Heliogen, Inc.

Good morning, and welcome to the Heliogen first quarter 2022 conference call. As a reminder, today's call is being recorded. At this time, all participants are in listen-only mode. A question and answer session will follow the prepared remarks. I would now like to turn the call over to Lewis Baltimore, Heliogen's Vice President of Investor Relations, for opening remarks and introductions.

Thank you, Operator, and good morning to everyone. We're glad you could join us today for our first quarter 2022 conference call. With us on today's call are Bill Gross, Heliogen's founder and chief executive officer, and Christy Obiea, our chief financial officer. Heliogen issued its results this morning in a press release that can be found on the investors 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 potential award grants, the company's future operations, and financial performance, including our guidance for full year 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 this morning's press release and other documents filed with the SEC by the company from time to time, including our amended annual report on Form 10-K-A. During this call, we may also refer to certain non-GAAP financial measures, including EBITDA and adjusted EBITDA. These non-GAAP financial 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 the reconciliation of the most comparable US GAAP measures is contained in the press release issued this morning, 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 to you today on our second conference call as a public company. First, I'll provide an update on our progress as it relates to the key milestones we laid out for you with our last report. Then I'll turn it over to Christy to walk you through our key financial aspects of the first quarter. Our mission is to build an enduringly profitable, scalable business that contributes to achieving the net zero ambition by decarbonizing heavy industry. We chose to focus on heavy industry because it's the largest energy-consuming sector in the world and is currently wildly underserved by renewable energies. Our systems, which replace industrial burning of fossil fuel with concentrated sunlight, are especially needed right now, and we have developed proprietary technology that meets the energy needs of heavy industry. Our technology concentrates sunlight to extremely high temperatures using an AI-based control system that turns a field of small mirrors into, in effect, a self-adjusting, huge magnifying glass at scale. We use that to create 100% carbon-free solar thermal energy at temperatures up to 1,000 degrees Celsius, which can be used to make steam, electric power, or green hydrogen. We call these three end products helioheat, heliopower, and heliofuel. If you're new to Heliogen's story or would like a refresher, I'll refer you to our full-year 2021 conference call from March 29th. during which we provided a more detailed overview of our business. Before we get into our progress on individual milestones, I am pleased to say that we remain on track with the plan for this year that we laid out in our last earnings call. Given the rapid pace of growth and goals we set out to achieve, I am proud of what our team has done so far. We continue to execute against our goals despite the ongoing supply chain disruptions. Fortunately, Our product is unique among renewable energy technologies in using software to derive value from widely available commodities such as steel, glass, and aluminum instead of relying on expensive and limited materials such as cobalt and lithium. The geopolitical situation that has caused fossil fuel prices to double in the past year provides a strong tailwind for our customer discussions because we are intent on matching or beating our customers' avoided cost of fossil fuels and delivering our products to them with zero carbon emissions. The geopolitical situation has made both of those objectives more urgent for our current and potential customers. You may have seen the headlines about a recent Department of Commerce investigation to determine whether PV solar panels are being assembled with Chinese components in Southeast Asia to get around the PV tariffs. Because we are solar thermal and not solar PV, We are not impacted by any future changes to Chinese tariffs on PV or recent lawsuits that have put hundreds of PV projects on hold. Another final note on market tailwinds. Because of the world's massive shift towards electric vehicles, lithium has become many times more valuable, and mining companies around the world are scaling up their operations to deliver much more. Thermal energy is a critical component to these mining operations. Almost all of these mines are in remote, off-grid locations, in places where it is often complicated or expensive to add transmission lines or pipelines. Heliogen is uniquely positioned to provide thermal energy in remote locations, making the mining sector a particularly attractive opportunity for our solutions. If you turn to page six of the presentation posted on our website, you'll see we've laid out our 2022 commercial and execution milestones in chronological order. It's been only eight weeks since our last conference call, yet we have made meaningful progress in that short time, and we are on track to achieve several more important milestones during the second half of this year. As we announced on March 28th, we have finalized the contract for our first commercial module with Woodside. This project supports the design and build of commercial scale five megawatt electric demonstration facility, and also includes the scope of funding of our previously announced $39 million award from the US Department of Energy. For this project, we will build, deploy, and test a supercritical carbon dioxide, supercritical CO2, SCO2 power generation system, coupled with our AI-enabled heliostat field. While our concentrated solar energy system can also be paired with existing steam turbine technology to convert thermal energy to power, Supercritical CO2 has the potential to deliver higher efficiency, lower cost power generation with a smaller footprint and with reduced water use. Our focus on the new approach which uses supercritical CO2 technology is one of many examples of where Heliogen continues to innovate to bring more value to all stakeholders and stay ahead of the competition. Along with the Woodside Project Agreement, We also entered into a collaboration agreement with Woodside to jointly market and identify opportunities for deploying Heliogen's technology throughout Australia. Woodside brings both familiarity with and access to industrial owner-operators in Australia that could really benefit from Heliogen's technology. Australia's resource base, climate, and geography makes it one of the best places on the planet to deploy our technologies. We are very enthusiastic about this partnership to help Woodside achieve its energy transition targets while also helping us to expand our business to one of the largest global markets for our technology. We also continue to make progress with the permitting and approvals process for the Woodside project. We have filed our conditional use permit application along with the necessary technical studies with Kern County, California, and the county has deemed that complete. In parallel with the permitting process, the detailed engineering work is well underway, and we are engaging with our supply chain partners. We expect to begin construction once the permitting process is complete. Another one of our key execution milestones is the selection and announcement of our major supply chain partners, and we are making great progress on that front, too. For example, we recently announced that we partnered with Hanwha Power Systems. a global leader in the development of eco-friendly power generation solutions. As part of this partnership, we jointly developed a modular, high-efficiency, 5-megawatt electric supercritical CO2 power block integrated with high-temperature solid-media thermal energy storage for deployment as part of the DOE award, and Hanwha will manufacture it. We see this partnership as an endorsement from Hanwha of our technical capabilities and the long-term potential of supercritical CO2 as an evolution in electric power generation. It's also one example of the way we leverage the scale and expertise of third-party manufacturers to help reduce our own capital expenditure needs. The supercritical CO2 power block is designed to meet the renewable power generation requirements for industrial customers in energy, mining, and other heavy industries. and we see a huge potential for this technology to enhance our HelioPower product offering. On the manufacturing front, in February, we announced initial site preparation for our Heliostat production facility in Long Beach, California, and we are progressing there as planned. Our rapid prototyping capabilities are fully operational. We now have operational automated mirror and actuator pilot lines that we're using to develop and tune critical processes, and equipment. We expect one final piece of equipment to be installed later this month to complete our reliability and test lab, which is being used for product validation and lifecycle testing. We are preparing for the installation of the main production lines, which will give us the capability to significantly boost Heliostat production capability while reducing our production costs. We remain on track for this portion to be fully operational later this year, completing the Long Beach facility. Once we get these main production lines up and running, we'll be sure to share some great video and photo content with you via our website and social media channels. The important part to note about this automated robotic large-scale concentrated solar manufacturing facility is that we believe to be the first of its kind in the world dedicated to efficient mass manufacturing of the heliostats used in concentrated solar energy production. This is an important difference Old generation heliostats are too large for automated manufacturing and have to be constructed with manual labor in the field, whereas Heliogen's heliostats are small enough for repeatable automated manufacturing processes, which take place entirely in our facility, where quality control and cost efficiencies can be achieved. Use of these small heliostats are made possible because of our innovative software control system. In February, we also announced the award of an exclusive lease agreement with the U.S. Bureau of Land Management for the Brenda Solar Energy Zone in Arizona. We plan to develop a facility to produce up to 20,000 metric tons of green hydrogen per year. This site is an ideal location for commercial scale green hydrogen production due to its ample local water supply and its proximity to key distribution channels. Since our last earnings call, We fully executed the lease with the Bureau of Land Management and are now working on our plan of development, which we anticipate submitting to the BLM before starting the National Environmental Policy Act permitting process. Our ultimate goal is to leverage the attractive aspects of this site and our in-house project development expertise in order to partner with a hydrogen producer that wants to own and operate a heliogen-developed heliofuel hydrogen production facility. The US federal government and many other governments around the world recognize the importance of mitigating the effects of climate change and have allocated large sums of money for grants, low-interest loan guarantees, and other monetary partnerships. The $39 million DOE award, which I mentioned earlier, is just the first of several we aim to receive over the next few years to help fund and accelerate the advancement of our game-changing industrial decarbonization technology. The DOE is also attempting to place over $40 billion in funding grants, loans, and loan guarantees that Heliogen's concentrated solar energy technology qualifies for. There are also additional government funding opportunities at state and local levels here in the United States, in addition to international grant programs overseas that we also qualify for. We have an experienced team working on this public sector funding effort, led by Tom Doyle, our Chief Commercial Officer. Tom has extensive experience in successfully navigating these grant and guarantee programs. Over a two-year period at BrightSource, Tom secured $1.75 billion in low-interest DOE loan guarantees and managed additional DOE guaranteed loans for a total of over $5 billion. This is just a part of the valuable experience and skill set Tom brings to Heliogen, gained over his 25 years developing utility-scale energy projects globally. We have already applied for several additional awards, and we look forward to sharing more about these efforts as we secure additional funding and make progress on these efforts. Now, I'd like to turn over the call to Christy Obiea, our CFO.