The following management's discussion and analysis ("MD&A") provides information
that management believes is relevant to an assessment and understanding of our
consolidated results of operations and financial condition, and includes
forward-looking statements that involve risks, uncertainties and assumptions.
The MD&A should be read in conjunction with our condensed consolidated financial
statements and related notes included in Part I Item 1 in this Quarterly Report
on Form 10-Q, and the section titled "Cautionary Note Regarding Forward-Looking
Statements" included in the forepart in this Quarterly Report on Form 10-Q.

Overview

Heliogen is a leader in next generation concentrated solar energy technology. We
are developing a modular, A.I.-enabled, concentrated solar energy plant that
will use an array of mirrors to reflect sunlight and capture, concentrate, store
and convert it into cost-effective energy on demand. Our unique system will have
the ability to cost-effectively generate and store thermal energy at very high
temperatures. The ability to produce high-temperature heat, and the inclusion of
thermal energy storage, distinguishes our solution from clean energy provided by
typical photovoltaic ("PV") and wind installations which do not produce thermal
energy and are only able to produce energy intermittently unless battery storage
is added. The system will be configurable for several applications, including
the carbon-free generation of clean power (electricity), industrial-grade heat
(for use in industrial processes), and green hydrogen, based on a customer's
needs.

We have developed innovations in the process of concentrating sunlight which we
believe fundamentally improve the potential, to efficiently and cost effectively
collect and deliver energy to industrial processes. We believe we will be the
first technology provider with the ability to deliver cost-effective renewable
energy capable of replacing fossil fuels used in industrial processes that
require high temperature heat and/or nearly 24/7 operation. In addition, we
believe our disruptive, patented design and A.I. technology will address a
fundamental problem confronted by many renewable sources of energy:
intermittency. An intermittent power supply does not match the continuous power
demand of industry and the grid. Without storage, wind and PV-based renewable
energy generation may rapidly fluctuate between over-supply and under-supply
based on resource availability. As the grid penetration of intermittent
resources increases, these fluctuations may become increasingly extreme. We
believe our technology will contribute to solving this problem. Our solar plants
will have the ability to store very high temperature energy in solid media. This
energy will then be dispatchable, including during times without sunlight, to
cost-effectively deliver near 24/7 carbon-free energy in the form of heat,
electric power or green hydrogen fuel.

The three use categories will be configured as follows, forming the backbone of three business lines:

HelioHeat - The production of heat or steam for use in industrial processes will be enabled by the baseline system.

HelioPower - With the baseline system as the foundation, the addition of a turbine generator system will then enable power generation.

HelioFuel - Building on the Power system described above, hydrogen fuel production will be enabled by further adding an electrolyzer system to the baseline system.



Our technological innovations will enable the delivery of our HelioHeat,
HelioPower and HelioFuel solutions to customers. HelioHeat plants will produce
carbon-free heat (e.g., process steam or hot air) to support industrial
processes. HelioPower plants will deliver solar thermal energy to a heat engine
to produce electrical power. HelioFuel plants will couple a HelioPower plant
with an electrolyzer to produce green Hydrogen fuel. All three solutions will be
enabled by Heliogen's proprietary heliostat design and artificial intelligence
technology, and will integrate thermal energy storage to enable operation nearly
24/7, overcoming the intermittency of other solar energy technologies.

For each of the three above solutions, we are offering multiple support models to customers looking to deploy Heliogen's technology:

•Contracting with owner-operators to build turnkey facilities that deploy Heliogen's technology (Heliogen will contract with engineering, procurement and construction ("EPC") partners for constructing the facility);

•Selling heliostats (and associated software control systems) to owner-operators and/or EPC contractors;

•Providing asset maintenance support services during operation, for completed facilities that use Heliogen's technology; and


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•Providing project development support services to help customers advance readiness to break ground in advance of final investment decisions.

In the future, we will also be prepared to offer Heliogen's IP through a licensing model to third parties interested in manufacturing and installing the hardware.



Recent Developments

Customer Contracts

On March 28, 2022, Heliogen entered into a series of commercial agreements with
Woodside Energy (USA) Inc. ("Woodside"), a wholly-owned subsidiary of leading
Australian energy producer Woodside Petroleum Ltd. for the commercial-scale
demonstration and deployment of Heliogen's AI-enabled concentrated solar energy
technology in California and the marketing of Heliogen's technology in
Australia. Pursuant to the terms of the commercial-scale demonstration agreement
(the "Project Agreement"), Heliogen has agreed to complete the engineering,
procurement, and construction of a new 5 MWe HelioPower facility to be built in
Mojave, California for testing, research and development. The two companies also
agreed to include the scope and associated funding from Heliogen's $39 million
award from the U.S. Department of Energy's Solar Energy Technology Office (the
"DOE Award"). As a result, in addition to commercial-scale demonstration of
Heliogen's 5 MWe power module, the project will also include the deployment and
testing of an innovative approach to converting the thermal energy produced by
Heliogen's facility into power with a smaller footprint than traditional steam
turbines.

In addition to the Project Agreement, Heliogen and Woodside also signed a
collaboration agreement to jointly market Heliogen's technology in Australia
with the objective to deploy further commercial-scale modules of HelioHeat,
HelioPower, and HelioFuel offerings. Under this arrangement, the parties expect
to define product offerings that use Heliogen's modular technology for potential
customers (including Woodside) in Australia and are establishing a roadmap to
identify and engage with those customers.

Letter of Intent with a Sustainable Fuels Company

Heliogen and a sustainable fuels company ("SFC"), recently entered into a
non-binding letter of intent ("LOI") to jointly produce sustainable aviation
fuel ("SAF") at Heliogen's concentrated solar thermal demonstration facility in
Lancaster, California. This first-of-its-kind collaboration aims to synthesize
sustainable jet fuel from sunlight and air to enable the rapid decarbonization
of the aviation industry.

The companies will work to deploy Heliogen's proprietary, artificial
intelligence (AI)-powered HelioHeat™ technology to convert sunlight directly
into thermal energy in the form of high temperature steam and air that will be
used to produce green hydrogen for SFC's Reactor platform. The hydrogen will be
produced leveraging the previously announced successful demonstration of
Heliogen's concentrated solar technology. As part of the collaboration between
Heliogen and SFC, the LOI includes a goal of building a fully integrated ~1
barrel per day drop-in ready SAF demonstration. The parties expect a
demonstration project to be a first step to develop a pipeline for approximately
3 million barrels of fuel over the next ten years. The LOI is subject to
negotiation and execution of a definitive agreement and we cannot provide any
assurances that we will be able to do so.

Brenda Solar Energy Zone



In December 2021, the U.S. Bureau of Land Management (the "BLM") awarded the
Company the exclusive right to lease land in the Brenda Solar Energy Zone (the
"Brenda SEZ"). Heliogen intends to develop a green hydrogen facility on the
Brenda site, capable of producing approximately 20,000 metric tons of hydrogen
per year. The Brenda SEZ is an ideal location for commercial-scale green
hydrogen production due to the ample local water supply and its close proximity
to potential offtake partners and key distribution channels.

In April 2022, the Company's wholly-owned subsidiary, Heliogen SR2, LLC, executed a right-of-way lease agreement with the BLM for 3,343 acres within the Brenda SEZ. As of June 30, 2022, the right-of-way lease had not commenced.


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Installation of Fourth Generation Heliostats



In July 2022, Heliogen completed the installation of its new fourth generation
heliostats at its demonstration facility in Lancaster, California. As with the
previous generations of our heliostats, each successive iteration is designed to
be less expensive and more efficient to manufacture, install and maintain, while
also improving performance and reliability of the solar field. These heliostats
were produced on our pilot lines as part of the manufacturing validation
process. We also installed them in Lancaster using the same installation methods
and equipment, that we plan to use for our first commercial-scale HelioHeat
facility.

Heliogen's Autonomous Cleaning Vehicle



We recently manufactured, deployed and began testing the autonomous cleaning
vehicle that we plan to use at our first commercial HelioHeat facility. These
tests are being conducted using the fourth generation heliostats installed in
the same radial pattern that will be used at the first commercial facility.

Key Factors and Trends Affecting our Business

Global Events including the COVID-19 Pandemic



Our operations are impacted by several global events including changes to
existing geopolitical dynamics such as Russia's invasion of Ukraine, social and
economic instability, and the ongoing impact of the COVID-19 pandemic, which
have resulted in increased market volatility, changes to the labor market and
supply chain constraints. Further, inflation has resulted in increased commodity
prices, among other things. The ultimate extent of the impact these global
events and economic conditions will have on our businesses, operating results,
cash flows, liquidity and financial condition will be driven primarily by the
severity and duration of the pandemic and the war in Ukraine, the direct impact
on products in our supply chain and the broad impact to the U.S. and global
economies.

Results of Operations

Key Components of Our Results of Operations



Revenue - For our contracts with customers, we recognize revenue over time using
the incurred costs method for projects under development and engineering and
design services. For government grants, we recognize grant revenue based on the
amounts determined to be reimbursable for costs, including permitted indirect
costs, incurred during a given period and we have reasonable assurance of the
funds being received under the grant.

Cost of Sales - Cost of sales consists primarily of direct labor and direct external vendor costs related to our revenue contracts. No allocation of depreciation and amortization has been recognized due to the nature of work being performed.



Selling, General and Administrative Expense - SG&A expense consists primarily of
salaries, share-based compensation, and other personnel-related costs,
professional fees, insurance costs, and other business development and selling
expenses.

Research and Development Expense - Research and development ("R&D") expense consists primarily of salaries and other personnel-related costs; the cost of products, materials, and outside services used in our R&D activities.


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Comparison of the Three and Six Months Ended June 30, 2022 and 2021



                                              Three Months Ended June 30,                                               Six Months Ended June 30,
$ in thousands                                  2022                  2021            $ Change                           2022                  2021             $ Change
Revenue:
Services revenue                          $          964          $     845          $    119                      $        3,008          $   1,361          $   1,647
Grant revenue                                      1,428                  -             1,428                               2,923                  -              2,923
Total revenue                                      2,392                845             1,547                               5,931              1,361              4,570
Cost of revenue:
Cost of services revenue                             958                845               113                               2,987              1,361              1,626
Cost of grant revenue                              1,428                  -             1,428                               2,923                  -              2,923
Provision for contract losses                          -                  -                 -                              33,737                  -             33,737
Total cost of revenue                              2,386                845             1,541                              39,647              1,361             38,286
Gross profit (loss)                                    6                  -                 6                             (33,716)                 -            (33,716)

Operating expenses:
Selling, general, and
administrative                                    22,589              4,260            18,329                              42,984              6,412             36,572
Research and development                           6,147              2,665             3,482                              15,752              4,273             11,479
Total operating expenses                          28,736              6,925            21,811                              58,736             10,685             48,051
Operating loss                                   (28,730)            (6,925)          (21,805)                            (92,452)           (10,685)           (81,767)

Other income (expense), net:
Interest income (expense)                            213                (41)              254                                 407                 (1)               408
SAFE instruments remeasurement                         -            (47,460)           47,460                                   -            (47,460)            47,460
Gain (loss) warrant remeasurement                  8,284             (1,979)           10,263                              12,310             (2,282)            14,592
Other (expense) income, net                         (109)                72              (181)                               (185)                39               (224)
Net loss before taxes                            (20,342)           (56,333)           35,991                             (79,920)           (60,389)           (19,531)
Income tax benefit                                   125                  -               125                                 735                  -                735
Net loss                                  $      (20,217)         $ (56,333)         $ 36,116                      $      (79,185)         $ (60,389)         $ (18,796)

Revenue and Gross Profit (Loss)



During the three and six months ended June 30, 2022, we recognized revenue of
$2.4 million and $5.9 million, respectively driven primarily by project revenue
for work associated with the development and planned deployment of our
technology and product offerings on a commercial scale, including $1.4 million
and $2.9 million, respectively, of grant revenue recognized under the DOE Award.
Under the Project Agreement executed with a customer in March 2022, we will
complete the engineering, procurement, and construction of a new 5 MWe
concentrated solar energy facility to be built in Mojave, California (the
"Facility") for the customer's use in testing, research and development. The
Facility is expected to serve as a fully operational model for the customer's
use in demonstrating the Company's technology and product offerings at a
commercial scale to aid in the development, engineering, and construction of
larger, commercial scale facilities under separate agreements between the
Company and the customer or other third-party customers.

During the three months ended June 30, 2022 we recognized a nominal gross
profit. During the six months ended June 30, 2022 we recognized a gross loss of
$33.7 million driven primarily by recognition of a contract loss of $32.9
million related to the Project Agreement and Facility. The contract loss
reflects our best estimate of the full expected loss on the Facility given
consideration expected to be realized under the Project Agreement (net of the
fair value of related warrants granted to the customer) and the DOE Award.
Revenue expected to be recorded for the Mojave, California project is
approximately $84.5 million over the full term of the project, consisting of
$45.5 million for the Project Agreement, of which $41.7 million is identified as
noncancelable at June 30, 2022, and the DOE Award of $39.0 million. Our cost
estimates as of June 30, 2022 for the anticipated final scope of the Facility
are subject to further refinement as we continue detailed engineering and design
with the customers, obtain firm pricing from subcontractors, order long-lead
items, and better understand short- and long-term commodity and market impacts
on cost inputs to the Project Agreement and Facility. As a result, the actual
loss for the Project Agreement and Facility could vary from our current
estimates.

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During the three and six months ended June 30, 2021, we recognized revenue of $0.8 million and $1.4 million, respectively, and no gross profit or loss associated with an engineering and design services contract.

Selling, General, and Administrative Expense



For the three and six months ended June 30, 2022, SG&A expenses increased $18.3
million and $36.6 million, respectively, compared to the same periods in 2021,
driven primarily by our growth to support commercial operations, resulting in
higher headcount and related employee expenses which contributed to the increase
by $13.6 million and $28.0 million, respectively, with the most notable
component being non-cash share-based compensation expense. For the same
comparative periods, professional and consulting services increased by $2.3
million and $4.4 million, respectively, associated primarily with being a newly
public company and the corresponding need to support and develop our accounting,
legal, and information technology infrastructures. Facilities and office related
expenses increased by $2.4 million and $4.2 million, respectively, to support
space requirements in our Pasadena, California and Long Beach, California
facilities.

Research and Development Expense



For the three and six months ended June 30, 2022, R&D expense increased $3.5
million and $11.5 million, respectively, compared to the same periods in 2021,
primarily due to headcount growth and related consulting services associated
with our efforts to ramp up and further develop our commercial-scale offering.

SAFE Instruments Remeasurement



In the first half of 2021, we entered into Simple Agreements for Future Equity
("SAFE Instruments") financing transactions with third party investors in
connection with a private round of funding to provide investors an opportunity
to convert into common or preferred stock, upon defined triggering events.
Pursuant to the terms of these agreements, the SAFE Instruments were converted
to common stock immediately prior to the closing of the Business Combination on
December 30, 2021. Due to the terms of the SAFE Instruments, the SAFE
Instruments were measured at fair value at each reporting period resulting in
the recognition of a $47.5 million loss on the remeasurement during the three
and six months ended June 30, 2021.

Warrant Remeasurement



As part of the Business Combination, we assumed the outstanding public and
private warrants of Athena, which are accounted for at fair value based on the
closing share price of the Company's common stock. We incurred a $8.3 million
gain during the three months ended June 30, 2022 related to the change in
valuation on our warrant liabilities, compared to a loss of $2.0 million during
the three months ended June 30, 2021. We incurred a $12.3 million gain during
the six months ended June 30, 2022 related to the change in valuation on our
warrant liabilities, compared to a loss of $2.3 million during the six months
ended June 30, 2021.

Liquidity and Capital Resources

Heliogen's principal source of liquidity has historically been proceeds from
private investors through the issuance of SAFE Instruments, preferred stock, and
common stock. Upon closing of the Business Combination with Athena completed in
December 2021, Heliogen received net cash proceeds of $159.4 million. In March
2022, Heliogen entered a series of commercial agreements with a customer for the
commercial-scale demonstration and deployment of Heliogen's AI-enabled
concentrated solar energy technology in California and the marketing of
Heliogen's technology in Australia and is in the process of negotiating further
revenue contracts. These contracts will provide a significant source of cash for
the Company. Our principal uses of cash are for project-related expenditures,
selling, general and administrative expenses and R&D expenditures in support of
Heliogen's development of its technology and operational growth efforts. To
date, Heliogen has not had any material bank debt and has no material
outstanding debt on the balance sheet as of June 30, 2022. Total liquidity for
Heliogen, including cash and cash equivalents, available-for-sale investments,
and other liquid securities with maturities greater than one year included in
other long-term assets totaled $185.5 million and $222.4 million as of June 30,
2022 and December 31, 2021, respectively. For more information on other liquid
securities with maturities greater than one year included in other long-term
assets, see Note 13 to our condensed consolidated financial statements.

With the funds raised in connection with the Business Combination, we believe
that our existing liquidity should provide the ability to meet our contractual
obligations and continue our current R&D efforts and development of our first
commercial facilities and will be sufficient to meet our cash requirements for
the next 12 months. However, we could

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potentially use these available financial resources sooner than expected due to
delays in project execution or higher than anticipated costs and, thus we may
need to incur additional indebtedness or issue additional equity to meet our
operating needs. In the event that additional financing is required from outside
sources, we may not be able to raise it on terms acceptable to us or at all. If
we are unable to raise additional capital or generate cash flows necessary to
expand our operations and invest in developing our new technologies, this could
reduce our ability to compete successfully and harm our business, growth and
results of operations. While we believe we will meet longer-term expected future
cash requirements and obligations through a combination of our existing cash and
cash equivalent balances, cash flow from operations, and issuances of equity
securities or debt offerings, our future capital requirements and the adequacy
of available funds will depend on many factors, including those disclosed in
Part I, Item 1A Risk Factors in our 2021 Form 10-K/A for the year ended
December 31, 2021.

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