Business context and reporting period
This is B. Riley Principal Merger Corp. II’s Form 10-Q for the quarter ended September 30, 2020—not an operating-company filing by Eos Energy Enterprises. B. Riley was a SPAC formed to complete a business combination; its proposed merger with Eos was announced September 7, 2020. The filing reports the SPAC’s finances, not Eos’s operating results.
Financial performance and position
- Revenue and margins: No operating revenue was reported. The company stated it would not generate operating revenue until after a business combination, at the earliest; margins are therefore not meaningful.
- Loss: Net loss was $2.0 million for the third quarter of 2020 and $2.05 million for the nine months ended September 30, 2020. Third-quarter operating costs were $1.98 million, partly offset by $16,294 of interest income; nine-month costs were $2.08 million, partly offset by $27,682 of interest income. Loss per share was $0.37 for the quarter and $0.27 for the nine-month period.
- Prior comparison: The comparable 2019 periods reported no operating costs, interest income, or net loss. The company completed its public offering in May 2020, so the periods reflect materially different stages of activity.
- Cash flow: Nine-month operating cash use was $458,706. Investing cash use was $176.75 million, primarily the deposit into the trust account; financing provided $177.52 million, mainly from the public offering and private placement. Ending operating cash was $315,105.
- Liquidity: At September 30, 2020, current assets were $551,331, current liabilities were $1.85 million, and the working capital deficit was $1.23 million. The trust account held $176.78 million, but those funds were generally reserved for a business combination or share redemptions, not ordinary operating expenses.
- Debt and obligations: No long-term debt or other long-term contractual obligations were reported. A $100,000 sponsor loan had been repaid; no amount remained outstanding. The company had $44,194 payable to a related party for administrative support and reported $1.79 million in accrued expenses.
Merger, outlook, and risks
The proposed transaction contemplated up to $300 million of shares for Eos securityholders, plus up to 2 million additional shares tied to earnout targets. Closing conditions included at least $110 million of cash available before certain expenses. B. Riley Financial committed to provide up to $40 million of equity financing, reduced by qualifying investor subscriptions; the commitment was not itself a statement that the funding had been drawn.
Management cited substantial doubt about the SPAC’s ability to continue as a going concern through its November 22, 2021 liquidation deadline, given limited operating cash, ongoing costs, and uncertainty about obtaining additional financing. If it could not raise funds, it might need to reduce costs, suspend the transaction pursuit, or curtail operations. If no business combination were completed by the deadline, public shares were generally subject to redemption from the trust account; warrants would expire worthless. No operating guidance for Eos was provided in this filing.
The company reported no legal proceedings and no material changes to previously disclosed risk factors. Management concluded disclosure controls were effective and reported no material change in internal control over financial reporting during the quarter.
Important facts for investors to verify
- Confirm this SPAC 10-Q is not being used as a substitute for Eos’s standalone financial statements or later combined-company filings.
- Review the merger’s final terms, closing status, redemption levels, and whether the $110 million minimum-cash condition was met.
- Verify the amount of B. Riley Financial’s equity commitment actually funded and any investor subscriptions that reduced it.
- Assess the SPAC’s usable cash and near-term expenses separately from trust-account funds subject to transaction and redemption restrictions.
- Review subsequent filings for any changes to the going-concern outlook, transaction terms, or share and warrant structure.