SCHEDULE: Eos Energy Enterprises Forms Joint Venture with Cerberus, HBC

Eos Energy Enterprises, Inc. has entered into an amended and restated binding term sheet to form a joint venture with affiliates of Cerberus Capital Management and Hudson Bay Capital Management, involving significant equity contributions and warrant issuances.

Summary

• Eos Energy Enterprises, Inc. (the "Issuer") has entered into an amended and restated binding term sheet on June 30, 2026, to establish a joint venture named Frontier Power USA Parent, LLC.
• The joint venture involves the Issuer, CCM Frontier JV Holdco, LLC (an affiliate of Cerberus Capital Management II, L.P.), and HBC MSF Capital Solutions Blocker II LLC (an affiliate of Hudson Bay Capital Management LP).
• CCM Frontier will contribute $100 million for Class A-2 Units and receive founder's equity (Class A-1 Units) for its platform value.
• The Issuer will contribute net proceeds from a registered direct offering and a rights offering for Class B Units.
• HBC will contribute $50 million for Class C Units and receive a warrant.
• The transactions are subject to conditions including completion of a rights offering, Department of Energy consent, and execution of commercial framework guidelines.
• A rights offering is planned to raise $150 million, with participants receiving units consisting of common stock and warrants.
• The Issuer will issue warrants to CCM Frontier (Additional CCM Warrants) and HBC (HBC Warrant) upon closing.
• HBC has exchange rights for its Class C Units into Issuer Common Stock at various prices depending on the timing and certain events.
• The joint venture's board will have seven members, with four appointed by CCM Frontier and up to three by the Issuer.
• Transfers of Preferred Units in the JV Company are restricted until the third anniversary of closing, with exceptions for permitted transfers to affiliates and subsequent rights of first offer.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive development due to the significant capital infusion and strategic partnership, although execution risks associated with the rights offering and regulatory approvals remain.

Positives

• Formation of a joint venture with significant capital partners (Cerberus and Hudson Bay) to advance the frontier power platform.
• Secures substantial investment through CCM Frontier's $100 million contribution and HBC's $50 million contribution.
• Planned rights offering targeting $150 million aims to further fund the Issuer's contribution to the JV.
• Warrants issued to CCM Frontier and HBC provide potential future capital to the Issuer.
• HBC's exchange rights for Class C Units offer a mechanism for potential future equity conversion into Issuer Common Stock.
• Joint venture governance structure provides CCM Frontier with significant board representation (4 out of 7 members) and day-to-day oversight delegation.

Negatives

• The Issuer's contribution to the JV is contingent on the success of a registered direct offering and a rights offering, introducing execution risk.
• The rights offering has a maximum raise of $150 million without consent from CCM Frontier and HBC, potentially limiting the Issuer's funding.
• HBC's exchange rights for Class C Units could lead to significant dilution of common stock if exercised at lower price points.
• Restrictions on transferring Preferred Units in the JV Company for three years limit liquidity for the JV partners.

Risks

• The closing of the joint venture transactions is subject to conditions, including Department of Energy consent and the successful completion of the rights offering.
• The mechanics, sequencing, and legal structure of the Rights Offering are subject to further documentation, consents, and regulatory requirements (Nasdaq, securities laws).
• HBC's exchange rights for Class C Units are subject to customary adjustments for stock splits, dividends, recapitalizations, consolidations, mergers, and other similar events, which could impact the number of shares received.
• The JV Company's board of managers will have reserved and fundamental matters requiring consent of an Issuer-appointed manager or the Issuer, indicating potential for governance disagreements.
• Day-to-day oversight of the JV Company's development projects is delegated to an appointee of CCM Frontier, potentially limiting direct Issuer control over operational execution.

Future Outlook

The formation of the joint venture and the associated capital raises (registered direct offering and rights offering) are expected to provide significant funding and strategic partnerships for Eos Energy Enterprises. The company anticipates the closing of these transactions, subject to customary conditions.

Industry Context

StockSavvy.ai notes that the formation of this joint venture by Eos Energy Enterprises with established financial players like Cerberus and Hudson Bay signals a strategic move to leverage external capital and expertise for growth in the energy storage sector, a market characterized by increasing demand and significant capital requirements.

Corporate Governance

Related Party Transactions

• The formation of the joint venture involves transactions between Eos Energy Enterprises, Inc. and affiliates of Cerberus Capital Management (CCM Frontier JV Holdco, LLC) and Hudson Bay Capital Management (HBC MSF Capital Solutions Blocker II LLC).
• CCM Frontier is contributing founder's equity and capital for Class A units in the JV Company.
• The Issuer is contributing capital for Class B units in the JV Company.
• HBC is contributing capital for Class C units and receiving warrants.
• The Issuer is issuing warrants to CCM Frontier and HBC.
• HBC has exchange rights for its Class C Units into Issuer Common Stock.
• A management services agreement is to be entered into between the Issuer and an affiliate of CCM Frontier for day-to-day oversight of JV projects.

Stakeholder Impact

• Shareholders: Potential for increased share value if the JV is successful, but also risk of dilution from rights offering and warrant exercises. HBC's exchange rights could also lead to dilution.
• Creditors: The capital raises and JV formation could improve the company's financial stability and ability to meet obligations.
• Employees: Potential for job creation and growth within the JV and Eos, but also uncertainty depending on the success of the new venture.
• Suppliers: Increased business activity from the JV could lead to more opportunities for suppliers.

Next Steps

• Execution and delivery of definitive written agreements for the joint venture transactions.
• Completion of the rights offering.
• Obtaining Department of Energy consent for the transactions.
• Execution and delivery of commercial framework guidelines.
• Filing of a resale registration statement for shares issuable upon exchange of Class C Units within 30 days of closing.
• Having the resale registration statement declared effective within 60 days of closing.

Key Dates

Recommendation

The formation of a joint venture with significant capital partners is a positive strategic move, but the reliance on a rights offering and the potential for dilution from warrant exercises and HBC's exchange rights warrant a cautious 'hold' recommendation pending successful execution and clearer visibility on future performance.

Keywords

Eos Energy Enterprises, Joint Venture, Cerberus Capital Management, Hudson Bay Capital Management, Frontier Power, Term Sheet, Equity Financing, Rights Offering, Warrants, Capital Raise, SEC Filing, Schedule 13D