Heliogen, Inc.

Good morning and welcome to the Heliogen second quarter 2022 earnings 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 Lewis Baltimore, Heliogen's Vice President of Investor Relations, for opening remarks and introductions. Please go ahead.

Thank you, Operator, and good morning to everyone. We're glad you could join us today for our second 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 yesterday afternoon 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 full year 2022, the status and impact of proposed legislation, discussions with potential customers, and commercial contract progress. 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, including our amended annual report on Form 10-K-A. During this call, we may also refer to certain non-GAAP financial measures. 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 yesterday, 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 what is now our third earnings call as a public company. First, I'll provide an update on our progress as relates to the key milestones that we laid out for you earlier this year. Our mission is to build an enduringly profitable and scalable business that contributes to achieving global net zero ambitions 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 energy. Our systems, which replace industrial burning of fossil fuel with concentrated sunlight, are especially needed right now and we have developed proprietary technology that we believe 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 magnifying glass at very large 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 heat, steam, electric power, or green hydrogen. We call these 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 provide a more detailed overview of our business. Despite a current difficult macroeconomic backdrop, our prospective customers in the mining and resource extraction sectors are seeing very strong earnings and cash flows as a result of sky-high commodity prices. However, because these customers are huge energy consumers, Today's higher fossil fuel prices are offsetting some of the margin tailwinds they are seeing from higher metals and mining revenues. We believe this makes Heliogen an even more attractive proposition because we can offer prospective customers an opportunity to avoid both the higher costs and the wild volatility in fossil fuel prices, and also to reduce their carbon footprint. Heliogen's method of producing carbon-free heat from concentrated sunlight is a direct replacement for heat generated from fossil fuels and is thus one of the best ways for our customers to decarbonize. 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 on our full year 2021 earnings call and reaffirmed on 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. If you turn to page six in our Q2 earnings presentation posted on our website, you'll see the key milestones we have laid out to track our execution progress. We continue to make meaningful progress towards meeting each of these milestones, and given the second half-weighted nature of the timing of these key events, we expect to have an eventful rest of this year as we accomplish more of the goals within the next weeks and months. I'd like to give you a progress update on our assembly line heliostat production. Heliogen's concentrated sunlight fossil fuel replacement technology is unique in that it's produced in an automated factory as opposed to individually constructed in the field. That is the result of our revolutionary software control system that enables the control of many thousands of small, factory-made heliostats. In the last quarter, we have made significant strides in our field operations as we prepare for our first commercial-scale customer projects. We demonstrated the ability to install each heliostat in under two minutes in our field trials at our Lancaster facility. This is a new record for Heliogen and we plan to continue to drive these times down from minutes to seconds over the coming years. We will be using this techniques to drive our gross margins up and our goal of sector leading profitability. We also continue to make strides in driving down cost and driving up performance of our heliostats. If you turn to page seven, you can see photos of each iteration in our heliostat evolution. In November of 2019, we deployed hundreds of our generation three heliostat in Lancaster, California. Those heliostats achieved one tenth of a degree of tracking accuracy and enabled us to achieve temperatures of a thousand degrees Celsius. We just completed the installation of over 300 of our generation four heliostats, and those are two times more accurate still achieving better than 1 20th of a degree of pointing accuracy. These heliostats were all produced in our new Long Beach factory, fully testing and validating our supply chain, inspection, production, shipment, and installation process. We will be ready to produce the first 7,500 heliostats for our first commercial scale facility as soon as permitting is complete. If you turn to page eight in our earnings presentation, You'll see the first several hundred heliostats installed in Lancaster last week are in the identical arrangement to be used for our customers and include our first implementation of wireless power and control with the solar power on our tracker at the end of each aisle of mirrors. This will eliminate the need to send electrical power from the grid out into the field and makes the entire operation of the mirrors fully solar powered. And finally, we have advanced our robotic autonomous cleaning and maintenance vehicle from last year's technology demonstration design to today's gantry design vehicle ready for customer deployment. This vehicle, designed and built entirely in-house using LIDAR, cameras, GPS, and our own proprietary software, cleans the mirrors each night, dramatically boosts performance, and lowers cost of maintenance. We have already designed, manufactured, deployed, and started testing the first customer's autonomous cleaning vehicle at our Lancaster facility. If you turn to page 9, you can see a picture of this impressive vehicle on site. Now I would like to give you an update on our commercial contract progress. We recently signed a non-binding letter of intent with Dimensional Energy to produce sustainable aviation fuel, or SAF for short, at our demonstration facility in Lancaster, California. You'll find an overview of this on page 10 of the earnings presentation. Dimensional Energy has developed a process to synthesize sustainable fuels from sunlight and air utilizing the Fischer-Tropsch process. The Fischer Trost process is one of seven ASTM-approved sustainable aviation fuel production pathways, meaning it can be used today in a blend of up to 50% of the fuel used in commercial airline flights. We plan to deploy our HelioHeat technology to convert sunlight directly into thermal energy in the form of high-temperature steam and air that we use to produce green hydrogen for Dimensional Energy's reactor platform. As part of the collaboration between Heliogen and Dimensional Energy, the LOI includes a goal of building a fully integrated sustainable aviation fuel demonstration to produce approximately one barrel per day. Both Heliogen and Dimensional expect the demonstration project to be a first step to develop a pipeline for approximately 3 million barrels of fuel over the next 10 years. Sustainable aviation fuel is a great case study demonstrating the potential for Heliogen's unique clean energy technology to decarbonize sectors that lack a solution that is both technically and economically feasible today. As a drop-in fuel, sustainable aviation fuel is functionally identical to traditional jet fuel refined from crude oil. It can utilize existing jet fuel infrastructure at airports, either on its own or blended with fossil jet fuel. It can also be burned in existing aircraft engines, all without upgrades or modifications. This is important in the context of the airline industry and its reliance on aircraft utilization, turnaround time, and flexibility. Since sustainable aviation fuel can be made with low or zero carbon feedstocks using renewable energy, the end result is a fuel with significantly lower lifecycle carbon footprint that can be used today. Cost has historically been a hurdle to sustainable aviation fuels adoption. Heliogen and Dimensional Energy aim to ultimately produce this fuel at a cost that is competitive with traditional jet fuel. While I just outlined some of the ways we utilize our Lancaster site to test our equipment and validate installation and maintenance techniques out in the field, this project with Dimensional Energy is another example of how we leverage the same assets to accomplish goals on the commercial side of our business, too. We continue to make progress with the permitting and approval process for our Woodside project. This is a five megawatt electric demonstration facility and also includes the scope of funding of our previously announced $39 million award from the U.S. Department of Energy. At this point, we have completed all the necessary environmental impact studies and permit applications. These have been submitted to the relevant regulatory bodies and we plan to break around in this project after receiving the necessary approvals. Now I'd like to turn the call over to Christy Obiea, our CFO.