Ed Zack Lee-Wright

[Ed Zack Lee-Wright @gsdaniel01]

@waitmaya 31

[Ed Zack Lee-Wright @gsdaniel01]

@OBGInvestments What’s your look back timeframe? Calls or common/leaps?

[Ed Zack Lee-Wright @gsdaniel01]

@OBGInvestments @TheAssociate13 Might need to start a podcast to accomplish that. Like most families, definitely some dysfunction in the mix.

[Ed Zack Lee-Wright @gsdaniel01]

$EOSE

Long-term shareholder here. I’m a nobody on X – no posts, no followers. Have lurked here since fall of ‘23. Familiar with all the characters and history. Average entry of $1.48. The smart moves: bought low, and bought lower, sold 20% at ~$17. The dumb moves/regrets: still hold 80%, got emotionally attached, and misread pretty much everything since as the SP has declined. TBD - smart vs. dumb: RO participant.

Coming out of the RO, here are some random, unrelated thoughts:

IMO, the RO will be successful. In general, I don’t believe retail SH were the ones scooping up 100’s of millions of $EOSER. Others have speculated (I believe correctly) that hedge funds shorted common, will receive long common in RO to cover, and then own $EOSEW inexpensively (free if they shorted immediately above $5.48). IMO, hedges account for most of the $EOSER volume, the downward pressure on SP due to shorting, and will be the bulk of those participating. With cheap/free warrant in hand, the hedges should be on the same side as longs coming out of the RO (in theory, not guaranteed…obviously fundamentals of company will always matter).

Rights were never "cheap". Even at $0.03 - $0.04 per right, when multiple x 14.046 (right to unit conversion), paying $0.42 - $0.56 per unit. Also, if a full oversubscription occurred, that price gets halved to $0.21 - $0.28 per unit…so, for some, oversubscription might have made financial sense. At a certain SP (I don’t know that price), it would obviously make sense to view RO as a sunk cost and let expire worthless. Most likely is the RO purchases were factored into the initial arbitrage opportunity calculation to get the warrants cheaply.

After hedges, then some institutional SH who liked the LT story and wanted to avoid dilution. Lastly and in my opinion the smallest category of participants are retail RO participants.

Yes, it was messy and complicated. But believe eose will raise the $150 million. Some rights will expire worthless. But there will be some oversubscription that gets them to the finish line. Say something like 80% direct participation with 20% oversubscription (nothing to support...pulled out of air using 80/20 rule).

Source 6/30 8-k: Eose’s ownership range in FPUSA is known from the 6/30 8-k. Cerberus will own 50,000,001 founder’s equity shares and 100,000,000 investment shares. Hudson Bay will own 50,000,000 investment shares. Eose will own a minimum of 75,000,000 investment shares (from the HB investment in Eose).
If no RO occurs, FPUSA still funds at $225 million ($75 million from Eose via HB) and Eose owns 75/275 or 27.3%. With half from RO of $75 million, FPUSA funds at $300 million and Eose owns 150/350 or 42.9%. With full $150 million from RO, FPUSA funds at $375 million and Eose owns 225/425 or 52.9%.

Source 7/2 8-k: There’s been a lot of speculation on Cerberus participation in rights offering. If you peel back the onion on Cerberus’ 159.6 million “shares”, they own no common shares and only own Series B Preferred and the SPA Warrants from June 2024. See page 43 of the PDF from the 7/2 8-k. The SPA Warrants from June 2024 are not listed as “participating warrants” in the RO. And the Series B preferred received no rights. Cerberus did receive 20 million additional warrants for funding FPUSA but absent picking up EOSER on the open market, they did not receive any rights/participate in the RO.

That’s all the random stuff. I had a lengthy back and forth with Grok on the merits of the Eose pursuing the RO vs. raising funds in other avenues. It’s a TLDR; but I will post it below for anyone that wants to plow through it.

NFA/DYOR

[Ed Zack Lee-Wright @gsdaniel01]

The first runup, I just bought, celebrated, and stuck my head in the sand for too long. I plan to be more active with covered calls and taking some profits along the way. I want to give enough time to see this FPUSA deal play out. I believe I remember seeing there is a 3 -year lockup on investments from the 3 parties...so this won't necessarily be overnight. No price target yet...get through 2Q earnings, 2H26, and then see where we are to start the new year.

[Ed Zack Lee-Wright @gsdaniel01]

Conversation with Grok. Warning – lengthy.

User: Eose Energy recently raised $75 million from Hudson Bay on terms similar to the $150 million rights offering they were about to initiate. I’m struggling to understand why eose did the rights offering at all rather than raise the $225 million separately. One varying factor is the proceeds of both will be invested in an outside entity called Frontier Power USA. Thoughts on why this would have been taken or why it made sense?

Grok: EOSE structured the $75M registered direct offering (RDO) to Hudson Bay alongside the planned ~$150M rights offering (RO) to accelerate and de-risk its equity contribution to Frontier Power USA (FPUSA), while giving existing shareholders priority participation and aligning new capital with them.
Background on the Deals and FPUSA
•FPUSA is a joint venture/platform (with Cerberus as a key anchor) to develop, own, and finance long-duration energy storage projects using Eos' zinc-based batteries. It aims to deploy projects at scale (pipeline ~16 GWh) with a financing model where ~$375M total equity (at ~75% LTV) supports >$1.5B in project capital.
•Original plan (May 2026): Cerberus ~$100M + Eos up to ~$150M (via RO to existing shareholders) → Eos retains meaningful economic interest in FPUSA.
•Hudson Bay addition (June 30, 2026): $75M RDO into EOSE (same terms as RO: ~$5.481/unit with fractional warrants) + $50M direct into FPUSA. This boosts total expected FPUSA equity to ~$375M (assuming full RO).
Proceeds from both the RDO and RO fund Eos' contribution to FPUSA (in exchange for Class B units). Hudson Bay's direct $50M is separate/additive.
Why Not Just Raise $225M Separately (e.g., One Big RO or Other Deal)?This hybrid approach was likely strategic for speed, alignment, credibility, and shareholder optics rather than a single larger raise. Key reasons include:
1.Speed and Certainty of Capital:
•The RDO closed quickly (announced/priced June 30, closed ~July 1). RO is ongoing (launched early July, expires ~July 21).
•A single $225M RO might have taken longer to market/execute, with higher risk of undersubscription. The RDO provides immediate, committed cash from a sophisticated investor (Hudson Bay), reducing execution risk for the FPUSA JV closing.
2.Aligning New Money with Existing Shareholders:
•Hudson Bay's $75M RDO was explicitly on the same economic terms as the RO. This lets Hudson Bay buy in at the shareholder-friendly price/discount (~10% below recent market) and participate as a holder of record in the RO.
•It "aligns new institutional capital with its current investor base" — avoiding a discounted PIPE that dilutes without giving existing holders a chance. Rights offerings prioritize pro-rata participation for current shareholders.
3.Boosting FPUSA's Scale and Credibility:
•Adding Hudson Bay's $50M direct + the extra $75M via Eos increases the equity base faster, enabling more/larger project deployments sooner amid strong demand (data centers, utilities, etc.).
•More institutional sponsors (Cerberus + Hudson Bay) improve the platform's credit profile for project-level debt/financing and lender comfort. This de-risks the overall structure.
4.Eos' Retained Interest and Balance Sheet Benefits:
•Eos contributes more overall (~$225M potential) but retains an economic interest in FPUSA (size depends on RO uptake and final structure). The JV separates project financing from Eos' corporate balance sheet, letting Eos focus on manufacturing/tech while sharing in upside.
•Extra capital strengthens Eos' liquidity without fully relying on one mechanism.
https://t.co/OYipTQCxXN Realities:
•Rights offerings can have lower uptake; the RDO backstops/accelerates funding. Dilution is spread out, with protections (discount, oversubscription privileges) for existing holders.
•Warrants and structure provide upside participation for all involved.
Potential Downsides/Trade-offs
•Dilution: Combined raises increase shares outstanding (RO alone ~7.7% if fully subscribed). Stock reacted negatively on announcement due to this.
•Complexity: Ownership in FPUSA is now less straightforward (shifting from simpler 51/49 talk to broader economic participation).
•Conditions: Everything ties to RO success, DOE consent, etc.
Overall, it made sense as a pragmatic way to bring in strong new capital quickly without sidelining existing shareholders, while supercharging the FPUSA platform for faster growth. Management emphasized alignment and acceleration toward meeting demand. This is common in growth-stage energy/tech where timing and sponsor quality matter for project finance. For the latest, check EOSE's SEC filings or investor presentations.

User: Looking at the existing capital structure pre-RO, Cerberus owns warrants and various classes of preferred shares, but I’m not aware of any common shares owned. Ignoring the direct investment in Frontier, will Cerberus have the opportunity to participate in the RO?

Grok: EOSE structured the $75M registered direct offering (RDO) to Hudson Bay alongside the planned ~$150M rights offering (RO) to accelerate and de-risk its equity contribution to Frontier Power USA (FPUSA), while giving existing shareholders priority participation and aligning new capital with them.
Background on the Deals and FPUSA
•FPUSAis a joint venture/platform (with Cerberus as a key anchor) to develop, own, and finance long-duration energy storage projects using Eos' zinc-based batteries. It aims to deploy projects at scale (pipeline ~16 GWh) with a financing model where ~$375M total equity (at ~75% LTV) supports >$1.5B in project capital.
•Original plan (May 2026): Cerberus ~$100M + Eos up to ~$150M (via RO to existing shareholders) → Eos retains meaningful economic interest in FPUSA.
•Hudson Bay addition (June 30, 2026): $75M RDO into EOSE (same terms as RO: ~$5.481/unit with fractional warrants) + $50M direct into FPUSA. This boosts total expected FPUSA equity to ~$375M (assuming full RO).
Proceeds from boththe RDO and RO fund Eos' contribution to FPUSA (in exchange for Class B units). Hudson Bay's direct $50M is separate/additive.
Why Not Just Raise $225M Separately (e.g., One Big RO or Other Deal)?
This hybrid approach was likely strategic for speed, alignment, credibility, and shareholder optics rather than a single larger raise. Key reasons include:
1.Speed and Certainty of Capital:
oThe RDO closed quickly (announced/priced June 30, closed ~July 1). RO is ongoing (launched early July, expires ~July 21).
oA single $225M RO might have taken longer to market/execute, with higher risk of undersubscription. The RDO provides immediate, committed cash from a sophisticated investor (Hudson Bay), reducing execution risk for the FPUSA JV closing.
2.Aligning New Money with Existing Shareholders:
oHudson Bay's $75M RDO was explicitly on the same economic terms as the RO. This lets Hudson Bay buy in at the shareholder-friendly price/discount (~10% below recent market) and participate as a holder of record in the RO.
oIt "aligns new institutional capital with its current investor base" — avoiding a discounted PIPE that dilutes without giving existing holders a chance. Rights offerings prioritize pro-rata participation for current shareholders.
3.Boosting FPUSA's Scale and Credibility:
oAdding Hudson Bay's $50M direct + the extra $75M via Eos increases the equity base faster, enabling more/larger project deployments sooner amid strong demand (data centers, utilities, etc.).
oMore institutional sponsors (Cerberus + Hudson Bay) improve the platform's credit profile for project-level debt/financing and lender comfort. This de-risks the overall structure.
4.Eos' Retained Interest and Balance Sheet Benefits:
oEos contributes more overall (~$225M potential) but retains an economic interest in FPUSA (size depends on RO uptake and final structure). The JV separates project financing from Eos' corporate balance sheet, letting Eos focus on manufacturing/tech while sharing in upside.
oExtra capital strengthens Eos' liquidity without fully relying on one mechanism.
https://t.co/OYipTQCxXN Realities:
oRights offerings can have lower uptake; the RDO backstops/accelerates funding. Dilution is spread out, with protections (discount, oversubscription privileges) for existing holders.
oWarrants and structure provide upside participation for all involved.
Potential Downsides/Trade-offs
•Dilution: Combined raises increase shares outstanding (RO alone ~7.7% if fully subscribed). Stock reacted negatively on announcement due to this.
•Complexity: Ownership in FPUSA is now less straightforward (shifting from simpler 51/49 talk to broader economic participation).
•Conditions: Everything ties to RO success, DOE consent, etc.
Overall, it made sense as a pragmatic way to bring in strong new capital quickly without sidelining existing shareholders, while supercharging the FPUSA platform for faster growth. Management emphasized alignment and acceleration toward meeting demand. This is common in growth-stage energy/tech where timing and sponsor quality matter for project finance. For the latest, check EOSE's SEC filings or investor presentations.

User: Looking at the existing capital structure pre-RO, Cerberus owns warrants and various classes of preferred shares, but I’m not aware of any common shares owned. Ignoring the direct investment in Frontier, will Cerberus have the opportunity to participate in the RO?

Grok: Initially said Cerberus participates.

User: Can you explore those documents in an attempt to identify which of Cerberus warrants would be deemed participating warrants? I’m trying to identify number of RO (eoser) Cerberus was eligible to receive.

Grok: The main Cerberus (CCM Denali/CCM Frontier) warrants do not qualify as “Participating Warrants” for the EOSE rights offering (RO), so Cerberus was likely eligible for very few (or zero) RO rights (EOSER) via its warrant holdings.
Exact Definition of Participating WarrantsThe RO prospectus supplement (filed ~July 2, 2026, on Form 424B2) explicitly defines eligibility:
“...holders of our common stock, par value $0.0001 per share, and holders of the Company’s warrants issued on April 14, 2023, May 17, 2023, December 19, 2023 and November 21, 2025 (the “Participating Warrants”) as of 5:00 p.m. (New York City time) on July 1, 2026 (the “Record Date”).”
Each eligible holder receives 1 Right per share of common stock or per share of common stock underlying a Participating Warrant held on the Record Date. Each whole Right entitles the holder to purchase ~0.071193 of a Unit (1 share + 0.4388 warrant) at $5.481 per whole Unit. Rights are transferable (trade as EOSER).
Cerberus’ Warrants and Why They Do Not QualifyCerberus’ primary warrant holdings (per their Schedule 13D/A filings and EOSE 10-Q/10-K notes) are:
•SPA Warrant / Purchase Agreement Warrant (the large “penny warrant”): Issued ~June 21, 2024 (in connection with the June 2024 Securities Purchase Agreement / Credit Agreement with CCM Denali Equity Holdings, LP). This is for 43,276,194 shares at $0.01 exercise price (10-year term, cash or cashless). This date does not match any of the four Participating Warrant issuance dates.
•New CCM Warrants (issued as part of the 2026 JV with Hudson Bay / Frontier Power USA): ~20,017,772 warrants at $5.481 exercise price (10-year term). These were granted concurrently with the JV term sheet / closing around late June 2026. This also does not match the specified dates.
Cerberus’ beneficial ownership (~31.1% on a fully diluted basis as of early July 2026) comes primarily from this 2024 SPA Warrant + conversion rights on Series B preferred stock (various tranches). Preferred stock does not qualify for RO rights (only common shares and the specific Participating Warrants do).The November 21, 2025 date in the Participating Warrants list appears to align with a DOE warrant issuance (~November 18–21, 2025), not a Cerberus warrant.Implications for Number of RO Rights (EOSER) Eligible to Cerberus
•Via warrants: Effectively zero or negligible. Their major warrants fall outside the four exact issuance dates.
•Via common shares: Cerberus filings emphasize derivative/convertible holdings rather than large direct common share ownership. Any direct common shares held on the July 1, 2026 Record Date would qualify (1 Right per share), but this appears minimal or zero based on available disclosures.
•Result: Cerberus was probably eligible for very few or no RO rights from its warrant/preferred holdings. They could participate indirectly (e.g., via market purchases of rights or post-RO transactions) or through any small qualifying positions, but not meaningfully via their core stake.
Other Notes
•The new RO-issued Warrants (part of the Units) and the concurrent CCM/HBC JV warrants are separate from the Participating Warrants and do not affect eligibility for the RO itself.
•Over-subscription privileges exist but are available only after fully exercising basic rights (and subject to proration/availability).
•Everything is subject to the overall RO conditions (including JV closing) and standard nominee/broker handling for beneficial owners.
For the most precise count of any qualifying warrants Cerberus actually held on the Record Date, the best sources are their latest Schedule 13D/A amendments (around July 2026) cross-referenced with the RO prospectus supplement’s exact warrant descriptions, or direct confirmation via their transfer agent/broker. The public filings strongly indicate the major warrants are not Participating Warrants.

User: Back to my first question, in hindsight with the share price trading off substantially since the RO was announced, can the RO be criticized? Is there a different path eose might have taken that would have resulted in less share price pain?

Grok: Yes, the rights offering (RO) and related financings can reasonably be criticized for contributing to significant share price pressure, primarily due to dilution fears in a volatile small-cap stock. However, the structure had merits for alignment and execution speed, and alternatives carried their own risks. Hindsight shows clear "share price pain," but the path chosen was a pragmatic response to capital needs for the Frontier Power USA (FPUSA) JV.
Why the RO Has Been Criticized (and Why the Pain Happened)
•Dilution overhang: The ~$150M RO (plus the $75M registered direct to Hudson Bay) represented meaningful dilution (~7-8%+ if fully subscribed, on top of other issuances). Markets hate uncertainty around capital raises in growth-stage names like EOSE, especially with ongoing losses and execution risks in energy storage. Announcements in late June 2026 triggered immediate negative reactions (e.g., ~5% drop on the direct offering news), with further pressure as the RO launched and traded.
•Timing and optics: The deal came amid a stock that had rallied earlier in 2026 but was vulnerable. Rights offerings, while shareholder-friendly in theory (pro-rata discount ~10%, oversubscription privileges, tradable rights as EOSER), often signal near-term cash needs and create selling pressure from non-participants or arbitrage. The stock has traded substantially lower since announcement (from mid-to-high $6s toward $4s/low $5s range in early July trading, with volatility).
•Broader context: EOSE is a high-beta story stock (volatile on news, funding, and sector sentiment). Adding dilution on top of JV complexity and execution risks amplified the sell-off. Critics can argue it prioritized speed over minimizing immediate shareholder pain.
That said, not all criticism is fair—rights offerings are a standard, relatively fair way to raise equity (existing holders can participate at a discount to maintain ownership). The hybrid with the Hudson Bay direct (same terms, allowing participation as a record holder) was designed to align new capital with shareholders rather than a heavily discounted PIPE.Alternative Paths That Might Have Caused Less Immediate PainEOSE needed capital for its FPUSA contribution amid strong project demand. Pure alternatives had trade-offs:
1.Larger/more backstopped direct/PIPE or ATM equity — A bigger registered direct or shelf drawdown to institutions could have been quicker with less public overhang, but often at worse pricing (deeper discount) and without giving existing holders priority. This risks more "toxic" dilution perception and potential resale pressure from new buyers.
2.Debt or non-dilutive financing — More convertible debt, project-level financing, or partnerships could have reduced equity needs. However, EOSE's balance sheet, cash burn, and credit profile likely made attractive debt expensive or unavailable at scale without equity support. The JV structure already aimed to separate project financing.
3.Delayed or staged raise — Waiting for stronger operational catalysts (e.g., more backlog conversions, positive margins) before raising could have supported a higher valuation/less dilution. But FPUSA momentum and customer demand created urgency—delaying risked losing projects or JV credibility.
4.At-the-market (ATM) or smaller tranches — Gradual raises via ATM could minimize single-event shock, but ATMs often trade at a discount to market and can create constant overhang in a volatile name.
The chosen path (hybrid RDO + RO) had strengths: It brought in sophisticated capital (Hudson Bay additive to Cerberus), aligned terms with shareholders, accelerated FPUSA equity to ~$375M (supporting >$1.5B project deployment), and gave existing holders a discounted participation right. In a capital-intensive growth story, some dilution was likely inevitable; the RO tried to make it "fairer."Bottom line: Yes, it can be criticized for the price reaction—markets penalized the dilution signal in a high-volatility stock. A less dilutive or more backstopped approach might have softened the blow short-term, but could have compromised speed, alignment, or terms. Long-term success hinges on FPUSA execution, project deployments, and revenue/margin progress turning the story positive. EOSE remains a high-risk, high-reward name; the financing supports the growth thesis but at the cost of near-term pressure. Always DYOR and consider your risk tolerance.

[Ed Zack Lee-Wright @gsdaniel01]

@MarkGregory1313 👍 Marco Island, FL…sky is not as blue, but sand is sand!

[Ed Zack Lee-Wright @gsdaniel01]

@FreemyerGreg I also have Etrade. When I went to link, they have incorrect ratio, 1 from 15 rather than 1 from 14.05. Reduces opportunity to participate in RO by 6.7%, less shares purchased/less warrants received. Did you notice? Or noticed and don’t care?
I called E*Trade 2 days ago to report and of course nothing has been fixed.

[Ed Zack Lee-Wright @gsdaniel01]

@ive_m5 Price today + Sept calls last week…does someone have chip news?
GCT at 11:30 👀

https://t.co/KfEwa6rPEb

[Ed Zack Lee-Wright @gsdaniel01]

@insultsrare that mfer back there isn't real

[Ed Zack Lee-Wright @gsdaniel01]

@3YearLetterman @VP @KamalaHarris Coach…for those not hearing your message!

[Ed Zack Lee-Wright @gsdaniel01]

@3YearLetterman Coach, Hershel Walker is a former youth football player, UGA great, Heisman Trophy winner, and National Champion. Did you have to fight the urge to vote in GA? Hershel appears as tempting as a bar is to your Uncle Gary.

[Ed Zack Lee-Wright @gsdaniel01]

@rosemontseneca Agree with you and not the answer you're looking for...unfortunate reality is a holiday would be deemed "too offensive" by the cancel culture in 2021 USA. https://t.co/MeMj2exlsY

[Ed Zack Lee-Wright @gsdaniel01]

@ive_m5 @InfinityTradesX Just clarifying that you meant the other "Warren & Co", not this one...

[Ed Zack Lee-Wright @gsdaniel01]

@ive_m5 @InfinityTradesX @CarterMansbach Food for thought...if they could take out remaining converts for $200m cash as part of broader financing, net leverage is at 6.05x (think mgmt mentioned area of 6x on call). SP under $11.50 keeps them under 200m on the remaining 104m. Likely a discussion they are having...

[Ed Zack Lee-Wright @gsdaniel01]

@ive_m5 @moon_shine15 Who’s the mOrron that hit me with a salt shaker? https://t.co/M1bcYgIk4k

[Ed Zack Lee-Wright @gsdaniel01]

@InfinityTradesX Response I would have heard growing up: “Who pissed in your Cheerios?”

[Ed Zack Lee-Wright @gsdaniel01]

@EyeoftheStormZ

[Ed Zack Lee-Wright @gsdaniel01]

@InfinityTradesX FYI, April options added for GOGO over the weekend.

[Ed Zack Lee-Wright @gsdaniel01]

@EyeoftheStormZ Unclear whether Lord Gryffin or Craig benefits more...get your order in before the 17th! https://t.co/U6URJFw9tL https://t.co/9VDSYlvBJ7