Thread by @FuzzyPandaShort

NEW: We are short Eos Energy (EOSE), a zinc-based battery maker. We uncovered multiple gas leaks of deadly hydrogen bromide.

Worse, executives told us Eos falsified financials for DOE loan – we expect the DOE loan to be pulled and the debt to be immediately due.

Former C-Suite executives told us backlog is “worthless” & $EOSE keeps 3 different sets of financials!

The CEO demanded executives to alter financials sent to the DOE and to “goal seek for whatever needed to be done”

Full report at: Fuzzypandaresearch.com/eos-energy-eos…

Like many men with bad gas, $EOSE refuses to take credit for it. Unfortunately, FOIA’s, customers, safety experts detailed multiple thermal events that resulted in gas leaks of deadly hydrogen bromide exceeding OSHA limits.

Eos batteries are NOT as safe as mgmt claims

Sending the DOE false financial statements or omitting key environment issues = Event of Default on DOE loan.

Loan Default = $EOSE's $90.9m in DOE debt could be immediately due

Senior executives told us $EOSE's backlog is “largely worthless.” They estimated that 80% of the backlog should be discounted

We sent FOIAs, pulled local permits, and got satellite images & our work corroborated ~80% of the backlog is fictitious

Digging into the backlog we found agreements that kept getting “dumb & dumber” $EOSE's backlog is almost worse than a briefcase full of IOUs.

Key major customers are LOI’s for “contemplated contracts” which formers say “aren’t worth the paper they are written on”

Another major backlog customer-Pine Gate told us “we won’t buy from Eos again”

Pine had significant issues with $EOSE batteries performance. RTE was so bad (<60%) that it caused them to lose money

Bloomberg recently reported that Pine Gate is preparing for bankruptcy

Another customer in $EOSE backlog (EnerSmart) switched to Lithium in 2023

Another (Z-Global) told us “I don’t think we have ever used Eos”

The DOE recently canceled the funding for another backlog customer (Faraday Microgrid)

Retail investors are excited about a pipeline of $EOSE deals with IEP

Formers told us IEP’s CEO was:
a “shyster”
“IEP is NOT real”
“Peter cannot get financing from anyone”

We dug into IEP & found:

A broken balance sheet
A CEO that can’t pay his bills
All IEP’s claimed employees list working for other co’s on LinkedIn

Even worse–one of IEP’s claimed major CA projects, Desert Wren, was already lost to a PE-backed competitor using lithium

Besides the deadly gas leaks, we discovered major $EOSE performance issues which include:

- low RTE of 42-55% causing customers to lose money (Pine Gate)
- High Failure rates of 30-40%
- Premature tripping of batteries (Indian Energy, Pine Gate)

We were told $EOSE sent NextEra “frankenstein’d” batteries that looked like a “rat’s nest”

NextEra refused them & sent them back for replacement

Formers revealed $EOSE allegedly “double counted” Rev from shipping replacement batteries to NextEra. Said Rev should be restated

$EOSE pumps out press releases about potential deals but not actual profits.
Why?

Because lithium-ion batteries offer better RTEs and are at least 50% cheaper, even with Trump’s China tariffs.

Falling lithium prices are making Eos even less competitive

Formers guided us in modeling $EOSE’s unit economics. Even at scale they are horrible!

Best Case Gross Margins are –43%. Material costs alone are > Eos ASPs.

If $EOSE could sell more product it would be amazing for short-sellers.

The more they sell, the more $ they lose.

We asked formers if $EOSE could ever be Gross Margin positive. They laughed & said they thought Eos would NEVER generate positive Gross Margins

The only possible way is if prices increased. Instead, prices have DECLINED significantly

Eos is still 2x more expensive than lithium

Formers said CEO Joe Mastrangelo has a weak “moral compass.”

Formers told us Joe demands that nothing bad be put in writing about Eos’ fictitious backlog.

No texts + no emails = No paper trail documenting that Joe knows the backlog is BS

We learned that executives who deliver bad news to Joe risk losing their jobs.

No wonder Eos has had 4 CFOs & 3 CCOs in 5 years

One former even said: “We’re all afraid to wake up to the horse in our bed”

Sounds like a CEO who keeps three sets of financials

Formers warned us $EOSE needs to write down inventory and restate revenue. Eos counted replacements for faulty batteries as new sales, and CEO Joe refused to write down obsolete battery electrolyte worth ~25% of reported Q2 inventory

We’re alerting Eos’ auditors at Deloitte

Investor’s love Cerberus. But regardless of the outcome for common shareholder’s Cerberus wins!

Cerberus is allowed to Short $EOSE's stock and hedge their downside risk.

Not only has $EOSE assigned their assets as collateral to Cerberus’ loan.

Reading the loan docs the allegedly false financials sent to the DOE would also result in an Event of Default on the Cerberus Loan

Trading in line with peers based on FY 2025 ests would result in ~88% downside for $EOSE’s stock.

And we believe sell-side estimates are ~$40m too high

Btw, $EOSE's fully diluted market cap w/ all the warrants & converts is actually ~$8 billion

Investors hope $EOSE is a pick & shovel play in AI

But Customers are NOT “picking” EOSE

People betting on Eos to lead the AI revolution are about to be hit with a shovel full of reality when FY 2025 guidance is cut & FY 2026 numbers come in ~95% below street est

We are Short $EOSE because its batteries short & release a deadly gas; the unit economics stink; and it has a big load of DOE debt that’s coming due once the Feds discover the real financials.

Full report at Fuzzypandaresearch.com/eos-energy-eos…