EOSE

MKT CAP $630MP/E —DIV YIELD —FCF YIELD -66.70%REV TTM $214.2M +533.9%NET INCOME −$528.7MNET DEBT $311.6M52W 1.68 – 19.19SEC XBRL · TTM TO Invalid Date

How EOSE rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Risks Related to Our Business and Industry • Our history of losses puts the onus on us to deliver on our potential for significant business growth and to improve our manufacturing processes to achieve sustained, long-term profitability and commercial success. • The relatively recent commercialization of our products makes it difficult to evaluate our prospects. • Failure to deliver the benefits offered by our technologies, or the emergence of improvements to competing technologies, could reduce demand for our products and harm our business. • As we endeavor to expand our business, we will incur significant costs and expenses, which could outpace our cash reserves.
Unfavorable conditions or disruptions in the capital and credit markets may adversely impact business conditions and the availability of credit. • Our success depends on the continuing contributions of our key personnel, and the loss of services of any principal member of our management team could adversely affect our business. • Labor disputes could disrupt our ability to serve our customers and/or lead to higher labor costs. • The imposition of tariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries may impact our revenue and results of operations.
Risks Related to Our Products and Manufacturing • Compared to traditional Li-ion energy storage technologies, our cells and modules have less power density and may be considered inferior to competitors’ products. • We have limited manufacturing experience and could experience difficulty producing commercial volumes of the battery storage system, establishing manufacturing capacity to scale and in meeting potential cost savings and efficiencies from anticipated improvements to our manufacturing capabilities. • We may experience delays, disruptions, or quality control problems in our manufacturing operations. • A disruption in the operations of our manufacturing facility could have a significant negative impact on our ability to manufacture our products. • We may not have sufficient insurance coverage to cover business continuity. • Defects or performance problems in our products could result in loss of customers, reputational damage and decreased revenue, facing warranty, indemnity and product liability claims that may arise from defective products. • We are heavily dependent on third-party suppliers and contractors.
Supply chain issues could adversely affect our operations and financial results. • If we elect to expand our production capacity by constructing one or more new manufacturing facilities, we may encounter challenges relating to the construction, management and operation of such facilities.
Risks Related to Our Future Growth • If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, or adequately address competitive challenges. • Our growth prospects depend on our ability to capitalize on market opportunities. • If we fail to meet the covenants in either the DOE Loan Facility or the Credit Agreement, we may be subject to default under the credit facilities, which could have a material adverse effect on our business. • The Company may need to seek alternative sources of capital, or risk its ability to continue operations, in the event it fails to meet a funding condition under the terms of the DOE Loan Facility or in the event that the government enacts laws and governmental regulations that could affect the availability of funding under the DOE Loan Facility. • A substantial number of shares of the Company’s common stock that are issuable upon the exercise or conversion of securities issued under the Credit Agreement and the SPA are subject to a contractual lockup. • Our results of operations may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of our common stock.
The reduction, elimination or expiration of government subsidies and economic incentives related to renewable energy solutions could reduce demand for our technologies and harm our business. • We have operations in the United States, which exposes us to multiple federal, state and local regulations. • Changes in applicable law, regulations or requirements, or our material failure to comply with any of them, can increase our costs and have other negative impacts on our business.
Future issuances of our common stock, including common stock that may be issuable pursuant to outstanding warrants or other convertible securities, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. • Our stock price may be volatile and may decline regardless of our operating performance. • Future resales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well. • We do not intend to pay dividends on our common stock in the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock. • We are a “smaller reporting company” and, because we have opted to use the reduced reporting requirements available to us, certain investors may find investing in our securities less attractive.
Risks Related to Our Business and Industry Our history of losses puts the onus on us to deliver on our potential for significant business growth and to improve our manufacturing processes to achieve sustained, long-term profitability and commercial success.
We have had net losses and negative operating cash flows each fiscal year since inception of our business.
For the years ended December 31, 2025 and 2024, we had $969.6 million and $685.9 million in net losses, respectively.
Although our available capital has increased substantially through the issuance of convertible notes and other financing, we continue to have limited resources relative to certain of our competitors, especially certain Li-ion manufacturers that have a longer history, are part of large multinational corporations and are already operating at a profit.
While, in order to execute our development strategy, we have historically relied on outside capital through the issuance of equity, debt, and borrowings under financing arrangements (collectively “outside capital”) to fund our cost structure.
Moving forward, our primary objective is to achieve a scale of operations that generates sufficient internal cash flow to sustain our business and eliminate our historical reliance on outside capital.
While we intend to reach and maintain profitability, there can be no assurance we will be able to achieve such profitability or do so in a manner that does not require our continued reliance on outside capital.
Additionally, our competitors may lower their sales prices in response to market competition.
Some competitors, particularly in China, may have lower operating expenses due to greater vertical integration and supportive regulatory frameworks, allowing them to operate with minimal or even negative margins over time.
This has hindered and may in the future hinder our ability to compete in certain markets, which may lead to reduced net sales and negatively impact our operating results.
In response to such competitive pressures, we may also choose to adjust our pricing strategy in certain markets or reduce our margin expectations, which could further affect our financial performance.
Under certain circumstances, our customers can modify or terminate their contracts.
We have ongoing arrangements with our customers and target customers.
Some of these arrangements are evidenced by early-stage agreements that are intended to be used to memorialize desired development with a party but will require renegotiation at later stages of development or production or more definitive agreements that have yet to be negotiated or executed, each of which may or may not materialize into next-stage contracts or long-term contract partnership arrangements.
If these arrangements are modified or terminated or if we are unable to enter into next-stage contracts or long-term operational contracts, our business, prospects, financial condition, and operating results may be materially adversely affected.
Modifications or termination of our existing contracts may also directly impact our business, prospects and financial condition, including by reducing backlog by significant amounts.
Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our operating results and prospects.
We prepare our financial statements in accordance with accounting principles generally accepted in the United States.
The accounting for our business is subject to change based on the evolution of our business model, interpretations of relevant accounting principles, enforcement of existing or new regulations, and changes in policies, rules, regulations, and interpretations, of accounting and financial reporting requirements of the SEC or other regulatory agencies.
A change in any of these principles or guidance, or in their interpretations or application to us, may have a significant effect on our reported results, as well as our processes and related controls, and may retroactively affect previously reported results.
The adoption of new or revised accounting principles may require us to make changes to our systems, processes and internal controls, which could have a significant effect on our reported financial results and internal controls, cause unexpected financial reporting fluctuations, retroactively affect previously reported results or require us to make costly changes to our operational processes and accounting systems upon our following the adoption of these standards.
Any of these results could adversely affect our business.
If our internal controls are found to be ineffective, our results of operations or our stock price may be adversely affected.
Our most recent evaluation resulted in our conclusion that, as of December 31, 2025, our internal controls over financial reporting were effective.
We believe that we currently have adequate internal control procedures in place for future periods.
However, if our internal control over financial reporting is found to be ineffective, investors may lose confidence in the reliability of our financial statements, which may adversely affect our results of operations or stock price.
The failure or breach of our network or Information Technology ("IT") systems, including as a result of a cybersecurity breach, could affect our sales and operations.
To date, no attempts to gain unauthorized access to our network or IT systems have resulted in any material adverse impact to our business or operations; however, there can be no guarantee that such intrusions will not be material in the future.
While we seek to detect and investigate all unauthorized attempts and attacks against our IT systems, network and products, and to prevent their recurrence where practicable through changes to our internal processes and tools and/or changes to our products, we remain potentially vulnerable to additional known or unknown threats, such as, among other things, malware and computer virus attacks, ransomware attacks, social engineering attacks (including phishing attacks), credential stuffing, terrorist attacks, civil unrest, military conflict, supply chain attacks, or denial-of-service attacks.
In addition to intentional third-party cybersecurity breaches, the integrity and confidentiality of Company and customer data may be compromised as a result of human error, fraud or malice on the part of our employees or third parties, product defects, software bugs, programming errors, design flaws, server malfunctions, software or hardware failure or other technological failures, or bad weather or natural disasters.
Such threats are evolving, may be difficult for long periods of time, and may see their frequency increased and effectiveness enhanced by the use of AI.
Any integration of AI in our or any third-party providers’ operations, products or services is expected to pose new or unknown cybersecurity risks and challenges.
Further, cybersecurity risks may be heightened in connection with ongoing global conflicts such as the military conflict between Russia and Ukraine and the military conflict between Israel and Hamas.

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Gone since FY2024

Risks Related to Our Business and Industry We have a history of losses that casts substantial doubt as to our ability to continue as a going concern.
We must deliver on our potential for significant business growth and improved manufacturing processes to achieve sustained, long-term profitability and long-term commercial success. • The relatively recent commercialization of our products makes it difficult to evaluate our prospects. • Failure to deliver the benefits offered by our technologies, or the emergence of improvements to competing technologies, could reduce demand for our products and harm our business. • A decline in lithium prices may result in increased competition from traditional lithium-ion batteries and adversely affect the demand for our products. • As we endeavor to expand our business, we will incur significant costs and expenses, which could outpace our cash reserves.
Unfavorable conditions or disruptions in the capital and credit markets may adversely impact business conditions and the availability of credit. • Our success depends on the continuing contributions of our key personnel, and the loss of services of any principal member of our management team could adversely affect our business. • The failure or breach of our network or IT systems, including as a result of a cybersecurity breach, could affect our sales and operations. • Internal system or service failures, or failures in the systems or services of third parties on which we rely, could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our business. • The nature of our business exposes us to potential legal proceedings or claims that could adversely affect our operating results.
These claims could conceivably exceed the level of our liability insurance coverage. • Labor disputes could disrupt our ability to serve our customers and/or lead to higher labor costs. • The imposition of tariffs, sanctions, restrictions on imports or other trade barriers between the United States and various countries may impact our revenue and results of operations.
Risks Related to Our Products and Manufacturing • We must obtain Underwriters Laboratories and other related certifications for our future generations of our products. • Compared to traditional Li-ion energy storage technologies, our cells and modules have less power density and round trip efficiency and may be considered inferior to competitors’ products. • We have limited manufacturing experience and could experience difficulty producing commercial volumes of the battery storage system, establishing manufacturing capacity to scale and in meeting potential cost savings and efficiencies from anticipated improvements to our manufacturing capabilities. • We may experience delays, disruptions, or quality control problems in our manufacturing operations. • We may not have sufficient insurance coverage to cover business continuity. • Defects or performance problems in our products could result in loss of customers, reputational damage, and decreased revenue, facing warranty, indemnity, and product liability claims that may arise from defective products. • We are heavily dependent on third-party suppliers and contractors.
Supply chain issues could adversely affect our operations and financial results. • If we elect to expand our production capacity by constructing additional manufacturing facilities, we may encounter challenges relating to the construction, management and operation of such facilities. • We could incur substantial costs as a result of violations of, or liabilities under, environmental laws. • Increased scrutiny from stakeholders and regulators regarding ESG practices and disclosures, including those related to sustainability and related disclosures could result in additional costs and risks.
Risks Related to Our Future Growth • If we fail to manage our recent and future growth effectively, we may be unable to execute our business plan, maintain high levels of customer service, or adequately address competitive challenges. • Our growth prospects depend on our ability to capitalize on market opportunities. • If we fail to meet the covenants in either the DOE Loan Facility or the Credit Agreement, we may be subject to default under the credit facilities, which could have a material adverse effect on our business. • The Company may need to seek alternative sources of capital, or risk its ability to continue operations, in the event it fails to meet a funding condition under the terms of the DOE Loan Facility or in the event that the government enacts laws and governmental regulations that could affect the availability of funding under the DOE Loan Facility. • A substantial number of shares of the Company’s common stock that are issuable upon the exercise or conversion of securities issued or issuable under the Credit Agreement and the SPA are subject to a contractual lockup. • Our planned expansion into new geographic markets or new product lines or services could subject us to additional business, financial, and competitive risks. • Our results of operations may fluctuate from quarter to quarter, which could make our future performance difficult to predict and could cause our results of operations for a particular period to fall below expectations, resulting in a decline in the price of our common stock.
The reduction, elimination or expiration of government subsidies and economic incentives related to renewable energy solutions could reduce demand for our technologies and harm our business. • We have operations in the United States, which exposes us to multiple federal, state and local regulations. • Changes in applicable law, regulations or requirements, or our material failure to comply with any of them, can increase our costs and have other negative impacts on our business. • We are subject to complex and evolving laws, regulations, rules, standards and contractual obligations regarding data privacy and cybersecurity, which could increase the cost of doing business, compliance risks and potential liability. • We could be adversely affected by any violations of the FCPA, the U.K.
Future issuances of our common stock, including common stock that may be issuable pursuant to outstanding warrants or other convertible securities, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. • Provisions in our third amended and restated certificate of incorporation of the Company (the “Charter”) and Delaware law may have the effect of discouraging lawsuits against our directors and officers. • Provisions in our Charter may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management. • Our stock price may be volatile and may decline regardless of our operating performance. • Future resales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well. • We do not intend to pay dividends on our common stock in the foreseeable future and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock. • We are a “smaller reporting company” and, because we have opted to use the reduced reporting requirements available to us, certain investors may find investing in our securities less attractive.
We must deliver on our potential for significant business growth and improved manufacturing processes to achieve sustained, long-term profitability and long-term commercial success.
We have had net losses and negative operating cash flows each fiscal quarter since inception of our business.
For the years ended December 31, 2024 and 2023, we had $685.9 million and $229.5 million in net losses, respectively.
For the fiscal year ended December 31, 2024, the Company concluded that there was substantial doubt about its ability to continue to operate as a going concern for the 12 months following the issuance of these Consolidated Financial Statements.
Although our available capital has increased substantially since our Merger through the issuance of convertible notes and other financing, we continue to have limited resources relative to certain of our competitors, especially certain Li-ion manufacturers that have a longer history, are part of large multinational corporations and are already operating at a profit.
In order to execute our development strategy, we have historically relied on outside capital through the issuance of equity, debt, and borrowings under financing arrangements (collectively “outside capital”) to fund our cost structure and expect to continue to rely on outside capital for the foreseeable future.
While we believe we will eventually reach a scale of profitability to sustain our operations, there can be no assurance we will be able to achieve such profitability or do so in a manner that does not require our continued reliance on outside capital.
The failure or breach of our network or IT systems, including as a result of a cybersecurity breach, could affect our sales and operations.
To date, no attempts have resulted in any material adverse impact to our business or operations; however, there can be no guarantee that such intrusions will not be material in the future.
While we seek to detect and investigate all unauthorized attempts and attacks against our network and products, and to prevent their recurrence where practicable through changes to our internal processes and tools and/or changes to our products, we remain potentially vulnerable to additional known or unknown threats, such as, among other things, malware and computer virus attacks, ransomware attacks, social engineering attacks (including phishing attacks) or denial-of-service attacks.
In addition to intentional third-party cybersecurity breaches, the integrity and confidentiality of Company and customer data may be compromised as a result of human error, fraud or malice on the part of our employees or third parties, product defects, software bugs, server malfunctions, software or hardware failure or other technological failures.
Such threats are evolving, may be difficult for long periods of time, and may see their frequency increased and effectiveness enhanced by the use of artificial intelligence.
Further, these risks may be heightened in connection with ongoing global conflicts such as the military conflict between Russia and Ukraine and the military conflict between Israel and Hamas.
Cybersecurity breaches, whether successful or unsuccessful, and other IT system interruptions, including those resulting from human error and technological failures, could result in us incurring significant costs related to, for example, rebuilding internal systems, reduced inventory value, providing modifications to our products and services, defending against litigation, responding to regulatory inquiries or actions, paying damages, or taking other remedial steps with respect to third parties.
We operate a few IT systems throughout our business that could fail for a variety of reasons, including the threats of unauthorized intrusions and attackers.
Furthermore, because our IT systems are essential for the exchange of information both internally and in communicating with third parties, including our suppliers and manufacturers, cybersecurity breaches could potentially lead to the unauthorized release of sensitive, confidential or personal data or information, improper use of our systems, or, unauthorized access, use, disclosure, modification or destruction of information or defective products.
We, and the service providers on which we rely, are also subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, cybersecurity threats, malicious insiders, natural disasters, power shortages, terrorist attacks, pandemics or other events, which could cause loss of data and interruptions or delays in our business, cause us to incur remediation costs, subject us to claims and damage our reputation.
As of December 31, 2024, we have 430 full-time employees.
Approximately 160 production and maintenance employees at our facilities in Turtle Creek and East Pittsburgh, Pennsylvania are represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC (“USW”).
The current political landscape has introduced significant uncertainty with respect to future trade regulations and existing international trade agreements.
The new, substantial tariff increases on imports to the United States from Canada, Mexico and China announced on February 1, 2025, or other tariffs should they be implemented and sustained for an extended period of time, could have a significant adverse effect, including financial, on the overall energy storage solutions industry, us, and our supply chain.
Further, retaliatory tariffs imposed by other governments would exacerbate the impact.
The Company sources approximately 15% of parts, products or materials from Canada and Mexico.
As long as such tariffs are in effect, we expect that the costs of such parts, products and materials would increase.
Our existing generation of battery systems has received Underwriters Laboratories ("UL") 1973 certification and has been tested for UL 9540A.
Compared to traditional Li-ion energy storage technologies, our cells and modules have less power density and round trip efficiency and may be considered inferior to competitors’ products.
While the energy density of the Eos Z3™ battery enclosure product is significantly improved compared to the Eos Gen 2.3 enclosure product, and we believe that for certain installation sites the Eos Z3 systems may now equal Li-ion energy density per acre of land, traditional Li-ion cells and modules continue to offer higher power density and a lower self-discharge rate than Eos cells and modules.
The differences in power density and energy efficiency become lower when comparing full size Li-ion systems to Eos Z3 systems due to the differences in auxiliary loads required by Li-ion systems and safety spacing between enclosures required by Li-ion, however, if customers were to place greater value on power density and efficient power delivery on a cell and module basis, then we could have difficulty positioning our batteries as a viable or compelling alternative to traditional Li-ion batteries and our business would suffer.
To date, we have only manufactured batteries in limited quantities for commercial customers.
We may not have sufficient insurance coverage to cover business continuity.
We rely on a single manufacturing site in Turtle Creek, Pennsylvania to manufacture the products to our customers.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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