UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 8.01 | Other Events. |
Earnout Stock
On November 9, 2021, ESS Tech, Inc. (“ESS” or the “Company”) achieved the earnout milestone events for 15,675,002 shares (the “Earnout Stock”) of ESS common stock (the “Common Stock”) issuable to the former stockholders of ESS Tech Subsidiary, Inc. (formerly known as ESS Tech, Inc.) (“Legacy ESS”) pursuant to the Agreement and Plan of Merger, dated as of May 6, 2021 (the “Merger Agreement”), by and among ACON S2 Acquisition Corp. (“STWO”), SCharge Merger Sub, Inc., and Legacy ESS (the “Legacy Holders”), relating to the business combination with STWO, which was consummated on October 8, 2021 (“Closing”).
As previously disclosed, pursuant to the Merger Agreement, the Legacy Holders are entitled to receive, subject to the terms and conditions of the Merger Agreement including applicable regulatory requirements, up to an additional 16,500,000 shares of Common Stock (less an incentive restricted stock units issues pursuant to the Merger Agreement), (x) 50% of which is issuable after the Closing if the volume-weighted average price of the Common Stock was equal to or exceeded $12.50 per share for any 20 trading days within any 30 consecutive trading-day period following the Closing and (y) the remaining 50% of which is issuable after the Closing if the volume-weighted average price of the Common Stock was equal to or exceeded $15.00 per share for any 20 trading days within any 30 consecutive trading-day period following the Closing. Both of these conditions were met as of November 9, 2021. In addition, upon the satisfaction of this condition, private placement warrants to purchase 583,334 shares of Common Stock held by STWO’s sponsor, ACON S2 Sponsor, L.L.C., vested and are no longer subject to forfeiture.
The Earnout Stock, when issued, will remain subject to the lock-up provisions of the Company’s amended and restated bylaws as currently in effect.
Transaction Expense Adjustment
Subsequent to Closing, the Company determined that aggregate Transaction Expenses (as defined in the Merger Agreement) were lower than had been estimated at the time of Closing. Pursuant to the Merger Agreement, this lower amount of Transaction Expenses resulted in an Expense Shortfall (as defined therein), which increases the Adjusted Equity Value (as defined therein) of Legacy ESS. As a result, the Company will issue an additional 125,958 shares of Common Stock as merger consideration to the Legacy Holders as required by the terms of the Merger Agreement.
Effectiveness of Form S-1
Also, on November 10, 2021, the Company’s registration statement on Form S-1 (File No. 333-260693), registering the resale of shares of Common Stock held by certain holders was declared effective by the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: November 15, 2021
| ESS TECH, INC. | ||
| By: | /s/ Amir Moftakhar | |
| Name: | Amir Moftakhar | |
| Title: | Chief Financial Officer | |