EOSE - NASDAQ

Hi. Good morning, and welcome to Eos Energy Enterprises Second Quarter 2023 Conference Call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. With that, I would like to turn the call over to Liz Higley, Acting Director of Investor Relations. Thank you. You may begin.

Thank you. Good morning, everyone, and thank you for joining us for Eos's financial results and conference call for the second quarter 2023. On the call today, we have Eos CEO, Joe Mastrangelo, and CFO, Nathan Kroeker. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call may include forward-looking statements, including but not limited to current expectations with respect to future results for our company, which are subject to certain risks, uncertainties and assumptions. Should any of these risks materialize or should our assumptions prove to be incorrect, our actual results may differ materially from our expectation or those implied by these forward-looking statements. The risks and uncertainties that forward-looking statements are subject to are described in our SEC filings. Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We undertake no obligation to update any forward-looking statements made during this call to reflect events or circumstances after today or to reflect new information or the occurrence of unanticipated events except as required by law. This conference call will be available for replay via webcast through Eos's Investor Relations website at investors.eose.com. Joe and Nathan will walk you through the company highlights, financial results and business priorities before we proceed to Q&A. With that, I'll now turn the call over to Eos CEO, Joe Mastrangelo.

On behalf of the 300 plus employees at Eos, I want to welcome everyone to our Q2 earnings call. It's a very important moment in time for both Eos and for our industry. As I said before, I've been in the energy industry for nearly 30 years and Eos has been in existence for 15 years. We're at an important inflection point as you look at what the world needs to power its future. When you look right now in the United States, the Texas, the ERCOT market is operating at record highs. California is experiencing high temperatures, which are straining their ability to produce on the grid. You see numerous fires on energy storage projects, which has caused a significant concern about how we can deliver and integrate renewable safely into our grid. Nathan's going to go through later on the details around our order pipeline, backlog and some specific customer examples. But what I wanted to talk about is what's required to truly grow our business and ultimately what's required to help decarbonize our energy -- our energy grid. What's important here is not just the intent of decarbonization. It's having the policies in place to deliver that. At the same time, as you have the policy framework in place, which I believe we do in the United States with the IRA legislation, it's then taking those policies and acting. And where we need to work on as an industry and as a company is acting and moving faster to deliver on that demand. What the world is asking for right now is not a two-hour energy storage solution, but a flexible energy storage solution provides the safety and reliability that we all demand from our power grid. We believe that we have that solution over time to deliver into that market and it's no more evidenced by that number on the lower left-hand side of the page. The fact that we've discharged 1.4 gigawatt hours of energy over the lifetime of our product. It's -- we still have work to do. We still have things that we need to fix, improve, and refine, but we have a technology that can deliver upon the need in the marketplace that we see every day and talk about every day. At the same time, we're focused on being able to deliver that product out of the state-of-the-art factory that we like to say it's a technology that was designed with American minds, it's built with American hands using predominantly American materials on American manufacturing equipment. That's important to note as we talk about also energy security and our ability to deliver the future growth of our country. If you flip to Page 4, look, a picture tells a 1,000 stories. Here's a picture of our semi-automated manufacturing line in Turtle Creek, Pennsylvania, with our employees manning their stations and building batteries. Now we are in early days of commercial production, but we feel really good about where we are we are very proud of what the team is doing and delivering on a day-by-day basis. So if we move to Page 5, I just want to hit on three core concepts here as to why we feel like we have a product that can deliver the future needs of our industry and our and the world. First one is, we've taken a product that has been around for 15 years. We've used the basic same core chemistry and our challenge technologically has always been, how do you do that and seal that battery so that the battery can perform over a 20-year life span? How do you do that at a cost where you can deliver a product and how do you do that at a cycle time that you can scale into a fast-growing market. We've learned a lot over the various generations of our technology. And in every step of the way, we've incorporated that into this new

Thanks, Joe. Good morning, everybody. I want to take a moment to explain how we're thinking about our path to profitability. Not only are we improving our bottom line, but we are also focused on improving our top-line. As you know, the first step to profitability is getting to positive gross profit. From this point, we can begin to cover our operating expenses which tend to be more fixed in nature as we achieve economies of scale. Looking at this graph, what you see here is sales prices are currently expected to increase over time. This is a result of increased market demand for long duration storage combined with a shortage of manufacturing capacity in the market. Some of these price increases are already baked into our backlog and are expected to be realized following the delivery of some of the earlier projects which were sold at lower prices in order to secure a foothold in a lithium dominated marketplace. As we establish our technology and credibility in the market and secure the needed financing to expand our manufacturing capacity, we expect to see our pricing increase over time. The IRA’s 10% domestic content bonus credit is an added tailwind. With our domestic content levels, we expect customers to see this benefit not only for their storage assets, but potentially in helping their overall projects to qualify for this added 10% credit. Moving on to COGS, while sales prices are increasing, one of the top priorities of the company is continue focusing on taking cost out of the product. With our planned cost-out initiatives in place, we expect to reach gross profit breakeven as we scale our first automated line. This would enable higher throughput, allowing us to absorb more of our fixed costs and gain operating leverage. Our cost program for 2023 includes seven discrete projects that are anticipated to either lower our supply costs, increase energy density or improve the manufacturability of our product. All three of these goals are essential to getting Eos to profitability. On top of taking cost out, another benefit available to us is the $45 per kilowatt hour production tax credit. As we produce storage systems, we are able to realize this benefit as an offset to COGS, which we have already begun accounting for in the first half of the year. While this $45 tax credit will help to accelerate our path to breakeven, we do not believe it is essential to achieve profitability. We believe this business makes economic sense even without the tax credit, but it certainly acts as an added benefit to us over time. Despite the progress we are making on improving our backlog and driving out costs, we still expect to see negative margins as we come down our cost curve and deliver on early backlog orders. Moving on to Slide 9. I'm now going to walk you through our classic pipeline page that I'm sure many of you are familiar with. This page is broken out into three key buckets, lead generation, current pipeline and backlog. Starting on the left side of the page is lead generation, which, at the end of the quarter, was $10.9 billion, representing 59 gigawatt hours of storage, up $1.2 billion from the previous quarter. You should think about this stage as customers coming to us with an idea for a project in which they do not yet have a technical use case for us to quote on. We do not count lead generation in our current pipeline. And generally, there is a lot of churn here as things drop out or progress into our pipeline. Moving to the right, we get to our pipeline. And we define pipeline in three segments. One, does it have a technical use case? Two, have we provided a non-binding quote? And three, do we have a signed letter of intent? We do not call something current pipeline unless we have a technical use case where we can provide a technical proposal to the customer, which then leads us to giving them a non-binding quote. Our goal from there is to then get customers to sign an LOI with us, which represents a non-binding agreement, and if the project materializes, they plan to choose Eos as their technology. Our current pipeline is now at $9.7 billion and is up $1.1 billion from the prior quarter. We have $1.6 billion in signed LOIs, an increase of $93 million versus last quarter, representing over 7 gigawatt hours. From there, the intention is to materialize projects into booked orders, which then get added to our backlog. We currently expect roughly 30% to be converted from LOIs into booked orders over time. The backlog stands at $534 million as of June 30, including some long-term service revenue, which represents less than 6% of the total value of our backlog. We expect to grow service revenue as more projects become operational in the field. During Q2, we booked a new industrial order in California, and we removed two small projects that no longer met our qualifications to be considered in backlog. While we didn't see a large increase in orders during the quarter, we continue to feel our pipeline is strong, and we believe many potential customers may be waiting to see our state-of-the-art factory in operation as well as additional clarity on the IRA tax credits. Each quarter, we assess the health of our reported backlog. Doing so requires us to exercise judgment about uncertain factors. We sometimes come to a view that a project that was booked in the past is unlikely to materialize or a change order has been executed, in which case, we may adjust our backlog. This assessment has resulted in projects being removed from our backlog in each of the last two quarters. While we've previously shipped products to 12 customers, our current backlog consists of 13 customers, representing 2.2 gigawatt hours, which includes a mix of utilities, developers, IPPs and industrial customers. Over 50% of our backlog is in the California and ERCOT markets, with the remaining 50% spread across other US and international markets. Now let's take a deeper dive on a few of the larger customers that we have in our backlog, beginning with Bridgelink. We first signed an MSA with Bridgelink Commodities LLC back in March of last year. This was a multiyear MSA where Bridgelink locked in the price of 240-megawatt hours of storage over a three-year period and then increased the overall size of the MSA to 1 gigawatt hour in June of last year. Bridgelink is a developer of solar and storage projects and has informed us that [Technical Difficulty] in its pipeline and some of these projects have received interconnects, while others are well into the interconnection queue. This is important because an interconnect approval is essential for a project to be able to deliver power to the grid. In today's environment, an interconnect can take years to secure, meaning that these types of projects have a certain amount of intrinsic value, and we believe a number of them will ultimately be built. We were informed by Bridgelink management that its affiliate has reached a confidential settlement with its lender, and the related assets were not sold at auction. Bridgelink recently confirmed that they are actively seeking alternative financing for these projects. Moving on to IEP. In 2020, we entered into an agreement to supply 1 gigawatt hour of storage, which was added to the pipeline as a letter of intent. Of this, we have two Texas projects totaling 100-megawatt hours in the backlog, with the remaining 900-megawatt hours included in LOIs. Control of the two Texas projects was transferred to a large North American infrastructure fund, and we currently anticipate breaking ground on the first project later this summer, with delivery scheduled for Q4 of this year. Carson Hybrid is another significant customer for us. We have a project in California that is co-located with an active gas turbine peaker plant that is delivering power to the California grid to meet the high summer demand. Construction is expected to begin this fall as soon as we can access the construction site to deliver our products. In addition, we have a 300-megawatt hour project with Carson that has recently received its interconnection approval and is included in our backlog. We have received a deposit or down payment on both contracts. Next, we have a confidential customer that is a leading Northeast developer of solar and storage projects that has signed a multiyear MSA with us to lock-in the price of our storage systems. The customer is actively pursuing permitting in New York. And given the safety of our product relative to other alternatives and the recent fires that have been in the news, we currently expect this market to have significant growth potential. We anticipate cash coming in as POs are issued and production schedules are set under this MSA. And finally, we have another confidential customer that has a very large utility and one of the largest operators of energy storage in the US. This utility has signed a long-term framework agreement for up to 4 gigawatt hours of energy storage volume, which is included in our pipeline in the LOIs/firm commitment category, along with the PO for their first 47-megawatt hour project, which is in our backlog and we expect to deliver later this year. This is an important project for the team as it represents our opportunity to demonstrate the capability of Eos' technology to one of the largest utilities in the world. The balance of our backlog is a combination of smaller deals, both front of the meter and behind the meter with developers, IPPs and investment-grade utilities. Now moving on to Slide 10. This is a page where we want to walk through the structure of our standard form customer contract as it relates to expected cash flows going forward. In order to offset the high working capital needs of the business, we strive to receive cash early to fund raw material purchases. Generally speaking, our template customer supply contracts are structured so that as we begin to manufacture and deliver storage systems, we expect to receive approximately 60% of cash prior to customer delivery. Amounts received are, of course, subject to the final negotiated terms in each individual agreement. Now looking at the page, I want to walk you through the process of what we generally see from a signed letter of intent, all the way to commercial operation on the right-hand side of the page. As mentioned earlier, a letter of intent represents the last stage in our pipeline before a deal gets into backlog. You should think about this stage as a non-binding agreement that aligns our interests with the customers and has us on the same side of the table, especially in the case of a developer as they pursue projects out in the marketplace. If the customer wins, Eos wins. To clarify, LOIs never meet our criteria for a booked order. What you see next is that an LOI or any active proposal can be formalized into a master supply agreement or MSA. Alternatively, a customer can skip the MSA and go directly to a definitive supply agreement with a PO, which sometimes happens for smaller, more discrete projects. MSAs and POs can be considered booked orders provided they meet certain internal qualifications, and each agreement can have different cash milestones, which are detailed in the contract. We typically require each of our customers to pay a deposit or downpayment before they are allocated a slot in our production schedule. You should think of an MSA as a multiyear agreement that defines a commitment to a specific amount of storage capacity being purchased over a defined period of time. As time progresses and specific projects are identified, individual POs would then be executed under those MSAs. We often get a small deposit of up to 5% and/or a cancellation fee with our multiyear MSAs. Even if an MSA does not have a specific project identified, it helps us with long-term capacity planning. In the case of multiyear MSAs, POs are then issued when individual projects materialize. When we receive a purchase order, we usually expect to receive 10% to 30% of the total contract price as a downpayment. We expect such payments to be a significant source of cash to offset increased working capital needs of some portion of our active proposals, LOIs and MSAs eventually result in purchase orders. Next, we expect to receive another 20% to 30% of the contract price during the manufacturing stage. During this stage, we're sourcing the raw materials, and we ask that our customers pay a cash milestone prior to manufacturing their systems and/or additional cash when the product is ready to ship. Revenue recognition does not necessarily follow the cash flows or the manufacturing cycle, but rather is determined based on our fulfillment of obligations to the customer. A meaningful portion of revenue is recognized when control passes to the customer, again, determined by the specific terms of the applicable agreement. Next, we expect to receive another 25% to 30% when systems are fully delivered. At this point, Eos begins site installation and commissioning, and the last 5% to 10% would be received after commissioning is complete and the system is placed in operation. I'd like to point out that an item we have mentioned briefly in the past is the opportunity for long-term service revenue. While our contracts generally offer a standard two-year warranty, we also provide customers with the option to purchase a long-term service agreement, which can go out as long as 20 years. As we begin to get more systems in operation, we expect this to be an increasing source of cash and revenue in the future. Now let's move into our second quarter financial results. Overall, the second quarter was an important quarter for the team, and I'm very proud of our employees as we continue to keep our heads down and focus on getting the

[Operator Instructions] Our first question comes from Joseph Osha with Guggenheim. Your line is open.

Good morning. This is actually Hilary on for Joe. I just wanted to first touch on some of your earlier comments on the transition to the

Hey, Hilary. Good morning. Yeah, I mean, look, at every phase of this, there's been learnings. I think what accelerated the development of the

Great. And then just as you look to transition to the buying and execute on some of the cost-out initiatives, I was just wondering if you could provide some context for how quickly we'll see that start to drive positive gross margin?

So -- sure, happy to elaborate on that a little bit. If you look at the different cost-out initiatives that we've got identified, really touch on three different areas. It's supply chain and some efficiencies in our supply chain. It's improving the energy density of the battery, and then also improving the manufacturability. And some of these, we are putting into effect now, like we said, with two of these have already been accomplished. And specifically, it's around volume discounts on our cube. So that's a supply chain-related item. Second one is improving the overall power density of the battery. So that falls in the second category of improving the energy efficiency. These are things that we can do now even on our semi-automated line. There are other cost-out initiatives that are dependent on getting to a fully automated line. You won't really see us fully achieve the cost-out into [Technical Difficulty] next year.

But – and, Hilary, the other thing I'd add that I always tell the team here at Eos, right? So prior to Eos, working at General Electric, right? I was managing product lines that were hundreds of years old. And you are getting a 4% to 5% cost--out productivity every year on a very mature product. This here, as we go through this, we're going to be learning every day and finding ways and updating our cost out pipeline, looking at cycle time reductions and productivity ideas. So this is going to be an iterative process where it's a funnel, right? You bring ideas in, and you want to realize ideas out the back end of this. And I think we're starting to see, as you actually start building and operating the product, you start to find more and more ideas on how to take cost out. We just got to, say, keep our nose to the grindstone and just keep finding ways to improve the competitiveness of what we put out in the field.

As I was listening to Joe, I realized I didn't fully address your question. You were asking about gross margin breakeven. I would say, we won't achieve gross margin breakeven until we get the efficiencies of the fully automated line. So that's how I would think of it in terms of timing. And the timing of that is somewhat dependent on capital [Technical Difficulty].

Great. Thank you for taking my questions.

Thanks, Hilary.

Thank you. Our next question comes from Christopher Souther with B. Riley Securities. Your line is open.

Hey, guys. Maybe just following up on that with the initial

Right, right. So, hey, Chris. Look, I mean this is night and day. The team of people that went through Gen 2.3, there's days where, at the end of the day, we're sitting in our -- we're sitting in our office talking and we'll say, "Do you remember where we were at the same time with Gen 2.3?" And it's just a nine-day difference. I mean like when you think about Gen 2.3 at the end of the first week of commercial production, our yields were in the 50% range on a good day for the first month as we were trying to perfect the infrared welding process. When you look at the stack up, and I think it's an important thing that we talked about was, you were doing 41 infrared wells, which we were doing this. We were doing those 41 wells. It was the largest surface area that has been done as an infrared well, and it was also the most continuous well. So doing the size of the battery we're doing for 41 wells, no one else is doing that. But you don't get paid by doing technological marvels. So doing what we're doing now with one, the cycle time being at four minutes, you're probably talking about -- you're saving 90 -- more than 1.5 hours per battery as you go through and do this with a lot less material handling. On the -- and then I think -- look, I think we can actually get better from where we are as we go through and look at the scrap rates and the performance. I think the thing that we've done is our new manufacturing operations leader, he's got visual management reports hour by hour that the entire team is focused on, what they have to do in each one of their stations. We've used the time here in the last three months to prepare ourselves to grow the company, and it's paying dividends here in the start-up. So it is totally different than what we had on Gen 2.3. Now what I would say is, we learned a lot on Gen 2.3. I think the biggest thing that we all need to remember on Gen 2.3, from a manufacturing standpoint and a product design standpoint, we learned a lot about sealing technology of sealing the battery and having a good cell-to-cell -- not having cell-to-cell leakage of electrolytes going from one cell to the other. So what we learned on that sealing allowed us to come up with the mechanical design on

Got it. And just on the BOM cost, [indiscernible] maybe versus more meaningful today versus kind of that post the three cost initiatives you called out for this year, like, what is the reduction you think you can get? And where does it stand today?

Really, I think the picture hasn't changed from what we've said historically, which is this battery -- or actually this entire system on a kilowatt hour basis was designed at half the cost of where we started with Gen 2.3. And then we've got seven cost-out initiatives that we're focused on for this year, two of which are completed. And when we say completed like in the case of the containers, I mean, we've negotiated the contract [Technical Difficulty] don't fully realize the savings coming through our P&L until [Technical Difficulty]. So there's those types of things that are going to roll in over time. And then as Joe mentioned, I mean, this is a continuous improvement process. We'll have significant efficiencies when we get to full automation. But even after that, we continue improvements, either supply chain design improvements, et cetera, going forward. But specifics on the BOM, I mean, that's as much granularity as we can get into at this point.

Yeah. I mean, I think it's fair to say that your starting point of the launch is significantly lower than where we were at Gen 2.3, just on the form factor of the battery and the fact that we have no titanium. The seven projects that Nathan is talking about, they get at the core of what we do to build the battery. So like, Chris, with -- as you look at these seven, right, this is something else. Like, so a 300-person company going out, building a pipeline of opportunities, building this battery, bringing a factory online, the third piece of this is building an American supply chain. So there's a tremendous cost-out opportunity here with us, working with companies like TETRA on electrolyte and coming up with ways to optimize -- the formula to optimize the mixing and delivering of that, to then look at what are we doing from the manufacturing of other components to really reduce the total supply chain cost, both material cost, logistics cost. But going out and saying like, "Here we are, a 300-person entity, in an environment where people say, can America innovate and can American manufacture?" And you know what I'd say, I'd say, "Yeah, we can." Because 300 people are doing it.

Got it. And maybe just kind of shifting towards the focus on American made and all that, everything in your kind of commercial activity side, you’ve grown, except for the order backlog, and you called out fact -- people see in the factory and the like. But can you give us a sense -- do you guys get a sense that the current -- people in the current pipeline are waiting for the DOE loan to make order commitments before kind of moving forward? Like, what are customers saying as far as kind of the DOE loan process?

Absolutely, Chris. I mean, we've had a number of conversations anecdotally where they're saying exactly that, right? We want to -- we like the technology. We've seen it. We've done a bunch of research but we just want to make sure that you guys are well capitalized and you're going to be here to deliver the product and also be here to deliver on the long-term service agreements on the back end. And so I think capital is important. I think just as important is as we get

And Chris, I'd add -- I mean, I think Nathan's kind of gave you the technical, how we get their response. Like the way I've always thought about this in my 30-year career is that when someone decides to place a purchase order with the company, they're making a bet on you. And when we're talking about these types of projects, and like -- and I'm very passionate about the fact that we've got to start speeding up and doing things faster to meet the demand of this market. But you're looking at projects where someone is making a purchasing decision today. And if they're lucky, they're going to get their grid connection in two to three years. So they're sitting there making this decision and saying, "I'm making my bet on this company and these people for something that's going to happen two to three years from now." So what we need to do is, as Nathan said, secure the financing to scale the factory and show them that we're going to be there to deliver that project. And yes, bringing them and showing them the manufacturing of the product and how the product works helps. But we've got to also show them that we're going to stand by the commitments that we make, and we're going to deliver on those commitments as we move forward. And that's as important as anything of having the underlying financials. It's both things. It's the -- being able to be there from a financing standpoint and being able to be there from a reliable partner that delivers, and we're doing both.

Yeah. That’s really helpful. I’ll hop in the queue. Thanks, guys.

Thanks, Chris.

Thank you. Our next question comes from Vincent Anderson with Stifel. Your line is open.

Yeah, thanks. Good morning, everyone. So just maybe to get it out of the way, it sounds like you've completed everything you needed to on your end of the loan process, which I believe would include the term sheet. If that's the case, did the 30-day clock start on the treasury OMB approval process? Or does that still wait until the loan goes through this new, call it, pre-conditional commitment review?

Yeah. Good morning, Vincent. I would say, yes, we're definitely in a 30-day window. We have been responding to some questions over the last couple of weeks. They're getting fewer and further in between and easier to answer. So we've been working through, which makes me feel like we're at the very final stages of answering questions. There are multiple approvals that have to occur in this process. And it's not necessarily clear from the outside looking in exactly what that process is, but we do believe and we've been informed we're in the very final stages of that. So we're hopeful that by Labor Day, we've got some great news to talk about. But like I said, we can't control the exact timing of it.

Okay. No, that's helpful, though. And then actually, Nathan, thanks for the deep dive on the pipeline. I was actually hoping we could go back to like a 10,000-foot view of the industry really quick. So as far as your customers go, you have companies like blue-chip utility companies that are going to be self-funding these projects, but you have a very different structure in a lot of the renewables market in terms of both the structure and the financing. So I was hoping maybe you could just kind of talk about how those projects would compare to something like a large-scale utility customer. And then just kind of ancillary to that, you hinted a couple of times that the interconnect, they might not want to call them delays, but they feel like delays to me. Is that having any impact on the pace of leads moving through the pipeline or the funding of those projects?

Yeah. So Vincent, I'll take some of these and Nathan can fill in. So on the last part of the question, look, the news that came out about the new FERC processes is great news for the industry, right? And we've got to get projects through the pipeline of projects and projects on to the grid performing. Like, you look at Texas, it looks like in the last week, it's almost like every other day, they set a record output for their grid. California going into highs, like I said earlier, going into a very hot time period here and straining on their reserve margins. So we need these projects, and we need to move quickly here to make this happen, to make the new energy future a reality, right? And that process of getting through, it slows down the project in the sense of, you're not breaking ground on the project, you're not installing assets and you're not charging and discharging on the grid while you're waiting for approval. So we got to find a way to be faster as that. And the we is the entire industry, including policy and government approvals and state approvals that need to happen to get the projects through. On your question like blue-chip customers, we see more and more of those coming in and putting us through our paces and working through the pipeline and being in both, some of the backlog confidential customers that Nathan talked about and also in our LOI pipeline. But on the other part of this market, like -- and look, you could spend your time and just look in Google or read any of the trade magazines to see the number of developers out there coming up with storage projects. And the way these projects work are, in general, you're doing project development, so you're going out and saying, here's where I want to do my project. I'm going to spend some money to do development and get permitting, get things online. Then once I do get all that done, I'm going to go out and finance my project with either debt or equity. So you're making a partnership with people that have to go out and work through that process and then get through the permitting and then do their projects. When we were [indiscernible], those are the types of people that wanted -- we had entrepreneurs who saw an opportunity, a great American story, by the way. I see an opportunity to have an idea, let's do this together. And those guys have come back, and we've developed and worked through this and are now getting ready to install assets. So you've got to work through that process side by side. It's a bumpy road. Look, it's a bumpy road when you're at Eos, and it was a bumpy road when I was at GE, like, where you've got to work through these. Like you look at the big players, that's why there was, at the time, a GE Energy Financial Services or there's a Siemens Financial Services because people know that to accelerate some of these projects, you got to help and get them through their financing to get them online. We do that more on the technology side and then try to bring in people that we know from our backgrounds, whether that be Nathan's background in the industry, my background in the industry. We've got Jeff Bornstein on our Board, who would -- who was the CFO of GE and the CFO of GE Capital, that we have all these contacts, and we're trying to put together the deal to take these LOIs and these opportunities, turn them into backlog. And backlog is not a guarantee [of such] (ph). Backlog just means we believe we have a project that's firm enough that we're going to start doing capacity planning around it. Then you got to translate that into revenue. And that's where the real hard work starts. But you've got to be a partner all the way through. It goes back to where I started before on Chris’ question where somebody is giving you an order, they're taking -- they're betting their career on your ability to deliver, and you've got to put 100% in to deliver that project, and we're going to do that at Eos.

That’s very helpful. I appreciate it. I think that’s all from me. Thank you.

Thanks, Chris.

Thank you. There are no further questions. I'd like to turn the call back over to Joe Mastrangelo for closing remarks.

Thank you. Thanks, everyone, for listening today. Exciting time. A lot of work going on, but extremely energizing. Energizing, and I say that as a -- with a dual meaning of what happens every day, whether that be an Edison or in Turtle Creek or out in the field, but also exciting to think about the future of the company, what we have to build here. And we're going to continue to be focused on the long-term value creation for our shareholders by bringing a product to market that the market demands, making it as competitive as possible and helping to power the new energy future, and we're excited to be able to do that. And again, I'll end the call the same way I started. On behalf of the 300-plus people that come into work every day at Eos to make this great company, thank you for your time today.