Heliogen, Inc.

Good morning, and welcome to the Helios Incorporated Full Year 2021 Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks. I would now like to turn the call over to Louis Baltimore, Heliogen's Vice President of Investor Relations, for opening remarks and introductions. Please proceed.

Thank you, Operator, and good morning to everyone. We're glad you could join us today for our full year 2021 conference call. With us on today's call are Bill Gross, Heliogen's founder and chief executive officer, and Chris Diobiaya, our chief financial officer. Heliogen issues its results yesterday in a press release that can be found on the investor section of our website at heliogen.com. As a reminder, our comments on this call include forward-looking statements which are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations, and financial performance, including our guidance for 2022. Actual results could differ materially from those contemplated in the forward-looking statements. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. Factors that could cause actual results to differ materially can be found in yesterday's press release and other documents filed with the SEC by the company from time to time. During this call, we may also refer to certain non-GAAP financial measures, including EBITDA and adjusted EBITDA. These non-GAAP measures should be considered in addition to and not as a substitute for or in isolation from GAAP results. More detailed information about these measures and a reconciliation to the most comparable U.S. GAAP measures is contained in the press release issued last night, which is available in the Investors section of our website and was furnished on Form 8K with the SEC. A replay of this call will also be available on the investors section of our company website this afternoon. And with that, I'm pleased to turn the call over to Bill Gross, our founder and chief executive officer.

Thank you, Louis, and thanks to everyone for joining us this morning. I'm incredibly excited to speak with you today on our first earnings call. If you turn to page four of the earnings presentation we posted on our website, I'd like to begin with a review of the nature of Heliogen's business. what makes our company unique, and why we believe Heliogen's technology can help change the world. At its core, Heliogen's mission is to decarbonize heavy industry, utilizing a combination of leading edge technologies to replace fossil fuel energy with concentrated sunlight. Heliogen provides clean solar thermal energy, which can be used to make heat, electric power, or green hydrogen. We call those products HelioHeat, heliopower and heliofuel. Global demand for carbon-free energy is skyrocketing in light of fossil fuel price increases and the volatility of those prices, as well as the growing commitments by companies and countries around the world to reduce their carbon emissions. Our company addresses these critical needs. Cement companies, mining companies, steel companies, oil and gas companies, and hundreds of other huge industrial customers are looking to reduce their carbon emissions and eliminate fossil fuel cost volatility from their planning processes. To address all these imperatives and decarbonize heavy industry, Heliogen has innovated and is now scaling a new generation of concentrated solar thermal energy production that is modular, AI-powered, and scalable. As a result, our technology can be installed behind the meter on our customers' premises to avoid or lessen their purchase of fossil fuels and enable them to take control of their own energy generation onsite. Turning to page six, you'll see more about the key insights and inventions that led to Heliogen's breakthrough approach. The first is that we've coupled advanced graphics processing units with AI-based control systems to move thousands of mirrors automatically with real-time feedback and more precision than ever before. This proprietary closed-loop tracking system allows Heliogen to optimize sunlight concentration, enabling us to efficiently generate thermal energy at temperatures from 150 up to 1,000 degrees Celsius, a far larger range than previously possible with traditional concentrated solar power. This closed-loop tracking system is superior to the older open-loop systems that relied only on pre-programmed maps of the sun's movement and were therefore relatively inefficient. We expect that the closed-loop heliogen systems will be significantly more efficient than their open-loop counterparts. Closed-loop tracking will also enable heliogen to eliminate weeks of heliostat field calibration when a new facility, of one or more modules is started up. Additionally, as the ground shifts and as equipment settles over time, the traditional open-loop systems require manually intensive recalibration out in the field every six months or so. Recalibration can be expensive and results in system downtime. Since our closed-loop system is actively monitoring and adjusting the mirror's focus in real time, there is no separate recalibration process and no associated downtime. plant operators get immediate insight into performance and maintenance needs. Second, this innovative AI-based closed-loop tracking system allows us to make our heliostats significantly smaller than what's common on traditional CSP projects. Ours are the size of a large television screen compared to older systems which use mirrors as large as a tennis court. This means our solar field can be manufactured efficiently in a factory at scale, like PV panels, instead of heavy construction out in the field. This enables mass production and rapid learning curve cost reduction that has not previously been applied to concentrated solar. With our more efficient, software-driven system utilizing smaller mirrors, our modules are designed to take up as little as 3% of the space compared to traditional CSP fields you may have seen while flying in and out of various airports in Southern California and Nevada. This provides the potential for reduced cost to our customers, as well as supporting much more flexibility in the siting of these projects. The third innovation of ours is modularity. For example, for our power modules, we use these mass-produced heliostats to build one 5-megawatt electric system and then replicate it. with each additional module generating another 5 megawatts. Modular design will allow us to standardize components to reduce overall costs while also eliminating single points of failure. This modularity allows Heliogen to target the huge industrial market, and we are not limited to just a commercial-scale wholesale utility market. We're the first company in concentrated solar that we know of to develop a modular system like this. previous concentrated solar was centralized, we are decentralized. And that is one thing that enables us to better service the industrial market. While there is a tremendous amount of capital, intellectual horsepower, and competition in the energy transition, I believe Heliogen is uniquely positioned to be one of the big winners in this race to decarbonize our planet. To defend against competition, Heliogen has patented several of these innovations. and built a strong R&D effort to continue to advance our state-of-the-art technology. For Heliogen and our investors, we believe these unique competitive advantages will enable us to create a wide moat around our business. For our customers, this technology can be a game changer. We want to scale this in a very large way, and down the road, we may license this technology to others. Another huge advantage that Heliogen's technology will provide Beyond cost and modular flexibility is low-cost energy storage that is dramatically less expensive than batteries. Because Heliogen can achieve higher temperatures, Heliogen can shrink the footprint and the cost to store thermal energy in solid media, such as rocks, ceramic, or sand, enabling near 24-7 operation and solving one of the key problems with most renewable energy, intermittency. While most free renewables provide power between about 20% and 40% of the time, called the capacity factor, Heliogen plans to build systems for its customers to provide a capacity factor of up to 85%, depending on customer preferences. Industrial customers typically need that because they continue to run after the sun goes down and on cloudy days, and Heliogen's technology will be able to uniquely support those needs. What this means is that Heliogen's technology will provide meaningful flexibility. It is flexible in scale, it is flexible in application, and it is flexible in time of use. But this did not occur overnight. Our team has spent eight years improving all aspects of our technology with the goal of achieving the record temperatures from concentrated sunlight that we have described. From the mirrors to the sunlight receivers to the full systems themselves, We are now on the fourth generation of technology innovation, and we will continue to innovate. Please turn to page seven, and I'll talk more about some of the progress in our execution efforts that we've made over the past year or so. And later, I'll turn it over to Christy to talk about our commercial progress. To demonstrate our technological innovation, control system, and modular plant design, we completed a 400-kilowatt test facility in Lancaster, California at the end of 2019. Here, we have proven at demonstration scale the tracking system, the storage, and carbon-free steam production. On the renewable fuel front, we recently held successful trials producing green hydrogen with Bloom Energy at our Lancaster site. These trials combined Heliogen's proprietary solar thermal technology with Bloom Energy's proprietary solid oxide high-temperature electrolyzer to produce green hydrogen. By combining these two technologies, we aim to solve the cost problem that the hydrogen economy is struggling with so much today. Heliogen and Bloom demonstrated in a trial that together, they can produce hydrogen significantly more efficiently than traditional low-cost PEM and alkaline electrolyzers. Substituting Heliogen solar heat for some of the electricity used during the hydrogen production process will significantly reduce cost. since our heat is a much more efficient source of energy than electricity. When combined with our thermal storage and renewable energy solution, we expect to be able to further improve the capital efficiency of the electrolyzer by powering the electrolyzer nearly 24-7. We also continue to devote significant energy to innovation and expansion of our capabilities. In December, we announced the execution of our $39 million award from the Department of Energy to support commercial scale deployment of our technology in combination with a unique power system that has the potential to lower costs, water usage, equipment size, and plant footprint as compared to other alternative types of power generation. After rigorous evaluation as part of a very competitive process, the DOE recognized the advantages of Heliogen's technology and we received the largest award within the DOE Solar Technologies Office fiscal year 2020 funding program. In February, we announced the award of an exclusive lease agreement with the U.S. Bureau of Land Management for the Brenda Solar Energy Zone in Arizona, where we plan to develop a site that could be sold to a prospective customer for the production of up to 20,000 metric tons of green hydrogen per year. This site is an ideal location for commercial green hydrogen production due to its ample water supply and close proximity to key distribution channels. These projects should lead to greater innovation and more opportunities for customers to take advantage of Heliogen's unique renewable energy solution. As we work to deliver on our mission and create shareholder value, I'll now provide you with an update on our operational progress. If you turn to page 10, you'll see what we've laid out for you in chronological order. In February, we announced initial site preparation for our Heliostat manufacturing facility in Long Beach, California. This facility, expected to be operational later this year, will be led by Andy Lambert, Heliogen's chief production and supply chain officer, who came over to us from SpaceX to lead our manufacturing effort. With state-of-the-art assembly lines, we believe this facility will give us the ability to ramp production rapidly and efficiently while reducing our production costs. It will also have a robust test facility and rapid deployment center for us to continue innovating and finding ways to squeeze out costs while increasing performance of our systems. In addition to manufacturing efficiencies, we will also continue to optimize efficiencies for the operation of the facilities we are deploying for customers. As we announced in December, we have successfully demonstrated our installation and cleaning autonomous robot and utility solution, or Icarus as we call it, which will now allow Heliogen to do several things. First, Icarus's cleaning function will maintain optimal reflectivity of our mirrors, enabling consistent maximization of generated heat and the highest possible efficiency of our systems. Second, Icarus positions Heliogen to be able to improve labor efficiency on our larger projects longer term. by eliminating some of the ongoing repetitive tasks required by humans. We expect to deploy the autonomous cleaning function of Icarus with one of our first full-scale facilities. During the rest of 2022, we aim to achieve a series of key commercial and execution milestones as summarized on page 10. Now I'd like to turn it over to Christy Obiea, our CFO.