formation.
Current report
Proceeds from the Registered Direct Offering and Rights Offering were used to fund the Company’s investment in FPUSA.
Current report
In August 2026, the Company delivered to the DOE and the FFB a third advance request, and on September 10, 2026, the FFB funded $87.0 million under the FFB Promissory Note (the “third loan advance”).
Current report
Investment in joint venture
Current report
The Company made an investment in FPUSA during the nine months ended September 30, 2026 for $112.6 million in cash contributions. See Note 8, Equity Method Investment, for further discussion.
Removed paragraphs (23)
Previous report
Frontier Power USA Parent, LLC (“FPUSA”)
Previous report
In May 2026 and June 30, 2026, the Company announced the planned formation of FPUSA, a joint venture with CCM Frontier and HBC. FPUSA is an independent development and investment company established to build, own and operate a diversified portfolio of long-duration battery energy storage projects with the strategy of becoming an Independent Power Producer (“IPP”).
Previous report
FPUSA is expected to enhance the Company’s ability to convert its existing commercial pipeline into booked orders and then energy storage systems operating in the field by providing an integrated financing solution to support multiple financing pathways for project deployment. These include sponsor equity contributions from Eos, CCM Frontier and HBC, potential institutional debt financings structured to target investment-grade characteristics supported by the Technology Performance Insurance (“TPI”) framework, and project-level debt facilities provided by commercial bank lenders. Management believes that the inclusion of TPI may broaden access to capital which is designed to support lender confidence in system performance. Management believes this structure will reduce execution friction for customers and counterparties and support the acceleration and expansion of the Company’s energy storage systems operating in the field.
Previous report
Governance of Eos’s equity interests in FPUSA will be conducted through an independent investment committee, and transactions between the Company and FPUSA are expected to be conducted on arm’s-length commercial terms. FPUSA is targeting the development of a multi-gigawatt-hour pipeline of long-duration energy storage projects across data center, utility and industrial end markets, which is expected to further support the growth and visibility of the Company’s revenue profile over time.
Previous report
In connection with these arrangements, Cerberus has agreed to extend the lock-up period on its existing Eos holdings through December 21, 2026.
Previous report
Rights Offering
Previous report
In May 2026, in connection with the planned formation of FPUSA, the Company announced a rights offering (the “Rights Offering”) targeting approximately $150.0 million. In the Rights Offering, shareholders of Eos common stock and holders of its warrants to purchase common stock issued on April 14, 2023, May 17, 2023, December 19, 2023, and November 21, 2025 as of the record date of 5:00pm New York time on July 1, 2026 (collectively, “Eligible Holders”), would receive rights to acquire a certain number of units, comprised of the Company’s common stock and warrants (the “Units”) in a rights offering to fund the Company’s previously announced capital contribution in the FPUSA joint venture.
Previous report
On June 30, 2026, the Company announced updated terms for the rights offering such that each right was expected to entitle an Eligible Holder the right to purchase approximately 0.071193 of a Unit at a subscription price equal to $5.481 per whole Unit, an approximate 10% discount to the closing price of the Company’s common stock on June 29, 2026. Each Unit would consist of one share of Eos common stock and 0.4388 of a warrant, with each whole warrant entitling the holder to purchase one share of Eos common stock at an exercise price of $5.481 per share, subject to adjustment. The warrants are expected to expire on the 10 year anniversary of the closing of the rights offering.
Previous report
The Company elected to conduct the rights offering to ensure that all stockholders of record as of July 1, 2026 had the opportunity to participate in the equity financing on a pro rata basis. This structure enabled existing stockholders to participate alongside the Company's largest investors in the capitalization of FPUSA.
Previous report
Registered Direct Offering
Previous report
Thorn Hill Expansion
Previous report
In June 2026, the Company successfully launched commercial production at its Thorn Hill manufacturing facility in Marshall Township, Pennsylvania, following successful site acceptance testing for its second Z3 manufacturing line. This milestone reinforces execution confidence by demonstrating a proven, repeatable and scalable production model. The expansion enhances operational flexibility and supports growing customer demand with the fortification of the Company’s manufacturing foundation for future growth.
Previous report
For the three months ended June 30, 2026, Total revenue increased by $53.5 million or 351% from $15.2 million. For the six months ended June 30, 2026, Total revenue increased by $100.0 million or 389% from $25.7 million. The increase for the three and six months ended June 30, 2026 was primarily driven by an increase in deliveries, an increase in the average selling price and higher revenue from third-party materials. These increases were partially offset by a decline in service revenue.
Previous report
Cost of goods sold
Previous report
For the three months ended June 30, 2026, Cost of goods sold increased by $71.4 million or 155% from $46.2 million recognized during the three months ended June 30, 2025. For the six months ended June 30, 2026, Cost of goods sold increased by $137.8 million or 170% from $81.2 million recognized during the six months ended June 30, 2025. The increase in Cost of goods sold for the three and six months ended June 30, 2026 was driven by costs associated with significantly higher cube deliveries, higher direct and indirect labor, higher field service costs associated with increased deliveries and higher volume-driven warranty accruals. These increases were partially offset by tax credit recognition.
Previous report
Cost of goods sold for the three and six months ended June 30, 2026 reflected continued progress in reducing battery system manufacturing costs, driven by higher production efficiencies and increased output at the Turtle Creek facility. During the second quarter, the Company expanded its manufacturing capacity and commenced commercial production from its second battery line on June 16, 2026. Initial commercial production began during the quarter; however, labor and overhead absorption continued to be impacted by the Eos operating at partial production levels as the expanded facility ramps toward planned capacity. The Company expects utilization, fixed-cost absorption and manufacturing efficiencies to improve as production volumes increase.
Previous report
In addition, field-related costs increased during the quarter as the Company's installed base continued to grow and as it advanced the deployment of DawnOS upgrades across legacy customer systems. These activities support long-term product performance and customer experience but increased service and support costs during the period.
Previous report
Inventory balances also increased during the quarter to support higher production levels and anticipated customer deliveries. Consistent with the Company's negative gross profit position, the related inventory reserve increased during the period.
Previous report
As the Company ramps production, the Company continues to see the benefit of the PTCs. For the six months ended June 30, 2026 and 2025, the Company recognized $22.8 million and $6.4 million, respectively, reduction of cost of goods sold related to the PTC.
Previous report
For the three months ended June 30, 2026 Selling, general and administrative expenses decreased $1.0 million or 4% compared to the three months ended June 30, 2025. The decrease for the three months ended June 30, 2026, was primarily attributable to a decrease in bad debt expense, stock compensation and outside services, partially offset by increases to facility costs, marketing and payroll related items.
Previous report
For the six months ended June 30, 2026, Selling, general and administrative expenses increased $2.1 million or 5% compared to the six months ended June 30, 2025. The increase for the six months ended June 30, 2026 was primarily attributable to higher facility costs, marketing, outside services and payroll related items, partially offset by a decrease in bad debt expense and stock compensation.
Previous report
Borrowings to our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further discussion.
Previous report
For the three and six months ended June 30, 2026, Other income (expense) of $0.2 million primarily relates to insurance claims.
Reworded paragraphs (33)
Previous wording
The following discussion should be read in conjunction with the accompanying Unaudited Condensed Consolidated Financial Statements for the six months ended June 30, 2026 and 2025 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including the financial statements and notes thereto.
Current wording
The following discussion should be read in conjunction with the accompanying Unaudited Condensed Consolidated Financial Statements for the nine months ended September 30, 2026 and 2025 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, including the financial statements and notes thereto.
Previous wording
The Company offers an innovative Znyth™ technology battery energy storage system ("BESS") designed to provide the operating flexibility to manage increased grid complexity and price volatility resulting from an overall increase in renewable energy generation and a congested grid coming from an increase in electricity demand growth. The Company’s BESS is a validated chemistry with accessible non-precious earth components in a durable design that is intended to deliver results in even the most extreme temperatures and conditions. The system is designed to be safe, flexible, scalable, sustainable and manufactured in the United States, using raw materials primarily sourced in the United States. We believe the Company’s Z3 battery module is the core of its innovative systems. The Z3 battery module is the only US designed and manufactured battery module that today provide utilities, independent power producers, renewables developers and C&I customers with an alternative to lithium-ion and lead-acid monopolar batteries for critical 3- to 12-hour discharge duration applications. We believe the Z3 battery will transform how utility, industrial and commercial customers store power.
Current wording
The Company offers an innovative Znyth™ technology battery energy storage system ("BESS") designed to provide the operating flexibility to manage increased grid complexity and price volatility resulting from an overall increase in renewable energy generation and a congested grid coming from an increase in electricity demand growth. The Company’s BESS is a validated chemistry with accessible non-precious earth components in a durable design that is intended to deliver results in even the most extreme temperatures and conditions. The system is designed to be safe, flexible, scalable, sustainable and manufactured in the United States, using raw materials primarily sourced in the United States. We believe the Company’s Z3 battery module is the core of its innovative systems. The Z3 battery module is the only U.S. designed and manufactured battery module that today provide utilities, independent power producers, renewables developers and C&I customers with an alternative to lithium-ion and lead-acid monopolar batteries for critical 3- to 12-hour discharge duration applications. We believe the Z3 battery will transform how utility, industrial and commercial customers store power.
Previous wording
The Company’s growth strategy contemplates increasing sales of battery energy storage systems and related software and services through a direct sales team and sales channel partners. The Company’s current and target customers include utilities, project developers, independent power producers and C&I companies.
Current wording
The Company’s growth strategy contemplates increasing sales of battery energy storage systems and related software and services through a direct sales team and sales channel partners. The Company’s current and target customers include utilities, project developers, independent power producers, C&I companies and government contracts.
Previous wording
In 2025, the Company introduced DawnOS, a software platform designed to enhance the value, reliability and safety of the Company’s BESS. DawnOS builds upon the Z3 battery architecture through a fully integrated hardware and software solution. It serves as the system’s intelligence layer and is designed to manage large numbers of battery modules in real time. The platform provides precise balancing, dynamic switching and continuous system operation, including in situations where individual modules within a string become imbalanced. DawnOS is intended to increase usable energy per cycle, reduce field service requirements and operate with embedded security and automation features. Through its advanced control capabilities, the Company expects DawnOS to be an integral component of its product portfolio going forward, reflecting its role in improving system resilience, efficiency and overall operational performance.
Current wording
The Company has successfully transitioned to the Eos Z3 platform, enabled by the commissioning and commercial operation of its first fully automated battery manufacturing line. Building on the same proven chemistry that has demonstrated durability over more than 3 million cycles, the Z3 incorporates a redesigned mechanical architecture that enhances performance, reduces costs and improves manufacturability. Since commencing shipments of Z3 battery modules in the third quarter of 2023, the Company has continued to leverage more than fifteen years of accumulated operational experience to drive manufacturing efficiencies as production scales and its state-of-the-art operations expand. In 2025, the Company further enhanced its product offering with the introduction of DawnOS, a software platform that serves as the intelligence layer of its battery energy storage system ("BESS"). Fully integrated with the Z3 architecture, DawnOS is designed to manage large numbers of battery modules in real time through advanced balancing, dynamic switching, automation and embedded security capabilities. The platform is intended to increase usable energy per cycle, improve system reliability and resilience, reduce field service requirements and enable continuous operation even when individual modules become imbalanced. The Company expects DawnOS to be an integral component of its product portfolio going forward, supporting enhanced efficiency, safety and overall system performance.
Previous wording
For the three months ended June 30, 2026 Research and development expenses increased $3.3 million or 46%, compared to the three months ended June 30, 2025. For the six months ended June 30, 2026, Research and development expenses increased $7.2 million or 51% compared to the six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 was primarily attributable to higher facility costs, materials and supplies, outside services and payroll-related costs.
Current wording
For the three months ended September 30, 2026 Research and development expenses increased $4.0 million or 58%, compared to the three months ended September 30, 2025. For the nine months ended September 30, 2026, Research and development expenses increased $11.2 million or 53% compared to the nine months ended September 30, 2025. The increase primarily relates to payroll, outside services and material costs.
Previous wording
The Company incurred a loss of $0.2 million from write-down of property, plant and equipment for the three months ended June 30, 2025, and a loss of $0.1 million and $0.8 million for the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2026, the write-downs were mainly related to miscellaneous equipment and tooling that could not be repurposed. In 2025, the write-downs were mainly due to design changes from the Z3-Phase 1 to Z3-Phase 2 production in which the Phase 1 production assets could not be utilized or repurposed for Phase 2 production. Additionally, the loss from write-down of property, plant and equipment contains costs for disposal of miscellaneous equipment and tooling that cannot be repurposed for more automated processes.
Current wording
For the three and nine months ended September 30, 2026, the Company incurred a loss of $0.1 million and $0.2 million, respectively, from write-down of property, plant and equipment. The write-downs were mainly attributable to the disposal of miscellaneous equipment and tooling.
Previous wording
Interest expense increased $9.0 million and $20.3 million for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, primarily due to an increased principal balance under the DOE Loan Facility and interest associated with the May 2025 Convertible Notes and November 2025 Convertible Notes, which were outstanding for the entire period for the three and six months ended June 30, 2026. See Note 12, Borrowings to our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further discussion.
Current wording
Interest expense increased $7.0 million and $27.2 million for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025, primarily attributable to an increased principal balance under the DOE Loan Facility and interest associated with the May 2025 Convertible Notes and November 2025 Convertible Notes, which were outstanding for the entire period for the three and nine months ended September 30, 2026. See Note 12, Borrowings, for further discussion.
Previous wording
Interest expense - related party decreased $4.5 million and $10.3 million for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, due to the fact that the 2021 Convertible Note Payable and the AFG Convertible Note were no longer outstanding during the three and six months ended June 30, 2026. See Note 12, Borrowings to our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for further discussion.
Current wording
Interest expense - related party decreased $0.8 million and $9.5 million for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025, attributable to the fact that the 2021 Convertible Note Payable and the AFG Convertible Note were no longer outstanding during the three and nine months ended September 30, 2026. See Note 12, Borrowings, for further discussion.
Previous wording
Interest income increased $2.8 million and $4.8 million for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025. The increase is due to the increase in Cash and cash equivalents held by the Company for the respective periods.
Current wording
Interest income increased $1.8 million and $6.5 million for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025. The increase is mainly attributable to the increase in Cash and cash equivalents held by the Company for the respective periods.
Previous wording
The Change in fair value of debt - related party is related to the DDTL. The Change in fair value of debt - related party was $4.5 million income and $31.6 million expense for the three months ended June 30, 2026 and June 30, 2025, respectively, and $8.8 million income and $25.7 million expense for the six months ended June 30, 2026 and June 30, 2025, respectively.
Current wording
The Change in fair value of debt - related party is related to the DDTL. The Change in fair value of debt - related party was $4.5 million expense and $3.6 million expense for the three months ended September 30, 2026 and September 30, 2025, respectively, and $13.3 million expense and $22.1 million income for the nine months ended September 30, 2026 and September 30, 2025, respectively.
Previous wording
For the three and six months ended June 30, 2026, the primary factor contributing to the change in fair value is the accretion of the DDTL resulting from the passage of time. For the three and six months ended June 30, 2025 the primary factor contributing to the change in fair value was a decrease in the DDTL interest rate from 15% to 7% per annum (as amended), as a result of the modification of the DDTL, partially offset by the accretion of the DDTL resulting in the passage of time. See Note 12,
Current wording
For the three months ended September 30, 2025, the primary factor contributing to the change in fair value is the accretion of the DDTL resulting from the passage of time. For the nine months ended September 30, 2025, the primary factor contributing to the change in fair value was a decrease in the DDTL interest rate from 15% to 7% per annum (as amended), as a result of the modification of the DDTL, partially offset by the accretion of the DDTL resulting in the passage of time. See Note 12, Borrowings, for further discussion.
Previous wording
For the three and six months ended June 30, 2026 and 2025, the change in fair value of warrants was composed of the items below:
Current wording
For the three and nine months ended September 30, 2026 and 2025, the change in fair value of warrants was composed of the items below:
Previous wording
The change in the fair value of the warrants for the three and six months ended June 30, 2026 and June 30, 2025 is largely driven by the Company’s common stock price movement for the periods presented.
Current wording
The change in the fair value of the warrants for the three and nine months ended September 30, 2026 and September 30, 2025 is largely driven by the Company’s common stock price movement for the periods presented.
Previous wording
For the three and six months ended June 30, 2026, the Change in fair value of derivatives of $70.4 million and $95.5 million, respectively, related to the change in fair value of the embedded derivative associated with the November 2025 Convertible Notes. The change is largely driven by the Company’s common stock price movement for the periods presented. The November 2025 Convertible Notes were not outstanding for the comparable periods for the three and six months ended June 30, 2025.
Current wording
For the nine months ended September 30, 2026, the Change in fair value of derivatives of $108.7 million related to the change in fair value of securities issued as part of the Registered Direct Offering and the change in fair value of the embedded derivative associated with the November 2025 Convertible Notes. The change is largely driven by the Company’s common stock price movement for the periods presented.
Previous wording
The Change in the fair value of derivatives - related parties, was due to the 2021 Convertible Note Payable and AFG Convertible Notes (See Note 12, Borrowings) and the Change in fair value of warrants - related parties was due to changes in fair value of our SPA Warrant and Contingent warrants (See Note 13, Warrants Liability). The change is largely driven by the Company's common stock price movement for the periods presented. The 2021 Convertible Note Payable and AFG Convertible Notes were not outstanding for the comparable period for the three and six months ended June 30, 2026.
Current wording
The Change in the fair value of derivatives - related parties, was attributable to the 2021 Convertible Note Payable and AFG Convertible Notes (See Note 12, Borrowings). The 2021 Convertible Note Payable and AFG Convertible Notes were not outstanding for the comparable period for the three and nine months ended September 30, 2026.
Previous wording
The Loss on contingently issuable securities, was due to the securities to be issued in connection with the registered direct offering (See Note 14, Fair Value Measurement). The loss is driven by the fair value of securities to be issued compared to the consideration to be received. The contingently issuable securities do not impact the three and six months ended June 30, 2025.
Current wording
The Loss on contingently issuable securities for the nine months ended September 30, 2026, was attributable to the securities issued in connection with the Registered Direct Offering (See Note 14, Fair Value Measurement). The loss is driven by the fair value of securities to be issued compared to the consideration to be received. The contingently issuable securities do not impact the three and nine months ended September 30, 2025 or three months ended September 30, 2026.
Previous wording
For the three months ended June 30, 2025, Other income (expense) of $(0.6) million primarily relates to costs associated with professional fees related to the Cerberus Amendments and extinguishment of the 2021 Convertible Notes. For the six months ended June 30, 2025, Other income (expense) of $(1.2) million primarily relates to costs associated with professional fees related to the Cerberus Amendments, extinguishment of the 2021 Convertible Notes and recognition of financing issuance costs from the Credit and Securities Purchase Transaction.
Current wording
For the nine months ended September 30, 2025, Other expense of $1.5 million primarily relates to costs associated with professional fees related to the Cerberus Amendments, extinguishment of the 2021 Convertible Notes, recognition of financing issuance costs from the Credit and Securities Purchase Transaction and professional fees associated with the amendment of the AFG Convertible Notes.
Previous wording
The Company incurred income tax expense for the three and six months ended June 30, 2026 and 2025, attributable to taxable earnings from the Company’s foreign operations which were insignificant for the periods presented.
Current wording
The Company incurred income tax expense for the three and nine month ended September 30, 2025 was attributable to taxable earnings from the Company’s foreign operations.
Previous wording
During the six months ended June 30, 2026, the Company incurred Net income of $233.2 million. Adjustments to reconcile the net income to cash used in operations are primarily from non-cash items on the Unaudited Condensed Consolidated Statements of Cash Flows. The non-cash items totaled $370.8 million. The Company incurred negative cash flows from operations of $191.8 million and had an accumulated deficit of $2,302.6 million as of June 30, 2026.
Current wording
During the nine months ended September 30, 2026, the Company incurred Net income of $358.2 million. Adjustments to reconcile the net income to cash used in operations are primarily from non-cash items on the Unaudited Condensed Consolidated Statements of Cash Flows. The non-cash items totaled $571.5 million. The Company incurred negative cash flows from operations of $261.6 million and had an accumulated deficit of $2,193.7 million as of September 30, 2026.
Previous wording
As of June 30, 2026, the Company had $305.5 million of unrestricted cash and cash equivalents available to fund the Company’s operations, and working capital of $356.1 million on the Unaudited Condensed Consolidated Balance Sheets. Additionally, the Company had $58.6 million of restricted cash, refer to Note 4, Cash, Cash Equivalents and Restricted Cash for further discussion.
Current wording
As of September 30, 2026, the Company had $271.2 million of unrestricted cash and cash equivalents available to fund the Company’s operations, and working capital of $358.9 million on the Unaudited Condensed Consolidated Balance Sheets. Additionally, the Company had $72.9 million of restricted cash, refer to Note 4, Cash, Cash Equivalents and Restricted Cash, for further discussion.
Previous wording
The Company has historically relied on outside capital to fund its cost structure and expects this reliance to continue for the foreseeable future until the Company reaches profitability through its planned revenue generating activities. During the three and six months ended June 30, 2026, the Company did not have any significant capital transactions.
Current wording
The Company has historically relied on outside capital to fund its cost structure and expects this reliance to continue for the foreseeable future until the Company reaches profitability. During the three and nine months ended September 30, 2026, the Company closed the following capital transactions:
Previous wording
On June 30, 2026, the Company announced the pricing of a registered direct offering pursuant to which it intended to issue 13,683,634 of common stock and 6,004,378 warrants, each warrant exercisable for one share of common stock at an exercise price of $5.481 per share, to HBMF. The Company received aggregate gross proceeds from the registered direct offering of approximately $75.0 million.
Current wording
In July 2026, the Company closed its Registered Direct Offering pursuant to which it issued 13,683,634 shares of common stock and 6,004,378 warrants, each warrant exercisable for one share of common stock at an exercise price of $5.481 per share, to HBMF. The Company received aggregate net proceeds from the Registered Direct Offering of approximately $74.9 million.
Previous wording
Through June 30, 2026, under the DOE Loan Facility, the Company drew down $90.9 million for the eligible project costs that the Company had incurred through June 4, 2025. These costs represent Tranche 1 of the DOE Loan Facility for eligible costs in connection with the design, construction, installation, startup and shakedown of a battery automation line and related tools. The Company has approximately $186.6 million of availability under the DOE Loan Facility. In the event the Company does not achieve certain funding conditions and the DOE chooses not to continue funding, the Company may need to seek alternative sources of capital, which may not be available on favorable terms or at all.
Current wording
Through September 30, 2026, under the DOE Loan Facility, the Company drew down approximately $178.0 million for the eligible project costs that the Company had incurred. These costs represent Tranche 1 and a portion of Tranche 2 of the DOE Loan Facility for eligible costs in connection with the design, construction, installation, startup and shakedown of a battery automation line and related tools. The Company has approximately $99.5 million of availability under the DOE Loan Facility. In the event the Company does not achieve certain funding conditions and the DOE chooses not to continue funding, the Company may need to seek alternative sources of capital, which may not be available on favorable terms or at all.
Previous wording
The Company expects capital expenditures and working capital requirements to increase as it seeks to execute its growth strategy. Total capital expenditures for the six months ended June 30, 2026 and June 30, 2025 were $70.6 million and $12.0 million, respectively. See Note 6, Property, Plant and Equipment and Note 7, Intangible Assets for further discussion.
Current wording
The Company expects capital expenditures and working capital requirements to increase as it seeks to execute its growth strategy. Total capital expenditures for the nine months ended September 30, 2026 and September 30, 2025 were $105.9 million and $29.7 million, respectively. See Note 6, Property, Plant and Equipment, and Note 7, Intangible Assets, for further discussion.
Previous wording
The Company relies heavily on private placement of convertible notes, term loans and issuance of common stock and warrants. Our short-term working capital needs are primarily related to funding of debt interest payments, product manufacturing, research and development and general corporate expenses. The Company’s long-term working capital needs are primarily related to repayment of long-term debt obligations and capital expenses for capacity expansion and maintenance, equipment upgrades and repair of equipment.
Current wording
The Company relies heavily on private placements of convertible notes, term loans and issuance of common stock and warrants. Our short-term working capital needs are primarily related to funding of debt interest payments, product manufacturing, research and development and general corporate expenses. The Company’s long-term working capital needs are primarily related to repayment of long-term debt obligations and capital expenses for capacity expansion and maintenance, equipment upgrades and repair of equipment.
Previous wording
Net cash used in operating activities was $191.8 million for the six months ended June 30, 2026, adjusted for non-cash items of $370.8 million, primarily related to changes in fair value of warrants and derivatives, with offsets of stock compensation expense, depreciation and amortization, non-cash interest expense, and change in fair value of debt - related party. The net cash outflows from changes in operating assets and liabilities was $54.1 million, primarily driven by an increase in grant receivable of $22.8 million due to increased volumes of production, an increase in inventory of $16.6 million to support anticipated customer demand and future shipments, decrease in contract liabilities of $7.6 million and increase in contract assets of $7.4 million driven by revenue recognition and production, an increase in vendor deposits of $5.9 million to supports anticipated customer demand, an increase in accounts receivable related party and accounts receivable of $5.5 million and $1.4 million, respectively, due to the increase in total sales and timing of customer payments and an increase in other of $7.0 million mainly related to IEEPA tariffs. This was partially offset by an increase of accounts payable of $12.5 million relating to increased production and timing of vendor payments and an increase in accrued expenses of $7.5 million which is attributable to timing of payroll and accruals for legal and professional fees and volume related warranty accruals.
Current wording
Net cash used in operating activities was $261.6 million for the nine months ended September 30, 2026, adjusted for non-cash items of $571.5 million, primarily related to changes in fair value of warrants and derivatives, with offsets of stock compensation expense, depreciation and amortization, non-cash interest expense, loss on contingently issuable securities and change in fair value of debt - related party. The net cash outflows from changes in operating assets and liabilities was $48.3 million, primarily driven by an increase in grant receivable of $28.3 million attributable to increased volumes of production, an increase in inventory of $21.8 million to support anticipated customer demand and future shipments, decrease in contract liabilities of $6.2 million and increase in contract assets and contract assets related party of $9.5 million and $4.4 million, respectively, driven by revenue recognition and production, an increase in vendor deposits of $5.1 million to support anticipated customer demand, an increase in accounts receivable related party and accounts receivable of $0.1 million and $2.0 million, respectively, attributable to the increase in total sales and timing of customer payments and an increase in other of $5.0 million mainly related to tax credits. This was partially offset by an increase of accounts payable of $3.7 million relating to increased production and timing of vendor payments, an increase in accrued expenses of $16.7 million which is attributable to timing of payroll, accruals for legal and professional fees, volume-related warranty accruals, an increase in contract liabilities related party of $9.8 million driven by timing on revenue recognition for established contracts and cash receipts and an increase in the deferred tax liability of $4.7 million from the Company’s difference in tax basis for the FPUSA formation.
Previous wording
Net cash used in operating activities of $95.0 million for the six months ended June 30, 2025, adjusted for non-cash items of $106.9 million, primarily related to stock compensation expense, loss on debt extinguishment and changes in fair value of debt, warrants and derivatives. The net cash inflows from changes in operating assets and liabilities was $5.8 million primarily driven by an increase in contract liabilities of $13.2 million due to customer cash receipts and increase in accounts payable of $10.2 million, partially offset by an increase in vendor deposits of $5.1 million and increase in grant receivable of $4.3 million.
Current wording
Net cash used in operating activities was $160.9 million for the nine months ended September 30, 2025, adjusted for non-cash items of $691.7 million, primarily related to stock compensation expense, loss on debt extinguishment and changes in fair value of debt, warrants and derivatives. The net cash outflows from changes in operating assets and liabilities was $3.4 million primarily driven by an increase in grant receivable of $10.0 million, decrease in contract liabilities of $7.2 million attributable to customer cash receipts and increase in inventory of $6.7 million and an increase in vendor deposits of $5.0 million, partially offset by increase in accounts payable of $22.2 million.
Previous wording
Net cash flows used in investing activities for the six months ended June 30, 2026 were primarily composed of payments made for purchases of property, plant and equipment of $70.5 million and minor investments in internally developed software. The increase in cash flows used in investing activities are primarily to support the growth of manufacturing facilities at our Warrendale location.
Current wording
Net cash flows used in investing activities for the nine months ended September 30, 2026 were composed of payments made for purchases of property, plant and equipment of $105.7 million and minor investments in internally developed software. The increase in cash flows used for the purchase of property, plant and equipment are primarily to support the growth of manufacturing facilities at our Warrendale location. The Company had net cash used for the FPUSA equity method investment of $112.6 million as part of the strategic investment and partnership.
Previous wording
Net cash flows used in investing activities for the six months ended June 30, 2025 were primarily composed of payments made for purchases of property, plant and equipment of $12.0 million.
Current wording
Net cash flows used in investing activities for the nine months ended September 30, 2025 $29.7 million, primarily related to $28.8 million of payments made for purchases of property, plant and equipment for the improvement of manufacturing facilities and $0.9 million of investment made for internally developed software.
Previous wording
Net cash provided by financing activities was $1.8 million for the six months ended June 30, 2026, primarily due to the proceeds received from the exercise of warrants during the period of $3.3 million. The proceeds were partially offset by debt issuance costs of $0.6 million and share repurchases from employees for tax withholding of $0.8 million.
Current wording
Net cash provided by financing activities was $200.1 million for the nine months ended September 30, 2026, primarily attributable to the proceeds received from the issuance of common stock of $112.7 million, the proceeds received from the DOE Loan of $87.0 million and the exercise of warrants during the period of $3.3 million. The proceeds were partially offset by debt issuance costs of $0.9 million and share repurchases from employees for tax withholding of $2.0 million.
Previous wording
Net cash provided by financing activities was $186.8 million for the six months ended June 30, 2025, primarily due to the proceeds received from the public offering of $81.1 million, from the issuance of the May 2025 Convertible Notes of $240.0 million, from the Credit and Securities Purchase Transaction of $38.5 million and from the exercise of warrants of $7.8 million. The proceeds were partially offset by the payoff of the 2021 Convertible Notes Payable and Delayed Draw Term Loan of $180.9 million, payments on the equipment financing facility of $0.9 million and share repurchases from employees for tax withholding of $0.5 million. The proceeds from the public offering and issuance of the May 2025 Convertibles Notes were used to repurchase the 2021 Convertible notes and prepay a portion of the DDTL.
Current wording
Net cash provided by financing activities was $214.1 million for the nine months ended September 30, 2025, primarily attributable to the proceeds received from the following transactions: issuance of 2025 Convertible Notes of $240.0 million, public offering of $81.1 million, Credit and Securities Purchase Transaction of $38.5 million, DOE Loan of $22.7 million, and exercise of warrants of $14.2 million. The proceeds were partially offset by payoff of the 2021 Convertible Notes Payable and Delayed Draw Term Loan of $180.9 million, debt and equity issuance costs of $4.6 million and payments on the equipment financing facility of $1.3 million. Proceeds from the public offering and issuance of the 2025 Convertible Notes were used to repurchase the 2021 Convertible Notes and prepay a portion of the DDTL.
Previous wording
•Future lease payments, including interest, under non-cancellable operating and financing leases of $59.4 million. The leases expire at various dates prior to 2030.
Current wording
•Future lease payments, including interest, under non-cancellable operating and financing leases of $70.4 million. The leases expire at various dates prior to 2039.
Previous wording
•Principal and Interest payments related to the following debt obligations (see Note 11, Borrowingsto our Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report):
Current wording
•Principal and Interest payments related to the following debt obligations (see Note 12, Borrowings, for further discussion):
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
For the three and nine months ended September 30, 2025, the Company incurred a loss of $0.6 million and $1.4 million, respectively, from write-down of property, plant and equipment. The write-downs were mainly attributable to design changes from the Z3-Phase 1 to Z3-Phase 2 production in which the Phase 1 production assets could not be utilized or repurposed for
Current report — wording carried from elsewhere
Phase 2 production. Additionally, the loss from write-down of property, plant and equipment contains costs for disposal of miscellaneous equipment and tooling that cannot be repurposed for more automated processes.
Current report — wording carried from elsewhere
For the three and nine months ended September 30, 2026, the primary factor contributing to the change in fair value is the accretion of the DDTL resulting from the passage of time.
Current report — wording carried from elsewhere
The Change in fair value of warrants - related parties was attributable to changes in fair value of our SPA Warrant and Contingent Warrants (See Note 13, Warrants Liability). The change is largely driven by the Company's common stock price movement for the periods presented.
Current report — wording carried from elsewhere
In August 2026, the Company closed the Rights Offering pursuant to which the Company issued 6,885,218 Units which separated upon closing and were issued separately as 6,885,218 shares of common stock and 3,019,242 warrants, each warrant exercisable for one share of common stock at an exercise price of $5.481 per share. The Company received aggregate gross proceeds from the Rights Offering of approximately $37.7 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The Company has successfully transitioned to the Eos Z3 platform, enabled by the commissioning and commercial operation of its first fully automated battery manufacturing line. The Z3 leverages the same proven underlying chemistry, which has demonstrated durability over more than 3 million cycles, while incorporating a redesigned mechanical architecture that enhances performance, reduces costs and improves manufacturability. Z3 battery modules have been shipped since the third quarter of 2023, and the transition reflects over fifteen years of accumulated insights and operational experience. The Company believes this experience will continue to drive manufacturing efficiencies as production scales and its state‑of‑the‑art operations expand.