FORM 10-Q Delaware (I.R.S. Employer Identification No.) reverse capitalization given effect herein Summary of Significant Accounting Policies Common and Preferred Units. vesting period. The thereto. Information May Prove Inaccurate Pursuant to the Merger Agreement, (1) Merger Sub I merged with and into Newco (the “First Merger”), whereupon the separate existence of Merger Sub I ceased, and Newco continued as the surviving company (such company, in its capacity as the surviving company of the First Merger, is sometimes referred to as the “First Surviving Company”) and became our wholly owned subsidiary; and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the First Surviving Company merged with and into Merger Sub II, whereupon the separate existence of the First Surviving Company ceased, and Merger Sub II continued as the surviving company and our wholly owned subsidiary. the convertible notes upon either a qualified financing event or the note holders’ put exercise. For the three months ended March 31, 2020, Procedures Factors Information 601(a)(5). The reference. Joe Mastrangelo DirectorxQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 2020OroTRANSITION REPORT PURSUANT TO SECTION 13 2021 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 File Numberfile number 001-39291B. RILEY PRINCIPAL MERGER CORP. II
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)Delaware84-429018808-7654321 (State or Other Jurisdictionother jurisdiction ofIncorporation incorporation or Organization)2993920 Park Avenue 21st FloorNew York, New YorkEdison 1017108820 (Address of Principal Executive Offices) (Zip Code) (212) 457-3300(Registrant’scode)codeTitle of each class Trading Symbol(s) Name of each exchange on which registered Common stock, par value $0.0001 per share EOSE The Nasdaq Stock Market LLC Warrants, each exercisable for one share of common stock EOSEW The Nasdaq Stock Market LLC ,; and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐o☒x No ☐o company or an emerging growth company. See the definitions of “large accelerated filer”,filer,” “accelerated filer,”filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer☐Accelerated filer☐Non-accelerated filer☒Smaller reporting company☒Emerging growth company☒Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company x Emerging growth company x ☐oExchange Act). Yes ☒o No ☐Securities registered pursuant12(b)12, 13 or 15(d) of the Act:Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes x NoTitle of each classTrading Symbol(s)Name of each exchange on which registeredUnits, each consisting of one share of Class A common stock and one-half of one redeemable warrantBMRG.UThe New York Stock ExchangeClass A common stock, par value $0.0001 per shareBMRGThe New York Stock ExchangeWarrants, each whole warrant exercisable to purchase one share of Class A common stock, each at an exercise price of $11.50 per shareBMRG WSThe New York Stock ExchangeAs of June 24, 2020, there were 18,150,000 shares of the registrant’s Class A common stock, par value $0.0001 per share, and 5,031,250 shares of the registrant’s Class B common stock, par value $0.0001 per share, outstanding.B. Riley Principal Merger Corp. IIQuarterly Report on Form 10-QPage Item 1. as of As Of March 31, 2021 (Unaudited) And December 31, 2020 and December 31, 2019 (Unaudited)12345Item 2.12Item 3. 14Item 4.1a.Controls and ProceduresRisk Factors14Item 1.Legal Proceedings15Item 1A.Risk Factors15Item 2. 151616161617iMarch 31,
2021December 31,
2020ASSETS Current assets Cash and cash equivalents $ 100,717 $ 121,853 Grants receivable 131 131 Accounts receivable 184 0 Inventory 92 214 Vendor deposits 4,144 2,390 Notes receivable 33 0 Prepaid and other current assets 2,090 2,779 Total current assets 107,391 127,367 Property and equipment, net 7,995 5,653 Intangible assets, net 310 320 Investment in joint venture 8,176 3,736 Security deposits 805 825 Notes receivable, long term 2,908 100 Other assets 215 263 Total assets $ 127,800 $ 138,264 LIABILITIES AND MEMBERS EQUITY (DEFICIT) Current liabilities Accounts payable and accrued expenses $ 8,939 $ 8,471 Accounts payable and accrued expenses - related parties 11,236 2,517 Provision for firm purchase commitments 0 1,585 Capital lease, current portion 11 11 Long-term debt, current portion 1,176 924 Contract liabilities 827 77 Total current liabilities 22,189 13,585 Long term liabilities Deferred rent 773 762 Capital lease 1 4 Long-term debt 105 427 Warrants liability 2,925 2,701 Total long term liabilities 3,804 3,894 Total liabilities 25,993 17,479 COMMITMENTS AND CONTINGENCIES (NOTE 8) SHAREHOLDERS' EQUITY Common Stock, $0.0001 par value, 200,000,000 shares authorized, 51,801,267 and 48,943,082 shares outstanding at March 31, 2021 and December 31, 2020, respectively 5 5 Contingently Issuable Common Stock 0 17,600 Preferred stock, $0.0001 par value, 1,000,000 shares authorized, 0 shares outstanding at March 31, 2021 and December 31, 2020 0 0 Additional paid in capital 415,569 395,491 Accumulated deficit (313,767) (292,311) Total shareholders' equity 101,807 120,785 Total liabilities and shareholders’ equity $ 127,800 $ 138,264 B. RILEY PRINCIPAL MERGER CORP. IICondensed Balance Sheets March 31, December 31, 2020 2019 (Unaudited) Assets Current assets: Cash $ 14,894 $ — Due from related party 1 1 Total current assets 14,895 1 Deferred offering costs 70,000 — Total assets $ 84,895 $ 1 Liabilities and Stockholder's Deficit Current liabilities: Accounts payable and accrued offering costs $ 35,626 $ 278 Note payable - related party 50,000 — Total liabilities 85,626 278 Stockholder's deficit: Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding — — Class A Common stock, $0.0001 par value; 100,000,000 shares authorized; none issued and outstanding issued and outstanding as of March 31, 2020 and December 31, 2019, respectively. — — Class B Common stock, $0.0001 par value; 25,000,000 shares authorized; 5,750,000 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively. 575 575 Additional paid-in capital — — Accumulated deficit (1,306 ) (852 ) Total stockholder's deficit (731 ) (277 ) Total liabilities and stockholder's deficit $ 84,895 $ 1 1B. RILEY PRINCIPAL MERGER CORP. IICondensed StatementTable of Operations(Unaudited) Three Months Ended March 31,
2020 Formation, general and administrative expenses $ 454 Net loss $ 454 Basic loss per share $ 0.00 Diluted loss per share $ 0.00 Weighted average basic shares outstanding (1) 5,000,000 Weighted average diluted shares outstanding (1) 5,000,000 (1)Excludes an aggregate of 750,000 shares that are subject to forfeiture toextent that the underwriter’s over-allotment is not exercised in full (Note 4). On February 3,three months ended March 31, 2021 and 2020 the Company conducted a 1:575 stock split and reclassification for each share outstanding (Note 4). March 31,
2021March 31,
2020Revenue Total revenue $ 164 $ 0 Costs and expenses Cost of goods sold 100 57 Research and development expenses 5,053 2,230 General and administrative expenses 16,654 2,359 Grant expense, net 8 346 Total costs and expenses 21,815 4,992 Operating loss (21,651) (4,992) Other income (expense) Interest expense, net (21) (95) Interest expense related party 0 (3,715) Change in fair value, embedded derivative 0 (515) Change in fair value, warrants liability (224) 0 Income (loss) from equity in unconsolidated joint venture 440 (31) Net loss $ (21,456) $ (9,348) Basic and diluted loss per share attributable to common shareholders1 Basic $ (0.42) $ (2.38) Diluted $ (0.42) $ (2.38) Weighted average shares of Common Stock2 Basic 51,126,863 3,930,336 Diluted 51,126,863 3,930,336 B. RILEY PRINCIPAL MERGER CORP. IICondensed StatementChanges in Stockholder’s Deficit(Unaudited) Additional Total Class B Common Stock Paid-in Accumulated Stockholder's Shares (1) Amount Capital Deficit Deficit Balance, January 1, 2020 5,750,000 $ 575 $ — $ (852 ) $ (277 ) Net loss — — — (454 ) (454 ) Balance, March 31, 2020 5,750,000 $ 575 $ — $ (1,306 ) $ (731 ) (1)Includes an aggregate of 750,000 shares that are subject to forfeiture toextent that the underwriter’s over-allotment is not exercised in full (Note 4). On February 3,three months ended March 31, 2021 and 2020 the Company conducted a 1:575 stock split and reclassification for each share outstanding (Note 4).Common Stock3 Additional Contingently Accumulated Total Shares Amount Paid in capital Issuable Common Stock Deficit Balance, December 31, 2019 3,930,336 $ 0 $ 20,346 $ 0 $ (204,068) $ (183,722) Stock-based compensation — 19 — — 19 Net loss — — — — (9,348) (9,348) Balance, March 31, 2020 3,930,336 $ 0 $ 20,365 $ 0 $ (213,416) $ (193,051) Balance, December 31, 2020 48,943,082�� $ 5 $ 395,491 $ 17,600 $ (292,311) $ 120,785 Stock-based compensation — — 2,478 — — 2,478 Release of Block B Sponsor Earnout Shares from restriction4 859,000 — — — — — 1,999,185 — 17,600 (17,600) — 0 Net loss — — — — (21,456) (21,456) 51,801,267 $ 5 $ 415,569 $ 0 $ (313,767) $ 101,807 3B. RILEY PRINCIPAL MERGER CORP. IICondensed StatementCash Flows(Unaudited) Three Months Ended March 31,
2020 Cash flows from operating activities: Net loss $ (454 ) Adjustments to reconcile net loss to net cash used in operating activities: Increase in deferred offering costs (70,000 ) Increase in accounts payable and accrued offering costs 35,348 Net cash used in operating activities (35,106 ) Cash flows from financing activities: Proceeds from note payable - related party 50,000 Net cash provided by financing activities 50,000 Increase in cash 14,894 Cash, beginning of year — Cash, end of period $ 14,894 Supplemental disclosures: Interest paid $ — Taxes paid $ — March 31, 2021 March 31, 2020 Cash flows from operating activities Net loss $ (21,456) $ (9,348) Adjustment to reconcile net loss to net cash used in operating activities Stock-based compensation 2,478 19 Depreciation and amortization 485 365 Loss from disposal of property and equipment 11 0 Provision for firm purchase commitments (1,585) 0 Loss (income) from equity in unconsolidated joint venture (440) 31 Accreted interest on convertible notes payable related party 0 3,715 Change in fair value, embedded derivative 0 515 Change in fair value, warrants liability 224 0 Changes in operating assets and liabilities: Receivable on sale of state tax attributes 0 2,488 Prepaid and other assets 718 302 Inventory 122 0 Accounts receivable (184) (66) Vendor deposits (466) (239) Security deposits 20 28 Accounts payable and accrued expenses 843 1,254 Accounts payable and accrued expenses-related parties 8,719 705 Contract liabilities 750 (116) Deferred rent 11 29 Other assets 47 (3) Net cash used in operating activities (9,703) (321) Cash flows from investing activities Investment in notes receivable (2,870) 0 Investment in joint venture (4,000) (221) Purchases of property and equipment (4,490) (1,358) Net cash used in investing activities (11,360) (1,579) Cash flows from financing activities Capital lease payments (3) (8) Proceeds from issuance of convertible notes payable related party 0 1,407 Repayment of other financing (70) 0 Issuance of contingently redeemable preferred units 0 258 Net cash provided by (used in) financing activities (73) 1,657 Net decrease in cash and cash equivalents (21,136) (243) Cash and cash equivalents, beginning of year 121,853 862 Cash and cash equivalents, end of the period $ 100,717 $ 619 Non-cash investing and financing activities Accrued and unpaid capital expenditures $ 0 $ 23 Supplemental disclosures Cash paid for interest 51 95 B. RILEY PRINCIPAL MERGER CORP. IINOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTSNOTE 1—ORGANIZATION AND NATURE OF BUSINESS OPERATIONSOrganizationGeneralIIII) (the “Company” or "Eos"), designs, develops, manufactures, and sells innovative energy storage solutions for the electric utilities, and commercial and industrial end users. Eos has developed and has received patents on an innovative battery design relying on a blank check company,unique zinc oxidation/reduction cycle to generate output current and to recharge. The Battery Management System (“BMS”) software uses proprietary Eos-developed algorithms and includes ambient and battery temperature sensors, as well as voltage and current sensors for the strings and the system. Eos and its partners focus on a collaborative approach to jointly develop and sell safe, reliable, long-lasting low-cost turn-key alternating current (“AC”) integrated systems using Eos’s direct current (“DC”) Battery System. The Company is also an investor in an unconsolidated joint venture (“JV”) which has the exclusive rights to manufacture the DC Battery Systems integrated with the BMS for DC Battery Systems that are sold and delivered in North America, subject to meeting certain performance targets. The Company’s primary markets focus on integrating battery storage solutions with (1) solar systems that are connected to the utility power grid (2) solar systems that are not connected to the utility power grid (3) storage systems utilized to relieve congestion and (4) storage systems to assist commercial and industrial customers in reducing their peak energy usage or participating in the utilities ancillary and demand response markets. The location of the Company’s major markets are seen in North America, Europe, Africa, and Asia.2019. The Company is an emerging growth2019 as a publicly held special purpose acquisition company as defined(“SPAC”) in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company was formed for the purpose of effectingorder to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “Initial Business Combination”businesses. On November 16, 2020 (the" Merger Date").As of March 31, 2020,, the Company had not commenced any operations. All activity of the Company includes the activity of the Company from inception and activity relatedconsummated a reverse recapitalization (the "Merger") pursuant to the initial public offering (the “Public Offering”) described below. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering described below. The Company has selected December 31st as its fiscal year end.Public OfferingThe Company completed the sale of 17,500,000 units (the “Units”) at an offering price of $10.00 per Unit in the Public Offering on May 22, 2020.which B. Riley Principal Sponsor Co.Merger Corp. II ("BMRG") acquired Eos Energy Storage LLC pursuant to an agreement and plan for merger (the “Sponsor”“Merger Agreement”), between the Company, BMRG Merger Sub, LLC, our wholly-owned subsidiary and a Delaware limited liability company and a(“Merger Sub I”), BMRG Merger Sub II, LLC, our wholly-owned indirect subsidiary of B. Riley Financial, Inc. (“B. Riley Financial”), purchased an aggregate of 650,000 Units at a price of $10.00 per Unit (the “Private Placement Units”) in a private placement that closed on May 22, 2020 simultaneously with the Public Offering. The sale of the 17,500,000 Units in the Public Offering (the “Public Units”) generated gross proceeds of $175,000,000, less underwriting commissions of $3,500,000 (2% of the gross proceeds of the Public Offering) and other offering costs of $561,189. The Private Placement Units generated $6,500,000 of gross proceeds.Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value (each a “public share”), and one-half of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock (each, a “Warrant” and, with respect to the warrants underlying the Private Placement Units, the “Private Placement Warrants” and, collectively, the “Warrants”). One Warrant entitles the holder thereof to purchase one whole share of Class A common stock at a price of $11.50 per share.The Company has also granted the underwriters a 45-day option to purchase up to 2,625,000 additional Units at the Public Offering price less the underwriting discounts.On May 28, 2020, the underwriters confirmed that they will not be exercising their over-allotment option in whole or in part.Sponsor and Note Payable - Related PartyOn February 4, 2020, the Sponsor agreed to loan the Company up to $300,000 (see Note 3) to support the Company’s initial formation and operations. At March 31, 2020, the Note Payable balance was $50,000. On April 21, 2020, the Company borrowed an additional $50,000 which increased the Note Payable balance to $100,000 which was paid in full using proceeds from the Public Offering and the Private Placement.The Trust AccountUpon completion of the Public Offering, $176,750,000 of proceeds were held in the Company’s trust account at J.P. Morgan Chase Bank, N.A., with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”) and will be invested in permitted United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended, which we refer to as the Investment Company Act, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act that invest only in direct U.S. government treasury obligations.. Unless and until the Company completes the Initial Business Combination, it may pay its expenses only from the net proceeds of the Public Offering and the Private Placement held outside the Trust Account, which was $1,284,805 on May 22, 2020, of which $100,000 was used to pay the Note Payable to Sponsor and $523,135 was used to pay the offering costs.Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its taxes, the proceeds from the Public Offering may not be released from the Trust Account until the earliest of: (i) the completion of the Initial Business Combination; (ii) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation to modify the substance or timing of the Company’s obligation to redeem 100% of its public shares if it does not complete the Initial Business Combination by November 22, 2021, 18 months from the closing of the Public Offering; or (iii) the redemption of all of the Company’s public shares if the Company is unable to complete the Initial Business Combination by November 22, 2021, 18 months from the closing of the Public Offering (at which such time up to $100,000 of interest shall be available to the Company to pay dissolution expenses), subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the holders of the Company’s public shares (the “public stockholders”).5Initial Business CombinationThe Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, although substantially all of the net proceeds of the Public Offering and the Private Placement are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more businesses or assets with a fair market value equal to at least 80% of the assets held in the Trust Account. There is no assurance that the Company will be able to successfully effect an Initial Business Combination.The Company will provide its public stockholders with the opportunity to redeem all or a portion of their shares upon the completion of the Initial Business Combination, either (i) in connection with a stockholder meeting called to approve the business combination or (ii) by means of a tender offer. However, in no event will the Company redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001.If the Company holds a stockholder meeting to approve the Initial Business Combination, a public stockholder will have the right to redeem its public shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of Class A common stock have been recorded at redemption amount and classified as temporary equity upon the completion of the Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity.”Pursuant to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete the Initial Business Combination by November 22, 2021, 18 months from the closing of the Public Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete the Initial Business Combination within 18 months of the closing of the Public Offering.The Sponsor and the Company’s officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Placement Shares (as defined below) held by them if the Company fails to complete the Initial Business Combination within 18 months of the closing of the Public Offering. However, if the Sponsor or any of the Company’s directors or officers acquires shares of Class A common stock in or after the Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such public shares if the Company fails to complete the Initial Business Combination within the prescribed time period.In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s remaining stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or other subscription rights. The Company will provide its stockholders with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, under the circumstances, and, subject to the limitations, described herein.Letter AgreementThe Company’s Sponsor, officers and directors have entered into a letter agreement with the Company, pursuant to which they have agreed, among other things (a) to waive their redemption rights with respect to any Founder Shares, Private Placement Shares and any Public Shares held by them in connection with the completion of the Initial Business Combination, (b) to waive their redemption rights with respect to their Founder Shares, Private Placement Shares and public shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation to modify the substance or timing of its obligation to redeem 100% of its public shares if it does not complete an Initial Business Combination within 18 months from the closing of the Public Offering and (c) to vote their Founder Shares and any Public Shares purchased during or after the Public Offering (including in open market and privately negotiated transactions) in favor of the Initial Business Combination.6Forward Purchase AgreementB. Riley Principal Investments, LLC (“BRPI”), a Delaware limited liability company an affiliate(“Merger Sub II”), Eos Energy Storage LLC, a Delaware limited liability company (“EES”), New Eos Energy LLC, a wholly-owned subsidiary of EES and a Delaware limited liability company (“Newco”) and AltEnergy Storage VI, LLC, a Delaware limited liability company (“AltEnergy”).Sponsor enteredFirst Merger, is sometimes referred to as the “First Surviving Company”) and became our wholly owned subsidiary; and (2) immediately following the First Merger and as part of the same overall transaction as the First Merger, the First Surviving Company merged with and into a forward purchase agreement (the “Forward Purchase Agreement”) withMerger Sub II, whereupon the separate existence of the First Surviving Company to provide forceased, and Merger Sub II continued as the purchase by it (or its designees) of an aggregate of 2,500,000 Units at $10.00 per Unit (the “Forward Purchase Units”) for an aggregate purchase price of $25,000,000 in a private placement to close concurrently withsurviving company and our wholly owned subsidiary. Upon the closing of the Initial Business Combinationbusiness combination (the “Forward Purchase”“Closing”). The obligations under the Forward Purchase Agreement do not depend on whether any public stockholders redeem their Class A common stock and provide, the Company withchanged its name to “Eos Energy Enterprises, Inc.”minimum funding level fornon-operating public shell company, the Initial Business Combination. The Forward Purchase Agreement includes registration rights with respect to the Forward Purchase Units.The proceeds from the salecurrent shareholders of EES have a relative majority of the Forward Purchase Units may be used as partvoting power of the consideration tocombined entity, the sellers in the Initial Business Combination, to pay expenses in connection with the Initial Business Combination or for working capital in the post-Business Combination company. The Forward Purchase will be required to be made regardlessoperations of whether any Class A common stock is redeemed by the Company’s public stockholders and is intended to provide the Company with a minimum funding level for the Initial Business Combination. The purchaser will not have the ability to approve the Initial Business CombinationEES prior to the signingacquisition comprises the only ongoing operations of the combined entity, and senior management of EES comprises the majority of the senior management of the combined entity, the Mergers have been accounted for as a material definitive agreement. The Forward Purchase Units will be issued only in connectioncapital transaction rather than a business combination. According to ASC 805 Business combination, the transaction was accounted for as a reverse recapitalization consisting of the issuance of Common Stock by Eos for the net monetary assets of BMRG accompanied by a recapitalization. Accordingly, the net monetary assets received by EES as a result of the Merger with B. Riley have been treated as a capital infusion on the closing date. No goodwill or other intangible assets were recorded during the Merger. The consolidated assets, liabilities and results of the Initial Business Combination.NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESBasis of PresentationThe financial statementsoperations of the Company are the historical financial statements of EES and the BMRG assets, liabilities and results of operations are consolidated with the Company beginning on the acquisition date. In order to reflect the change in capitalization, the historical capitalization related to EES common units has been retroactively restated based on the exchange ratio as if shares of B. Riley Common Stock had been issued as of the later of (i) the issuance date of the shares, or (ii) the earliest period presented in conformity with accounting principles generally accepted in the United Statesaccompanying consolidated financial statements..Section 102(b)(1)JOBS Act exempts emerging growth companies from being requiredMerger, the former EES convertible notes and redeemable preferred units were converted to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt outcommon stock of the extended transition periodCompany.comply with“our” in these notes to the requirements that applyunaudited condensed consolidated financial statements refers to non-emerging growth companies but any such an election to opt out is irrevocable. Eos Energy Enterprises, Inc. and its consolidated subsidiaries.Company has elected not to opt outunaudited condensed financial statements include the accounts of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.The Company’s unaudited condensed interim financial statementsand its 100% owned direct and indirect subsidiaries and have been prepared in accordance with U.S. GAAPgenerally accepted accounting principles (“GAAP”). All intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the SEC for interim financial informationU.S. Securities and the instructions to Form 10-Q. Accordingly, the financial statements do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments considered for a fair presentation have been included. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or any other period. The accompanyingExchange Commission. These unaudited condensed interimconsolidated financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s prospectus filedAnnual Report on Form 10-K of the Company for the year ended December 31, 2020. These interim results are not necessarily indicative of results for the full year.SECcurrent year presentation. These reclassifications had no effect on May 20,the reported results of operations. Adjustment has been made to the Consolidated Balance sheets for the year ended December 31, 2020, to reclassify notes receivable from other assets.well aspart of its initiative to reduce complexity in the Company’s audited balance sheet statementaccounting standards. The amendments in ASU 2019-12 eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and notes theretothe recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also clarifies and simplifies other aspects of the accounting for income taxes. The Company has adopted this ASU in Q1 2021. The adoption did not have an impact on the Company's consolidated financial statements. March 31,
2021December 31,
2020March 31,
2020December 31,
2019Contract Liabilities $ 827 $ 77 $ 184 $ 300 Company’s Form 8-K filed withcontract liability balance at the SEC on May 28, 2020.Loss Per Common ShareThe Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period, excluding shares of common stock subject to forfeiture. Net loss per common share is computed by dividing net gain/(loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period, plus, to the extent dilutive, the incremental number of shares of common stock to settle warrants, as calculated using the treasury stock method. At March 31, 2020, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earningsbeginning of the Company under the treasury stock method. As a result, diluted loss per common share is the same as basic loss per common share for the periods. In February 2020, the Company completed a stock splitperiod.1 to 575 shares of Class B common stock, resulting in 5,750,000 shares of Class B common stock issued and outstanding. The financial statements have been retroactively adjusted to reflect the stock split for all periods presented.Cash and Cash EquivalentsThe Company considers all short-term investments with an original maturity date of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents$827 as of March 31, 2020 and December 31, 2019.Concentration of Credit RiskFinancial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.Fair Value of Financial InstrumentsThe fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.Use of EstimatesThe preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.Deferred Offering CostsThe Company complies with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering.” Deferred offering costs of $35,000 as of March 31, 2020, consisted principally of costs incurred in connection with preparation for the Public Offering. The total offering costs incurred by the Company in connection with the Public Offering was $561,189. These costs and the underwriter discount, of $3,500,000, were charged to capital upon completion of the Public Offering on May 22, 2020.Income TaxesThe Company is included in the consolidated tax return of B. Riley Financial (the “Parent”). The Company calculates the provision for income taxes by using a “separate return” method. Under this method the Company is assumed to file a separate return with the tax authority, thereby reporting its taxable income or loss and paying the applicable tax to, or receiving the appropriate refund from, the Parent. The Company’s current provision is the amount of tax payable or refundable on the basis of a hypothetical, current year, separate return.Any difference between the tax provision (or benefit) allocated to the Company under the separate return method and payments to be made by (or received from) the Parent for tax expense are treated as either dividends or capital contribution. Accordingly, the amount by which the Company’s tax liability under the separate return method exceeds the amount of tax liability ultimately settled as a result of using incremental expenses of the Parent is periodically settled as a capital contribution from the Parent to the Company.The Company complies with the accounting and reporting requirements of ASC Topic 740 “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences2021 are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. within the next twelve months.20202021 and December 31, 2019, there2020, we had inventories of $92 and $214, respectively. 2021 2020 Useful lives Equipment $ 8,293 $ 7,055 5 — 10 years Capital Lease 201 201 5 years Furniture 276 211 5 — 10 years Leasehold Improvements 2,732 2,732 Lesser of useful life/remaining lease Tooling 2,033 523 2 — 3 years Total 13,535 10,722 Less: Accumulated Depreciation and Amortization (5,540) (5,069) $ 7,995 $ 5,653 no unrecognized tax benefits and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.There was no provision for income taxes$111, $220, $144 for the three months ended March 31, 2020.Following changes in ownership on May 22,2021 and 0, $270, $81 for the three months ended March 31, 2020, respectively.deconsolidated from the Parentrecorded amortization expenses of $10 for tax purposes. Beginning May 22, 2020, the Company files separate corporate federal and state and local income tax returns. Unrecognized Tax BenefitsThe Company recognizes tax positions in its financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical meritseach period related to patents.the position. A position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. A liability is established for differences between positions taken in a tax return and amounts recognized in the financial statements. There were no unrecognized tax benefitsintangible assets as of March 31, 2020.2021 are as follows:Remainder of 2021 $ 30 2022 40 2023 40 2024 40 2025 40 Thereafter 120 Total $ 310 recognizes accruedhas purchased battery storage systems and spare parts from the JV. The facility is located in Turtle Creek, Pennsylvania. The Company’s financial commitment to the JV upon inception was $4,100 in the form of a combination of cash and special purpose manufacturing equipment. The Company’s ownership interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for interest expense and penalties related to income tax matters as of March 31, 2021 is 49%. Operating Capital Remainder of 2021 $ 518 $ 11 2022 755 1 2023 825 0 2024 895 0 2025 966 0 Later years 679 0 Total minimum lease payments $ 4,638 $ 12 Less amounts representing interest 0 Present value of minimum lease payments $ 12 examinationsreturns in federal and various state jurisdictions. The open tax years for federal and state returns is generally 2016 and forward. In addition, net operating losses generated in closed years and utilized in open years are subject to adjustment by majorthe tax authorities. Eos is not currently under examination by any taxing authorities since inception.Recent Accounting StandardsManagementjurisdiction.believeexpect that any recently issued, but not yet effective, accounting standards updates, if currently adopted, wouldwill have a material effectimpact on the tax provision.financial statements.NOTE 3 — RELATED PARTY TRANSACTIONSFounder Shares March 31, 2020 Phase I Phase II Total Convertible notes payable $ 40,587 $ 40,970 $ 81,557 Discount, original issuance (20,946) (27,313) (48,259) Premium (discount), embedded derivative 181 (1,271) (1,090) Discount, fair value of preferred units 0 (2,290) (2,290) Discount, beneficial conversion features (1,799) 0 (1,799) Convertible notes payable, net $ 18,023 $ 10,096 $ 28,119 March 31,
2021December 31,
2020Paycheck Protection Program loan payable $ 1,257 $ 1,257 Other 24 94 Total 1,281 1,351 Less: Long-term debt, current portion (1,176) (924) Long-term debt $ 105 $ 427 June 3, 2019, 10,000April 7, 2020, the Company received $1,257 related to its filing under the Paycheck Protection Program and Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The payment terms of the note are as follows:
13. Long-term Debt (cont.) Preferred Units Units Amount Balance, December 31, 2019 80,707 $ 109,365 Contributions allocated to preferred units 1,666 259 Balance, March 31, 2020 82,373 $ 109,624 were issuedwith the same terms and exercise provisions prior to B. Riley Principal Investments, LLC.the Merger. The Private Placement Warrants meet the definition of a derivative. On February 3, 2020,the basis of the SEC Division of Corporation Finance’s April 12, 2021 Public Statement-Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACS”), the Private Placement Warrants do not meet the scope exception as prescribed by ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. Accordingly, the Company conducted a 1:575 stock split and reclassification, resulting in B. Riley Principal Investments, LLC holding 5,750,000 shares of Class B common stock (the “Founder Shares”). Allrecognized the Private Placement Warrants as of the Founder SharesMerger Date on November 16, 2020 at fair value and classified them as a liability in the Company’s consolidated balance sheet. Thereafter, changes in fair value are recognized in earnings as a derivative gain (loss) in the Company’s consolidated Statement of Operations.contributedoutstanding with a fair value of $2,925 and $2,701 as of March 31, 2021 and December 31, 2020, respectively. The change in fair value for the three months ended March 31, 2021 amounted to $224 and has been recognized as a derivative loss in the Sponsor in January 2020. The financial statements reflectCompany’s consolidated Statement of Operations for the three months ended March 31, 2021.these shares retroactively for all periods presented. On April 21, 2020, 20,000 Founder Shares were transferred to eachother forms of Patrick Bartels, Jamie Kempner, Timothy Presuttistock-based compensation, including profit interests, unit appreciation rights and Robert Suss, the Company’s independent directors, at their par value. On May 19, 2020, the Sponsor returned 718,750 shares of Class B common stock to Company for cancellation, resulting in a total of 5,031,250 Founder Shares outstanding. As used herein, unless the context otherwise requires, Founder Shares shall be deemed to include the shares of Class A common stock issuable upon conversion thereof. The Founder Shares are identicalrestricted units. Subsequent to the Class A common stock included in the Units sold in the Public Offering, the Founder Shares will automatically convert into shares of Class A common stock at the timeclosing of the Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below, and the holders of the Founder Shares, as described in more detail above, have agreed to certain restrictions and will have certain registration rights with respect thereto. Up to 656,250 Founder Shares were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option to purchase additional Units was exercised. On May 28, 2020, the underwriters confirmed that they will not be exercising their over-allotment option in whole or in part, as such 656,250 Founder Shares have been forfeited. The number of Founder Shares issued was determined based on the expectation that the Founder Shares would represent 20% of the outstanding shares of Company common stock upon completion of the Public Offering excluding the shares underlying the Private Placement Units (the “Private Placement Shares”).The Company’s initial stockholders, officers and directors have agreed, subject to limited exceptions, not to transfer, assign or sell any Founder Shares held by them until the earlier to occur of: (i) one year after the completion of the Initial Business Combination, (ii) the last sale price of Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Initial Business Combination, or (iii) the date following the completion of the Initial Business Combination on whichMerger, the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all ofapproved the public stockholders having the right to exchange their2020 Equity Incentive Plan (the “2020 Incentive Plan”) and reserved 6,000,000 shares of common stock for cash, securities or other property.Business Combination Marketing AgreementPursuant to a business combination marketing agreement,issuance thereunder. In 2021, the Company engaged B. Riley FBR, Inc. as advisors in connection with its Initial Business Combination to assist it in arranging meetings with its stockholders to discuss a potential business combination andreserved additional 498,021 shares for the target business’ attributes, introduce it to potential investors that may be interested in purchasing its securities, assist it in obtaining stockholder approval for its Initial Business Combination and assist it with the preparation of press releases and public filings in connection with the Initial Business Combination.2020 Incentive Plan. The Company will pay B. Riley FBR, Inc. for such services2020 Incentive Plan became effective immediately upon the consummationClosing of the Initial Business Combination a cash fee in an amount equal to 3.5%Merger and all equity granted under the 2012 Plan were converted into equivalent equity under the 2020 Incentive Plan. As of the gross proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable). Pursuant to the terms of the business combination marketing agreement, no fee will be due if the Company does not complete an Initial Business Combination.9Administrative FeesCommencing on May 19,March 31, 2021 and December 31, 2020, the Company agreedhas stock options and restricted units issued under the 2020 Incentive Plan Units Weighted-Average
Exercise PriceWeighted-Average
Remaining
Contractual Term
(years)Options Outstanding at December 31, 2020 2,143,636 $ 9.19 9.5 Granted 44,798 $ 17.46 Cancelled/Forfeited (5,713) $ 11.46 Options Outstanding at March 31, 2021 2,182,721 $ 9.35 9.3 Options Exercisable at March 31, 2021 719,773 $ 9.08 9.3 Units Weighted-Average
Grant-Data Fair ValueRU Outstanding at January 1, 2021 42,318 $ 13.46 Granted 1,111,500 $ 20.02 RU Outstanding at March 31, 2021 1,153,818 $ 19.78 pay an affiliatefive years and have a term of five to ten years. During the three months ended March 31, 2021 and 2020, the Company granted stock options with both service and performance conditions. Stock compensation is recognized on a straight-line basis over the requisite service period of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion ofaward, which is generally the Initial Business Combination oraward vesting term. For awards with performance conditions, compensation expense is recognized using an accelerated attribution method over the Company’s liquidation, it will cease paying these monthly fees.Registration Rightsholders of Founder Shares (and any shares of Class A common stock issuable upon conversion of the Founder Shares), Private Placement Units, Private Placement Shares, Private Placement Warrants (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants) and any securities that may be issued upon conversion of working capital loans, if any, have registration rights to require the Company to register the resale of any of its securities held by them (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock) pursuant to a registration rights agreement. The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. These holders are also entitled to certain piggyback registration rights with respect to registration statements filed subsequentperformance conditions primarily relate to the completion of project milestones, achievement of operational certifications, and the Initial Business CombinationCompany’s closing of financing rounds.rights$1,524 from stock options, respectively. $19 of stock compensation was recorded for stock option for the three months ended March 31, 2020. The stock compensation has been recorded in cost of sales, research & development expense and general and administrative expenses in the Statements of Operations. Unrecognized stock compensation expenses amount to require the Company$28,049 and include $21,774 attributable to register for resale such securities pursuantRUs and $6,275 attributable to Rule 415 under the Securities Act. However, the registration rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-upstock option. The weighted average vesting period for the securities to be registered. The Company will bear the expenses incurred in connection with the filingstock options and RUs was 2.4 years and 2.7 years as of any such registration statements. Notwithstanding the foregoing, the Sponsor may not exercise its demand and piggyback registration rights after five and seven years, respectively, after the effective date of the registration statement of which this prospectus forms a part and may not exercise its demand rights on more than one occasion. The Forward Purchase Units and securities underlying the Forward Purchase Units have substantially similar registration rights.Note Payable - Related PartyThe Company had a Note Payable to the Sponsor which allowed the Company to borrow up to $300,000 without interest to be used for a portion of the expenses associated with the Public Offering. The Note Payable was payable on the earlier of: (i) December 31, 2019 or (ii) the date on which the Company consummated an initial public offering of its securities. At March 31, 2020,2021, respectively.Note Payable balance was $50,000. On April 21, 2020,fair value of options granted in the Company borrowed an additional $50,000 which increased the Note Payable balance to $100,000 which was paid in full using proceeds from the Public Offering and the Private Placement on May 27, 2020.NOTE 4 — STOCKHOLDER’S EQUITYCommon StockThe authorized common stock of the Company includes up to 100,000,000 shares of Class A common stock and 25,000,000 shares of Class B common stock. If the Company enters into an Initial Business Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the Initial Business Combination, to the extent the Company seeks stockholder approval in connection with the Initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock. On February 3, 2020, the Company conducted a 1:575 stock split and reclassification resulting in 5,750,000 shares of Class B common stock outstanding (up to 750,000 shares of which are subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised) atthree months ended March 31, 2021 and 2020 are as follows: 2021 2020 Volatility 57.43 % 50.00 % Risk free interest rate 1.11 % 0.49 % Expected life (years) 6.25 6.25 Dividend yield 0 % 0 % December$2.08 per option for the three months ended March 31, 2019. On April 21, 2020, 80,000 founder shares were transferred to the Company’s independent directors, at their par value. On May 19, 2020, 718,750 shares2021 and 2020.boardBoard of directors.Directors. At March 31, 20202021 and December 31, 2019,2020, there were no0 shares of preferred stock issued or outstanding.
Common StockWarrantsWarrants may only be exercisedwhole numberChange of shares. No fractional WarrantsControl having been entered into) during the Earnout Period (each of clauses (i) and (ii), a “Triggering Event”).issued upon separationforfeited and canceled for no consideration. If after the five year period, only the triggering event described in clause (a) above has occurred, the remaining 859,000 Sponsor Earnout Shares described in clause (b) will be forfeited and canceled for no consideration.UnitsCompany's common stock in the public offering and onlythe private placement on May 22, 2020. One warrant entitles the holder to purchase 1 whole share of common stock at a price of $11.50 per share. At March 31, 2021 and December 31, 2020, there were 8,750,000 Public Warrants will trade. The Warrantsoutstanding recorded as equity, which will become exercisable on May 22, 2021.lateryear ended December 31, 2020(a) 30 days after the completionCorporation of Finance released Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). Upon review and analysis of the Initial Business Combination or (b) 12 months from the closing of the Public Offering; provided in each caseStatement, management determined that the Company has an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their Warrants on a cashless basis and such cashless exercise is exempt from registration under the Securities Act). The Company will as soon as practicable, but in no event later than 15 business days, after the closing of the Initial Business Combination, use its best efforts to file with the Securities and Exchange Commission (“SEC”) a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Warrants, to cause such registration statement to become effective within 60 business days after the closing of the Initial Business Combination and to maintain a current prospectus relating to those shares of Class A common stock until the Warrants expire or are redeemed, as specified in the Company’s warrant agreement. If the shares issuable upon exercise of the Warrants are not registered under the Securities Act by the 60th business day after the closing of the Initial Business Combination, the Company will be required to permit holders to exercise their Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Company’s Class A common stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.The Warrants will expire at 5:00 p.m., New York City time, five years after the completion of a Business Combination or earlier upon redemption or liquidation.The Private Placement Warrants are identical toissued in connection with BMRG's IPO on May 22, 2020 (see Notes 1 and Note 15) do not meet the Warrants underlying the Units sold in the Public Offering, except thatscope exception from derivative accounting prescribed by ASC 815-40. Accordingly, the Private Placement Warrants should have been recognized by the Company at fair value as of the November 16, 2020 Merger Date and classified as a liability, rather than equity in the sharesCompany’s previously reported consolidated balance sheet as of Class A common stock issuable upon exerciseDecember 31, 2020. Thereafter, the change in fair value of the outstanding Warrants should have been recognized as a derivative gain (loss) each reporting period in the Company’s consolidated Statement of Operations. The fair value of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completionas of the Initial Business Combination, subjectMerger Date on November 16, 2020 and December 31, 2020 amounted to certain limited exceptions. Additionally,$559 and $2,701, respectively.Private Placement Warrants will be non-redeemable so longMerger Date on November 16, 2020 through December 31, 2020 amounted to $2,142 and has been recognized as they are held bya derivative loss in the SponsorCompany’s consolidated Statement of Operations for the year ended December 31, 2020. Management concluded the effect of this error is not quantitatively or its permitted transferees. Ifqualitatively material on the Private Placement Warrants are held by someone other thanCompany’s previously reported consolidated financial statements as of and for the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable byyear ended December 31, 2020. However, the Company has elected to correct the impact of this immaterial error in the accompanying Condensed Consolidated Balance Sheet as of December 31, 2020 and exercisableCondensed Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2021 by such holders on the same basisincreasing previously reported Accumulated Deficit and decreasing Additional Paid-In Capital by $2,142 and $559, respectively and increasing Warrants liability by $2,701 as the Warrants.The Company may call the Warrants for redemption (except with respectof December 31, 2020.Private Placement Warrants):·in whole and not in part;·at a price of $0.01 per warrant;·upon a minimum of 30 days’ prior written notice of redemption (the “30-day redemption period”); and·if, and only if, the last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.Ifcorrection noted above, the Company calls the Warrants for redemption,identified and has elected to correct certain other errors that originated in 2020 which management will have the option to require all holders that wish to exercise the Warrants to do so on a “cashless basis,” as described in the warrant agreement.The exercise price and number of shares of Class A common stock issuable upon exercise of the Warrants may be adjusted in certain circumstances including in the event of a share dividend,has concluded are not quantitatively or recapitalization, reorganization, merger or consolidation. In addition, if (x) the Company issues additional shares of Class A common stock or securities convertible into or exercisable or exchangeable for shares of Class A common stock for capital raising purposes in connection with the closing of the Initial Business Combination (excluding any issuance of securities under the forward purchase agreement), at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance (the “Newly Issued Price”)), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for funding the Initial Business Combination, and (z) the volume weighted average trading price of the Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the Initial Business Combination (the “Market Value”) is below $9.20 per share, the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Additionally, in no event will the Company be required to net cash settle any Warrant. In the event that a registration statement is not effective for the exercised Warrants, the purchaser of a Unit containing such Warrant will have paid the full purchase price for the Unit solely for the share of Class A common stock underlying such Unit. There will be no redemption rights or liquidating distributions with respect to the Warrants, which will expire worthless if the Company fails to complete an Initial Business Combination within the 18-month time period.NOTE 5 — SUBSEQUENT EVENTSThe Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the financial statements were issued. Other than described in these financial statements in relationqualitatively material to the Company’s Initial Public Offeringpreviously reported consolidated financial statements as of and for the transactionyear ended December 31, 2020. The nature of these other errors pertains to immaterial reconciling adjustments in certain of the Company’s accounts payable and financing account balances as of December 31, 2020. Accordingly, the accompanying Condensed Consolidated Balance Sheet as of December 31, 2020 and Condensed Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2021 have been revised to give effect to the correction of these other errors by decreasing previously reported Accounts payable and accrued expenses by $390, reclassifying $147 from Long Term Debt, Current Portion, to Long Term Debt, decreasing Contingently Issuable Common Stock by $344, increasing Additional Paid-In Capital by $137, and decreasing Accumulated Deficit by $597 as of December 31, 2020.June 24,the Company’s previously reported consolidated financial statements as of and for the year ended December 31, 2020 described below,(in thousands, except per share amounts):Company did not identify any subsequent events that would have required adjustment or disclosureyear ended December 31, 2020 (cont.)As of December 31, 2020 As Originally Reported Warrants adjustments Other Immaterial adjustments As Revised Consolidated Balance Sheet Current liabilities Accounts payable and accrued expenses 8,861 0 (390) 8,471 Long term debt, current portion 1,071 0 (147) 924 Total current liabilities 14,122 0 (537) 13,585 Long term liabilities Long term debt 280 0 147 427 Warrants liability 0 2,701 0 2,701 Total long term liabilities 1,046 2,701 147 3,894 Total liabilities 15,168 2,701 (390) 17,479 Shareholders' equity Contingently Issuable Common Stock 17,944 0 (344) 17,600 Additional paid in capital 395,913 (559) 137 395,491 Accumulated deficit (290,766) (2,142) 597 (292,311) Total shareholders' equity 123,096 (2,701) 390 120,785 Total liabilities, contingently redeemable preferred units, and shareholders’ equity 138,264 0 0 138,264 For the three months ended March 31, 2021 As Originally Reported Warrants adjustments Other Immaterial adjustments As Revised Condensed Consolidated Statements of Shareholders' Equity (Deficit) Balance, December 31, 2020 Additional Paid in Capital 395,913 (559) 137 395,491 Contingently Issuable Common Stock 17,944 0 (344) 17,600 Accumulated Deficit (290,766) (2,142) 597 (292,311) Total 123,096 (2,701) 390 120,785 For the year ended December 31, 2020 As Originally Reported Warrants adjustments Other Immaterial adjustments As Revised Consolidated Statement of Operations Costs and expenses Research and development expenses 13,983 0 (390) $ 13,593 Total costs and expenses 39,288 0 (390) $ 38,898 Operating loss (39,069) 0 390 $ (38,679) Other income (expense) Change in fair value, Sponsor Earnout Shares (8,083) 0 (137) $ (8,220) Change in fair value, warrants liability 0 (2,142) 0 $ (2,142) Net loss (68,754) (2,142) 253 $ (70,643) Basic and diluted loss per share attributable to common shareholders Basic $ (7.31) $ (0.23) $ 0.03 $ (7.51) Diluted $ (7.31) $ (0.23) $ 0.03 $ (7.51) For the year ended December 31, 2020 As Originally Reported Warrants adjustments Other Immaterial adjustments As Revised Consolidated Statements of Shareholders' Equity (Deficit) Additional Paid in Capital Net equity infusion from the Merger 126,024 (559) 215 125,680 Reclassification of Block B Sponsor earnout shares 11,760 0 (78) 11,682 Balance, December 31, 2020 395,913 (559) 137 395,491 Contingently Issuable Common Stock Contingently Issuable Common Stock 17,944 0 (344) 17,600 Balance, December 31, 2020 17,944 0 (344) 17,600 Accumulated Deficit Contingently Issuable Common Stock (17,944) 0 344 (17,600) Net loss (68,754) (2,142) 253 (70,643) Balance, December 31, 2020 (290,766) (2,142) 597 (292,311) Total Shareholders' Equity (Deficit) Net equity infusion from the Merger 126,026 (559) 215 125,682 Reclassification of Block B Sponsor earnout shares 11,760 0 (78) 11,682 Net loss (68,754) (2,142) 253 (70,643) Balance, December 31, 2020 123,096 (2,701) 390 120,785 For the year ended December 31, 2020 As Originally Reported Warrants adjustments Other Immaterial adjustments As Revised Consolidated Statements of Cash Flows Cash flows from operating activities Net loss (68,754) (2,142) 253 (70,643) Adjustment to reconcile net loss to net cash used in operating activities Change in fair value, Sponsor Earnout Shares 8,083 0 137 8,220 Change in fair value, warrants liability 0 2,142 0 2,142 Changes in operating assets and liabilities: Accounts payable and accrued expenses 1,709 0 (390) 1,319 Net cash used in operating activities (26,559) 0 0 (26,559) the financial statements.On June 24, 2020, the Company executed a letter of intent with privately held Eos Energy Storage LLC (“EOS”) for a business combination transaction which would result in privately held EOS becoming a publicly listed company. Founded in 2008, EOS is an established provider of long-duration energy storage focused on providing a domestic solution to a global need: low-cost, safe, and environmentally friendly energy storage.Hi-Power from Holtec. The transaction contemplates a valuationwas closed on April 9, 2021. Refer to Note 6 for further discussion.Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “us,” “our” or the “Company” are to B. Riley Principal Merger Corp. II. References to our “management” or our “management team” refer to our officers and directors. and analysis should be read in conjunction with the accompanying unaudited financial statements for the three months ended March 31, 2021 and 2020 and our unaudited condensedannual report on Form 10-K for the year ended December 31, 2020, including the financial statements and related notes thereto included elsewhere in this Quarterly Report.StatementsQuarterly Report includes forward-lookingreport contains statements about the future, sometimes referred to as “forward-looking” statements. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements are subject to knowntypically identified by the use of the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project,” “propose,” “plan,” “intend,” and unknownsimilar words and expressions. Statements that describe our future strategic plans, goals, or objectives are also forward-looking statements.uncertainties and assumptions about usuncertainties. The forward-looking information is based on present circumstances and on our predictions respecting events that have not occurred, that may not occur, or that may occur with different consequences from those now assumed or anticipated. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors. See also the “Risk Factors” disclosureslevels of activity, performance or achievements to bediffer materially different from any future results, levels of activity, performance or achievementsthose expressed or implied byin our forward-lookingstatements. Factors that might causestatements to reflect subsequent events or contribute to such a discrepancy include, but are not limited to, those describedcircumstances.the Risk Factors section of our final prospectus for our Public Offering (as defined below) and in our other Securities and Exchange Commission (“SEC”) filings. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whetherDelaware on June 3, 2019 as a result of new information, future events or otherwise.OverviewWe are a blank checkspecial purpose acquisition company incorporated as a Delaware corporation and formed forunder the purpose of effectingname B. Riley Principal Merger Corp. II., in order to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businessesbusinesses.“Initial Business Combination”“Merger Agreement”), dated as of September 7, 2020, by and among BMRG Merger Sub, LLC, our wholly-owned subsidiary and a Delaware limited liability company (“Merger Sub I”), BMRG Merger Sub II, LLC, our wholly-owned subsidiary and a Delaware limited liability company (“Merger Sub II”), Eos Energy Storage LLC, a Delaware limited liability company (“EES”), New Eos Energy LLC, a wholly-owned subsidiary of EES and a Delaware limited liability company (“Newco”) and AltEnergy Storage VI, LLC, a Delaware limited liability company (“AltEnergy”).effectuateexpand our sales both in volume and geography, we have started discussions with several companies in North America, Europe, the Middle East, Australia, and Asia about partnering on selling our product in these regions. For some of these potential partners, we have begun discussions ranging from being a reseller of our product to being a joint venture partner in the manufacturing of our battery systems. We expect to continue expanding the direct sales force in North America, adding direct sales people outside North America, and entering into strategic alliances to advance our sales growth globally.Initial Business Combinationestimated $660 billion in future investment by 2040. With approximately 3.3 GW of energy storage commissioned globally in 2019, it is expected to increase to 4.7 GW in 2020. It is expected that the global energy storage market will grow at a 53% compound annual growth rate from 6,480 megawatt hours (“MWh”) in 2019 to approximately 83,000 MWh by 2025.cashZnyth® technology will gradually take over market share within the battery industry. Our system’s unique characteristics position us for success in the market, including 100% depth of discharge, low degradation rate, 3-12 hour discharge duration capability, inherent system safety and low O&M costs. Our ability to successfully deploy our battery system technology and gain market share in the energy storage market will be important to the growth of our business.proceedsUL certification of the Gen 2.3 product due to the certification company being delayed in completing the in-person witness tests. In addition, it caused the delay for us to deliver products to one of our customers. Other than these delays, Covid-19 did not have a material impact on our operations or financial condition. Three Months Ended
March 31$ % ($ in thousands) 2021 2020 Change Change Revenue $ 164 $ — $ 164 NM Cost and expenses: Cost of sales 100 57 43 75 Research and development 5,053 2,230 2,823 127 General and administrative expenses 16,654 2,359 14,295 606 Grant expense (income), net 8 346 (338) (98) Operating loss (21,651) (4,992) (16,659) 334 Other income (expense) Interest (expense) income, net (21) (95) 74 (78) Interest expense related party — (3,715) 3,715 (100) Change in fair value, embedded derivative — (515) 515 (100) Change in fair value, warrant liability (224) — (224) NM Income (loss) on equity in unconsolidated joint venture 440 (31) 471 (1,519) Net loss $ (21,456) $ (9,348) $ (12,108) 130 public offering (the “Public Offering”)energy storage solution for specific customer application. In 2020, Eos transitioned our business to launch our next generation of energy storage solutions Gen 2.3 and no revenue was recognized during this period. We shipped our first customer order of Gen 2.3 in January 2021.closedthe Company had recorded in 2020 and which was related to product intended to be purchased for commercial purposes. During the three months ended March 31, 2021, these products were received, and the Company used them for R&D purposes. The associated expense was therefore recorded within Research and Development.May 22,sales of the Gen 2.3 battery storage solution, these outside services are crucial to our professional growth and integrity. In addition, for the three months ended March 31, 2021, the Company incurred $7.8 million expense to accrue for payments required to be made to Holtec under the JV agreement.(the “Closing Date”)to $8 for the three months ended March 31, 2021. The decrease results from higher grant income earned for three months ended March 31, 2021 and level of research and development activity related to our grants from the California Energy Commission.unitsupon the Closing.purchase sharesincrease as we seek to execute on our growth strategy. We currently anticipate that total capital expenditures for fiscal 2021 will be approximately $35 to $40 million which will be used primarily for additional equipment, automation, and implementation to increase our capacity and efficiency to meet our customer’s needs. Our capital expenditure and working capital requirements in the foreseeable future may change depending on many factors, including but not limited to the overall performance of existing equipment, our sales pipeline, our operating results and any adjustments in our operating plan needed in response to industry conditions, competition or unexpected events. We believe that our existing cash, together with cash from operations, will be sufficient to meet our capital expenditure and working capital requirements for the next twelve months. Three months ended March 31, ($ in thousands) 2021 2020 Net cash used in operating activities $ (9,703) $ (321) Net cash used in investing activities (11,360) (1,579) Net cash provided by (used in) financing activities (73) 1,657 Class Ainitial energy storage products, and other general and administrative activities. As we continue and expand commercial production, we expect our expenses related to personnel, manufacturing, research and development and general and administrative activities to increase.($ in thousands) Total Less than 1 year 1-3 years 3-5 years More than 5 years Paycheck Protection Program Loan $ 1,257 1,152 105 — — Operating and capital lease $ 4,638 702 1,615 1,896 425 Firm purchase commitment $ 295 295 — — — Other loans $ 24 24 — — Total $ 6,214 2,173 1,720 1,896 425 (“Private Placement Warrants”) that closedis contingently issuable based on a Monte Carlo Stimulation pricing model considering stock price of the Company, the risk free rate of 0.41% and a volatility of 55% utilizing a peer group based on five year term.Datedate were estimated using a Monte Carlo simulation based on the stock price of the Company, a risk free rate of 0.41% and from additional issuancesa volatility of if any, our capital55% utilizing a peer group based on a five year term. The fair value of the first tranche of Sponsor Earnout Shares that vested on December 16, 2020 was based on the closing share price of the Company’s publicly traded stock and our debt, oron that date.combinationsmall group of cash, stock and debt.Our business activities from inception to March 31, 2020 consisted primarilyindividuals constituting the Sponsors of our formation and preparation for our Public Offering that was completed on May 22, 2020, and since the offering on May 22, 2020, our activity has been limited to identifying and evaluating prospective acquisition targets for an Initial Business Combination.At March 31, 2020, we had cash of $14,894 and current liabilities of $85,625. Further, we expect to continue to incur significant costsCompany would result in the pursuitPrivate Placement Warrants becoming Public warrants. Thus, the fair value of each Private Placement Warrants is the same as that of a Public warrants, which are publicly traded, with an insignificant adjustment for short-term marketability restrictions.acquisition plans. We cannot assure youfinancial statements.our plans to complete an Initial Business Combination will be successful.Resultscould accelerate the repayment of Operationswe had a net lossembedded derivative liabilities with an initial fair value of $454. Our net loss for$126 were recognized. During the three months ended March 31, 2020 solely consisteda change in fair value of formation costs and general and administrative expenses. Thereembedded derivative loss of $515 was no operationrecognized. The fair value of the Company during the three months endedembedded derivative was zero as of March 31, 20192021 and December 31, 2020 as the Company was formed on June 3, 2019.Liquidity and Capital ResourcesUntil the closinga result of the Public Offering, our only source of liquidity was an initial sale of shares (the “Founder Shares”) of Class B common stock, par value $0.0001 per share, to our sponsor, B. Riley Principal Sponsor Co. II, LLC, a Delaware limited liability company (the “Sponsor”), and the proceeds of a promissory note (the “Note”) from the Sponsor, in the amount of $300,000. The Note was repaid upon the closingconversion of the Public Offering.At March 31, 2020 we had cash of $14,894 and working capital deficit of $70,731.We completed the sale of 17,500,000 units at an offering price of $10.00 per unit in the Public Offering. The Sponsor subscribed to purchase an aggregate of 650,000 units at a price of $10.00 per Private Placement Unit in a private placement that closed on May 22, 2020 simultaneously with the Public Offering. The sale of the 17,500,000 Units generated gross proceeds of $175,000,000, less underwriting commissions of $3,500,000 (2% of gross proceeds) and other offering costs of $523,135. The Private Placement Units generated $6,500,000 of proceeds.Each unit consists of one share of our Class A common stock, $0.0001 par value (each a “public share”), and one-half of one redeemable warrant, with each whole warrant exercisable for one share of Class A common stock (each, a “Warrant” and, collectively, the “Warrants” and, with respect to the warrants underlying the Private Placement Units, the “Private Placement Warrants”). One Warrant entitles the holder thereof to purchase one whole share of Class A common stock at a price of $11.50 per share.We granted the underwriters a 45-day option to purchase on a pro rata basis up to 2,625,000 additional units at the initial public offering price less the underwriting discounts and commissions.On May 28, 2020, the underwriters confirmed that they will not be exercising their over-allotment option in whole or in part.In addition, income on the funds held in the Trust Account may be released to us to pay our franchise and income taxes.We do not believe we will need to raise additional funds other than the funds raised in the Public Offering on May 22, 2020 in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an Initial Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Initial Business Combination. Moreover, we may need to obtain additional financing either to complete our Initial Business Combination or because we become obligated to redeem a significant number of our shares of Class A common stock upon completion of our Initial Business Combination, in which case we may issue additional securities or incur debt in connection with such business combination (including from our affiliates or affiliates of our Sponsor).Off-Balance Sheet ArrangementsWe have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.Contractual ObligationsAt March 31, 2020, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. On May 19, 2020, we entered into an administrative support agreement pursuant to which we have agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, administrative and support services. Upon the earlier of the completion of the Initial Business Combination and the Company’s liquidation, we will cease paying these monthly fees.We have engaged B. Riley FBR, Inc. as advisorsnotes in connection with the Initial Business Combination to assist us in arranging meetings with stockholders to discuss a potential business combination and the target business’ attributes, introduce us to potential investors that may be interested in purchasing our securities, assist us in obtaining stockholder approval for our Initial Business Combination and assist us with the preparation of press releases and public filings in connection with the Initial Business Combination. We will pay B. Riley FBR, Inc. for such services upon the consummation of the Initial Business Combination a cash fee in an amount equal to 3.5% of the gross proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable). Pursuant to the terms of the business combination marketing agreement, no fee will be due if we do not complete an Initial Business Combination.Critical Accounting PoliciesThe preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following as our critical accounting policies:Deferred Offering CostsWe comply with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A — “Expenses of Offering.” Deferred offering costs of $70,000 as of March 31, 2020 consist principally of costs incurred in connection with preparation for the Public Offering. These costs, together with the underwriter discount, were charged to capital upon completion of the Public Offering in May 2020.Recent Accounting PronouncementsManagement does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our financial statements.Risk.AsRiskProcedures.controlsControls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (who serves as our Principal Executive Officer) and Chief Financial Officer (who serves as our Principal Financial and Accounting Officer), as appropriate, to allow timely decisions regarding required disclosure.As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2020. Based upon his evaluation, our Chief Executive Officer and Chief Financial Officer concluded that ourProcedureswere effective.Duringthat are designed to provide reasonable assurance that information required to be disclosed in the most recently completed fiscal quarter, there has been no changereports that we file or submit under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in our internal control over financial reportingthe Securities and Exchange Commission’s rules and forms, and that has materially affected, orsuch information is reasonably likelyaccumulated and communicated to materially affect, our internal control over financial reporting.Inherent Limitation on Effectiveness of ControlsOur management, including our Chief Executive Officer and Chief Financial Officer, doesas appropriate to allow timely decisions regarding required disclosures. Because of inherent limitations, disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not expectabsolute, assurance that the objectives of disclosure controls and procedures are met.oras of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting resulting from our lack of (i) a formalized internal control framework, (ii) segregation of duties in the financial reporting process, (iii) review and approval of journal entries, and (iv) management review controls. These deficiencies are a result of our previously smaller footprint as a private company and we are building our team to meet the requirements as a public company. These material weaknesses resulted in the revision of our consolidated financial statements as of and for the year ended December 31, 2020. Specifically, while the classification of Private Placement Warrants with provisions like those of ours as equity was broadly accepted industry practice, our management, due to our lack of a formalized internal control framework, did not identify the error in this accounting practice until the SEC’s issuance of their statement calling out this treatment and management's consideration thereof.well-designedwell conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system’s objectives will besystems are met. TheFurther, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, becauseBecause of the inherent limitations in alla cost-effective control systems,system, no evaluation of controlsinternal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected. The design of any system of controls is basedpart on certain assumptions about the likelihood of future events, and there can beInternal Control Over Financial Reporting assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditionsour internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during our most recent quarter that have materially affected, or deterioration in the degreeare reasonably likely to materially affect, our internal control over financial reporting.Proceedings.None.Factors. that could cause our actual resultsdiffer materially from thosethe other information set forth in this Quarterly Report are any of the risks described in our prospectus dated May 19, 2020 filed with the SEC on May 20, 2020. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.As of the date of this Quarterly Report on Form 10-Q, thereyou should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K, for the fiscal year ended December 31, 2020. There have been no material changes to thein our risk factors from those disclosed in our prospectus dated May 19, 2020 filed with the SECAnnual Report on May 20, 2020. However, we may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company's results of operations, financial position and cash flows will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's results of operations, financial position and cash flows may be materially adversely affected. Additionally, the Company's ability to complete an Initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company's ability to have meetings with potential investors or affect the ability of a potential target company's personnel, vendors and service providers to negotiate and consummate an Initial Business Combination in a timely manner. The Company's ability to consummate an Initial Business Combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.Unregistered Sales of Equity SecuritiesOn May 22, 2020, simultaneously with the closing of the Public Offering, we completed the private sale of 650,000 Private Placement Units at a purchase price of $10.00 per Private Placement Unit, to the Sponsor, generating gross proceeds to us of $6,500,000. The Private Placement Units are substantially identical to the units sold as part of the units in the Public Offering (as described below), except that our Sponsor has agreed not to transfer, assign or sell any of the Private Placement Units (except to certain permitted transferees) until 30 days after the completion of our Initial Business Combination. The Private Placement Units are also not redeemable by us so long as they are held by our Sponsor or its permitted transferees, and they may be exercised by our Sponsor and its permitted transferees on a cashless basis. The Private Placement Units were issued in connection with our incorporation pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).Use of ProceedsOn May 22, 2020, we consummated the Public Offering of 17,500,000 Units. Each Unit consists of one share of Class A common stock of the Company, par value $0.0001 per share, and one-half of one redeemable warrant of the Company. Each whole warrant entitles the holder thereof to purchase one share of Class A Common Stock for $11.50 per share, and only whole warrants are exercisable. The warrants will become exercisable on the later of 30 days after the completion of our Initial Business Combination and 12 months from the closing of the Public Offering and will expire five years after the completion of our Initial Business Combination or earlier upon redemption or liquidation. Subject to certain terms and conditions, we may redeem the warrants either for cash once the warrants become exercisable or for shares of our Class A Common Stock commencing 90 days after the warrants become exercisable.The units were sold at a price of $10.00 per unit, generating gross proceeds to the Company of $175,000,000. B. Riley FBR, Inc. served as the sole book-running manager for the offering. The securities sold in the Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-237812). The SEC declared the registration statements effective on May 20, 2020.
NoneWe paid a total of $3,500,000 in underwriting discounts and commissions and $523,135 for other costs and expenses related to the Public Offering. B. Riley FBR, Inc., an underwriter in the Public Offering, and an affiliate of us and our Sponsor (which Sponsor beneficially owns more than 10% of our common stock) received a portion of the underwriting discounts and commissions related to the Public Offering. After deducting the underwriting discounts and commissions and incurred offering costs, the total net proceeds from our Public Offering and the sale of the Private Placement Warrants was approximately $177,439,000, of which $176,750,000 (or $10.10 per unit sold in the Public Offering) was placed in the Trust Account. We also repaid $100,000 in noninterest bearing loans made to us by our Sponsor to cover expenses related to the Public Offering. Other than as described above, no payments were made by us to directors, officers or persons owning ten percent or more of our common stock or to their associates, or to our affiliates.Securities.None.Disclosures.Not applicable.Information.None.Incorporated by Reference Exhibit Number Description of Document Schedule/Form File Number Exhibits Filing Date 10.1 Form 8-K File No. 001-39291 10.1 March 12, 2021 10.2 Form 8-K File No. 001-39291 10.1 March 31, 2021 31.1* 31.2* 32* 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 6. Exhibits.followingRegistrant agrees to furnish a copy of all omitted exhibits areand schedules to the SEC upon its request.orthis registration statement are listed in the index to the financial statements immediately preceding such financial statements, which index to the financial statements is incorporated herein by reference into, this Quarterly Report on Form 10-Q.Exhibit IndexExhibitNo.Description31.1*Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 193431.2*Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 193432.1**Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2**Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002101.INS*XBRL Instance Document101.SCH*XBRL Taxonomy Extension Schema Document101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document101.DEF*XBRL Taxonomy Extension Definition Linkbase Document101.LAB*XBRL Taxonomy Extension Label Linkbase Document101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document*Filed herewith**Furnished herewith
SIGNATURESB. Riley Principal Merger Corp. IIEOS ENERGY ENTERPRISES, INC. Date: June 26, 2020By:/s/ DANIEL SHRIBMANDate: May 13, 2021 By: Name: Daniel Shribman/s/ Joe MastrangeloName: Title: Chief Executive Officer and
(Principal Executive Officer)Date: May 13, 2021 By: /s/ Sagar Kurada Name: Sagar Kurada Title: Chief Financial Officer
(Principal Executive OfficerFinancial andPrincipalFinancial Accounting Officer)17