Secured an additional 45,000 sq/ft of manufacturing space in Wilsonville, OR

Global identified opportunities in excess of $8 billion, compared to $7 billion at the end of the second quarter¹

Customers continue to mature through pipeline for 2022 with 72%+ classified as booked or awarded

Successful hiring efforts led to a more than 30% increase in total company headcount in Q3

ESS finalized the business combination with ACON S2 Acquisition Corp. on October 11, 2021, and its shares and warrants began trading on the New York Stock Exchange (“NYSE”) under the new ticker symbols “GWH” and “GWH.W”, respectively. The closing of the business combination resulted in cash received of $246 million , including a private investment in public equity (PIPE). All prior ESS shareholders rolled 100% of their equity holdings into the new public company.

Our $8.0 billion pipeline of visible potential opportunities for 2021 through 2027 was determined based on named projects with customers ESS has spoken to and signed non-disclosure agreements to discuss the projects. Within our pipeline, we classify opportunities as (i) booked (ESS and the potential customer have signed a contract and ESS has received a purchase order), (ii) awarded (ESS has been notified by a customer that they have been selected for a potential contract), (iii) negotiating (ESS and the potential customer are negotiating a potential contract) and (iv) qualifying (ESS and the potential customer are determining whether move forward with contract negotiations).

On August 3, 2021, ESS announced it was selected by TerraSol Energies, Inc., a developer and manager of turnkey solar and storage solutions for commercial customers, to deliver an ESS Energy Warehouse flow battery at a commercial facility in Pennsylvania. The Energy Warehouse system will be integrated with solar PV as part of a microgrid to reduce electricity demand charges and provide safe, sustainable backup power to Sycamore International, an Information Technology Asset Disposition (ITAD) company with a focus on data security.

On September 16, 2021, ESS announced expanded coverage of its industry-leading 10-year warranty insurance coverage for its Energy Center product through Munich Re, the world’s largest reinsurance company. The innovative policy provides a warranty backstop for ESS Inc.’s proprietary flow battery technology and electrolyte management system, supporting the system performance guarantee regardless of project size or location. ESS has also collaborated with Munich Re to similarly expand its Project Cover to ensure a bankable product offering for the Energy Center. The Cover eliminates any technology or business continuity risk for operators and can be extended to provide long-term assurance of project performance to system owners, investors and lenders.

On September 23, 2021, ESS announced a contract with Enel Green Power España to deliver 17 ESS Energy Warehouse iron flow battery systems, which will be used to support a solar farm in Spain as a part of a broader EU-wide engagement, providing resilience for the local power grid. With a combined capacity of 8.5 MWh, the ESS systems will be among the largest battery storage resources in Spain.

On September 30, 2021, ESS announced that it has entered into a framework agreement with SB Energy, a wholly owned subsidiary of SoftBank Group Corp, to deploy 2 GWh of ESS batteries through 2026. The first ESS system has already been delivered to an SB Energy location in Davis, California, and is currently being commissioned. SB Energy plans to install additional ESS flow battery systems to complement its expanding portfolio of solar power projects in Texas and California.

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

Restricted cash

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Restricted cash

TOTAL ASSETS

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:

Accounts payable

Accrued and other current liabilities

Notes payable, current

Total current liabilities

Notes payable, non-current

Other non-current liabilities

Derivative liabilities

Warrant liabilities

Total liabilities

COMMITMENTS AND CONTINGENCIES (NOTE 5)

REDEEMABLE CONVERTIBLE PREFERRED STOCK:

Redeemable convertible preferred stock ($0.0001 par value, 62,072,064 and 61,436,037 shares authorized, 38,768,389 and 32,865,949 shares issued and outstanding, liquidation preferences of $61,392 and $46,391 as of September 30, 2021 and December 31, 2020, respectively)

STOCKHOLDERS’ DEFICIT:

Common stock ($0.0001 par value; 79,000,000 shares authorized as of September 30, 2021 and December 31, 2020 9,125,954 and 7,134,668 shares issued and outstanding as of September, 2021 and December 31, 2020, respectively)

Common stock warrants

Additional paid-in capital

Accumulated deficit

Total stockholders’ deficit

TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

Operating expenses

Research and development

Sales and marketing

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Interest expense, net

Gain (loss) on revaluation of warrant liabilities

Gain (loss) on revaluation of derivative liabilities

Other income (expense), net

Total other income (expense)

Loss before income taxes

Provision for income taxes

Net loss and comprehensive loss

Net loss per share - basic and diluted

Weighted average shares used in per share calculation - basic and diluted