Conference Transcript - BESS 2026-04-02

Operator

Welcome back, everyone. Next, we have Bimergen Energy Corporation. It trades on the New York Stock Exchange American under the symbol BESS. It's a US-based independent power producer specializing in the development, ownership, and operation of standalone battery energy storage systems, or BESS, and develops utility scale and distributed storage projects designed to provide grid reliability, renewable integration, and flexible energy solutions. Happy to welcome co-CEO and CFO, Bob Brillin. Nice to see you today, Bob. Welcome to the conference.

Bob Brillin, CEO

Thank you. I appreciate it. I'm going to jump right into it and talk about BESS by immersion. Our company just uplisted to the New York Stock Exchange American here about a month ago, and And we're excited to be working with more volume, with more credible investors. We during that 13.6 million dollar offering, we actually had three institutions jump in for about half of that. They did a lot of due diligence. And I just say that because as we go through here, you're going to be talking to yourself and saying, wow, this is too good to be true. because we got a lot of feedback like that as we went through and i'll actually explain why it is uh too good to be true it's just a an incredible business model and it's also helping the grid meaning uh putting power where it needs to go uh we started this company a while back we did a merger or acquisition i'll call it back in april of 2024 we bought 23 development projects these projects were ready to be built and what that means is you're building battery farms these battery farms are on about 10 acres uh and they the typical is about 100 megawatts the catch here is it takes 125 million dollars to build each of these projects the uh nice thing about this is we don't raise that money in this public company we raised 13.6 million dollars to get the credibility of being on the big boards also get the credibility of being able to work with some of the the larger names in the industry using other people's money and what we're going to talk about that is we're using mezzanine debt from strategic partners and we're using bank debt uh to finance the rest the other piece that's going to be critical here is this company would operate as a normal throwing off the normal p l the normal bottom line but really what really really helps is the itc tax credits so when you put 125 million dollars in the ground but as soon as you get it operational which is within about a year you get 60 million dollars of that back up to 60 million dollars back so you then you only have 65 million dollars worth of debt and debt serviced whereas normally in a normal company you'd have 125 million dollars worth of debt against that asset so what that means for us is we have two gigawatts worth of development projects so that means we're going to need over two billion dollars to get them all on the ground we'd like to do that in the next four to five years but what that also means is each of those projects will generate about 20 million dollars of energy arbitrage what i mean by that is buy low sell high on a daily basis so there's always energy there at certain times of the day And then there's energy need at different times of day. So it is that buy low, sell high mentality that happens every day with almost day trading for energy. We're going to talk a little bit more here about where our projects are. Our projects are throughout the United States. The majority of them are actually in Texas. And that's because the development team had identified a lot of pinch points. meaning here if we put a hundred million dollar asset here it's really going to help balance the grid meaning the the utility company that we buy the energy from when it's really low we invite it two cents a kilowatt and then later that day we're going to sell it back at 10 to 15 cents a kilowatt you have that energy arbitrage going on all day long as there's uh peaks and valleys in the energy needs the development process actually took place for about two to three years before we bought it A lot of that is the feasibility studies, making sure you know where your land is that you need, getting the leases negotiated, going through the legal formation, et cetera. Really where we were at at that point is needing capital. Again, so the key point here is what we did next. And here, I also talk about the sustainability. So this model is really, really going to be sustainable just because of the need for power. Power is supposed to double over the next four years. and there's a lot of sustainable intermittent renewable supply coming on meaning battery solar uh i mean solar and wind but the batteries are really needed because the solar and wind only come during certain times of the day so you have to have the battery to store those and put it back to the grid when it's needed or it's just not efficient the duck curve has been modeled over the last 15 years really identifying the the disparity between supply and demand how we fit into this is we are the power plant so we're there we don't care where the power comes from we're not generating power we're taking it off the grid so we're actually buying it from the same utility that we sell it back to so they they can't own a battery storage system there in texas so they really need us as a good partner and as i say as you can see here it's the buy low sell high model it's it's a straight very simple arbitrage model so you are doing this on a daily basis and as i said 100 megawatt project can generate about 20 million dollars in that arbitrage uh on an annual basis and when you talk about two gigawatts uh that we have in play over the next four to five years well that that adds up very quickly because it's about $400 million of annual revenue that can be generated once we get all those in place. So as you can see, the value proposition here is very simple. We're growing a company that's currently at the $20 million market cap, when in reality, we should be much higher. The actual market value of the projects that we bought, they're on our books for $22 million. But in reality, as we put each those projects into a joint venture to take it forward a hundred megawatt project will bring seven to eight million dollars into our pnl and also cash flow so you'll see that this year even though it takes us a year to get into operations with these facilities you'll have development fees that come back to us in the in the range of 20 million dollars and that's what's going to make us actually profitable for this year this this is the key here though is like i said we need money to build these so we brought in rely easy as our first partner rely easy is a chinese battery manufacturer they have committed 50 million dollars worth of upfront mezzanine debt uh to do these projects they put 10 million dollars initially in a joint venture uh we've made announcements recently how we're moving forward on eight projects in texas with them uh money's already being spent on on you know moving dirt and getting things ready buying equipment etc uh to get those projects so they're uh some are going to be operational this year in 2026 and then first quarter 2027. next one here is eos eos is another public company here in the united states they are a battery manufacturer zinc bromide we announced a joint development agreement with them uh just not too long ago and what that means is we've got projects that we're to be doing with eos and their technology their technology uh being that zinc bromide battery but eos has stepped up with some of their financing partners and they're going to help actually finance these projects so we don't have to use our external sources the other one over here to the far right is cox again cox committed 200 million dollars worth of equity capital uh and that what's important there is when you get equity capital or mezzanine debt you have a 20 80 mix so the other 80 comes in from the larger banks uh like a nomura or a zion or somebody like that that's actually into uh having these energy projects as one of their portfolio uh projects because what they do is they only charge two to two and a half cents over so far and that's really good because uh they see how this cash is generated they also understand that because of that tax equity event where we get $60 million back, they now have only a $65 million debt against $125 million asset. So not a lot of risk there, and their payback period is only that five to six years. The other thing that comes into play is they do require us to do a tolling agreement. This de-risks it for everybody. With the likes of a Goldman Sachs commodity desk or others they will sign up and they will give you a guarantee for that project they'll say okay we've done our own own analysis we've done our own independent studies uh yes we believe this can do 20 million dollars worth of arbitrage in a year we're going to give you know again round numbers we're going to give you 10 million dollars as a guarantee and then we're going to split the upside 50 50. so of course there's a lot of upside for them and and we're all de-risked at that point because we now have guaranteed revenues for that five to six years meaning that the the debt is going to be paid back the debt service and our profit margins are built in there the other one on this slide is goshen we were originally uh negotiating a supply chain agreement with goshen another chinese battery manufacturer that's also doing manufacturing in the united states now um but as we got through that cox came to us as we have the best supply chain agreement and cost structure you could ever want and so they brought that to the party for us i talked a little bit about that tolling agreement just now and again having that in place is a guarantee for us so that's very important what happens after that five to six years we have a choice and it's called going merchant or or re-extending that tolling agreement going merchant is we take the risk of how the market's going to react and but we're also getting that much higher margin if things go as expected we also on the scheduling side instead of us having our own day traders our energy day traders we hire tanaska who takes a piece of the pie they're running about 60 percent of the market right now in texas so they really understand it and they work well with the likes of goldman sachs and our team has worked with them many times in the years past in their experience on a case study it's important to have all the key partners in place we had all them in place over the last several months but it's interesting once we did our uplisting and we also got money from our equity partners then that has really turned into a lot more partners have stepped up but it's great that we have these initial ones that we're moving forward with on our initial projects the other key thing here on on this slide is that on the equipment so about 68 percent of your costs going out of that 125 million dollars are for equipment and that makes everybody feel comfortable when you talk about your mezzanine debt guy and your long-term permanent debt guy they love the fact that their money is going to physical assets and not out the door for construction costs or the like the important thing here too everybody likes to uh really bet on management we have a been there done that team and that includes cole johnson who's the other co-ceo and president he has been in this business for over 20 years he's been in oil and gas battery solar wind so he's done it all uh and we really uh love the fact that cole and i've worked together now since April 2024. We get along great. We both have different talents, and that's why we work really well as co-CEOs. Cole also brought some key management with him. These guys have been there, done that in the energy industry. They really understand how these projects flow, how to put the piece of the puzzle together. So they really have some relationships that are priceless to us because when somebody has written you a $100 million check before in a different company, it's much easier to get them to write a $100 million check this time because they understand where you're coming from. The other thing is Cole has done project finance and corporate finance throughout his career. So he understands those pieces. With him and I really doing this in tandem, it's coming across very well to our investors and all of our key vendor partners that we're working with. Ben Tran is on here also. Ben was one of our founders, still involved as the executive chairman uh and you know he's been in the capital markets for many many years key thing to understand is like i said we have 22 million dollars worth of assets out there and those are mostly the development projects that we purchased we have added that 13 6 million dollars worth of the offering since this slide was put in there uh and then that i'll go on to the next one to show where that came from uh the other thing though i should put out there is i talked about it being worth 22 million dollars but again that 22 million dollars remember from the beginning i told you we get seven to eight million dollars for each of the projects as we put them into a joint venture and get them financed what that means is we have on our balance sheet about 150 million dollars worth of value before we even get into operations that really isn't showing up in the in the market cap yet uh but we believe as we unleash these and show uh kind of the market where we're going with this, that'll be unleashed. People will understand how this company is going to grow so quickly. The other aspect to understand is we do, and this is my piece of this, I've been in this capital markets for the last 30 years plus. So I'm the old guy of the bunch. But at the same time, I also understand you can't just build a company, make it, and again, this is going to be very, very profitable, very good cash flow. But if you don't communicate it, nobody cares. So we're going to make sure we get out there. We start communicating it more. Now that we're on the New York Stock Exchange, it makes sense. We'll be going to New York next week. Got two presentations on Wednesday, another presentation actually in Puerto Rico on Thursday. So we're actually moving around, making sure we're getting in front of the right institutions, the right people, doing some, obviously, just good family offices. We really want to get a good investor base. We're not looking for miracles where we go in and ask for a check because again this is non-deal road show we're not raising any more money we only spent two and a half million dollars in cash last year so this 3.6 is going to be great for us 13.6 is going to be great for us and especially when we got the 20 million coming in this year from the development fees as we move forward so again just seeing how this is going to grow you see the the reality is when we talk about two megawatts of projects we're talking about 400 million dollars worth of annual revenue and again because of the way this is structured and because it's not a normal situation where you have all the operational operating expenses uh you really are just an asset that you're managing so you there's no reason we can't do what we think we can do and that's bring 50 to our bottom line uh and again everybody looks at this and said okay 400 million dollars uh you know and you're going to bring 200 million dollars to your bottom line on an annual basis you know that your company should be a 1.5 billion dollar company at that point of course it should and again everybody looks at it and says okay well i'm going to cut that in half that's great but our goal today is to have you look at this company and say all right it's trading at this price where should it be where should it be in six months where should it be in a year if they communicate this properly and they execute even half of what they do you'll you'll make the same decision that a lot of people are starting to make and that we plan on getting out there and getting the word spread so really more and more people know about this company and as we perform and execute on what we say we can do it's going to be a nice ride for us all uh we currently only have 7.3 million shares outstanding uh the tradable warrants came on with this last deal we have no convertible debt have no other warrant overhang uh those tradable warrants are five-year warrants at five dollars uh the the warrants have been trading uh at quite a premium you know at about 70 to 80 cents so we actually you know take that in as good news in the fact that people are expecting us to shoot past the five dollar range uh or they wouldn't be buying those up for premiums so just to sum this up again looking at my time uh you know we're doing pretty pretty well here again two gigawatts of projects here again like i said two gigawatts equates to 400 million dollars worth of gross annual revenues 200 million dollars worth of bottom line it's a very scalable uh business the other thing that's happening for us even though we have this portfolio of two gigawatts now that we have all the pieces of the puzzle in place we have additional developers coming to us with projects that are ready to build so with us having the pieces of puzzle this becomes a cookie cutter becomes a rinse and repeat so we are looking at projects you'll see that we'll be adding to our portfolio again when we negotiate these we always negotiate them with cash flow in mind because we don't have a lot of cash sitting here waiting just to go buy projects we'll set up a cash flow model where they'll get paid as we get paid because we get paid from the financing institutions that we work with so as those are financed we'll be paying off these these uh new projects that we're buying at the same time they'll be brought under the buy merchant portfolio and then also be making operating profits from those going forward the tolling and hedging agreements we talked about those those are guarantee so there's not a lot of risk here it's being de-risked for us for that first five years and it's on purpose it's because the debt guys we're working with other people's money this isn't our own bank that we're working with so everybody wants to feel good everybody wants to make money and there's a lot here to go around so uh when the banks are making what they want and they feel like they've got a lot of leverage uh meaning that they there there's not a lot of risk there for them when they've got a six 65 million dollar debt against a 125 million dollar asset that's producing 20 million dollars a year they're feeling pretty good about it uh we the itc momentum uh is great for us again uh the uh both sides of the aisle are in support of battery storage because the uh solar and wind took a little bit hit on their incentive tax credits uh they're kind of waning those off a little bit but battery actually now got siloed out away from those and because both sides of the aisle understands that this is a balancing the grid and really needs to happen because our infrastructure can't take all of the energy that's being produced because a lot of that energy is now being wasted because there's too much energy there during certain times of the day if we have a place to store it and then bring it on when we need it that just makes things more efficient so that's why they've all stepped up said okay through 2033 now we're going to put uh these itcs in place uh for these battery storage systems and we actually expect that to get extended but as you all may know even though it says 2033 you can get grandfathered in on all your projects by that time for about the next three years beyond that the 250 million dollars worth of strategic capital i talked about was the catalyst for us. So it's enabled us to start moving forward with these projects. That unleashed a billion dollars worth of bank debt. So you'll hear more and more from us as these projects get going. The other thing that wasn't in that 250 is the EOS joint development agreement. Again, we expect that to be somewhere between 25 and $100 million that they'll be putting into these projects over the next year. And you'll hear more about that as that occurs also. uh our key relationships again these are priceless relationships that our group already had you have to have the right construction company we're not doing anything inside i mean we're we're only 15 to 20 people uh that will be by the end of the year and so we're not doing this construction ourselves we're not doing not managing it it's all third party and these are guys that do it every day they've used them before and it makes sense for everybody going forward uh the market tailwinds It's just what's happening in the market. I mean, you have the AI, data centers, et cetera, eating up a bunch of electricity, going to need the power. And so we're there stepping in to do this. Again, our current model is buy it from the utility company, sell it back to the utility company. They have the agreements with the data centers, et cetera. We can go what's called behind the meter and actually work directly with those data centers. That's something that you may see from us in the future. Right now, though, our model is to just work strictly with the utility companies. We'll be on their substations. We'll take the energy off, put the energy back on, but at the same time, have that energy arbitrage that we can work with. With that, I'm happy to open up to any questions anybody might have.

Operator

Perfect, Bob. Thank you so much. We do have quite a few questions. Let's start with how much capital is required before profitability.

Bob Brillin, CEO

Yeah, before profitability, we had the $13.6 million that we raised. And like I said, we expect to bring in another $20 million this year. We are only going to have about the maximum $4 million worth of corporate overhead. So we need no additional capital for profitability.

Operator

And how many projects are currently fully permitted under construction or generating revenue?

Bob Brillin, CEO

We have none of them that are generating any operational revenue yet. The first projects got started under construction, got the construction agreement let out just a couple of weeks ago when we announced it. Some of those will be done by the end of this year and be operating, and some of those will be in the first quarter. We have other projects that we'll be letting out here soon. Again, they'll be coming on the first part of 2027. And again, that's the operations energy arbitrage revenues. As I said, you will have revenues come on to our books before that during 2026, because as soon as the project is financed, we start getting development fees, kind of reimbursements for the costs that we put into it over the last several years. and that when we bought the projects for $22 million worth of stock, again, those are worth $150 million that we'll be getting over the next four years.

Operator

And can you break that down? What percentage of revenue comes from battery energy storage systems and solar projects?

Bob Brillin, CEO

Yeah, we're not really focusing on solar projects at all. We have some in our portfolio, but reality is we're going to probably be selling those off and let somebody else build them. We've chosen to really focus on battery, and so we'll be just building and focusing on the operations from the battery energy storage.

Operator

Okay, and so is the strategy to develop and sell projects or build, own, and operate long-term assets? Would you consider yourself a developer or owner-operator?

Bob Brillin, CEO

Yeah, no, we're not a developer because we actually bought all these development projects. We will develop future ones, but we'll be developing them for ourselves for us to then construct them and then operate them. And there's nothing to say. Again, we're a public company. So if down the road somebody comes in and says, hey, we like these three projects that you built and are operating here in Southwest Texas. We'd like to buy those from you for X. And it happens to be a number that we're happy with. We'd sell those projects. So it is really the economics of what makes sense for our shareholders.

Operator

And talk about the arbitrage strategy. How profitable is it in real markets? And are the expected revenue streams limited to energy arbitrage and grid services?

Bob Brillin, CEO

Yeah. And it is all about the energy arbitrage. So it is about knowing that here's a market that has an issue. And that issue being they've got plenty of energy during certain times of the day because of the infrastructure that that's there but then that infrastructure has set up so that it can't have energy during other times of day so those are actually analysis that you do over that first two to three years and really identify this is the this is where you want to put this hundred million dollar asset because it's going to make the most for you here so it is it's almost like a real estate play it's location location location make sure you're picking the area that needs the support and are you providing any revenue or profit guidance for 2026 since there's now more visibility to the agreco and redbird projects we will be we're actually bringing on some research analysts right now and so we'll be working with them on putting a model together and having it out you know here probably within the next month or so and what percentage of the total addressable market of about 150 billion do you think you can capture realistically considering the current competition in the space? Yeah, the competition is kind of spread out. There's really nobody else kind of like us that's focusing on battery, but that's what's nice. The number you just threw out there is huge. There is a lot of, I guess, a lot of market to take care of. And we're looking, again, we talked about the two gigawatts that we're looking to do. that is a little over two, two and a quarter billion dollars worth of assets. We really want to buy about that same amount over the next four years. So we're hoping we can do about four billion dollars to five billion dollars worth of assets in the ground in that four to five year period.

Operator

And can you break down the development fees on a hundred megawatt project?

Bob Brillin, CEO

Yeah, no, sure uh the development fees and again these are negotiated uh up front usually with your financing partners so so far our financing partners these have been negotiated between seven and eight million dollars per hundred megawatts okay perfect and talk about what does success look like for you in two to three years uh success is getting more and more projects uh in place and then having the deal flow uh that that we're currently seeing so it it becomes that rinse and repeat model where we have partners because we're working on other people's money uh and again once you get the first ones done it's just like our first one that we just put out there uh bringing in other people's money having our our partners work with us on financing the equipment uh and moving it forward that's going to be success is how many of these uh can we get moving and how many how much assets can we get operating uh because it's all you know everybody does projections everybody hopes they can hit certain goals uh and we want to get as close to our goals as we can perfect well thank you bob for this really interesting presentation we appreciate your time and we would love to continue on this conversation in the future thank you appreciate it.

Operator

All right, everyone stay with us. We'll be right back.

Bob Brillin, CEO

Bye now.