Eos Energy Enterprises (EOSE) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our 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 success27% rewritten
2. 02The relatively recent commercialization of our products makes it difficult to evaluate our future prospects
3. 03Failure 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 business35% rewritten
4. 04A decline in lithium prices may result in increased competition from traditional lithium-ion (“Li-ion”) batteries and adversely affect the demand for our products
5. 05Under certain circumstances, our customers can modify or terminate their contractsNew
6. 06As 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
7. 07Our 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
8. 08Changes in accounting principles or their application to us could result in unfavorable accounting charges or effects, which could adversely affect our operating results and prospectsNew
9. 09If our internal controls are found to be ineffective, our results of operations or our stock price may be adversely affectedNew
10. 10The failure or breach of our network or Information Technology ("IT") systems, including as a result of a cybersecurity breach, could affect our sales and operations20% rewritten
11. 11Internal 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 business36% rewritten
12. 12Uncertainty in the development, deployment or use of AI in our products and services, as well as our business more broadly, may adversely affect our business, financial condition, and results of operationsNew
13. 13beneficial to our business, including our efficiency or profitability. Any of the foregoing may adversely affect our business, financial condition, results of operations and prospectsNew
14. 14The 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
15. 15Approximately 420 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”)
16. 16The 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 operations71% rewritten

Risks Related to Our Products and Manufacturing

1. 17We must obtain Underwriters Laboratories ("UL") and other related certifications for our future generations of product
2. 18Compared to traditional Li-ion energy storage technologies, our cells and modules have less power density and may be considered inferior to competitors’ products23% rewritten
3. 19We have limited manufacturing experience and could experience difficulty in 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
4. 20We may experience delays, disruptions, or quality control problems in our manufacturing operations
5. 21A disruption in the operations of our manufacturing facility could have a significant negative impact on our ability to manufacture our productsNew
6. 22Defects 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
7. 23We are heavily dependent on third-party suppliers and contractors. Supply chain issues could adversely affect our operations and financial results
8. 24If 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
9. 25We could incur substantial costs as a result of violations of, or liabilities under, environmental laws
10. 26Increased scrutiny from stakeholders and regulators regarding environmental, social and governance practices and disclosures, including those related to climate change and sustainability, as well as recent U.S. based anti-ESG efforts, could result in additional costs and risks22% rewritten

Risks Related to Our Future Growth

1. 27If 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
2. 28Our growth prospects depend on our ability to capitalize on market opportunities31% rewritten
3. 29If 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 business59% rewritten
4. 30A 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
5. 31Our planned expansion into new geographic markets or new product lines or services could subject us to additional business, financial and competitive risks
6. 32Our 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

Risks Related to Our United States Operations

1. 33Some of our customers receive federal, state and local government incentives for renewable energy solutions. 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 business54% rewritten
2. 34impact on our business, financial condition, and results of operations, which could have a material negative effect on our business and results of operationsNew
3. 35We 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
4. 36We 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
5. 37Changes in tax laws or tax rulings could materially affect our business, financial position and results of operationsNew
6. 38We could be adversely affected by any violations of the FCPA, the U.K. Bribery Act and other foreign anti-bribery laws, as well as violations against export controls and economic embargo regulations

Risks Related to Intellectual Property

1. 39If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, then our business and results of operations could be materially harmed
2. 40Third parties may assert that we are infringing, misappropriating or otherwise violating their intellectual property rights, which could divert management’s attention, cause us to incur significant costs and prevent us from selling or using the technology to which such rights relate

Risks Related to Our Securities

1. 41Under the terms of the Credit Agreement, the SPA and the securities issued thereunder, current stockholders may be subject to significant dilution and the voting power of the currently outstanding common stock could be significantly diluted93% rewritten
2. 42The Certificates of Designation governing the Series B Preferred Stock (the “Series B Certificates of Designation”) contain preemptive rights that permit the holders of Series B Preferred Stock to participate in certain future equity offerings by the CompanyNew
3. 43Provisions in our Charter and Delaware law may have the effect of discouraging lawsuits against our directors and officers
4. 44Provisions 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
5. 45Our stock price may be volatile and may decline regardless of our operating performance
6. 46Short sellers may engage in manipulative activity intended to drive down the market price of our common stock, which has and could in the future result in related governmental and regulatory scrutiny, among other effectsNew
7. 47Future resales of our common stock may cause the market price of our securities to drop significantly, even if our business is doing well
8. 48We 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
9. 49We 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