ghw-20250331

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________

Commission file number 001-39525

ESS Tech, Inc.

(Exact name of registrant as specified in its charter)


Delaware			98-1550150
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
26440 SW Parkway Ave., Bldg. 83
Wilsonville, Oregon			97070
(Address of Principal Executive Offices)			(Zip Code)

(855) 423-9920

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $0.0001 par value per share

GWH

New York Stock Exchange

Warrants, each fifteen warrants exercisable for one share of common stock at an exercise price of $172.50

GWH.W

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 12, 2025, the registrant had 12,103,750 shares of common stock, par value $0.0001, issued and outstanding.

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TABLE OF CONTENTS


		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		2
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Condensed Balance Sheets	4
	Condensed Statements of Operations and Comprehensive Loss	5
	Condensed Statements of Stockholders' Equity	6
	Condensed Statements of Cash Flows	7
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	63
SIGNATURES		65

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including, without limitation, statements in “Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “possible,” “may,” “might,” “will,” “potential,” “projects,” “predicts,” “continue,” “could,” “would” or “should,” or, in each case, their negative or other variations or comparable terminology. These words and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business.

These statements are based on management’s current expectations, but actual results may differ materially due to various factors, risks, and uncertainties, including, but not limited to:

•our financial and business performance, including financial projections and business metrics;

•changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;

•the implementation, market acceptance and success of our technology and business model;

•our ability to scale in a cost-effective manner;

•developments and projections relating to our competitors and industry;

•the impact of the Russia-Ukraine conflict, geopolitical tensions involving China, tensions in the Middle East, and similar macroeconomic events, including global supply chain challenges, tariffs and trade restrictions, foreign currency fluctuations, instability in the financial markets, fluctuating inflation and interest rates and monetary policy changes, upon our and our customers’, contractors’, suppliers’ and partners’ respective businesses;

•our expectations regarding our ability to obtain and maintain intellectual property protection and manufacture and sell our products and services without infringing on the rights of others;

•our future capital requirements and sources and uses of cash;

•our ability to obtain funding for our operations and the impact of any cash conservation or fundraising measures;

•our business, expansion plans and opportunities;

•our relationships with third parties, including our customers, contractors, and suppliers;

•issues related to the shipment, installation, and operation of our products;

•issues related to contract execution, including customer site readiness and acceptance of our products;

•our ability to enter into commercial or strategic partnerships or transactions and recognize benefits therefrom;

•the outcome of any known and unknown litigation and regulatory proceedings;

•our ability to successfully deploy the proceeds from the Business Combination (as defined herein), other investments in our Company and any borrowing under our existing or future credit agreements;

•our ability to regain compliance with certain New York Stock Exchange (“NYSE”) listing requirements and maintain a trading market for our common stock; and

•other risks and uncertainties discussed in “Part II—Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause our actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Part II—Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024. Should one or more of these risks or uncertainties

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materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described in “Part II—Item 1A. Risk Factors” may not be exhaustive.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report on Form 10-Q. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report on Form 10-Q, those results or developments may not be indicative of results or developments in subsequent periods.

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PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ESS Tech, Inc.

Condensed Balance Sheets

(unaudited)

(in thousands, except share data)


	March 31, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	8,422	$	13,341
Restricted cash, current	906		906
Accounts receivable, net	253		215
Short-term investments	4,379		18,263
Inventory	6,884		5,641
Prepaid expenses and other current assets	2,848		4,998
Total current assets	23,692		43,364
Property and equipment, net	22,510		20,582
Intangible assets, net	4,589		4,656
Operating lease right-of-use assets	1,142		1,503
Restricted cash, non-current	868		948
Other non-current assets	780		760
Total assets	$	53,581	$	71,813
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	10,215	$	8,070
Accrued and other current liabilities	7,351		9,315
Accrued product warranties	2,028		3,288
Operating lease liabilities, current	1,293		1,692
Deferred revenue, current	1,359		5,237
Total current liabilities	22,246		27,602

Deferred revenue, non-current	3,835		—
Deferred revenue, non-current - related parties	14,400		14,400
Common stock warrant liabilities	917		802
Other non-current liabilities	104		125
Total liabilities	41,502		42,929
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock ($0.0001 par value; 200,000,000 shares authorized, none issued and outstanding as of March 31, 2025 and December 31, 2024)	—		—
Common stock ($0.0001 par value; 1,000,000,000 shares authorized, 12,103,750 and 11,986,516 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)	1		1
Additional paid-in capital	812,483		811,262
Accumulated deficit	(800,405)		(782,379)
Total stockholders’ equity	12,079		28,884
Total liabilities and stockholders’ equity	$	53,581	$	71,813

See accompanying notes to the condensed financial statements

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ESS Tech, Inc.

Condensed Statements of Operations and Comprehensive Loss

(unaudited)

(in thousands, except share and per share data)


	Three Months Ended March 31,
		2025		2024
Revenue:
Revenue		$	571	$	2,214
Revenue - related parties		28		524
Total revenue		599		2,738
Cost of revenue		8,746		11,126
Gross profit (loss)		(8,147)		(8,388)
Operating expenses
Research and development		2,478		3,546
Sales and marketing		1,950		2,034
General and administrative		5,571		5,526
Total operating expenses		9,999		11,106
Loss from operations		(18,146)		(19,494)
Other income, net
Interest income, net		216		1,239
Loss on revaluation of common stock warrant liabilities		(115)		—
Other income (expense), net		19		(55)
Total other income, net		120		1,184
Net loss and comprehensive loss to common stockholders		$	(18,026)	$	(18,310)

Net loss per share - basic and diluted		$	(1.50)	$	(1.57)

Weighted-average shares used in per share calculation - basic and diluted		12,033,442		11,634,302

See accompanying notes to the condensed financial statements

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ESS Tech, Inc.

Condensed Statements of Stockholders’ Equity

(unaudited)

(in thousands, except share data)


	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance as of December 31, 2023	11,614,127	$	1	$	799,513	$	(696,157)	$	103,357
Issuance of common stock under stock-based compensation plans, net of stock withheld for taxes	45,745	—		(81)		—		(81)
Stock-based compensation expense	—	—		2,854		—		2,854
Net loss	—	—		—		(18,310)		(18,310)
Balance as of March 31, 2024	11,659,872	$	1	$	802,286	$	(714,467)	$	87,820









Balance as of December 31, 2024	11,986,516	$	1	$	811,262	$	(782,379)	$	28,884
Issuance of common stock under stock-based compensation plans, net of stock withheld for taxes	117,234	—		(13)		—		(13)
Stock-based compensation expense	—	—		1,234		—		1,234
Net loss	—	—		—		(18,026)		(18,026)
Balance as of March 31, 2025	12,103,750	$	1	$	812,483	$	(800,405)	$	12,079

See accompanying notes to the condensed financial statements

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ESS Tech, Inc.

Condensed Statements of Cash Flows

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2025		2024
Cash flows from operating activities:
Net loss	$	(18,026)	$	(18,310)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,540		1,219
Non-cash interest income	(137)		(995)
Non-cash lease expense	361		326
Stock-based compensation expense	1,234		2,854
Inventory write-down and losses on noncancellable purchase commitments	(774)		(1,979)
Change in fair value of common stock warrant liabilities	115		—
Other non-cash expenses, net	58		29
Changes in operating assets and liabilities:
Accounts receivable, net	(19)		1,309
Inventory	(390)		1,145
Prepaid expenses and other assets	2,130		(266)
Accounts payable	497		153
Accrued and other liabilities	(3,106)		(4,024)
Accrued product warranties	(1,260)		1,193
Deferred revenue	(62)		(1,184)
Operating lease liabilities	(399)		(380)
Net cash used in operating activities	(18,238)		(18,910)

Cash flows from investing activities:
Purchases of property and equipment	(762)		(953)
Maturities and purchases of short-term investments, net	14,014		35,645
Net cash provided by investing activities	13,252		34,692

Cash flows from financing activities:
Proceeds from stock options exercised	4		—

Repurchase of shares from employees for income tax withholding purposes	(17)		(81)

Net cash used in financing activities	(13)		(81)

Net change in cash, cash equivalents and restricted cash	(4,999)		15,701
Cash, cash equivalents and restricted cash, beginning of period	15,195		22,483
Cash, cash equivalents and restricted cash, end of period	$	10,196	$	38,184

See accompanying notes to the condensed financial statements

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ESS Tech, Inc.

Condensed Statements of Cash Flows (continued)

(unaudited)

(in thousands)


	Three Months Ended March 31,
	2025		2024
Supplemental disclosures of cash flow information:
Cash paid for operating leases included in cash used in operating activities	$	438	$	449
Non-cash investing and financing transactions:
Purchase of property and equipment included in accounts payable and accrued and other current liabilities	4,277		517

Transfers between inventory and property and equipment, net	—		1,051

Cash and cash equivalents	$	8,422	$	36,332
Restricted cash, current	906		906
Restricted cash, non-current	868		946
Total cash, cash equivalents and restricted cash shown in the condensed statements of cash flows	$	10,196	$	38,184

See accompanying notes to the condensed financial statements

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ESS TECH, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (unaudited)

1.DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business—ESS Tech, Inc. (“ESS” or the “Company”) is a long-duration energy storage company specializing in iron flow battery technology. ESS develops long-duration iron flow batteries for commercial and utility-scale energy storage applications requiring up to twelve hours of flexible energy capacity predominantly using earth-abundant materials.

The Company was founded in 2011 (“Legacy ESS”) and became a publicly traded company through a business combination with a special purpose acquisition company named ACON S2 Acquisition Corp. (“STWO”) which changed its name to ESS Tech, Inc. upon closing (the “Business Combination”). As a result of the Business Combination, Legacy ESS survived and became a wholly owned subsidiary of ESS Tech, Inc. On March 31, 2024, Legacy ESS merged with ESS Tech, Inc. leaving ESS Tech, Inc. as the sole remaining legal entity. As of April 1, 2024, the Company did not have any subsidiaries.

Basis of Presentation—The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Condensed Financial Statements—The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed financial statements reflect all normal and recurring adjustments that are, in the opinion of the Company’s management, necessary in order to make the condensed financial statements not misleading. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These condensed financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 31, 2025.

Reclassifications—Certain immaterial prior year amounts have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operations.

Liquidity and Capital Resources—The Company has incurred operating losses and cash outflows from operations since inception and the Company anticipates that losses will continue in the near term. During the three months ended March 31, 2025, the Company incurred net losses of $18.0 million and used $18.2 million of cash in operating activities. As of March 31, 2025, the Company had unrestricted cash and cash equivalents of $8.4 million and short-term investments of $4.4 million, or total liquid assets of $12.8 million.

The continuation of the Company as a going concern is dependent upon generating profit from its operations and its ability to obtain additional debt or equity financing. Management is evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources. There is no assurance that the Company will be able to generate sufficient profits, obtain such financings, or obtain them on favorable terms. Any such financing activities are subject to market conditions and accordingly involves factors that are outside the Company’s control. These uncertainties cause substantial doubt to exist as to the Company’s ability to continue as a going concern for 12 months from the issuance of these financial statements. The accompanying condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The condensed financial statements do not reflect any adjustments that might result from the outcome of this uncertainty.

2.SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies have not changed from those disclosed in the annual audited financial statements and accompanying notes in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Reverse Stock Split

On August 23, 2024, the Company filed a certificate of amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of all shares of the Company’s common stock that were issued and outstanding at a ratio of 1-for-15 ( the “Reverse Stock Split”) and reduce the total number of authorized shares of common stock from 2,000,000,000 to 1,000,000,000. The amendment became effective as of 4:01 p.m., Eastern Time, on August 23, 2024. The par value of the Company’s common stock remained unchanged at

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$0.0001 per share. Proportionate adjustments were made to the number of shares issuable upon the exercise or vesting of all warrants, RSUs (as defined herein) and options outstanding at the effective time of the Reverse Stock Split, as well as to their corresponding exercise prices. All share-based balances, including warrants, RSUs and options, herein are reported on a retroactively adjusted basis.

Recently Issued Accounting Pronouncements—Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. The ASU requires entities to disaggregate operating expenses into specific categories within the notes to the financial statements to provide enhanced transparency. The ASU will be effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively or prospectively. The Company is currently evaluating the effect of this new standard on the Company's disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This new standard will be effective for the annual periods beginning the year ended December 31, 2025. The new standard permits early adoption and can be applied prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on our financial statements.

3.INVENTORY

Inventory consists of the following (in thousands):


	March 31, 2025		December 31, 2024
Raw materials	$	11,052	$	12,084
Work in process	5,943		4,521
Finished goods	5,639		5,639
Inventory, gross	$	22,634	$	22,244
Net realizable value adjustment	(15,750)		(16,603)
Inventory	$	6,884	$	5,641

The balance of the Company’s inventory was written down by $15.8 million and $16.6 million from its cost to its net realizable value as of March 31, 2025 and December 31, 2024, respectively. Additionally, the Company has lower of cost or net realizable value (“LCNRV”) losses related to noncancellable purchase commitments which were $0.3 million and $0.2 million as of March 31, 2025 and December 31, 2024, respectively. These LCNRV losses related to noncancellable purchase commitments are reflected in the materials and related purchases component of accrued and other liabilities on the condensed balance sheets. For further details, refer to Note 8, Commitments and Contingencies.

4.PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following (in thousands):


	March 31, 2025		December 31, 2024
Machinery and equipment	$	24,295	$	23,306
Leasehold improvements	6,457		6,234
Furniture and fixtures	231		231
Software	614		614
Construction in process	5,911		3,722
Total property and equipment	37,508		34,107
Less accumulated depreciation	(14,998)		(13,525)
Total property and equipment, net	$	22,510	$	20,582

Depreciation expense related to property and equipment, net was $1.5 million and $1.2 million for the three months ended March 31, 2025 and 2024, respectively.

5.INTANGIBLE ASSETS, NET

In September 2023, the Company acquired patent rights valued at $5.0 million under a Patent License Agreement with UOP LLC (“UOP”), an affiliate of Honeywell International Inc. (“Honeywell”), a related party. These patent rights

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SEC Form 10-Q filed by ESS Tech Inc.