Q3 2021 Eos Energy Enterprises Inc Earnings Call

Speaker 1: Great.

Greetings and welcome to the Ehealth Energy Enterprises, Inc. Third quarter 2021 earnings call.

Speaker 2: Welcome to the EOS Energy Enterprises, Inc. third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation.

At this time all participants are in a listen only mode.

A question and answer session will follow the formal presentation.

Speaker 2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

Please note this conference is being recorded.

Speaker 2: I will now turn the conference over to your host, Laura Ellis, VP of Investor Relations. Thank you. You may begin.

I will now turn the conference over to your host Laura L. S V. P of Investor Relations. Thank you you may begin.

Thank you good morning, everyone and thank you for joining us for <unk> financial results conference call for the third quarter I mean September 30th 2021.

Speaker 3: Thank you. Good morning everyone and thank you for joining us for EOS's Financial Results Conference Call for the third quarter ending September 30th, 2021.

Speaker 3: On the call today, we have EO CEO Joe Mastrangelo and CFO Bhagir Karata.

On the call today, we have E S CEO, Joe Mr Angelo and CFO Saga Corrado.

Speaker 3: Before we begin, allow me to provide a disclaimer regarding forward-looking states.

Before we begin allow me to provide a disclaimer regarding forward looking statement.

Speaker 3: This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company, which are subject to certain risks, uncertainties, and assumptions.

This call, including the Q&A portion of the call May include forward looking statements related to the expected 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 projections or those implied by these forward looking statements.

Speaker 3: Should any of these risks materialize or should our assumptions prove to be incorrect, our actual results may differ materially from our projection, or those implied by these forward-looking states?

Speaker 3: The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings.

The risks and uncertainties. The forward looking statements are subject to are described in our earnings release and other SEC filings.

Our remarks during todays discussion should be considered to incorporate this information by reference.

Speaker 3: Our remarks during today's discussion should be considered to incorporate this information by reference.

Speaker 3: Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made.

Forward looking statements represent our beliefs and assumptions only as of the date such statements are made.

Speaker 3: 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.

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.

Speaker 3: Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release.

Today's remarks will also include references to non-GAAP financial measure.

All information, including reconciliation between non-GAAP financial information to the GAAP financial information is provided in the press release.

Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U S. GAAP.

Speaker 3: non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with US GAAP.

Speaker 3: In addition, our non-GAAP financial measures may not be the same as, or comparable to, similar non-GAAP measures presented by other companies.

In addition, our non-GAAP financial measures may not be the same or comparable to similar non-GAAP measures presented by other companies.

Speaker 3: This conference call will be available for replay via webcast through EOTA's Investor Relations website at investors.eosce.com.

This conference call will be available for replay via webcast through the Investor Relations website at investors that E O S E Dot com.

Speaker 3: Joe and Sagar 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 Joe.

<unk> Sagar, who 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 Joe.

Speaker 4: Thanks, Laura. And thanks everyone for joining us today for the 3-4th or 3-4th Operating Results of VOC Energy Storage.

Thanks, Laura and thanks, everyone for joining us today for the three court third quarter operating results of U S energy storage.

Speaker 4: It's another quarter of great accomplishments for the team starting off with a page we use every quarter. The technology we continue to discharge energy and run operating cycles and prove out not only the robustness but also the operating flexibility of what we bring to market. We've announced this morning the largest order in the company's history. We're at book orders of over a half a gigawatt with a backlog now at $150 million. We're very excited about the project that we've announced with Blue Ridge and Pine Gate. It's an exciting opportunity for us but also the follow-on order from Duke and a new order from Emoresco. Our opportunity pipeline continues to be robust with over 22 gigawatt hours. What we're seeing as we look in the market is continued growth.

Other quarter of great accomplishments for the team is starting off with the page we use every quarter because the technology, we continue to discharge energy and run operating cycles improve out not only the robustness, but also the operating flexibility of what we bring to market. We've announced this morning, the largest order in the cost of the.

The company's history, where I booked orders of over a half a gigawatt with a backlog now at $150 billion. We're very excited about the projects that we've announced with with Blue Ridge and <unk>, It's an exciting opportunity for us, but also the follow on order from Duke and a new order for my Moresco, our opportunity pipeline continues.

He has to be robust with over 22 gigawatt hours, what we're seeing as we looked at the market is continued growth on the opportunity front, we're navigating a little choppiness and also some uncertainty on when orders will close, but we continue to see customers coming to us to want to understand how our technology can deliver on their needs the factory.

Speaker 4: On the opportunity front, we're navigating a little choppiness and also some uncertainty on when orders will close, but we continue to see customers coming to us to want to understand how our technology can deliver on their needs.

Speaker 4: factory and the team in Turtle Creek had a very strong quarter. I'll go through some of the improvements that we've made in the operation. We're standing at 3.5, 3.4 million of sales of shipments year to date, and we have 144 million dollars of cash in hand to continue.

The team in Turtle Creek had a had a very strong quarter I'll go through some of the improvements that we've made in the operation we're standing at $3 five $3 4 billion of Upsells of shipments year to date, and we have $144 million of cash on hand to continue to execute on our operating strategy overall, a solid performance by the team and.

Speaker 4: to execute on our operating strategy. Overall, a solid performance by the team and continuing to position the company for future growth. So if we move to

To position the company for future growth. So if we move to slide four you'll just overall the environment like many other companies we are going through the headwinds of what's happening on the supply chain. Both on the labor material and logistics side you know when you look at where we are and how that's impacting us were running our factory at two shifts versus.

Speaker 4: slide four, you know, just overall the environment, like many other companies, you know, we are going through the headwinds of what's happening on the supply chain both on the labor, material, and logistics side. You know, when you look at where we are and how that's impacting us, we're running our factory at two shifts versus three shifts.

<unk> three shifts we continue to hire and want to build out over time, but we have been experiencing some labor shortages, but I've been able to manage through that at the same time, you know one of our biggest items that we manage to is the actual container that we use for our system. We've come up and now have three sources of supply for that and are managing through the logistical ability to be able to receive those.

Speaker 4: We continue to hire and want to build out over time, but we have been experiencing some labor shortages, but I've been able to manage through that. At the same time,

Speaker 4: You know, one of our biggest items that we managed to is the actual container that we use for our system. You know, we've come up and now have three sources of supply for that and are managing through the logistical ability to be able to receive those containers in our factories to ship then the customers.

Containers in our factories to ship then the customers. We still have the same challenges on the semiconductor side of having availability, but given the ramp and the planning that we've been able to do we should be able to manage through that as we go through the rest of the year and on the inflation side. The biggest thing that we're managing through is just on the resin that we use for our battery module itself is just managing that overall.

Speaker 4: battery module itself is just managing that overall Equation and how we hit our our cost curves moving forward and then I talked about on the previous page You know, there's a lot of there there's certain key around the growth in the market There's uncertainty around the timing of that and we see that From the upfront opportunity through the sales process all the way through to the startup of our equipment out in the field and the team We continue to manage our way through that and that really when you take these three together You know what it really requires is leadership team as we manage

All our equation and how we hit our cost curves moving forward and then I talked about on the previous page.

A lot of there's certainty around the growth of the market, there's uncertainty around the timing of that and we see that from the upfront opportunities through the sales process all the way through to the startup of our equipment out in the field and the team we continue to manage our way through that and that really when you take these three together what it really requires his leadership team.

Speaker 4: from the upfront opportunity through the sales process all the way through to the startup of our equipment on the field and the team we continue to manage our way through that and that really when you take these three together, you know, what it really requires as a leadership team is we manage the company tightly as we go through and solve our issues that come up on a day-to-day basis. On the tail-in side, you know, continue to see strong demand for storage, you know, the market is going to grow BNEF.

As we manage the company tightly as we go through and solve our issues that come up on a day to day basis on the tailwind side Youll continue to see strong demand for storage and the market is going to grow be any effort continues to forecast over the near term a 23% CAGR.

Speaker 4: forecast over the near term a 23% cager. The market as you start to see it now is starting to shift to needing flexible duration discharge. So you know moving from a static 2 hour or 4 hour to systems that can do anything from 2 to upwards to 15 hours and you know our technology fits the bill there And I think you're going to see you know a new technology mix as we come in and the market grows and evolves for the future And I think another big one for us that talked about on the previous page is that

The market as you start to see it now is starting to shift to needing flexible duration discharged so moving from static to our four hour to systems that can do anything from two to upwards to 15 hours and you know our technology fits the bill there and I think you're going to see it.

New technology mix as we come in and the market grows and evolves for the future and I think another big one for US I talked about on the previous pages that we continue to improve our operational capability, we have a higher output coming out of the factory, we have better yields and I'll show you. Some of the data on how we're getting consistent battery and and system performance as we should.

Speaker 4: We continue to improve our operational capability. We have a higher output coming out of the factory, we have better yields, and I'll show you some of the data on how we're getting consistent battery and system performance as we ship out into the field. So really a lot of work and a lot of focus from the team on this aspect and results starting to show through here is we look at what we did in the third quarter. On the next page.

Chip out into the field, so really a lot of work and a lot of focus from the team on this aspect and results starting to show through here as we look at what we did in the third quarter on.

On the next page page five.

Speaker 4: Here's what we're talking about for where we are versus our business priorities for the year. You know, we, as I mentioned before, we booked our largest order in company history in October . We're starting to build up a blue chip portfolio of customers that we're working with. I talked about the names earlier, but we like what we see. We also like the work that we're doing with some major power developers and utilities as we go through their qualification process.

Here's what we're talking about for where we are versus our business priorities for the year.

We as I mentioned before we booked our largest order in company history in October.

We are starting to build up a blue chip portfolio of customers that we're working with I talked about the names earlier, but we like what we see and we also like the work that we're doing with some major.

Power developers and utilities as we go through their qualification process of making a lot of progress as we move forward for future growth for the company as we move forward on the revenue side. We're on track we're managing the risks that we talked about $2 billion to $5 billion revenue target you know our second half revenue is six times, what we did.

Speaker 4: A lot of progress as we move forward for future growth for the company as we move forward. On the revenue side, we're on track. We're managing the risks.

Speaker 4: that we talked about to our $5 million revenue target. Our second half revenue is six times what we did in the first half of this year and will continue to grow over time as we continue to de-bottleneck our factory and add capacity. And on the capacity adding, we will scale our manufacturing capacity by year end next year to 800 megawatt hours on our foot...

<unk> in the first half of this year and we will continue to grow over time as we continue to Debottleneck, our factory and add capacity and then on the capacity, adding we scaled we will scale our manufacturing capacity by year end next year to 800 megawatt hours on our footprint.

Speaker 4: in Turtle Creek in Pennsylvania. It's a $35 million planned investment and we saw the announcement of us getting an equipment financing deal to be able to manage our capital. But we'd like and I'll walk through in more detail later.

Internal Creek in Pennsylvania, It's a $35 million planned investment and we saw the announcement of us getting equipment and equipment financing deal to be able to manage our capital, but we like and well I'll walk through in more detail later on we like our asset light Capex manufacturing model, because it will allow us to grow as the.

Speaker 4: Our asset light cap ex-manufacturing model, because it will allow us to grow as the market.

A market grows on our next generation technology, we have a working prototype that's been on test. We've got first piece parts coming in and we will start the manufacturer ability.

Speaker 4: On our next generation technology, we have a working prototype that's been on test. We've got first piece parts coming in and we'll start the manufacturability test here over the next couple of weeks.

S. Here over the next couple of weeks and we are planning our first half our.

Speaker 4: and we're planning our first shipments for the product, first commercial shipments for the product at the end of next year. You know, it's an exciting time. I'll go through some details as we wrap up the presentation around the NextGen product. We like the product that we have today and how that's performing. I'll show that as well. So again, I think overall strong performance by the team, and I'll turn it over to Sagar now to walk us through the financials and upfront discussion around the commercial aspect.

Our first shipments for the product first commercial chip shipments for the product at the end of next year. You know this is an exciting time I'll go through some details as we wrap up the presentation around the next gen product, we like the product that we have today and how that's performing I'll show that as well. So again I think overall strong performance by the team and I'll turn it over to saga now to walk us through.

The financials and upfront discussion around the commercial aspects of the business.

Speaker 5: Thanks, Joe. Good morning, everyone. In the next two pages, I will talk to you through the third quarter financial. Let's start with the income space.

Thanks, Joe Good morning, everyone. In the next two pages I will talk you through the third quarter financials, let's start with the income statement.

Speaker 5: We delivered $718,000 in revenue from the water. As you know, motor oil was one of our first commercial orders. Third quarter revenue recognized with the second shipment to Greece. Revenue for the first shipment was recognized in the second quarter of an ad.

We delivered $718000 in revenue from the quarter as you know motor oil was one of our first commercial orders third quarter revenue recognized in the second shipment to group revenue for the first Shipman was recognized in the second quarter financial statement.

Speaker 5: We also successfully delivered on two other orders this quarter, River Valley in Massachusetts for one megawatt hour and Renew in India for 0.5 megawatt hours.

We also successfully delivered.

On to other order this quarter River Valley in Massachusetts for one megawatt hour and renew in India, four five megawatt hours or cost of sales in the quarter were $12 9 million. This included $2 $8 million of expense related to fair market value adjustment to inventory.

Speaker 5: are cost of sales in the quarter, but $12.9 million. This included 2.8 million of expense related to fair market value adjustments to inventory, attributable to future booktoders. Additionally, 3.6 million inexpensive related to improving our current manufacturing yield.

Attributable to future booked orders. Additionally, $3 6 million in expenses related to improving our current manufacturing yield.

Speaker 5: $4.1 million of costs were incurred as we bring the factory up to capacity and entitlement. And lastly, $1.2 million in logistics, freight, and other transportation.

$4 $1 million of call were incurred as we bring the factory up to capacity and entitlement and lastly, $1 2 million and logistics freight freight and other transportation call.

Speaker 5: Moving on, our R&D expenses were $1.5 million higher versus Q2, related to ongoing investment in our Z3 product here in 2020.

Moving on our R&D expenses were $1 $5 million higher versus Q2 related to ongoing investment in our <unk> product here in 2022.

General and administrative expenses were $2 $5 million lower driven by staff related accrual and outside service spend.

Speaker 5: general and administrative expenses were $2.5 million lower driven by staff related accruals and outside services.

Moving to interest expense the primary driver of interest expense is related to the accounting for the convertible note.

Speaker 5: Moving to interest expense, the primary driver of interest expense is related to the accounting for the convertible notes specific to the 100 million in investment from Koch Industries earlier in the year. Lastly, other income includes 9.9 million for the change in fair value of existing derivatives and 0.7 million on fair value for our private warrants, both of which are attributable to EO share price in the total.

Specific to the $100 million in investment from Coke industry earlier in the year.

Lastly, other income includes $9 9 million for the change in fair value of existing derivative and $7 million on fair value for our private warning.

Both of which are attributable to <unk> share price in the third quarter.

Speaker 5: Moving on to the next page on our cash balance, as of 9.30, we have $144 million in cash. We finalized a $25 million strategic partnership with Trinity Capital to finance our investment in equipment purchases as we increase our manufacturing capacity here in 2020.

Moving onto the next page on our cash balance as of 930, we have $144 million in cash we finalized a $25 million strategic partnership with Trinity capital to finance, our investment in equipment purchases as we increase our manufacturing capacity here in 2012.

Speaker 5: An initial tranche of 6 million inflow is as a result of that.

And.

An initial tranche of 6 million inflow.

The result of that we.

Speaker 5: We additionally received $4 million in warrants exercised during this quarter.

We Additionally received $4 million in warrant exercised during this quarter.

Speaker 5: From business operations, we expended $41 million this quarter.

From business operations, we expanded $41 million this quarter.

Speaker 5: 20 of that is directly related to the cost of sales. 6 million in general admin

Plenty of that is directly related to the cost of sale.

$6 million in general administrative expenses.

Speaker 5: 4 million in capital expenditure, 3 million in R&D, 1 million in customer financing, and an additional 1 million in commercial operation. And lastly, we had $6 million in one-time transaction expense.

$4 million in capital expenditure $3 million in R&D.

$1 million in customer financing and an additional $1 million in commercial operation and lastly, we had $6 million in one time transaction expense.

Let's go on to the next section.

Speaker 5: We'll review our progress on commercial pipeline and book daughters to deliver on our 2021 and beyond financial.

I'll review, our progress on commercial pipeline in booked orders to deliver on our 2021 and beyond financially committed pay.

Speaker 5: page 9 is a snapshot of our commercial activity as of October 2021.

Page nine is a snapshot of our commercial activity as of October 2021.

Speaker 5: This is the page you're now familiar with from previous presentations. Let's start with Leach-Ed. Leach-Generation is where we work with our customers to materialize ideas and assess the feasibility regulations, project plans and economics related to specific projects. We today have 2.9 billion or 18 gigawatt hours and review within this topic.

This is a page you are now familiar with from previous presentation, let's start with lead Gen.

Lead generation is where we work with our customers to materialize ideas and assess the feasibility regulations project plans and economic related to specific project. We today have $2 9 billion or 18 gigawatt hours and review within that bucket.

Speaker 5: Our commercial pipeline is 3.7 billion or 22 gigawatt hour.

Our commercial pipeline of $3 7 billion or 22 gigawatt hours.

Speaker 5: This constitutes of two key segments, active proposal for 3.2 billion and customers with whom we have a firm commitment of another 0.5 billion.

This constitutes a two piece segment active proposal for $3 2 billion and customers with whom we have a firm commitment of another <unk> 5 billion.

Speaker 5: Like we have discussed on previous call, only a project or a customer with a clear mandate on the requirement, technical specifications, and only a youth case that satisfies EO specifications will be included in our pipeline.

Like we have discussed on previous call only a project or a customer with a clear mandate on requirement technical specifications and only a use case that satisfy yields specification will be included in our pipeline.

Speaker 5: In this stage, we actively present our commercial and technical proposals to customers.

In this stage, we've actively presents our commercial and technical proposals to customers alright.

Speaker 5: Our experience is about 30% of our pipeline over the long run translates into book dollars.

Experience is about 30% of our pipeline over the long run translates into booked orders.

Speaker 5: In specific circumstances where we have reached an agreement on commercial terms with select customers and have agreed to terms with a letter of intent supported by clearly defined next steps that require actions on behalf of the customer, we categorize these projects as an LOI or firm commitment. Our experience indicates that on average 60% within this category translates into book total.

In specific circumstances, where we have reached an agreement on commercial terms with select customers and have agreed to turn with a letter of intent supported by clearly define next steps that require actions on behalf of the customer. We categorize these projects that are in LOI or firm commitment.

Experienced indicate that on average 60% within this category translates into booked orders and now lastly, we have the right most of the page $137 4 million and book doors, We consider project booked order, where there is an agreement for yields to procure material manufacturer and a dealer.

Speaker 5: And now lastly, we have to the right most of the page, 137.4 million dollars in book dollars. We consider a project of book dollar where there's an agreement for use to procure material, manufacture, and deliver stories for you.

Edwards story.

Speaker 5: We see a strong momentum in demand. Booktoddards have increased 58 million since the second quarter earnings.

We see a strong momentum and demand.

Booked orders have increased $58 million.

Our second quarter earnings call.

Speaker 5: On the next page, here's a snapshot of our orders backlog, which is now a reflection of our 2021 year today's book, Daughters, plus 2020 year end backlog, minus of any shipments to meet customer commitments.

On the next page here's a snapshot of our orders backlog, which is now a reflection of our 2021 year to date of October one 2020 year end backlog minus of any shipments to meet customer commitments.

Speaker 5: This backlog comprises of 30 projects with 16 customers and 613 megawatt hours.

This backlog comprises up 30 projects with 16 customers and 613 megawatt hours.

Speaker 5: As a second quarter earnings presentation, we reported orders and backlog of 95.6 million. Since then, we have recorded 58.3 million in new booktodors. We have also successfully shipped 2.1 million, resulting in a total of 151.8 million in backlog.

<unk> second quarter earnings presentation, we reported orders and backlog of $95 6 million. Since then we have recorded $58 3 million in New book daughter, We have also successfully shipped $2 1 million, resulting in a total of $151 8 million in backlog deliver.

Speaker 5: Delivery on these commitments is expected to be in 2021, 22 and beyond. Equipment sales constitute 118 million of our backlog and 34 million in long-term service revenue.

<unk> on these commitments is expected to be in 2021, 'twenty two and beyond.

Equipment sales constitute $118 million of our backlog and $34 million in long term service revenue.

Our backlog as an increase in third quarter is 100% driven by cash sales and service revenue.

Speaker 5: Our backlog as an increased in scope quarter is 100% driven by cash sales and service rent. I'll hand the conversation back to Joe now.

I'll hand, the conversation back to Joe now on page 11.

Speaker 4: Thanks, Sagar, and just want to build off of the comments that Sagar talked about on it.

Thanks Saga and I just wanted to build off of the comments that that <unk> talked about on their commercial how we're managing our pipeline and closing orders in the backlog we have to just talk about the hunt and over $150 million of backlog that we have on hand with 60 different customers really how that segregates itself out from type of.

Speaker 4: how we're managing our pipeline and closing orders in the backlog. We have to just talk about the over $150 million of backlog that we have on hand with...

Speaker 4: really how that segregates itself out. From type of project, we have a lot of our backlog is on the front of the meter side. We're starting to grow in the size of those projects and I'll talk about that. But also on the behind the meter, you see that being a smaller segment for us in our backlog today. And that really comes down to us.

Project, we have a lot of our our backlog is on the front of the meter side, we're starting to grow in the size of those projects and I'll talk about that but also the behind the meter you see that being a smaller segment for us in our backlog today and that really comes down to us.

Speaker 4: experimenting and finding out where the technology works the best and then developing a strategy to address that market as we go forward. So although you see a high concentration on front of

Experimenting and finding out where the technology works the best and then developing a strategy to address that market as we go forward. So although you see a high concentration on front of the meter we believe with the operating aspects of our technology behind the meter will be important to us and now we're working on getting the right partners to be able to address that market are they use.

Speaker 4: We believe with the operating aspects of our technology behind the

Speaker 4: to us and now we're working on getting the right partners to be able to...

Speaker 4: On the use case side, the technology from day one was designed for integrating solar into the grid and helping to enable solar to not only power when the sun is shining, but also provide reliable power when the sun is not shining in the evening hours to manage what is classically called the duck curve. But we've also talked about the fact that we see more and more locational capacity to be able to...

K side, you know the technology from day, one was designed for integrating solar into the grid and helping to enable solar to not only power when the Sun is shining, but also provide reliable power.

When the Sun is not shining in the evening hours to manage what is classically called the duck curve, but we've also talked about the fact that we see more and more locational capacity to be able do firming of the grid and you could see that that's how our technology splits out and then the microgrid other really ties back to that behind the meter that I talked about earlier.

Speaker 4: Firming of the grid and you can see that that's how our Technology splits out and then the microgrid other really ties back to that behind the meter that I talked about earlier

Speaker 4: And one of the proof points for us as a company is that the backlog and size of project on the far right is starting to grow. It just shows...

And you know one of the proof points for us as a company is that the backlog in size of project on the far right is starting to grow it just shows the credibility that we're having as we bring customers into our facility in Edison and show them one of North America's largest test facilities and how we've been operating this technology for over a decade and then bringing.

Speaker 4: the credibility that we're having as we bring customers into our facility in Edison and show them.

Speaker 4: one of North America's largest test facilities and how we've been operating this technology for over a decade. And then bring them out to our factory in Turtle Creek and show them product being manufactured and tested and coming off.

Them out to our factory in Turtle Creek, and show them product being manufactured and tested and coming off the line have been shipped to customers. We are in one of our goals. When we went public was to become an operating company and I think when you look at this page and the things I'm going to talk about here you see that we have become an operating company that now needs to grow and improve itself as we move forward and we have a team that's ready for.

Speaker 4: We are in one of our goals when we went public was to become an operating company. I think when you look at this page and the things I'm going to talk about here, you see that we have become an operating company that now needs to grow and improve itself as we move forward and we have a team that's ready for that challenge.

That challenge when you flip forward to page 13, and really start talking about manufacturing capacity and how we are delivering.

Speaker 4: So, I'll flip forward to page 13 and really start talking about manufacturing capacity and how we're delivering. You know, we have, you know,

We have you know.

Speaker 4: A fantastic team in our factory in Turtle Creek. And you can see some of our operators there building equipment on the shop floor. As I talked about earlier, we improved our yields by 10%. You can see the breakdown of that on the right-hand side of the page. Our current production capacity is at 250 megawatt hours per year. As I talked earlier in soccer discussed, we have 3.4 million of year-to-day shipments. amount of maintenance billments per week.

A fantastic team in our factory in Turtle Creek, and you could see some of our operators they're building building equipment on the shop floor as I talked about earlier, we improved our yields by 10% you can see the breakdown of that on the right hand side of the page. Our current production capacity is at 250 megawatt hours.

Per year.

I talked earlier and soccer discussed we have $33 4 million of year to date shipments, but we've seen improvement across the board in all four of our of our beam quality of our being manufacturing processes with with great quality and I think the biggest one for us when you really look at this is we've really started the whole.

Speaker 4: improvement across the board and all four of our of our main quality of our main manufacturing processes with Great quality and I think the biggest one for us when you really look at this is you know, we've really started to hone in and

In an improved the process of welding of infrared welding, our battery modules together and then getting the throughput a battery assembly and then really getting a higher yield as we ship product out in the field.

Speaker 4: the process of infrared welding our battery modules together and then getting the throughput on battery assembly and then really getting a higher yield as we ship product out.

Speaker 4: We've done a lot of testing as we go through this manufacturing process to make sure that the product that hits the field is product that's going to operate to specification. We're starting to see a lot of the hard work that we've been doing on the shop floor pay dividends in how we do outputs. Now it's not about getting the quality right, it's about scaling the great quality as we go forward to grow the company in the future and I think we've laid a good foundation out in Turtle Creek to be able to do that. We move to page 14.

<unk> done a lot of testing as we go through this manufacturing process to make sure that the product that hits. The field. This product that's going to operate to specification, we're starting to see a lot of the hard work that we've been doing on the shop floor pay dividends and how we do output. So now it's not about getting the quality right. It's about scaling the great quality as we can.

Go forward to grow the company in the future and I think we've laid a good foundation out in Turtle Creek to be able to do that we move to page 14.

Speaker 4: But what I've just talked about, these graphs show the improvement over time. So, you know, the top three graphs are current coming out of containers on test and the bottom.

What I've just talked about these graphs show the improvement over time. So you know the top three graphs are current coming out of containers on test in the bottom three graphs are voltage coming out of containers at different points in time, and when you see those lines and those variations in lines, that's really variations.

Speaker 4: three graphs are voltage coming out of containers at different points in time. And when you see those lines and those variations in line.

Speaker 4: That's really variations in how you can operate and how our equipment performs. So we were testing.

How you can operate and how our equipment performs so we were testing and honing in 12 months ago on how we want a manufacturer and bringing our operators up to speed on how to build the equipment. You saw a lot of variation, particularly in that lower left hand chart, where you look at the far.

Speaker 4: And honing in 12 months ago and how we want to manufacture and bringing our operators.

Speaker 4: up the speed on how to build the equipment. You saw a lot of variation particularly in that lower left hand chart where you look at the far

Speaker 4: right-hand side of the lower left chart where you see all those lines diverging that's not being able to get full power out of a system. So you then look six months later we made tremendous amount of progress. You still see variation in both of the charts but there's less variation and you look at where we are today. Where we are today is when a

Right hand side of the lower left chart, where you see all those lines diverging, that's not being able to get full power out of a system. So you then look six months later, we've made tremendous amount of progress you still see variation in both of the charts, but theres less variation and then you look at where we are today, where we are today as when it when we finish.

Speaker 4: finish manufacturing and ship, we have a very consistent performance coming out of the container. The batteries in a container are within 2% of one another and how they perform coming off the manufacturing.

Manufacturing and ship, we have a very consistent performance coming out of the container the batteries and a container or with our within 2% of one another and how they performed coming off the manufacturing line. This is really getting to what we've talked about as our strategy as we ramped up manufacturing was.

Speaker 4: This is really getting to what we've talked about as our strategy as we ramped up manufacturing.

Speaker 4: get the individual processes right and then optimize the overall process. The output that we're seeing coming off the manufacturing line in the first pass yield that we're getting shows that we're getting that process right and now we've got to think about productivity and scaling the business for growth in the future. When you move to page 15.

Get the individual processes right and then opt to optimize the overall process the output that we're seeing coming off the manufacturing line in the first pass yield that we're getting shows that we're getting that process right and now we've got to think about productivity and scaling the business for growth in the future. When you move to page 15, what.

Speaker 4: What that consistency allows you to do is bring flexibility, operating flexibility to your customer. So this chart is one we've talked about before and I think it's critical for us to talk about it again today. This is a battery on consecutive days running for very different operating cycles of the charge and discharge. So far left excuse me is taking...

That consistency allows you to do is bring flexibility operating flexibility to your customers. So this chart is one we've talked about before and I think it's critical for us to talk about it again today. This is a battery on consecutive days running four very different operating cycles of the charge.

And discharge so the far right is far left excuse me is taking one battery and discharging at over $12 seven hours. The next one is doing that same battery. The next day at $6. Three then 4.1 and $2 nine and when you take those kilowatts per container and you do that on a on a killer.

Speaker 4: one battery and at discharging it over 12.7 hours.

Speaker 4: The next one is doing that same battery the next day at 6.3 then 4.1 and 2.9. And when you take those kilowatt per container and you do that on a kilowatt per hour basis, you see very consistent performance.

<unk> per hour basis, you see very consistent performance across a very wide discharged time, what that means is when you think about the amount of when we talk about intermittency in renewables and what happens with putting more renewables.

Speaker 4: across a very wide discharge time.

Speaker 4: What that means is when you think about the amount of, when we talk about inter-mittency in renewables and what happens with putting more renewables.

Speaker 4: on the grid you can't have static storage assets to be able to react to the intermittency in the variability of renewables and we have a technology that performs and can really offset different days and different conditions that intermittency that's being brought into the grid to bring stabilization reliable power at a great cost

On the grid, you can't have static storage assets to be able to react to the intermittency and the variability of renewables and we have a technology that performs that can really offset on different days different conditions that intermittency, that's being brought into the grid to bring stabilization reliable power at a great cost.

Speaker 4: And when we do this, unlike other technologies, doing this does not degrade the product's performance or reduce its product life.

Point and when we do this unlike other technologies doing this does not degrade the products performance or reduce its product its product lifecycle, we get higher round trip efficiency, depending on how you want to cycle and how you manage your state of charge and what we're doing now with our technology team around our <unk>.

Speaker 4: We get higher round trip efficiency, depending on how you want to cycle and how you manage your state of charge. And what we're doing now with our technology team around our software and our battery management system is going to add incremental performance. So what we're finding.

Software and our battery management system is going to add incremental performance. So we're finding.

Speaker 4: Think about the previous page we're finding in our technology as we become more consistent in our manufacturing process We get more performance out of the battery through software than we tend to making changes on hardware So more to come as we think about this by also think it's very important that when you look at our technology You think about this operating flexibility and consistency that we can bring to the challenge of bringing reliable storage to the grid and to our energy value chain We move to page 16 This is a key page for us because one of the things that we

Think about the previous page what we're finding in our technology is that as we become more consistent in our manufacturing process, we get more performance out of the battery through software than we can through making changes on hardware. So more to come as we think about this by also think it's very important that when you look at our technology you think about this operating flexibility.

Consistency that we can bring to the challenge of bringing reliable storage to the grid to our energy value chain. We move to page 16. This is a key page for us because one of the things that we talked about.

Speaker 4: when we went public almost a year ago, was that we had a very asset-light capex model to be able to scale manufacturing. And really, we've proven this out as we've invested and operated our facility in Turtle.

When we went public almost a year ago was that we had a very asset light.

Capex model to be able to scale manufacturing and really we've proven this out as we've invested in operated our facility in Turtle Creek. So you look at the different phases of our development of where we are now and what we're doing and being able to get on a $16 million investment 60000 square feet square feet.

Speaker 4: so you know you look at the different phases of our development and where we are now and what we're doing and being able to get a sixteen million dollar investment sixty thousand square square feet two hundred and sixty megawatt hours of output out of our fact

260 megawatt hours of output out of our factory as we look forward to 2022, we're gonna add some square footage to what we have today, but for 110000 square feet. We will do 800, plus megawatt hours, a total investment of around $50 million. So it proves that we have a highly scalable.

Speaker 4: We look forward to 2022. We're going to add some square footage to what we have today, but for 110...

Speaker 4: thousand square feet we will do 800 plus megawatt hours a total investment of around fifty million dollars So it proves that we have a highly scalable model we can deploy this in nine to twelve months

Model, we can deploy this in nine to 12 months, depending on where we start from a building readiness and we can get to around a gigawatt hour capacity for that $50 million, which is what we said when we went public a year ago. We've now proven it with data and actual square footage, where we walk people through and show them, what's happening on the shop floor. So very.

Speaker 4: pending on where we start from a building readiness and we can get to around the gigawatt hour capacity for that 50 million Which is what we said when we went public a year ago We've now proven it with data and actual square footage where we walk people through and show them what's happening on the shop floor So very exciting for us as we start thinking about what's going to happen as the market grows is being able to expand our capacity relatively quickly and in expense

Lighting for us as we start thinking about what's going to happen as the market grows as being able to expand our capacity relatively quickly and inexpensively for the future. We go to page 17, or do you want to hit them on what's next and really show everyone. Here on the left hand side of this page our first pieces coming off the line with our builders for the.

Speaker 4: We go to page 17, do you want to hit on what's next and really show everyone here on the left hand side of this page, our first piece is coming off of the line with our molders for the Z3 battery. If you remember, we talk about our battery today as a form factor like a window air conditioner. We're moving to the size of a computer server and really when you think about our form factor going forward, what the same form factor as the lithium ion battery as we move forward with all the safety and operating flexibility that we just talked about.

The Z three batteries you remember we talk about our battery today has a form factor like a window air conditioner, we're moving to the size of a computer server and and really when you think about our form factor going forward will have the same for form factor as the lithium ion battery as we move forward with all the safety and operating flexibility.

That we just talked about when you look at the middle of this page we have our improving our manufacturing capabilities. That's our next generation infrared welders to be able to put those batteries together, we're qualifying both of those first pieces and the manufacturing process and targeting to be able to bring a battery. That's one third of the size of it.

Speaker 4: When you look at the middle of this page, we have, you know, our improving our manufacturing capabilities. That's our next generation.

Speaker 4: infrared welders to be able to put those batteries together. We're qualifying.

Speaker 4: both those first pieces and this manufacturing process and targeting to be able to

Speaker 4: A battery that's one third in size of what we have today, so less material input to be able to manufacture. We're going to reduce the total system in operating costs because

What we have today, so less material input to be able to manufacture were going to reduce the total system and operating costs, because we can manage our thermal footprint a lot easier and come up with very very variable system configurations, and as we come out of 2021 and go into 2022, it's about optimizing the.

Speaker 4: We can manage our thermal footprint a lot easier and come up with very, very, variable system configurations. And as we come out of 2021 and go into 2022, it's about optimizing the overall system that we provide to the customers.

Overall system that we provide to the customers for better performance and improved footprint density and continue to work on the software of how we run this equipment from the customer standpoint to allow them to get better operating flexibility and higher output from the assets that they deploy out in the field. So.

Speaker 4: for better performance and improve footprint density and continue to work on the software of how we run this equipment from the customer standpoint to allow them to get better operating flexibility and higher output from the assets that they deploy on the field. So very encouraging on the work of what the technology team has done here over the last four months with more to come as we go into 2022 and continue to move forward on progress to bring this new technology to the field. So...

Very encouraging on the work of what the technology team has done here over the last four months with more to come as we go into 2022 and continue to move forward on progress of bringing this new technology to the field.

So to wrap up for today.

So as you think about what we're going to do here for the rest of the fourth quarter going into 2022.

Speaker 4: You know, you think about what we're going to do here for the rest of the fourth quarter going into 2022. You know, we're going to continue to grow our pipeline with a focus on utility scale projects going back to that mix.

We're going to continue to grow our pipeline with a focus on utility scale projects going back to that mix that both saga and I talked about earlier, we have to manage uncertainty around the project timing of when things are going to close and when we look at that timing and think about quarter points, we're saying that.

Speaker 4: that both Saaghan and I talked about earlier, you know, we have to manage, you know, uncertainty around the project timing of when things are gonna close, and you know, when we look at that timing and think about quarter points, you know, we're saying that, you know, we feel very confident in the growth of the company. There is uncertainty in the timing, so we're saying on our orders range that we could be at a range of anywhere from 175 million to 300 million of book do orders, you know, as the year closes, but as we go into 2022, I think we'll go into it with a much stronger pipeline. Delivering our 5 million of revenue, we've got to continue to manage the supply chain.

We feel very confident in the growth of the company. There is uncertainty on the timing. So we're staying on our on our orders range that we could be at a range of anywhere from $175 million and $300 million booked orders.

As the year closes, but as we go into 2022, I think we will go into it with a much stronger pipeline.

Delivering our $5 million of revenue we've got to continue to manage the supply chain risks. This is every day being in the details and reading and reacting what's happening in overcoming the challenges I think team has done a great job. So.

Speaker 4: RIFT is, you know, this is every day being in the details and reading and reacting what's happening and overcoming the challenges that team has done a great job so far and then we really have to continue to work and prepare for shipping that backlog as we work with our customers and look at the where how the shipment profile will be for 2020.

So far and then we really have to continue to work and prepare for shipping that backlog as we work with our customers and look at the how the shipment profile will be for 2022 and 2023 on the capacity front, we're going to continue to scale out our facility in Turtle Creek, and we'll have an update on that as we come into January really again proud of with the team.

Speaker 4: capacity front, you know, we're going to continue to scale out our facility Internal Creek 11 update on that as we come into January really again Proud of what the team is doing and proud of where we're going and proud of the output that's coming that's coming up

Is doing and proud of where we're going and proud of the output that's coming that's coming out of our factory and we will continue to grow that and refine that as time goes on and then launching the Z three product will do the validation and the builds of the first prototypes here as we go through the end of this year into the beginning of next year, we will deliver our first commercial.

Speaker 4: grow that and refine that as time goes on. And then launching the Z3 product, we'll do the validation and the build to the first prototypes here as we go through the end of this year and to the beginning of next year. We'll deliver our first commercial project as we talked about in the second half of next year. And the big thing for us now with the form factor that we have at the battery is to really come up with multiple configurations to meet additional use cases as we move forward.

<unk> as we talked about in the second half of next year and the Big thing for US now with the with the form factor that we have the batteries to really come up with multiple configurations to meet additional use cases as we move forward. So overall when you look at the third quarter really strong operating results and in an uncertain environment. The team continues to be focused on.

Speaker 4: So overall when you look at the third quarter, really strong operating results in an uncertain environment, the team continues to be focused on creating...

On creating the best stationary energy storage company in the market and we will continue to work together with our customers to deliver and create shareholder value as we move forward I want to thank everybody for their time and listening in today and turn it over to the operator for question and answers. Thanks.

Speaker 4: stationary energy storage company in the market and we'll continue to work together with our customers to deliver and Create shareholder value as we move forward. I want to thank everybody For their time and listening in today and turn it over to the operator for question and answers. Thanks

Thank you.

Speaker 2: Thank you. At this time, we'll be conducting a question after session.

At this time, we'll be conducting a question and answer session.

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Our first question comes from the line of Chris Souther with B Riley. Please proceed with your question.

Speaker 2: Our first question comes from the line of Chris Suther with B. Riley. Please give it your question.

Hey, guys. Thanks for taking my question here.

Speaker 6: Hey guys, thanks for taking my question here. Congrats on the 300 megawatt hour order with Blue Ridge and adding M or F's go and the Duke fall on here. I wanted to talk a little bit about kind of the pipeline here. You know, seeing kind of the decline in the current pipeline for active proposals in late stage L O I.

Congrats on the 300 megawatt hour order with Blue Ridge, and adding <unk> and Duke follow on here.

I wanted to talk a little bit about kind of the pipeline here.

We're seeing kind of the decline in the current pipeline for active proposals.

Oh.

Speaker 6: Obviously, a portion of that is coming from book doors, which is great. I'm curious on the projects that you're taking out as a factor of with you, my own, winning a few that you were going after, the projects that are getting scrapped for supply chain costs or interconnection issues, I'm just kind of curious where you're seeing some of those later stage ones that are falling out.

Obviously, a portion of that is coming from booked orders, which is great I'm curious on the on the projects that you are taking out.

A good factor.

Am I on winning a few that youre going after or is it projects that are getting scrap for.

Supply chain costs are interconnection issues I'm, just kind of curious where youre seeing some of those later stage ones that are falling out.

Speaker 4: a christian morning thanks um uh... sorry so i think you you see the net there's a natural progression of

Hey, Chris Good morning. Thanks.

So I think you've seen that there is a natural progression of <unk>.

Speaker 4: Active pipeline into LOIs and both of those feeding into order. So part of that is just moving through

<unk> pipeline into LOI is in both of those feeding into orders. So part of that is just moving through.

Speaker 4: the life cycle of projects. I think when you look at the L.O.I.s, you know.

The lifecycle of projects I think when you look at the LOI.

Yes.

Speaker 4: Part of that is projects that haven't moved forward for interconnection and also

Part of that is projects that havent move forward for interconnection.

And also.

Speaker 4: just looking at what the revenue models will be from the customer standpoint. And then on the active pipeline piece, it's a snapshot in time. And we do run a pretty strict process of what goes into that number. We took some things out. It was a mix.

Just looking at what the revenue models will be from the customer standpoint, and then and then on the active pipeline piece.

As a snapshot in time and we do run a pretty strict process of what goes into that number we took some things out it was a mix of what you brought up there are projects that we've lost large large projects here as you see we're starting to go after bigger bigger projects, there's one large project.

Speaker 4: of what you brought up. You know, there are projects that we've lost large projects. As you see, we're starting to go after bigger, bigger projects. There's one large project.

Speaker 4: that the customer went with with him, I on as as their preferred choice. It was it was a shorter duration project. So not unexpected and we were going after it. We went after it to really.

The customer went with lithium ion as their preferred choice. It was a it was a shorter duration projects are not unexpected.

Unexpected and we were going after it we went after it is really.

Speaker 4: as a learning process to see where we're going to be. And then in the kind of the lead generation, you'll see more of that move in the active pipeline as we refine the use cases going forward. But for the point and time of where we're at, you're just seeing the different moves between the buckets and regular market activity as far as we see. We feel really good.

Learning process to see where we're going to be and then in the in kind of the lead generation Youll see more of that move in the active pipeline as we as we refine the use cases going forward, but for the point in time of where we're at you're just seeing the different moves between the buckets and regular market activity as far as we see we feel really good about what we have in there and about scene.

Speaker 4: about what we have in there and about seeing the activity in the market coming more and more to longer duration flexible duration storage.

The activity in the market coming more and more to longer duration flexible duration storage.

Got it Okay. That's fair.

It's a wide range of $175 million to $300 million target for booked orders by year end.

Speaker 6: the wide range of 175 to 300 million target for book orders by year end.

Speaker 6: How many, as projects are getting larger here, how many large potential orders could swing things from the low end to the high end there? I'm just curious how many similar sides to the list.

How many projects are getting larger here.

Many large potential orders could swing things from on the low end to the item there.

Curious how many similar like.

Blue Ridge, we'd be looking at there that could really swing things kind of one.

Booked at the end of this year to potentially early next year, yes, yes.

Speaker 6: book at the end of this year to, you know, potentially books early next year.

Speaker 7: Yeah, it's a great question. So there's three or four larger projects, ranging up to where Bougard Pine Gate is and a little bit smaller than where they are. We're given that big range because it is lumpy, right? So from the standpoint of...

Yeah, Yeah, it's a great question, Chris So.

There's three or four larger projects ranging up to where we were at pine gate is in a little bit smaller than where they are.

We're given that big range, because it is lumpy right. So so from the standpoint of closing by the end of the calendar year, we see challenges just as you've been working through.

Speaker 4: closing at the end of the calendar year, we see challenges just as you've been working through, running the process of closing and negotiating, closing out the transactions, and just saying that, look, there could be, there could be that lumpiness where things are gonna happen after a quarter point, but still will move forward, and we're just trying to signal everybody that, we feel confident in what we have, as far as what we're working on, but there could be some timing risk in there. So this first day, doing our interviews today, that really allowed people to program and are positive about what we've been looking for.

Running the process of closing and negotiating closing out the transactions. It just saying that there could be there could be that lumpiness, where things are going to happen after a quarter point, but still we will move forward and we're just trying to signal to everybody that we feel confident on what we have as far as what we're working on but there could be.

Some timing risk in there.

Okay, Yeah that makes a lot of.

Speaker 6: And looking at the manufacturing capacity, makes sense you kind of push the ramp of additional lines up to that 800 megawatt hours in Pittsburgh, given the pushout in some of the project timing.

And looking at the manufacturing capacity.

Makes sense to kind of push the ramp of additional lines up to that 800 megawatt hours in Pittsburgh, given the push out in some of the project timing.

Speaker 6: Could you walk through the cadence of those additional lines coming online, you know, between now and year end 2022 and then, you know, you mentioned kind of the scale up to one and a half giga lot hour. I'm curious.

Could you walk through the cadence of those.

<unk>.

Coming online.

Between now and year end 2022, and then.

You mentioned kind of the scale up to one five gigawatt hour I'm curious.

Speaker 6: You know, what are the plans, you know, as we stand today and, you know, timing expectations that we should look at there?

What are the plans.

Stand today and timing expectations that we should look at there.

Speaker 4: Yeah, so Chris, what you'll see is we'll go in the first quarter with a similar run rate of when we come out of 4Q from a production stand.

Yes so.

Chris what you'll see is we'll go into first quarter with a with a similar run rate of where we come out of when we come out of <unk> from a production standpoint, and then gradually ramp up as we go through the year and I think we're doing this in phases. So.

Speaker 4: and then gradually ramp up as we go through the year. We're doing this in phases, so we're going to add well-dirt capacity as we get to the end of the first quarter. Bring up.

We're gonna add while their capacity as we get to the end of the first quarter bring up that will then bring up the production of battery modules and then from that standpoint, we will then go in and add contain.

Speaker 4: that will then bring up the production of battery modules and then from that standpoint we'll then go in and add

Speaker 4: container where you form and test a container before you ship as you get into third quarter to be ramped up into the first quarter to that 800 megawatt hour annual run

Container, where he form and test the container before you ship as you get into third quarter to be ramped up into the first quarter.

To that 800 megawatt hour.

Annual run rate now now the second part of your question on the on the 1.5, it's going to be a mix of two things right. So what we've learned as we've gone through here over the last three or four months is that we are starting to get more and more throughput out of our existing assets and if you remember what we've always said about.

Speaker 4: now now the the second part of your question on the on the one point five i it's gonna be a mix of two things right so what we've learned

Speaker 4: as we've gone through here over the last three, four months is that we are starting to get more and more throughput out of our existing assets.

Speaker 4: And if you remember, you know, what we've always said about how we want to run manufacturing.

How we want to run manufacturing is we want to get the process of matched the actual process of manufacturing. The part right. Then go for productivity our automation. So we're getting we're at the point now where we consistently get the process right and you see that in our yields now.

Speaker 4: We want to get the process of, the actual process of manufacturing the part right.

Speaker 4: then go for productivity or automation. So we're at the point now where we consistently get the process right? You see that in our yield.

Speaker 4: Now it's how do you get better throughput through the asset base that you have? That being said, you know, when we look at where turtle creek is.

How do you get better throughput through the asset base that you have that being said when we looked at where Turtle Creek is.

Speaker 4: You're going to run into entitlement of the facility as you get into the end of next year beginning of the following year in 2023. So we will be out looking for where factory number two will be located as we give into the middle of next year.

Youre going to run into entitlement of the facility as you get into the end of next year beginning of the following at the beginning of the following year in 2023. So we will be out looking for where factory number two will be located as we get into the middle of next year.

Speaker 4: to get to the target that we have for Gingwet our product.

To get to the target that we have four four gigawatt hour production.

Got it okay.

Speaker 6: Okay, that's really helpful. And then maybe just last one. I could you talk a little bit about the OPEX trajectory. Any additional costs we should be expecting in the fourth quarter or the first half of next year is we're validating, launching the three, ramping up sales activity. I'm just kind of, you know, the capital plan, you know, as far as CAPEX very helpful, but I'm just curious, you know, where we see kind of operating business kind of going, but the next couple of quarters here in Casper and Mike. Now.

Very helpful. And then just last one can you talk a little bit about the.

Opex trajectory.

Any additional costs, we should be expecting in the fourth quarter or the first half of next year as we're validating launching three ramping up sales activity I'm just kind of.

The capital plan.

As far as Capex very helpful, but I'm, just curious where do we see kind of the operating business.

Kind of going over the next couple of quarters here and cash burn and Mike.

Sorry, you want to start then I can jump in.

Speaker 8: Yeah.

Yes.

Hi, Chris.

Speaker 5: Hi Chris, the off expert this for next year will be right in line with where we are for this year. Plus maybe five to 10% to mark up for the incremental growth. That's more so specific to your point on research and development and commercial operations as we ramp up both internationally as well as to Joe's point balance back front of the meter.

Thanks for that for next year will be right in line with where we are for this year.

Well, maybe 5% to 10%.

Part of the incremental growth.

So.

Specific to to your point on research and development and commercial operation as we ramp up both internationally as well as to Joe's point balance out in front of the meter in behind me.

Speaker 4: And Chris, the one thing I would say on your specific question on the Z3 ramp, right? So, you know, when you look at what we did on the current product, you know, we were, we were,

And Chris the one thing I would say on your specific question on the E. Three ramp rate. So when you look at what we did on the current product we were we were.

Speaker 4: Validating, industrializing, and commercializing simultaneously in one...

Validating industrializing and commercializing simultaneously in one facility.

Speaker 4: What we're doing with the Z3 is that we are, we will have a production line, a partial production line in our facility in Edison, which will allow us.

We are doing with the Z. Three is that we are we will have a.

A production line of partial production line in our facility in Edison, which will allow us to do all the work on the industrialization and validation of the product outside of our production, where we need to produce product to ship to customers and then and then feather that in.

Speaker 4: Do all the work on the industrialization.

Speaker 4: and validation of the product outside of a production where we need to produce product to ship to customers. And then feather that into the production capacity that we have in Turtle Creek Ward Factory 2 to deliver the first commercial units at the end of next year. So it should be a smoother process where we take the lessons that we've learned.

Two the production capacity that we have in Turtle Creek or factory to to deliver the first commercial units at the at the end of at the end of next year. So it should be a smoother process, where we take the lessons that we've learned for the Gen. Two three apply that the Z three and do it in our facility.

Speaker 4: for the Gen 2.3. Apply that to Z3 and do it in our facility here in Edison side by side with the technology.

Here in Edison side by side with the technology team to be able to ramp up that production process and validate the product itself.

Speaker 4: to be able to wrap up that production process and validate the product.

Speaker 6: Got it. So that's helpful. All right, I'll help him to hear the next guys.

Got it that's helpful.

Thanks, Scott Thanks, Thanks, Chris.

Our next question comes from the line of Tom Curran with Seaport Research Partners. Please proceed with your question.

Speaker 2: Our next question comes from the line of Tom Kuran with Seaport Research Partners. Please proceed with your question.

Good morning, Hey, Tom.

Speaker 4: You know, when it comes to educating both investors and prospective customers, you've done a great job of articulating the advantages of EOS' proprietary aquiasing chemistry over lithium ion alternatives for long duration storage solutions.

When it comes to educating both investors and prospective customers you've done a great job of articulating the advantages of uses proprietary aqueous and chemistry over lithium iron alternatives for long duration storage solutions.

Speaker 4: But if we shift the frame of comparison from the ZINT versus LIDs, you know, lithium ion batteries to the ZINT versus other non-LID storage technology.

But if we ship the frame of comparison from from the zinc versus <unk> lithium ion batteries too.

Versus other non.

Storage technologies.

Speaker 4: which strengths would you emphasize? Specifically, how would you compare contrast to the zinth with iron-air technology and then with liquid metal and molten salt?

Which strengths would you emphasize specifically how would you compare and contrast, the zinc with iron are technology, and then with liquid metal in molten salt technology.

Speaker 9: Yeah Tom, so I always start off with the framework of the energy value chain is always going to be a mix.

Yes, Tom so so so I always I always start off with.

The framework of the energy value chain is always going to be a mix and no. One technology can meet all the use cases of what that mix requires so the examples that you're talking about those technologies those are longer duration.

Speaker 4: And no one technology can meet all the use cases of what that makes required.

Speaker 4: So the examples that you're talking about, those technologies, those are longer duration discharge technologies than the market segment that we would go after. What I would say, when you compare to them side by side, I go back to the CAPEX Lite model to add capacity and be able to manufacture products.

Discharged technologies, then then the market segment that we would go after what I would say like when you compare to them side by side I.

I go back to the Capex light model to add to add capacity and be able to manufacture product. The operating flexibility that we have to go down into you know we can run cycles down into the short duration and we can run cycles that go beyond 12 hours. So weird This bridge technology, which.

Speaker 4: operating flexibility that we have to go down into you know we can run cycles down into the short duration and we can run cycles That go beyond 12 hours. So we're this bridge technology which is a very important

She is a very important market segment as you think about firming up the grid is more renewables come in and giving it the flexibility it needs to handle the intermittency, but to compare one to one on some of the some of the some of the things.

Speaker 4: Market segment, as you think about firming up the grid as more renewables come in and giving it the flexibility it needs to.

Speaker 4: But to compare one to one on some of the technologies that you brought up.

The technologies that you brought up.

Speaker 4: difficult to do just because they're going for much longer duration storage Discharge than what we are when I would say is we have a much simpler system The you know what holds when we talk about lithium ion holds when you look at those at those technologies as well You know earth abundant readily available raw materials a very simple system design

Difficult to do just because theyre going for much longer duration storage.

Discharge than what we are what I would say is we have a much simpler system.

What holds when we talk about lithium ion holds when you look at those at those technologies as well you know first.

Burst abundant readily available raw materials are very simple system design with the competitive upfront investment and very low operating cost to maintain the system and ease of use which I think when you look at where we want to apply the technology and how we want to use it that's a key differentiator for us against either side of the spectrum that you look like.

Speaker 4: with a competitive upfront investment in very low operating costs to maintain the system.

Speaker 4: which I think when you look at where we want to apply the technology and how we want to use it, that's a key differentiator for us against either side of the spectrum that you look like, that you look at either short or long duration.

You look at either short or long duration.

Great.

Speaker 10: Great. So, you know, as the long duration non-LIB, you know, utility storage.

The long duration non L b.

Utility storage.

Market matures.

Speaker 10: And we do end up seeing room for several technologies rather than gravitate towards any one silver bullet or dominant solution.

And we do end up seeing room for several technologies, rather than gravitate towards any one silver bullet or a dominant solution.

Speaker 10: You think about that future demand pie consisting of several sites.

You think about that future demand pie consisting of several places.

Speaker 10: which single use criterion is most likely to determine the size of each piece. Should it be duration range?

Which single use criteria and it is most likely to determine the size of each piece should it be duration range.

Speaker 9: Well, so I think it's the...

So I think I think I think it's I think it's the.

Speaker 9: The total cycle that you're looking at, so how fast do you want to charge?

The total cycle that youre looking at so how fast do you want to charge how long do you want to wait between discharge so get up to whenever you're you're charging is and then and then how long or short do you want a discharge. So it's that it's that total cycle and I think what the industry with the industry.

Speaker 4: how long do you want to wait between discharge so get up to whatever your your charging is and then and then how long or short do you want a discharge so it's that it's that total cycle and i and i think you know what the industry you know it with the industry needs to think about in the way that i think about it you know having been in the industry thirty years and worked in different technologies is we talk about bye bye

Needs to think about in the way that I think about it having been in the industry 30 years and worked with different technologies as we talk.

A generic cycle to make it easy for people to understand but in the real world you very rarely run at that generic cycle right. So when I look at what we do as a technology. There is no generic cycle for us and we showed it in that one chart that shows the battery on consecutive days.

Speaker 4: cycle to make it easy for people to understand. But in the real world you very rarely run at that generic cycle.

Speaker 9: Right, so when I look at what we do as a technology

Speaker 4: There is no generic cycle for us. We showed it in that one chart that shows the battery on consecutive days running different discharge times. There's a tremendous amount of volume there because the whole purpose.

He's running different discharge times, there's a tremendous amount of volume there because the whole purpose of wanting to bring energy storage into the energy mix is to give the system flexibility. So you want assets that can be flexible and when we operate like that across that flexible range different power ratings different.

Speaker 4: of wanting to bring energy storage into the energy mix.

Speaker 9: is to give the system flexibility. So you want asset.

Speaker 4: that can be flexible and when we operate like that across that flexible range different power ratings, different discharge and charge times you don't damage the battery, you don't reduce its useful life, it doesn't degrade faster and it gives you great performance so it's kind of like hey what is your use case, how do you want to use it? And we know and I know after 30 years that no one day is going to be exactly the same as the next day and you need to be able to meet the demands of those days and that's what we love about our technology in the market

Discharge and charge sense, you don't damage. The battery you don't reduce its useful life. It doesn't degrade faster and it gives you a great performance. So it's kind of like Hey, what is your use cases, how do you want to use it and we know and I know after 30 years that no. One day is gonna be exactly the same as the next day and you need to be able to meet the demands of those days and that's what.

We love about our technology in the market.

That's very helpful. Thanks for that Joe.

Speaker 11: ?????t turning to

Turning to <unk>.

Speaker 10: the initial expectation that you would realize the 45 of the initial expected 50 million of revenue for 2021.

The initial expectation that you would realize the 45 of the initial expected $50 million of revenue for 2021.

Speaker 10: over the first half of 2022. Can you update us on how much of that remaining 45?

Over the first half of 2022.

Can you update us on how much of that remaining 45 you know.

Speaker 10: Now expect to recognize over the first half and then turning to the the blue ridge power order. How much of the the blue ridge power order revenue should we see recognize over the first?

Do you now expect to recognize over the first half.

And then turning to the Blue Ridge power order.

How much of the Blue Ridge power.

Order revenue should we see recognized over the first half.

Yeah, I'll start and then Joe will jump in.

Speaker 10: Yes, I'll start and then Joe will jump in. Look, first off, we expect at this point to provide a better perspective on 2022 when we report our fourth quarter earnings in February , largely driven by some of the near term secular headwinds that Joe alluded to when he started out the conversation with the trend in March this late.

Hum.

First off we expect at this point to provide a better perspective on 2022, when we report our fourth quarter earnings in February largely driven by some of the near term headwinds that Joe alluded to when you started off the conversation, but with the trends in the marketplace.

Speaker 5: Clearly, all of the backlog is expected to be delivered sometime between 2022 and 2023, both based on customer readiness and our ramp-up.

Clearly.

All of the backlog is expected to be delivered sometime between 2022 and 'twenty three and both based on customer readiness and our ramp up which is which is fragmented to the demand at this point, we'll be we'll be taking a look at what the path looks like.

Speaker 5: which is fragmented to the demand at this point. We'll be taking a look at what the first half looks like. As Joe said, the first quarter will look similar to the fourth quarter, and that's really what are starting point for 2000 credits.

As Joe said, the first quarter will look similar to the fourth quarter and that's really what our starting point.

Speaker 9: And Tom, I would just add on timing of when you see Blue Ridge Pine Gate coming into revenue.

And Tom I would just add on timing of when you see Blue Ridge <unk> coming into revenue.

Speaker 9: You know, these are projects, and when you think of the project cycle from order to kind of discharge on the grid, you know, they're usually median time frame around a year, can be as short as nine months and as long as 18 months.

These are projects and when you think of the projects cycle from order to kind of discharge on the grid. They're there, they're usually median timeframe around a year. It can be as short as nine months and as long as 18 months now inside.

Speaker 4: The order that we announced are a multiple projects, so this will come in over time. So I think when you look at our revenue coming in the first half.

The order that we announced our multiple projects. So this will come in over time. So I think when you look at our revenue coming in the first half of next year that revenue is going to be delivering on the on the existing backlog that we have and then going into the second half of the year to start delivering not only this.

Speaker 4: of next year that revenue is going to be delivering on the existing backlog that we have and then going into the second half of the year to start delivering not only this...

Speaker 4: 300 megawatt hour order for Pine Gate, but the original order that we have with them coming into the quarter. And as SIGAR said, we'll come back with what that plan looks like.

300 megawatt hour order for <unk> with the original order that we have with them coming into the quarter and as Sarah said, we'll come back with what that plan looks like as we get together with customers and understand where they are and it's from a timing standpoint to lay out what the revenue profile will look like throughout 2022.

Speaker 4: you know as we get together with customers and understand where they are and it's from a timing standpoint to lay out what the revenue profile will look like throughout 2022.

Great. Thank you for taking my questions.

Thanks, Tom.

Thank you.

Speaker 2: Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Martin Molloy with Johnson. Please proceed with your question.

As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Our next question comes from the line of Martin Malloy with Johnson. Please proceed with your question.

Good morning.

Hey, Mark.

Hi.

Speaker 12: The do opt

The Duke order.

Speaker 12: Yeah, it was, I think it's great to see a repeat order from customer like that. Can you maybe talk a little bit more about?

Yeah. It was a I think it's great to see a repeat order from a customer like that can you maybe talk a little bit more about.

Speaker 12: how they're using the batteries and kind of feedback from them on what they saw that they like.

How they are using the batteries and in kind of feedback from them on what they saw that they like.

Yes. So we ran we ran a pilot project with them over the course of 24 months basically.

Speaker 9: Yeah, so we ran a pilot project with them over the course of 24 months basically at their test facility outside Charlotte, North Carolina. And what they really, what consistent feedback from the team at Duke has always been, we don't know when the system is running because

At their test facility outside of Charlotte, North Carolina, and what they really you know what.

Consistent feedback from the team at Duke has always been.

We don't know when the system is running because.

You don't draw any power to be able to run. So the fact that we don't require HVAC to keep the system within a narrow temperature band and we also don't know because you don't make any noise. It's very it's a very quiet system compared to other technologies and what they really liked was consistently being able to deliver cycle.

Speaker 4: We don't draw any power to be able to run. So the fact that we don't require HVAC to keep the system within a narrow temperature band. And we also don't know because you don't make any noise. It's a very quiet system compared to other technologies. And what they really liked was...

Speaker 4: consistently being able to deliver cycles around six hours for the use case that they were looking at but the flexibility of going down the two and above six as required and that's what led us to this next following order which is a full commercial order with them and then we'll hopefully lead to other orders in the future as we deliver and continue to prove out the technology.

<unk> around six hours for the use case that they were looking at but the flexibility of going down to two and above six as required and that's what led US to this next follow on order, which is which as you know.

A full commercial order with them and then we will hopefully lead to other orders in the future as we deliver and continue to prove out the technology.

Right.

Speaker 12: Thank you for that. And I was wondering, and I don't know.

Thank you for that and I was wondering and I don't know.

Speaker 12: willing to share this, but when we look forward to the 3.0, it looks like what's in your backlog is about $244 per kilowatt hour.

You're willing to share this but when we look forward to the three point O.

It looks like what's in your backlog is about $244 per kilowatt hour.

Can you maybe.

Speaker 12: help us with pricing for 3.0 and how you expected to trend over time and also gross profit

Help us with with pricing for three point O and how you expect it to trend over time and also gross profit margins.

Speaker 9: So, when I would say specific, you know, I would go back to...

So I would I would say specific I would go back to the model that we've laid out.

Speaker 4: the model that we've laid out when we went public. And then what I would say Martin is, what we are trying to do is deliver more power per container.

When we went public and then what I would say Martin as well.

We're trying to do is deliver more power per container.

Speaker 4: and to require fewer containers in a smaller footprint to deliver on customer requirements. As the market evolves and grows and accelerates, we will continue to compete on price, but hard to really give a forward forecast just.

And to require fewer containers in a smaller footprint to deliver on customer requirements as the market.

As the market evolves and grows and accelerates we will we will continue to compete on an on price, but hard to really give a forward forecast just because you just don't know where the market would be in and I think giving any guidance on that would be would be difficult for us to hold to it but we're going to continue with our model that we that we have.

Speaker 4: don't know where the market would be and I think giving any guidance on that would be difficult for us to hold to it but we're going to continue with our model that we have today and the girl trajectory that we have to be able to make the company grow smart and positive and casual positive.

Have today and the growth trajectory that we have to be able to make the company gross margin positive and cash flow positive in the future.

Okay and on round trip efficiency for three.

Speaker 12: And on round trip efficiency for 3.0 in the range, any help you can give us.

Any help you can give us there again, depending on the use case.

Speaker 4: Yeah, again, depending on the use case, you know, and how you use it, we have seen, and I've run even with our current technology. You always have to remember on the round trip of Fischemar, and this is a really interesting question, and I'll try to keep it as, I'll try to keep it.

And how you use it we have seen.

And I've run, even even with our with our current with our current technology with you you always have to remember on the round trip efficiency of Martin. This is a really interesting question and I'll try to keep it as I'll try to keep it.

Speaker 4: It's nuance, but I'll try to keep it as simple as possible. We run our batteries. We charge to 100. We discharge down to zero. So when we say round trip efficiency, it's that full.

It's nuanced, but I'll try to keep it.

Simple as possible.

We run our batteries recharged to a hunter, we discharged down to zero. So when we say round trip efficiency at set full.

Speaker 4: operating cycle of a battery now the gen three product should be anywhere from the high 70s to low 80s on rap total round trip efficiency now what we do do is if we do like like what what lithium ion does Which lithium ion when they quote their round trip efficiency? They cut that they go from 80 to 20 usually on their operating cycle so if we go from 100 charge

Operating cycle of a battery now the gen three product should be anywhere from the high <unk> to low eighties on wrap total round trip efficiency now what we do do is if we do like like what with lithium ion does which lithium ion when they quote their round trip efficiency. They cut that they go from <unk>.

80 to 20, usually on their operating cycle. So if we go from 100 charged down to 20% left in the battery so don't discharged down to zero or round trip efficiency, then goes up to the mid eighties, and we've run cycles in our factory, where where the current technology has been in the mid eighties.

Speaker 4: 20% left in the battery, so don't discharge down to zero. Our round trip efficiency then goes up to the mid 80s, and we've run cycles.

Speaker 4: in our factory where the current technology has been in the mid-Aid.

Speaker 4: Now the specifics of being able to give you a more pinpointed number around the next generation product. Give us a little time to get these first production run units.

Now the specifics of being able to give you a more pinpointed number around the next generation product give us a little time to get these first production run units on test here towards the end of the year beginning of next year, we'll come back with more details, but we like what we see out of the prototypes that we're running today.

Speaker 4: on test here towards the end of the year beginning of next year. And we'll come back with more details, but we like what we see out of the prototypes that we're running today. Okay. And then, are there, what are the raw materials specifically that are both scares or difficult?

Okay.

And then.

Are there what are the raw materials, specifically that are both scares are difficult to come by or is it just the logistics.

You said that are plaguing everybody is that what's causing.

Speaker 4: For us, it's logistics and availability. So you have to remember, Earth-upunded raw materials going into the battery. So plastic resin is being molded into a frame.

Yeah for us, it's like logistics and availability. So you have to remember.

Earth abundant raw materials going into the battery. So you know plastic resins being molded into frames.

Speaker 4: Titanium, carbonized, graphetized, felt, and zinc bromine electrolyte. So materials are available. It's managing the delivery of those materials to when we, to our production schedule.

Titanium carbonize graphitize felt and zinc bromine intellectually so materials or materials are available.

Managing the delivery of those those those.

Those materials to when we to our production schedule and honestly the biggest challenge for us as a team that's been around shipping containers. Yale. This went from a market where you you know they couldnt give you enough of them to you can't find them and you've got advanced by and that's what we're doing just to make sure that we have those on hand, but it's it's like <unk>.

Speaker 4: And honestly, like the biggest challenge for us as a team has been around shipping containers, y'all. This went from...

Speaker 4: a market where you know they couldn't give you enough of them to you can't find them and you've got to advance buy and that's what we're doing just to make sure that we have those on hand but it's you know it's like everyone else you know you're dealing with

Everyone else youre dealing with the port issues and that's that's the one thing one of two parts that we import that we just have to manage the timing on when they arrive and getting into the factory, but it's a day by day and you need to be in the details. We did production calls on a daily basis to figure out what's happening and then you chase them down and try to get better just to keep the material flowing into the.

Speaker 4: the poor issues and that's the one thing, you know, one of two parts that we import, that we just have to manage the timing on when they arrive and getting into the factory. But it's a day by day, you need to be in the details, we do production calls on a daily basis to figure out what's happening and then you chase them down and try to get better just to keep the material flowing into the factory.

Factory.

Speaker 12: Okay. And my last question on the software side, I thought I heard in the call that you're seeing some improvement and efficiency as a result of...

Okay and my last question on the software side I thought I heard in the call that you see.

Seeing some improvement improvement in efficiency as a result of them.

Improvements in the software could you maybe talk a little bit about that.

Speaker 12: improvements in the software. Could you maybe talk a little bit about the software that you're developing and how that integrates with the customer's software for controlling storage or solar units and using them in conjunction with each other for the example? Yeah, great question Martin. So when we came out and developed our system, so the entire system is on a building block base.

Software that youre, developing and how that integrates with.

The the customer's software sure.

Rolling storage or solar units and using them in conjunction with each other.

Yeah, Great question Mark.

We when we came out and develop their system. So the entire system is its on a building block basis.

Speaker 4: We are DC systems, our software controls the battery modules and the overall

Our D C system, so our software controls the battery modules and the overall container right that software is agnostic to the MFC energy management system that the customer uses and we did that on purpose because we knew coming in as a new entrant and new entrants to market we didn't want.

Speaker 4: That software is agnostic to the EMS, the energy management system that the customer uses. And we did that on purpose.

Speaker 4: because we knew coming in as a new entrance to market, we didn't want to go to customers and say in order to use...

Go to customers and say in order to use our equipment and you have to retrain your workforce on a new.

Speaker 4: Our equipment, you have to retrain your workforce on a new software that they interface with. So we have taken our system and integrated it into multiple EM energy management systems that customers use today.

Software that they interface with so we have we have taken our system and integrated it into multiple energy management systems that customers use today, what we are learning.

Speaker 4: what we are learning on our software today where we're getting performance. If you go back to that chart where I showed batteries off the line in July of last year, batteries off the line in December last year, July of last year, and today, our battery management system is managing that variation that we showed to smooth it out.

On our on our our software today, where we're getting performance. If you go back to that if you think back to that chart, where I showed batteries off the line in <unk>.

July of last year batteries offline in December.

In December last year July of last year and today.

Our our battery management system is managing that variation that we show to smooth it out what we're seeing now is that as we improve upon the manufacturing consistency in first pass yield off the line, we're able to get more performance out of the battery because really the way our system works.

Speaker 9: But we're seeing now is that as we improve upon

Speaker 4: the manufacturing consistency and first pass yield off the line, we're able to get more performance out of the battery because really the way our system works is very simple. The lowest common denominator in the container determines the performance of the container.

Very simple the lowest common denominator in the in the in the container determines the performance of the container. So what we're doing now is seeing that all the work that our engineers have done and our R&D team have done to improve the battery gets better performance and now we are adapting the software to give customers.

Speaker 9: So what we're doing now is seeing that, hey, all the work that our engineers have done and our DTEM have done to improve the battery, gets better performance and now we're adapting the software to give customers those multiple use cases that I talked about so that they can operate the battery any way they want.

So those multiple use cases that I talked about so that they can operate the battery any way they want.

Great. Thank you very much for your time, thanks Martin.

Thank you Lee.

Speaker 2: Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Joe, Mr. Angelo for closing remarks.

Ladies and gentlemen, we have reached the end of the question and answer session. I will now turn the call over to Joe Mr. Angelo for closing remarks.

Speaker 9: So thank you everyone for joining today. You know, extremely exciting time to be part of the company and really, you know.

Thanks.

Thanks, everyone for joining today.

Extremely exciting time to be part of the company and really.

It's very exciting to be either when he goes through our labs here in Edison, where I am today or on the factory floor and Turtle Creek. This as a dedicated workforce that everyday comes in and realizes that we have an opportunity to change the way the world powers itself, making it cleaner and greener as we move forward with our product.

Speaker 9: very exciting, you know, to be either when you go through our labs here in Edison where I am today or on the factory floor in Turtle Creek.

Speaker 4: You know, this is a dedicated workforce that every day comes in and realizes that we have an opportunity to change the way the world powers itself, making it cleaner and greener as we move forward with a product that can deal with the robustness and the real world demand. So we're gonna continue to build a great operating company and look forward to coming back beginning of next year to update you on the fourth quarter and thanks again for listening in.

I can deal with the robustness in the real world demand. So we're going to continue to build a great operating company and look forward to coming back are beginning of next year to update you on the fourth quarter and thanks again for listening in.

Speaker 2: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

Okay.

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Speaker 13: No.

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