Eos Energy Enterprises Inc

Previous wording

The Credit Agreement contains various affirmative and negative covenants applicable to the Company including, among others, (i) meeting certain minimum EBITDA and revenue metrics, measured quarterly, and maintaining certain minimums of liquid cash with accounts controlled by the Agent, (ii) reporting and information covenants including the delivery of annual, quarterly and monthly financial statements, daily cash reports, annual financial plans and forecasts with weekly progress reports and updates, (iii) monthly meetings with the Lenders and the engagement of advisors and consultants requested by the Lenders, and (iv) restrictions on business and activities including debt incurrence, asset dispositions, distributions, investments, and modifications to or terminations of various material contracts. The Credit Agreement is subject to certain events of default which can be triggered by, among other things, (i) breach of payment obligations and other obligations and representations in the Credit Agreement nor related documents, (ii) default under other debt facilities with a principal above a predetermined amount, (iii) failure to perform or comply with certain covenants in the Credit Agreement, (iv) entry into a decree or order for relief in respect of the Company or any of its subsidiaries in an involuntary case under the Bankruptcy Code of the United States or under any other debtor relief law,(v) any money judgment, writ or warrant of attachment or similar process involving in the aggregate at any time an amount in excess of $2.5 million, (vi) any order, judgement or decree entered against the Company or the Guarantors decreeing the dissolution or split up of such entity, (vii) the failure of the Common Stock to be listed on an internationally recognized stock exchange in the United States and (viii) a change of control.

Current wording

The Credit Agreement contains various affirmative and negative covenants applicable to the Company including, among others, as defined in the Credit Agreement (i) meeting certain Minimum Consolidated EBITDA, Minimum Consolidated Revenue, and Minimum Liquidity (the cash in accounts controlled by the Agent,) measured quarterly, (ii) reporting and information covenants including the delivery of annual, quarterly and monthly financial statements, daily cash reports, annual financial plans and forecasts with weekly progress reports and updates, (iii) monthly meetings with the Lenders and the engagement of advisors and consultants requested by the Lenders, and (iv) restrictions on business and activities including debt incurrence, asset dispositions, distributions, investments, and modifications to or terminations of various material contracts. The Credit Agreement is subject to certain events of default which can be triggered by, among other things, (i) breach of payment obligations and other obligations and representations in the Credit Agreement nor related documents, (ii) default under other debt facilities with a principal above a predetermined amount, (iii) failure to perform or comply with certain covenants in the Credit Agreement, (iv) entry into a decree or order for relief in respect of the Company or any of its subsidiaries in an involuntary case under the Bankruptcy Code of the United States or under any other debtor relief law,(v) any money judgment, writ or warrant of attachment or similar process involving in the aggregate at any time an amount in excess of $2.5 million, (vi) any order, judgement or decree entered against the Company or the any of its subsidiaries decreeing the dissolution or split up of such entity, (vii) the failure of the Common Stock to be listed on an internationally recognized stock exchange in the United States and (viii) a change of control.

Previous wording

While the Company was in compliance with the above covenants as of July 31, 2024, the Company may be unable to remain in compliance and cure any noncompliance with these covenants in the future, in which case the Lenders may no longer be required to continue funding under the Credit Agreement. There can be no assurance that the Company will be able to secure funding under the Credit Agreement or outside sources of capital in the event it fails to meet a funding milestone. In the event the Company is unable to remain in compliance with the covenants under the Credit Agreement, and the Company is further unable to cure such noncompliance or secure a waiver, the Lender may, at its discretion, exercise any and all of its existing rights and remedies. 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. Any such default on the Credit Agreement could have a material adverse effect on our business.

Current wording

Since the Company was not in compliance with the financial covenant for Minimum Consolidated Revenue for the three months ended September 30, 2024, the Company secured a waiver from Cerberus. The Company expects it may be unable to remain in compliance with the Minimum Consolidated Revenue financial covenant beginning December 31, 2024, absent the Company’s ability to secure a waiver or amend the Credit Agreement. In the event the Company is unable to comply with all financial covenants when required under the Credit Agreement, and the Company is unable to secure another waiver or amendment to the Credit Agreement, Cerberus may, at its discretion, exercise any and all of its existing rights and remedies, which may include, among other things, asserting its rights in the Company’s assets securing the loan, and the Lenders may no longer be required to continue funding under the Credit Agreement. There can be no assurance that the Company will be able to secure funding under the Credit Agreement or outside sources of capital in the event it fails to meet a funding milestone. 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. Any such default on the Credit Agreement could have a material adverse effect on our business.

Previous wording

As of June 30, 2024 there were 216,491,215 shares of Common Stock issued and outstanding and an aggregate of 131,071,870 shares of Common Stock issuable upon the conversion or exercise of outstanding convertible securities, including 43,276,194 shares of Common Stock underlying the SPA Warrant. Although the SPA Warrant is not exercisable for more than 19.99% of the Company’s outstanding shares as of June 21, 2024, upon receipt of stockholder approval in accordance with Nasdaq rules, the SPA Warrant would no longer be subject to such limitation, and the Preferred Stock, SPA Warrant and Contingent Warrants (the SPA Warrant and any Contingent Warrants, collectively the “Warrants”) issued or issuable under the Delayed Draw Term Loan would become exercisable or convertible into a significant portion of the outstanding shares of Common Stock.

Current wording

As of November 1, 2024, there were 217,904,747 shares of Common Stock issued and outstanding and an aggregate of 242,556,689 shares of Common Stock issuable upon the conversion or exercise of outstanding convertible securities, including 142,282,584 shares of Common Stock underlying the SPA Warrant and Series B Preferred Stock issued to Cerberus.

Previous wording

If the Purchaser funds all draws under the Delayed Draw Term Loan and the Company meets each of the milestones under the Delayed Draw Term Loan, the Purchaser will be entitled to receive Preferred Stock and/or Contingent Warrants (depending on whether stockholder approval has been received) that, when aggregated with the SPA Warrant and Series A Preferred Stock, equal 33.0% of the issued and outstanding Common Stock on a fully diluted basis. Assuming the Company issues no other securities after July 31, 2024, such Preferred Stock and Warrants would aggregate to an equivalent of 152,505,718 shares of Common Stock. If the Purchaser funds all draws under the Delayed Draw Term Loan and the Company fails to meet all of the milestones under the Delayed Draw Term Loan, the Purchaser would be entitled to receive Preferred Stock and/or Contingent Warrants (depending on whether stockholder approval has been received) that, when aggregated with the SPA Warrant and Series A Preferred Stock, equal 49.0% of the issued and outstanding Common Stock on a fully diluted basis, assuming the Warrants and Series A Preferred stock were fully convertible into Common Stock. Assuming the Company issues no other securities after July 31, 2024, such Preferred Stock and Warrants would aggregate to an equivalent of 297,490,357 shares of Common Stock.

Current wording

If the Purchaser funds all future draws under the Delayed Draw Term Loan and the Company meets each of the milestones under the Delayed Draw Term Loan, the Purchaser will be entitled to receive Series B Preferred Stock and/or Contingent Warrants that, when aggregated with the SPA Warrant and Series B Preferred Stock, equal 33.0% of the issued and outstanding Common Stock on a fully diluted basis. Assuming the Company issues no other securities after November 1, 2024, such Series B Preferred Stock, SPA Warrant and Contingent Warrants (such warrants, collectively, the “Warrants”) would aggregate to an equivalent of 156,714,957 shares of Common Stock. If the Purchaser funds all draws under the Delayed Draw Term Loan and the Company fails to meet all of the remaining milestones under the Delayed Draw Term Loan, the Purchaser would be entitled to receive Preferred Stock and/or Contingent Warrants (depending on whether stockholder approval has been received) that, when aggregated with the SPA Warrant and Series B Preferred Stock, equal 41.0% of the issued and outstanding Common Stock on a fully diluted basis, assuming the Warrants and Series B Preferred stock were fully convertible into Common Stock. Assuming the Company issues no other securities after November 1, 2024, such Preferred Stock and Warrants would aggregate to an equivalent of 221,107,338 shares of Common Stock.