Company Developments - ESS Tech, Inc. (NYSE:GWH) stock price surged to $4.57, marking a 166.24% increase due to a collaboration with Salt River Project for a renewable energy storage project [1][7] - Quoin Pharmaceuticals, Ltd. (NASDAQ:QNRX) experienced a price increase to $20.84, a 155.48% rise, potentially driven by positive clinical trial results for its lead product QRX003 [2][7] - Safe & Green Holdings Corp. (NASDAQ:SGBX) saw its stock climb to $6.11, an 88.73% increase after regaining compliance with Nasdaq listing requirements through a restructuring deal [3][7] Investor Sentiment - The trading volume for ESS Tech, Inc. spiked to 245,639,308, indicating strong investor interest following the announcement of Project New Horizon [1] - Quoin Pharmaceuticals' significant share price increase suggests strong investor confidence despite a downturn in U.S. stocks [2] - The restructuring deal for Safe & Green Holdings Corp. reduced dilution by over 80%, boosting investor confidence [3] Market Trends - The stock movements reflect a growing investor interest in sectors such as renewable energy, biotechnology, and sustainable construction [6] - ESS Tech, Inc. Warrants (NYSE:GWH-WT) increased to $0.15, up by 61.69%, mirroring positive sentiment around the parent company [4] - enGene Holdings Inc. Warrants (NASDAQ:ENGNW) rose to $1.13, a 56.94% increase, reflecting optimism towards its lead product candidate for bladder cancer [5]

U.S. stocks traded lower midway through trading, with the Nasdaq Composite falling around 2.5% on Friday.The Dow traded up 1.26% to 45,772.50 while the NASDAQ rose 2.46% to 22,459.24. The S&P 500 also rose, gaining, 1.79% to 6,614.73.Check This Out: Top 2 Tech & Telecom Stocks That May Implode This MonthLeading and Lagging SectorsConsumer staples shares jumped by 0.6% on Friday.In trading on Friday, energy stocks fell by 0.6%.Top HeadlineThe University of Michigan consumer sentiment slipped to 55 in October ...

Core Viewpoint - ESS Tech, Inc. (GWH) has shown a recent downtrend, losing 7.1% over the past week, but a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, where the stock opens lower, makes a new low, but then closes near its opening price, suggesting that bears may be losing control [4][5]. - Hammer candles can appear on various timeframes and are utilized by both short-term and long-term investors [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for GWH, with a 15.6% increase in the consensus EPS estimate over the last 30 days, indicating that analysts expect better earnings than previously predicted [7][8]. - GWH holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Company Performance - ESS Tech, Inc. reported a quarterly loss of $0.9 per share, slightly worse than the Zacks Consensus Estimate of a loss of $0.88, but an improvement from a loss of $1.8 per share a year ago, indicating a year-over-year improvement [1] - The company posted revenues of $2.36 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.75%, but showing significant growth from $0.35 million in the same quarter last year [2] - Over the last four quarters, ESS Tech has surpassed consensus EPS estimates two times, but has not been able to beat consensus revenue estimates [2] Stock Performance - ESS Tech shares have declined approximately 71.3% since the beginning of the year, contrasting with the S&P 500's gain of 10% [3] - The company's earnings outlook and management's commentary on the earnings call will be crucial for the stock's immediate price movement [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is -$0.65 on revenues of $1.3 million, and for the current fiscal year, it is -$3.56 on revenues of $6 million [7] - Ahead of the earnings release, the estimate revisions trend for ESS Tech was favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] Industry Outlook - The Electronics - Miscellaneous Products industry, to which ESS Tech belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - The company reported GAAP revenue of $2.4 million, a 294% increase from the previous year, driven by deliveries of energy warehouses and energy centers [15] - GAAP cost of revenues decreased by 15% compared to the previous year, amounting to $7.5 million [15] - GAAP operating expenses fell by 35% quarter over quarter to $6.4 million, reflecting effective cost reduction efforts [15] - The net loss improved by 50%, and adjusted EBITDA improved nearly 60% compared to the same quarter last year [11] Business Line Data and Key Metrics Changes - The company secured its first commercial order for the energy base, an eight megawatt hour project expected to be delivered in 2026 [9] - The cost of revenue decreased by 37% year over year, indicating improved operational efficiency [11] - The company reported a significant reduction in operating cash burn rate, down approximately 80% in June compared to the first quarter average [9] Market Data and Key Metrics Changes - The company noted strong interest in long duration energy storage solutions, with 100% of its pipeline now focused on energy base or core component sales [12] - Proposal activity exceeded 1.1 gigawatt hours since the launch of the energy base, highlighting market demand [12] Company Strategy and Development Direction - The company is focused on three core priorities: delivering on customer commitments, scaling with discipline, and converting commercial momentum into long-term growth [21] - A strategic pivot has been made to position the company for long-term success, including leadership changes to enhance operational capabilities [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture value as long duration storage becomes a strategic imperative across markets [19] - The company is optimistic about the impact of recent legislation on investment tax credits, which should benefit its domestic manufacturing and supply chain [18] Other Important Information - The company secured up to $31 million in new capital, including a standby equity purchase agreement for up to $25 million [16] - Cash and cash equivalents at the end of July were reported at $7.2 million, a significant improvement from the end of the second quarter [17] Q&A Session Summary Question: What kind of traction is being seen with the energy base proposals? - The company has already converted one proposal into a sale and expects to convert additional proposals into backlog in the second half of the year [26] Question: How should revenue trajectory be expected to change in Q3 and Q4? - The company is not providing guidance on revenue for the latter half of the year but hopes to close contracts that will provide clarity on future revenue [28] Question: How much of the $31 million capital has been secured so far? - The company reported $7.2 million in cash and cash equivalents, including $2 million raised under the standby equity purchase agreement [30] Question: What is the outlook for cash burn into Q3 and Q4? - The company aims to continue reducing cash burn and is focused on right-sizing the business and securing extended payment terms with vendors [32]

Product & Strategy - Launched the Energy Base product, featuring a configurable Iron Core for gigawatt-hour storage capacity[11, 18] - The Energy Base utilizes existing iron flow battery modules and scalable enclosures to extend duration up to 22 hours[27] - ESS manufactures core components in-house and procures the balance of system from preferred vendors[22] - Partnered with Honeywell to optimize Energy Base design for quality, cost-efficiency, and scale[24, 26] Market & Applications - Data centers' electricity demand is projected to grow to 800 TWh by 2026, increasing the risk of infrastructure failure[31] - Power disruption accounts for 54% of impactful data center outages[34] - ESS Energy Base provides a safe, scalable, and cost-effective alternative to traditional power solutions for data centers[32] Manufacturing & Cost - Commissioning a second automated battery manufacturing line ("Line 2") in H2 2025 to increase capacity[41] - Capital efficiency improves with the shift from Energy Centers to Energy Bases, reducing capex per unit[41] - ESS products qualify for the domestic content ITC adder due to being 98% domestically sourced and 100% domestically manufactured[42] Financial Performance - Q2 2025 revenue reached $2.4 million, a 578% increase compared to Q2 2024's $0.3 million[49] - Q2 2025 net loss was ($11.1) million, a 50% improvement compared to Q2 2024's ($21.9) million[49] - Adjusted EBITDA for Q2 2025 was ($7.8) million, a 59% improvement compared to Q2 2024's ($18.8) million[49]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) For the six months ended June 30, 2025, ESS Tech, Inc. reported total revenue of $3.0 million, a slight decrease from $3.1 million in the prior year period, and a net loss of $29.1 million, an improvement from a $40.3 million loss. The balance sheet shows a significant decline in liquidity, with cash and cash equivalents dropping to $0.8 million from $13.3 million at year-end 2024. The company used $30.6 million in cash from operations. Crucially, the report raises substantial doubt about the company's ability to continue as a going concern due to recurring losses and insufficient cash to fund operations for the next 12 months - The company's financial statements have been prepared on a going concern basis, but management has identified substantial doubt about its ability to continue as a going concern for the next 12 months due to recurring operating losses, negative cash flows, and a low cash balance of **$0.8 million** as of June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) Condensed Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $797 | $13,341 | | Short-term investments | $0 | $18,263 | | Total current assets | $11,167 | $43,364 | | Total assets | $39,617 | $71,813 | | **Liabilities & Equity** | | | | Total current liabilities | $23,957 | $27,602 | | Total liabilities | $36,313 | $42,929 | | Total stockholders' equity | $3,304 | $28,884 | Condensed Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $2,358 | $348 | $2,957 | $3,086 | | Gross profit (loss) | $(5,101) | $(11,400) | $(13,248) | $(19,788) | | Loss from operations | $(11,557) | $(23,125) | $(29,703) | $(42,619) | | Net loss | $(11,056) | $(21,940) | $(29,082) | $(40,250) | | Net loss per share | $(0.90) | $(1.87) | $(2.39) | $(3.45) | Condensed Statement of Cash Flows Summary (in thousands) | Cash Flow Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(30,597) | $(34,131) | | Net cash provided by investing activities | $16,920 | $50,187 | | Net cash provided by financing activities | $803 | $57 | | **Net change in cash, cash equivalents and restricted cash** | **$(12,874)** | **$16,113** | - Subsequent to the quarter end, the company engaged in several critical financing activities, including a **$25.0 million** Standby Equity Purchase Agreement (SEPA), a **$10.5 million** sale and leaseback of a production line with UOP, and **$0.9 million** in bridge financing from directors and management[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on its iron flow battery technology and recent strategic developments aimed at improving liquidity, including a Standby Equity Purchase Agreement (SEPA), a sale-leaseback transaction, and bridge financing. The analysis highlights a 578% increase in revenue for Q2 2025 YoY, driven by related-party sales, but a 4% decrease for the six-month period. Operating expenses decreased significantly due to cost-saving initiatives. The company reiterates the substantial doubt about its ability to continue as a going concern, citing recurring losses and a critical need for additional financing to meet near-term operating cash flow requirements, despite implementing cost reduction measures like employee furloughs - The company is focused on establishing attractive margin unit economics by reducing production costs through design optimization, supply chain projects, and manufacturing automation for its Energy Base product[110](index=110&type=chunk) - Recent developments post-quarter end include a **$25.0 million** Standby Equity Purchase Agreement (SEPA), a **$10.5 million** sale and leaseback of a production line with UOP, and **$0.9 million** in bridge financing to improve liquidity[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) Results of Operations Comparison (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $2,358 | $348 | 578% | $2,957 | $3,086 | (4)% | | Gross profit (loss) | $(5,101) | $(11,400) | (55)% | $(13,248) | $(19,788) | (33)% | | Total operating expenses | $6,456 | $11,725 | (45)% | $16,455 | $22,831 | (28)% | | Net loss | $(11,056) | $(21,940) | (50)% | $(29,082) | $(40,250) | (28)% | - The company has implemented significant cost reduction and cash conservation measures, including an employee furlough as of May 30, 2025, to align costs with business continuity. Despite these measures, substantial doubt exists about its ability to continue as a going concern without additional financing[143](index=143&type=chunk)[144](index=144&type=chunk) - The Inflation Reduction Act (IRA) and the One Big Beautiful Bill Act (OBBB) are expected to positively impact gross margins through Production Tax Credits (PTC), though legislative changes create some uncertainty for customers[116](index=116&type=chunk)[117](index=117&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company defined by Rule 12b-2 of the Exchange Act, ESS Tech, Inc. is not required to provide quantitative and qualitative disclosures about market risk[165](index=165&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the principal executive officer and principal financial officer, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. There were no material changes in internal control over financial reporting during the quarter - Based on an evaluation as of the end of the period, the company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[167](index=167&type=chunk) - There were no changes in the company's internal control over financial reporting during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[168](index=168&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, nor is it aware of any material legal proceedings threatened against it - The company reports that it is not currently a party to any material legal proceedings and is not aware of any material legal proceedings being threatened against it[171](index=171&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company outlines numerous significant risks, with key concerns including its early stage of commercialization, reliance on third-party suppliers, and potential for manufacturing delays and quality control issues. A major risk highlighted is the company's history of losses and the substantial doubt about its ability to continue as a going concern, which necessitates raising additional capital in the near future. Other risks involve the ability to control costs, achieve profitability, market acceptance of its technology over competitors like lithium-ion, potential product recalls, and failure to convert non-binding orders into sales - The company faces significant barriers in producing its energy storage products at a commercial scale and is in the early stages of commercialization, with risks that it may not generate significant revenues or achieve profitability[173](index=173&type=chunk)[175](index=175&type=chunk) - There is substantial doubt about the company's ability to continue as a 'going concern' due to a history of losses and the need to raise additional capital in the near future, which may not be available on acceptable terms[178](index=178&type=chunk)[214](index=214&type=chunk) - The business depends on third-party suppliers for key components and is vulnerable to delays, quality issues, and cost increases in its supply chain, which could harm manufacturing and commercialization efforts[173](index=173&type=chunk)[181](index=181&type=chunk) - The company's ability to become profitable is impaired if it cannot adequately control operational costs, reduce its cost structure, and effectively scale its manufacturing operations[173](index=173&type=chunk)[190](index=190&type=chunk) - On March 24, 2025, the company received a notice from the NYSE for non-compliance with the minimum market capitalization standard, and failure to regain compliance could result in delisting[376](index=376&type=chunk)[377](index=377&type=chunk)[378](index=378&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no sales of equity securities during the period that were not registered under the Securities Act and not previously reported on a Form 8-K - The company reports no unregistered sales of equity securities during the period covered by the report that were not previously disclosed in a Form 8-K[394](index=394&type=chunk) [Item 3. Defaults Upon Senior Securities](index=69&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[395](index=395&type=chunk) [Item 4. Mine Safety Disclosures](index=69&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[396](index=396&type=chunk) [Item 5. Other Information](index=69&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[397](index=397&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the company's articles of incorporation, bylaws, warrant agreements, and various certifications by the CEO and CFO

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for ESS Tech, Inc. (GWH) due to higher revenues, with actual results being crucial for stock price movement [1][2]. Company Summary - ESS Tech is expected to report a quarterly loss of $0.88 per share, reflecting a year-over-year change of +51.1% [3]. - Revenues are projected to be $2.4 million, which is an increase of 585.7% compared to the same quarter last year [3]. - The consensus EPS estimate has been revised 24.42% higher in the last 30 days, indicating a reassessment by analysts [4]. Earnings Prediction Insights - The Most Accurate Estimate for ESS Tech aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. - The company holds a Zacks Rank of 2 (Buy), but this combination makes it challenging to predict an earnings beat conclusively [12]. - Historically, ESS Tech has beaten consensus EPS estimates in two out of the last four quarters [14]. Industry Context - In the Zacks Electronics - Miscellaneous Products industry, Plug Power (PLUG) is expected to report a loss of $0.15 per share, with a year-over-year change of +58.3% [18]. - Plug Power's revenue is anticipated to be $151.2 million, up 5.5% from the previous year [19]. - The consensus EPS estimate for Plug Power has been revised 0.9% higher, resulting in an Earnings ESP of +2.44%, indicating a likelihood of beating the consensus EPS estimate [19][20].

[Standby Equity Purchase Agreement Overview](index=1&type=section&id=Standby%20Equity%20Purchase%20Agreement) This section introduces the Standby Equity Purchase Agreement, outlining the terms for the Company to sell common stock to the Investor [Agreement Introduction](index=1&type=section&id=Agreement%20Introduction) This Standby Equity Purchase Agreement, dated July 9, 2025, is between ESS TECH, INC. (the "Company") and YA II PN, LTD. (the "Investor"), granting the Company the right to sell, and obligating the Investor to purchase, up to $25 million of the Company's common stock, registered under Form S-3 Key Agreement Terms | Term | Details | | :--- | :--- | | **Agreement Date** | July 9, 2025 | | **Company** | ESS TECH, INC. (Delaware corporation, NYSE: GWH) | | **Investor** | YA II PN, LTD. (Cayman Islands exempt limited company) | | **Commitment Amount** | Up to $25 million of Common Shares | | **Registration** | Form S-3 (File No. 333-268138) | - As consideration for the Investor's **commitment**, the Company will issue **Commitment Shares** to the Investor[2](index=2&type=chunk) [Article I: Certain Definitions](index=1&type=section&id=Article%20I.%20Certain%20Definitions) This article defines key capitalized terms used throughout the agreement for consistent interpretation [Definitions](index=1&type=section&id=Definitions) This article states that capitalized terms used throughout the agreement are defined in Annex I or as otherwise specified within the document - Capitalized terms used in the agreement have meanings defined in Annex I or elsewhere within the agreement[4](index=4&type=chunk) [Article II: Advances](index=1&type=section&id=Article%20II.%20Advances) This article details the mechanics, limitations, and closing procedures for the Company's share sales to the Investor [Section 2.01: Advances Mechanics](index=1&type=section&id=Section%202.01%20Advances%3B%20Mechanics) This section outlines the process for the Company to sell shares to the Investor through "Advances," allowing the Company to issue an "Advance Notice" for purchase, subject to ownership caps, registration limits, and exchange rules, with the Company able to set a minimum acceptable price - The Company has the right, but not the obligation, to sell shares to the Investor by delivering an **Advance Notice** during the **Commitment Period**[6](index=6&type=chunk) Advance Limitations | Limitation Type | Description | | :--- | :--- | | **Ownership Limitation** | The Investor's beneficial ownership cannot exceed **4.99%** of the Company's outstanding shares | | **Registration Limitation** | The number of shares in an Advance cannot exceed the number of shares registered under the effective Registration Statement | | **Exchange Cap** | The aggregate number of shares issued under the agreement cannot exceed **2,566,333** (**19.99%** of outstanding shares as of the effective date), unless shareholder approval is obtained or the average sale price is at least **$1.48** per share | - The Company can specify a Minimum Acceptable Price in an **Advance Notice**; **Trading Days** where the **VWAP** is below this price are considered "**Excluded Days**," reducing the number of shares in the advance and excluding that day from the price calculation[11](index=11&type=chunk) - Upon the Investor's receipt of a valid **Advance Notice**, the parties are deemed to have entered into an unconditional and binding contract for the purchase and sale of the shares[11](index=11&type=chunk) [Section 2.02: Closings](index=4&type=section&id=Section%202.02%20Closings) This section details the closing procedures for each Advance, where the Investor provides a Settlement Document specifying the final number of shares and purchase price, followed by the Company's share transfer and the Investor's fund wire, ensuring shares are delivered without restrictive legends under an effective registration statement - On each Advance Date, the Investor delivers a Settlement Document to the Company detailing the final terms of the purchase, including the number of shares, **Market Price**, and total proceeds[12](index=12&type=chunk) - The Company must electronically transfer the **Advance Shares** to the Investor's account promptly after receiving the Settlement Document, and the Investor must pay the aggregate purchase price promptly upon notification of the share transfer[12](index=12&type=chunk) - If a **Material Outside Event** or **Black Out Period** occurs during the **Pricing Period**, the pending Advance ends, and the number of shares to be purchased is limited to the number of shares the Investor has already sold during that period[12](index=12&type=chunk) [Section 2.03: Hardship](index=6&type=section&id=Section%202.03%20Hardship) This section addresses the consequences if the Company fails to perform its obligations after an Advance Notice is received, requiring the Company to hold the Investor harmless against resulting losses and acknowledging the Investor's right to seek specific performance - If the Company defaults on its obligations after an **Advance Notice**, it must indemnify the Investor for any resulting loss, claim, damage, or expense, including legal fees[13](index=13&type=chunk) - The Investor is entitled to seek an injunction and specific performance to prevent breaches by the Company and enforce the terms of the agreement[13](index=13&type=chunk) [Section 2.04: Completion of Resale](index=6&type=section&id=Section%202.04%20Completion%20of%20Resale%20Pursuant%20to%20the%20Registration%20Statement) This section specifies that once the Investor has purchased and resold the full Commitment Amount, it will notify the Company, at which point the Company is no longer obligated to maintain the effectiveness of the Registration Statement - After the Investor purchases and resells the full **Commitment Amount**, it will notify the Company, relieving the Company of its obligation to maintain an effective Registration Statement[14](index=14&type=chunk) [Article III: Representations and Warranties of the Investor](index=6&type=section&id=Article%20III.%20Representations%20and%20Warranties%20of%20the%20Investor) This article outlines the Investor's representations regarding its legal standing, financial sophistication, and compliance [Investor Representations](index=6&type=section&id=Investor%20Representations) The Investor provides several representations and warranties to the Company, confirming its legal standing, authority to enter the agreement, financial sophistication, status as an **Accredited Investor**, compliance with securities laws, non-affiliate status, and absence of prior short sales of the Company's stock - The Investor is a duly organized entity with the authority to enter into and perform its obligations under the agreement[16](index=16&type=chunk) - The Investor is an "**Accredited Investor**" as defined in Rule 501(a)(3) of Regulation D[20](index=20&type=chunk) - The Investor is acquiring the shares for its own account and investment purposes, not for public distribution, except as permitted by a registration statement or exemption[19](index=19&type=chunk) - The Investor confirms it has not engaged in any short sales of the Company's securities during the period from first contact about the investment until the execution of the agreement[23](index=23&type=chunk) [Article IV: Representations and Warranties of the Company](index=8&type=section&id=Article%20IV.%20Representations%20and%20Warranties%20of%20the%20Company) This article details the Company's extensive representations concerning its corporate status, SEC filings, and financial health [Company Representations](index=8&type=section&id=Company%20Representations) The Company makes extensive representations and warranties to the Investor, covering its corporate organization, authorization for the agreement, compliance with laws, accuracy of **SEC filings** and financial statements, and its capital structure, along with intellectual property, litigation, and tax status, assuring the Investor of its good standing and the validity of the shares - The Company and its subsidiaries are duly organized, in good standing, and have the authority to conduct their business[26](index=26&type=chunk) - The Company has the corporate power to enter into the agreement and issue the shares, and the agreement constitutes a legal, valid, and binding obligation[27](index=27&type=chunk) - The Company's **SEC filings** are timely, complete, and do not contain any untrue statements of a material fact or omit material facts[30](index=30&type=chunk) - The Company is eligible to use **Form S-3** for the registration of the shares, and the Registration Statement is effective without any stop orders[32](index=32&type=chunk) Equity Capitalization (as of agreement date) | Security Type | Authorized | Outstanding | | :--- | :--- | :--- | | **Capital Stock** | 1.2 billion | N/A | | **Common Stock** | 1 billion | 12,896,146 | | **Preferred Stock** | 200 million | 0 | - The Company confirms it has not entered into any **Variable Rate Transactions** and that the issuance of shares under this agreement will not trigger any anti-dilution provisions in other securities[37](index=37&type=chunk) - The Company and its subsidiaries are not subject to any sanctions by **OFAC** or other authorities and will not use the proceeds from the sale of shares in violation of sanctions laws[58](index=58&type=chunk)[59](index=59&type=chunk) [Article V: Indemnification](index=16&type=section&id=Article%20V.%20Indemnification) This article establishes mutual indemnification obligations for both the Company and the Investor against specified liabilities [Indemnification Obligations](index=16&type=section&id=Indemnification%20Obligations) This article establishes mutual indemnification obligations, where the Company indemnifies the Investor against losses from untrue statements or omissions in registration documents or breaches of Company representations, and the Investor indemnifies the Company for losses from false information provided for registration or breaches of Investor representations - The Company will indemnify the Investor and its affiliates ("**Investor Indemnitees**") against liabilities arising from untrue statements or material omissions in the Registration Statement or Prospectus, or from any material breach of the Company's representations or covenants[62](index=62&type=chunk)[63](index=63&type=chunk) - The Investor will indemnify the Company and its affiliates ("**Company Indemnitees**") against liabilities arising from untrue statements or omissions based on written information furnished by the Investor for use in the registration documents, or from any breach of the Investor's representations or covenants[64](index=64&type=chunk) - The article outlines specific procedures for making indemnification claims, including prompt written notice and the right of the indemnifying party to assume control of the defense[65](index=65&type=chunk)[66](index=66&type=chunk) [Article VI: Covenants](index=18&type=section&id=Article%20VI.%20Covenants) This article outlines the ongoing obligations of both the Company and the Investor during the **Commitment Period** [Mutual Covenants](index=18&type=section&id=Mutual%20Covenants) This article details the ongoing obligations of both the Company and the Investor during the **Commitment Period**, including the Company's requirements to maintain an effective registration statement, keep common stock listed, and disclose material information, and the Investor's restrictions on short selling, along with procedures for **Black Out Periods** and use of proceeds - The Company must maintain the effectiveness of the Registration Statement at all times during the **Commitment Period** and file necessary reports and prospectus supplements with the **SEC**[71](index=71&type=chunk) - The Company may suspend the use of the Registration Statement during a "**Black Out Period**" if necessary to amend the prospectus, but such periods cannot exceed **20 days**[73](index=73&type=chunk) - The Company must keep its common shares listed on the **Principal Market** (**NYSE**) and will file all required Exchange Act reports in a timely manner[75](index=75&type=chunk)[77](index=77&type=chunk) - The Investor covenants not to engage in any short sales of the Company's common stock during the **Restricted Period**, with specific exceptions for selling shares it is unconditionally obligated to purchase under a pending **Advance Notice**[91](index=91&type=chunk) - The Company agrees not to provide the Investor with material non-public information without the Investor's prior written consent and will publicly disclose any such information provided[85](index=85&type=chunk)[93](index=93&type=chunk) - The agreement specifies that under the current **Form S-3** registration, only **$6.64 million** of shares can be offered and sold; any sales above this amount would require a new registration statement[96](index=96&type=chunk) [Article VII: Non-Exclusive Agreement](index=26&type=section&id=Article%20VII.%20Non-Exclusive%20Agreement) This article clarifies that the agreement is non-exclusive, allowing the Company to pursue other financing options [Non-Exclusivity](index=26&type=section&id=Non-Exclusivity) This article clarifies that the agreement is non-exclusive, allowing the Company to retain the right to issue and sell other shares, securities, or convertible instruments to other parties at any time - The agreement is non-exclusive, allowing the Company to pursue other financing and issue other securities to third parties without restriction[98](index=98&type=chunk) [Article VIII: Governing Law and Jurisdiction](index=26&type=section&id=Article%20VIII.%20Choice%20of%20Law%2FJurisdiction%3B%20Waiver%20of%20Jury%20Trial) This article establishes the legal framework, governing law, and jurisdiction for disputes arising from the agreement [Legal Framework](index=26&type=section&id=Legal%20Framework) This article establishes the legal framework for the agreement, specifying that it will be governed by New York State laws, with legal actions heard in New York County, and both parties waiving their right to a jury trial for any disputes - The agreement is governed by the laws of the State of New York[100](index=100&type=chunk) - The parties consent to the jurisdiction of courts in New York County, New York for any legal proceedings[100](index=100&type=chunk) - Both parties explicitly waive their right to a trial by jury in any legal proceeding related to the agreement[101](index=101&type=chunk) [Article IX: Termination](index=27&type=section&id=Article%20IX.%20Termination) This article outlines the conditions and procedures for the termination of the agreement by either party [Termination Clauses](index=27&type=section&id=Termination%20Clauses) This article outlines the conditions under which the agreement can be terminated, including automatic termination after **36-month** or full **Commitment Amount** purchase, and the Company's right to terminate with **five trading days'** notice, with indemnification obligations surviving termination - The agreement automatically terminates on the earlier of the **36-month** anniversary of the **Effective Date** or the date the full **Commitment Amount** is purchased[106](index=106&type=chunk) - The Company may terminate the agreement with **five trading days'** written notice, provided no **Advance Notices** are outstanding and all amounts owed to the Investor have been paid[106](index=106&type=chunk) - Liability for any breach occurring before termination and the indemnification provisions in Article V survive the termination of the agreement[106](index=106&type=chunk) [Article X: Notices](index=27&type=section&id=Article%20X.%20Notices) This article specifies the formal communication procedures and contact information for both parties [Communication Procedures](index=27&type=section&id=Communication%20Procedures) This article specifies the procedures for formal communication between the parties, requiring all notices to be in writing and deemed delivered upon receipt, and providing specific contact information and addresses for both the Company and the Investor - All notices, consents, and waivers must be in writing and delivered personally, by email, certified mail, or a national overnight service to the addresses specified in the agreement[105](index=105&type=chunk)[107](index=107&type=chunk) [Article XI: Miscellaneous](index=28&type=section&id=Article%20XI.%20Miscellaneous) This article includes standard miscellaneous clauses and details the commitment and structuring fees payable by the Company [Miscellaneous Provisions](index=28&type=section&id=Miscellaneous%20Provisions) This article contains standard miscellaneous clauses, including provisions for counterparts, the entire agreement clause, and brokerage representations, and details the commitment and structuring fees payable by the Company to the Investor, which include a cash reimbursement for costs and a **commitment fee** paid in **common shares** Commitment and Structuring Fees | Fee Type | Amount/Calculation | | :--- | :--- | | **Cost Reimbursement** | **$85,000** in cash, payable on the earlier of the first Advance or 30 days from the agreement date | | **Commitment Fee** | **1.00%** of the **Commitment Amount** (**$250,000**), payable in Common Shares; **50%** is issued on the **Effective Date**, and the remaining **50%** is issued on the earlier of a new registration filing or 60 days from the **Effective Date** | - The agreement can be executed in counterparts, and electronic signatures are considered valid[109](index=109&type=chunk)[110](index=110&type=chunk) - This agreement supersedes all prior oral or written agreements between the parties on this matter[111](index=111&type=chunk) [Annexes and Exhibits](index=31&type=section&id=Annexes%20and%20Exhibits) This section provides supplementary documents, including definitions, conditions precedent, and official forms for transactions [Annex I: Definitions](index=31&type=section&id=ANNEX%20I%20DEFINITIONS) Annex I provides a comprehensive list of definitions for the capitalized terms used throughout the Standby Equity Purchase Agreement, ensuring clarity and consistent interpretation of the contract's language - Defines key terms such as "**Commitment Amount**" (**$25 million**), "**Market Price**" (lowest daily **VWAP** during the **Pricing Period**), and "**Purchase Price**" (**97%** of the **Market Price**)[126](index=126&type=chunk)[131](index=131&type=chunk)[138](index=138&type=chunk) - Specifies the "**Pricing Period**" as the three consecutive **Trading Days** starting on the **Advance Notice** Date[135](index=135&type=chunk) [Annex II: Conditions Precedent to Advances](index=36&type=section&id=ANNEX%20II%20CONDITIONS%20PRECEDENT) Annex II lists the conditions that must be satisfied or waived before the Company has the right to deliver an **Advance Notice** to the Investor, ensuring the Company is in good standing and compliance at the time of each requested share purchase - The Company's representations and warranties must be true and correct[146](index=146&type=chunk) - The Registration Statement must be effective, and the Company must be current with its **SEC filings**[146](index=146&type=chunk) - There must be no trading suspension of the Company's common shares, and the shares must remain listed on the **Principal Market**[147](index=147&type=chunk) - No **Material Outside Event** shall have occurred and be continuing[146](index=146&type=chunk) [Exhibit A: Advance Notice Form](index=38&type=section&id=EXHIBIT%20A%20ADVANCE%20NOTICE) Exhibit A provides the official template for the **Advance Notice** that the Company must use to request the Investor to purchase shares, requiring certification that all conditions are met and specifying the number of shares requested - This is the standardized form the Company must use to initiate an **Advance**[148](index=148&type=chunk) - The form requires the Company to state the number of **Advance Shares** requested and the total number of common shares outstanding[151](index=151&type=chunk)[152](index=152&type=chunk) [Exhibit B: Settlement Document Form](index=39&type=section&id=EXHIBIT%20B%20FORM%20OF%20SETTLEMENT%20DOCUMENT) Exhibit B is the template for the Settlement Document, which the Investor provides to the Company to finalize an Advance, detailing the calculation of the final number of shares and total purchase price, and providing the Investor's account information for share delivery - This form is used by the Investor to communicate the final settlement details of an **Advance** to the Company[155](index=155&type=chunk) - The document outlines the calculation of the total purchase price, accounting for the **Market Price**, **Purchase Price** (**97%** of **Market Price**), and any adjustments for **Excluded Days**[156](index=156&type=chunk)[157](index=157&type=chunk) - It includes the Investor's DTC participant and account information for the electronic transfer of shares[158](index=158&type=chunk)

Core Viewpoint - ESS Tech, Inc. (GWH) has experienced a bearish price trend, losing 14.7% over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out, with selling pressure likely subsiding, which supports a bullish outlook for the stock [2][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control over the price during a downtrend [4][5]. - The occurrence of a hammer pattern at the bottom of a downtrend suggests that bulls may have successfully halted further price declines, indicating a potential trend reversal [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for GWH, which is a bullish indicator, as it typically leads to price appreciation in the near term [7]. - Over the last 30 days, the consensus EPS estimate for the current year has increased by 6.8%, indicating that sell-side analysts expect better earnings than previously predicted [8]. - GWH currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [9].