ESS Tech, Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001628280-25-026025
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001819438-25-000014
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 87 previous paragraphs and 111 current paragraphs.
50 unchanged; 32 reworded; 25 added; 4 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Recent Developments
Current report
Yorkville Standby Equity Purchase Agreement
Current report
On July 9, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (the “Investor”), pursuant to which and subject to the satisfaction of certain conditions, the Investor has committed to purchase shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million during the 36 months following the date of the SEPA. The shares will be sold at our option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA) and purchases are subject to certain limitations set forth in the SEPA and as imposed by the NYSE.
Current report
Sale and Leaseback
Current report
On July 10, 2025, we entered into a Sale and Leaseback Agreement with UOP, pursuant to which UOP has agreed to purchase the stack assembly line 1 used to build power module stacks for our products, including the Energy Base, for a purchase price of $10.5 million (comprised of $4.0 million in cash and $6.5 million applied to certain pre-payments from UOP), and to lease such equipment back to us. The lease term is for seven years unless terminated early. During the lease term, the monthly lease payment from us to UOP is $186 thousand, pro-rated for any partial month at a daily lease rate of $6 thousand.
Current report
Bridge Financing
Current report
On July 10, 2025, we issued unsecured promissory notes to certain of our directors and members of management and the Investor (the “Promissory Notes”) in the aggregate principal amount of $0.9 million. Each Promissory Note was repaid in full with an exit fee of 15% on or before the maturity date of July 24, 2025. In connection with the Promissory Notes, we issued to the noteholders warrants exercisable for an aggregate number of up to 129,312 shares of common stock (the “Bridge Financing Warrants”) at an exercise price of $3.48 per share, payable in cash or, under certain circumstances,
Current report
21 - pursuant to net exercise. The exercise period will commence the earlier of twelve months from the date of issuance and the date on which our shareholders approve the issuance of the shares issuable upon exercise of the Bridge Financing Warrants. The Bridge Financing Warrants will be exercisable for three years following the date they are first exercisable.
Current report
Board Compensation
Current report
Our directors have agreed to forego payment of cash compensation for 2025 under our outside director compensation policy.
Current report
Production Tax Credits
Current report
On July 10, 2025, we entered into a Tax Credit Transfer Agreement with SE Global Holdings, LLC (“SEGH”), an affiliate of SB Energy Global Holdings One Ltd. (“SBE”), for a production tax credit transaction for approximately $0.8 million, of which $775 thousand is reimbursable to SEGH in the event SEGH does not exercise the option to purchase certain tax credits by October 31, 2025.
Current report
Leadership Transition
Current report
On August 1, 2025, Anthony Rabb, Chief Financial Officer of the Company, was terminated from the Company, effective as of August 1, 2025. The termination was not related to any issues regarding accounting policies, standards or practices, reporting obligations or other regulations, or internal control over financial reporting. Kate Suhadolnik, the Company’s then Controller, was appointed as the interim Chief Financial Officer and assumed the duties as principal financial officer and principal accounting officer of the Company, effective August 1, 2025.
Current report
Impact of Legislative Developments
Current report
Gain on revaluation of common stock warrant liabilities
Current report
Cost of revenue decreased by $4.3 million or 37% from $11.7 million for the three months ended June 30, 2024 to $7.5 million for the three months ended June 30, 2025 as a result of lower net realizable value adjustments in 2025 due to reduced inventory purchases and the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023.
Current report
Research and development expenses decreased by $1.4 million or 50% from $2.8 million for the three months ended June 30, 2024 to $1.4 million for the three months ended June 30, 2025. The decrease was driven by decreased personnel-related expenses, including stock-based compensation, decreased outside services expenses, and decreased purchases of testing equipment and supplies.
Current report
Sales and marketing expenses decreased by $1.4 million or 52% from $2.7 million for the three months ended June 30, 2024 to $1.3 million for the three months ended June 30, 2025. The decrease is driven by decreased outside services and professional expenses, marketing and trade show expenses, and reduced personnel-related expenses, including stock-based compensation.
Current report
Sales and marketing expenses decreased by $1.5 million or 31% from $4.7 million for the six months ended June 30, 2024 to $3.3 million for the six months ended June 30, 2025. The decrease is driven by decreased outside services and professional expenses, marketing and trade show expenses, and reduced personnel-related expenses, including stock-based compensation.
Current report
General and administrative expenses decreased by $2.5 million or 40% from $6.2 million for the three months ended June 30, 2024 to $3.7 million for the three months ended June 30, 2025. The decrease is due to decreased personnel-related expenses, including stock-based compensation, and decreased professional and outside services costs, director fees, and insurance fees.
Current report
Gain on revaluation of common stock warrant liabilities
Current report
Other income (expense), net decreased by $6 thousand or 33% from $18 thousand of income for the three months ended June 30, 2024 to $12 thousand of income for the three months ended June 30, 2025 due to foreign currency rate fluctuations.
Current report
Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly substantial doubt exists as to our ability to continue as a going concern for 12 months from the issuance of the condensed financial statements included in this Quarterly Report on Form 10-Q. We have based our near-term operating cash flow requirements on certain assumptions, including consistency of cash usage with cash usage in the second quarter of 2025, continued cooperation from vendors with respect to payment plans for outstanding invoices, absence of additional severance costs or other unanticipated contingencies and continued sales under the SEPA, which may prove to be wrong, and we may use our available capital resources sooner than we currently expect. In addition, we may not be successful in raising additional funds.
Current report
On July 9, 2025, we entered into the SEPA with the Investor, pursuant to which and subject to the satisfaction of certain conditions, the Investor has committed to purchase shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million during the 36 months following the date of the SEPA. The shares will be sold at the Company’s option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA). Purchases are subject to certain limitations set forth in the SEPA and as imposed by the NYSE, which may restrict our ability to access funding under this arrangement. Under the applicable rules of the NYSE and pursuant to the Purchase Agreement, in no event may we issue or sell to the Investor shares of common stock in excess of 2,566,333 shares of common stock (the “Exchange Cap”) representing 19.99% of the shares of common stock issued and outstanding as of the effective date of the Purchase Agreement, unless (i) the Company obtains stockholder approval to issue shares of common stock in excess of the Exchange Cap or (ii) the sales of common stock covered by an advance notice are made at a purchase price that complies with the NYSE’s minimum price requirements. Pursuant to the Purchase Agreement, the Investor shall not be obligated to purchase or acquire any shares of common stock under the Purchase Agreement which, when aggregated with all other shares of common stock beneficially owned by the Investor and its affiliates, would result in the beneficial ownership of the Investor and its affiliates (on an aggregated basis) exceeding 4.99% of the then outstanding voting power or number of shares of common stock. We expect that the extent to which we make sales under the SEPA will be determined by, among other things, our liquidity needs, the share price of our common stock during the applicable pricing period for each sale and our ability to obtain stockholder approval for issuances above the Exchange Cap.
Removed paragraphs (4)
Previous report
Inflation Reduction Act of 2022
Previous report
Loss on revaluation of common stock warrant liabilities
Previous report
Sales and marketing expenses generally remained consistent year over year, decreasing by $84 thousand or 4%. The decrease is driven by minor fluctuations in personnel-related expenses including stock-based compensation, outside services and professional expenses.
Previous report
Loss on revaluation of common stock warrant liabilities
Reworded paragraphs (32)
Previous wording
ESS is a long-duration energy storage company specializing in iron flow battery technology. We design and produce long-duration batteries predominantly using earth-abundant materials that we believe can be cycled over 20,000 times without capacity fade. Because our batteries are designed to operate using an electrolyte of primarily salt, iron and water, they are environmentally sustainable and substantially recyclable or reusable.
Current wording
ESS is a long-duration energy storage company specializing in iron flow battery technology. We design and produce long-duration batteries predominantly using earth-abundant materials that we believe can be cycled over 20,000 times without capacity fade based on lab-scale results. Because our batteries are designed to operate using an electrolyte of primarily salt, iron and water, they are environmentally sustainable and substantially recyclable or reusable.
Previous wording
Our batteries provide flexibility to grid operators and energy assurance for commercial and industrial customers. Our technology addresses energy delivery, duration and cycle-life in a single battery platform that compares favorably to lithium-ion batteries, the most widely deployed alternative technology. Using our iron flow battery technology, we are developing several products, each of which is designed to provide reliable, safe, long-duration energy storage. Our first energy storage product, the Energy Warehouse, is our ‘behind-the-meter’ solution (referring to solutions that are located on the customer’s premises, behind the service demarcation with the utility) that is used for initial testing and technology validation. Our larger scale energy storage products, the Energy Center and Energy Base, are designed for either ‘behind-the meter’ or ‘front-of-the-meter’ (referring to solutions that are located outside the customer’s premises, typically operated by the utility or by third-party providers who sell energy into the grid, often known as independent power producers) deployments specifically for utility and large commercial and industrial consumers. We are developing additional products at larger scale, in addition to productized versions of our core technology components, for integration into third-party systems.
Current wording
Our batteries provide flexibility to grid operators and energy assurance for commercial and industrial customers. Our technology addresses energy delivery, duration and cycle-life in a single battery platform that compares favorably to lithium-ion batteries, the most widely deployed alternative technology. Using our iron flow battery technology, we have developed several products, each of which was designed to provide reliable, safe, long-duration energy storage. Our first energy storage product, the Energy Warehouse, was our ‘behind-the-meter’ solution (referring to solutions that are located on the customer’s premises, behind the service demarcation with the utility) that was used for initial testing and technology validation. Our product offering evolved to a larger scale energy storage product with the Energy Center, designed for either ‘behind-the-meter’ or ‘front-of-the-meter’ (referring to solutions that are located outside the customer’s premises, typically operated by the utility or by third-party providers who sell energy into the grid, often known as independent power producers) deployments specifically for utility and large commercial and industrial consumers, before the launch of our 10+ hour Energy Base product earlier this year. We also offer productized versions of our core technology components for integration into third-party systems.
Previous wording
We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We believe our business model is positioned for scalability due to the ability to leverage the same core technology and components across our products and customer base. We anticipate significant reduction in our cost of goods through our cost reduction initiatives, including design optimization from value engineering, strategic supply chain projects, and further automation of our manufacturing processes. Additionally, significant improvements in manufacturing scale are expected to decrease the cost of materials and direct labor. Compared to 2024, we expect our indirect cost of revenue and operating expenses to increase when we ramp up our manufacturing and sales activities. We further expect an increase in expenses related to the implementation of cost reduction projects and initiatives in our supply chain, manufacturing engineering and research and development functions. Achievement of margin targets and cash flow generation is dependent on the execution of these cost out initiatives.
Current wording
We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We believe our business model is positioned for scalability due to the ability to leverage the same core technology in the Energy Base’s modularized form for different project size and duration needs across our customer base. We anticipate significant reduction in our cost of goods through our cost reduction initiatives, including design optimization from value engineering, strategic supply chain projects, and further automation of our manufacturing processes. Additionally, significant improvements in manufacturing scale are expected to decrease the cost of materials and direct labor. Compared to 2024, we expect our indirect cost of revenue and operating expenses to increase when we ramp up our manufacturing and sales activities. We further expect an increase in expenses related to the implementation of cost reduction projects and initiatives in our supply chain, manufacturing engineering and research and development functions. Achievement of margin targets and cash flow generation is dependent on the execution of these cost out initiatives.
Previous wording
Our near-term and medium-term revenue is expected to be generated from our Energy Centers, second-generation Energy Warehouses, Energy Base, and core technology component productization. We believe our unique technology provides a compelling value proposition and an opportunity for favorable margins and unit economics in the energy storage industry in the future.
Current wording
Our near-term and medium-term revenue is expected to be generated primarily from Energy Base and core technology component sales. We believe our unique technology provides a compelling value proposition and an opportunity for favorable margins and unit economics in the energy storage industry in the future.
Previous wording
We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, tensions in the Middle East, and other areas of geopolitical tension around the world, and how they may adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2024 and the first quarter of 2025 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. We believe some or all of these negative trends may continue during the remainder of 2025.
Current wording
We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, tensions in the Middle East, and other areas of geopolitical tension around the world, and how they may adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2024 and the first half of 2025 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. We believe some or all of these negative trends may continue during the remainder of 2025.
Previous wording
To the extent that challenging macroeconomic conditions persist, we may experience an extension and worsening of these effects as well as additional adverse effects on our business, financial condition, or results of operations in future periods. These effects could include, among others, slower purchasing decisions by existing and potential new customers, additional delays in timing of payments under our existing customer contracts, further reduction or delays in purchasing decisions by our customers, potential losses of customers as a result of economic distress or bankruptcy, and increased costs for raw materials and freight resulting from inflationary cost pressures.
Current wording
To the extent that challenging macroeconomic conditions persist, we may experience an extension and worsening of these effects as well as additional adverse effects on our business, financial condition, or results of operations in future periods. These effects could include, among others, slower purchasing decisions by existing and potential new customers, additional
Previous wording
On August 16, 2022, President Biden signed into law the Inflation Reduction Act, which extended the availability of investment tax credits (“ITCs”) and production tax credits and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to pending legislation, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. We are continuing to evaluate the overall impact and applicability of the IRA as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions, to our results of operations going forward.
Current wording
On August 16, 2022, the President of the United States signed into law the IRA, which extended the availability of investment tax credits (“ITCs”) and production tax credits and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to recently enacted legislation discussed below, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was signed into law by the President of the United States. The OBBB contains a number of changes to the IRA that significantly impact the availability of the ITCs under Sections 48(a) and 48E of the Code as discussed further below, but the Company’s domestic manufacturing and supply chain structure generally should benefit from the addition of foreign entity of concern limitations. We are continuing to evaluate the overall impact and applicability of the IRA and OBBB as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions, to our results of operations going forward.
Previous wording
As discussed in Note 13, Government Grants, to our condensed financial statements, Section 45X of the Code, as enacted by the IRA, currently provides a PTC that can be claimed on certain battery components manufactured in the U.S. and sold to unrelated U.S. or foreign customers after 2022, through the end of 2032. The tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity for battery cells and $10 per kWh of capacity for battery modules. The credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through the end of 2032, subject to pending legislation. The Section 45X PTC may be refundable by the IRS or saleable to unrelated third parties. Subject to the enactment of any adverse pending legislation, we expect these credits will have a positive impact on our gross margins in the future. Further, on October 28, 2024, Treasury and the IRS issued final regulations providing guidance on requirements that taxpayers must satisfy to qualify for the Section 45X PTC, including the definition of a Section 45X manufacturing facility.
Current wording
As discussed in Note 14, Government Grants, to our condensed financial statements, Section 45X of the Code, as enacted by the IRA, currently provides a PTC that can be claimed on certain battery components manufactured in the U.S. and sold to unrelated U.S. or foreign customers after 2022, through the end of 2032. The tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity for battery cells and $10 per kWh of capacity for battery modules. The credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through the end of 2032, subject to additional qualification requirements in the recently enacted OBBB as discussed further below. The Section 45X PTC may be refundable by the IRS or saleable to unrelated third parties. We continue to evaluate the impact of the OBBB; however, we expect these credits will have a positive impact on our gross margins in the future. Further, on October 28, 2024, Treasury and the IRS issued final regulations providing guidance on requirements that taxpayers must satisfy to qualify for the Section 45X PTC, including the definition of a Section 45X manufacturing facility.
Previous wording
Loss on revaluation of common stock warrant liabilities consists of periodic fair value adjustments related to our common stock warrants.
Current wording
Gain on revaluation of common stock warrant liabilities consists of periodic fair value adjustments related to our common stock warrants.
Previous wording
Other income (expense), net consists primarily of various gains and losses associated with our short-term investments and other income and expense items.
Current wording
Other income (expense), net consists primarily of various gains and losses associated with our short-term investments and other miscellaneous income and expense items.
Previous wording
Comparison of Three Months Ended March 31, 2025 to Three Months Ended March 31, 2024
Current wording
Comparison of Three and Six Months Ended June 30, 2025 to Three and Six Months Ended June 30, 2024
Previous wording
Revenue for the three months ended March 31, 2025 was $0.6 million compared to $2.7 million for the three months ended March 31, 2024. During the three months ended March 31, 2025 we delivered and recognized revenue for Energy Centers, other related equipment, and extended warranty services. During the three months ended March 31, 2024 we delivered and recognized revenue for a higher volume of Energy Warehouses and other related equipment compared to the three months ended March 31, 2025.
Current wording
Revenue increased by $2.0 million or 578% from $0.3 million for the three months ended June 30, 2024 to $2.4 million for the three months ended June 30, 2025. During the three months ended June 30, 2025, we delivered and recognized revenue for a higher volume of Energy Warehouses, Energy Centers, and other related equipment compared to the three months ended June 30, 2024, primarily to related parties. The sales to related parties included both completed and in-process energy storage systems and core technology components.
Previous wording
Cost of revenue decreased by $2.4 million or 21% from $11.1 million for the three months ended March 31, 2024 to $8.7 million for the three months ended March 31, 2025. Cost of revenue during the three months ended March 31, 2024 included a significant benefit related to the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023. When removing this benefit, the decrease aligns proportionately with the revenue recognized in each period. Additionally, we recognized reduced warranty expense in the three months ended March 31, 2025.
Current wording
Cost of revenue decreased by $6.7 million or 29% from $22.9 million for the six months ended June 30, 2024 to $16.2 million for the six months ended June 30, 2025 as a direct result of the implementation of product cost-saving initiatives. The benefits realized were partially offset by a significant benefit realized during the six months ended June 30, 2024 related to the utilization of inventory previously expensed during the research and development phase, which we transitioned out of in the third quarter of 2023.
Previous wording
Research and development expenses decreased by $1.1 million or 30% from $3.5 million for the three months ended March 31, 2024 to $2.5 million for the three months ended March 31, 2025. The decrease resulted from reduced personnel-related expenses including stock-based compensation and decreased purchases of testing equipment and supplies.
Current wording
Research and development expenses decreased by $2.5 million or 39% from $6.4 million for the six months ended June 30, 2024 to $3.9 million for the six months ended June 30, 2025. The decrease resulted from reduced personnel-related expenses, including stock-based compensation, and reduced purchases of testing equipment and supplies.
Previous wording
General and administrative expenses increased by $45 thousand or 1% from $5.5 million for the three months ended March 31, 2024 to $5.6 million for the three months ended March 31, 2025. The increase is due to increased professional and outside services costs offset by decreased personnel-related expenses including stock-based compensation expense, as a result of reduced executive compensation, and decreased IT expenses.
Current wording
General and administrative expenses decreased by $2.4 million or 21% from $11.7 million for the six months ended June 30, 2024 to $9.3 million for the six months ended June 30, 2025. The decrease is driven by decreased personnel-related expenses, including stock-based compensation expense, as a result of reduced executive compensation, decreased IT expenses and decreased insurance fees, partially offset by increased professional and outside services costs.
Previous wording
Interest income, net decreased by $1.0 million or 83% from $1.2 million for the three months ended March 31, 2024 to $0.2 million for the three months ended March 31, 2025. The decrease resulted from a decrease in interest income earned on our short-term investment portfolio.
Current wording
Interest income, net decreased by $1.0 million or 97% from $1.1 million for the three months ended June 30, 2024 to $30 thousand for the three months ended June 30, 2025. The decrease resulted from a decrease in interest income earned on our short-term investment portfolio due to lower investment balances.
Previous wording
The change in fair value of common stock warrant liabilities resulted in a loss of $0.1 million for the three months ended March 31, 2025 and there was no change in valuation for the three months ended March 31, 2024. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Current wording
The change in fair value of common stock warrant liabilities resulted in gains of $0.5 million and $0.1 million for the three months ended June 30, 2025 and June 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Previous wording
Other income (expense), net increased by $74 thousand or 135% from $55 thousand of expense for the three months ended March 31, 2024 to $19 thousand of income for the three months ended March 31, 2025. The increase to income during the three months ended March 31, 2025 is a result of decreased unrealized losses on trading securities and miscellaneous income from the disposal of excess materials in 2025.
Current wording
Other income (expense), net was $31 thousand of income for the six months ended June 30, 2025 compared to $37 thousand of expense for the six months ended June 30, 2024. The change to income during the six months ended June 30, 2025 is a result of decreased unrealized losses on trading securities and foreign currency rate fluctuations.
Previous wording
Since our inception, we have financed our operations primarily through the issuance and sale of equity and debt securities and loan agreements. We have incurred losses since inception and have negative cash flows from operations. We anticipate that losses will continue in the near term. During the three months ended March 31, 2025, we incurred net losses of $18.0 million and used $18.2 million of cash in operating activities. As of March 31, 2025, we 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. We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending, and we may implement further measures.
Current wording
Since our inception, we have financed our operations primarily through the issuance and sale of equity and debt securities and loan agreements. We have incurred losses since inception and have negative cash flows from operations. We anticipate that losses will continue in the near term. During the six months ended June 30, 2025, we incurred net losses of $29.1 million and used $30.6 million of cash in operating activities. As of June 30, 2025, we had unrestricted cash and cash equivalents of $0.8 million. We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions, and the implementation of a furlough for a substantial number of our employees as of May 30, 2025 to better align organizational costs with business continuity, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending, and we may implement further measures.
Previous wording
We will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly there is substantial doubt as to our ability to continue as a going concern for 12 months from the issuance of the condensed financial statements included in this Quarterly Report on Form 10-Q. Management is evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources. If such financing is not available or if the financing terms are less desirable than we expect, we may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial prospects.
Current wording
Management has taken a variety of steps to mitigate costs, reduce operating expenses and extend our runway while we are evaluating various strategies to obtain additional funding, which may include sales under the SEPA, additional offerings of equity, issuance of debt, or other capital sources. If such financing is not available or if the financing terms are less desirable than we expect, we may be forced to decrease our level of investment in product development or further scale back our operations, which could have an adverse impact on our business and financial prospects.
Previous wording
We had a standby letter of credit with First Republic Bank for $75 thousand as security for an operating lease of office and manufacturing space in Wilsonville, Oregon secured by a restricted certificate of deposit totaling $75 thousand. As of December 31, 2024 the certificate of deposit was recorded as restricted cash, non-current. The letter of credit expired during February 2025 and as of March 31, 2025 was no longer recorded as restricted cash. There were no draws against the letter of credit during the three months ended March 31, 2025 and 2024.
Current wording
We had a standby letter of credit with First Republic Bank for $75 thousand as security for an operating lease of office and manufacturing space in Wilsonville, Oregon secured by a restricted certificate of deposit totaling $75 thousand. As of December 31, 2024 the certificate of deposit was recorded as restricted cash, non-current. The letter of credit expired during February 2025 and as of June 30, 2025 the certificate of deposit was no longer recorded as restricted cash. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Previous wording
We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of March 31, 2025, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three months ended March 31, 2025 and 2024.
Current wording
We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of June 30, 2025, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Previous wording
We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2025. As of March 31, 2025, $0.2 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were no draws against the letter of credit during the three months ended March 31, 2025 and 2024.
Current wording
We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2026. As of June 30, 2025, $0.2 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were no draws against the letter of credit during the three and six months ended June 30, 2025 and 2024.
Previous wording
On November 1, 2024, we entered into a Credit Agreement with Export-Import Bank of the United States, as lender, and related agreements related to the financing of two production lines (the “Credit Agreement”). The Credit Agreement provides for a secured loan facility in an aggregate principal amount of up to $22.7 million, of which $20.0 million is available to be borrowed for equipment financing and the balance will be used to finance an exposure fee and transaction expenses. The loan facility has a maturity date of June 30, 2031. Half of the proceeds of the loan facility may be used on a retroactive basis for the financing of the Company’s existing automated battery assembly line and the remainder may be used for the financing or refinancing of an additional line upon the closing of an equity raise milestone. As of March 31,
Current wording
On November 1, 2024, we entered into a Credit Agreement with Export-Import Bank of the United States, as lender, and related agreements related to the financing of two production lines (the “Credit Agreement”). The Credit Agreement provides for a secured loan facility in an aggregate principal amount of up to $22.7 million, of which $20.0 million is available to be borrowed for equipment financing and the balance will be used to finance an exposure fee and transaction expenses. The loan facility has a maturity date of June 30, 2031. Half of the proceeds of the loan facility may be used on a retroactive basis for the financing of our existing automated battery assembly line and the remainder may be used for the financing or refinancing of an additional line upon the closing of an equity raise milestone. As of June 30, 2025 we had no outstanding borrowings under the Credit Agreement. Any obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement, reportable as restricted cash, that decreases upon the equity raise milestone. See Note 8, Commitments and Contingencies, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.
Previous wording
We also maintain a shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units. On March 31, 2025, we entered into an at-the-market sales agreement with Robert W. Baird & Co. Incorporated (“Baird”), pursuant to which we may sell, from time to time, shares of Common Stock having an aggregate offering price of up to $13,504,438, in such share amounts as we may specify by notice to Baird (the “ATM Offering”).
Current wording
We also maintain a shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units. On March 31, 2025, we entered into an at-the-market sales agreement with Robert W. Baird & Co. Incorporated (“Baird”), pursuant to which we may sell, from time to time, shares of common stock having an aggregate offering price of up to $13,504,438, in such share amounts as we may specify by notice to Baird (the “ATM Offering”). During the three months ended June 30, 2025, we sold 616,264 shares under the ATM Offering for total proceeds, net of commission fees, of $0.7 million. On July 11, 2025, we terminated our continuous offering under the prospectus supplement dated March 31, 2025 related to the ATM Offering.
Previous wording
Net cash used in operating activities was $18.9 million for the three months ended March 31, 2024, which is comprised of net loss of $18.3 million, noncash interest income of $1.0 million, inventory write-downs and losses on noncancellable purchase commitments of $2.0 million, partially offset by stock-based compensation of $2.9 million and depreciation and amortization expense of $1.2 million. Net changes in operating assets and liabilities used $2.1 million of cash driven by cash collections on accounts receivable and an increase in accrued product warranties, partially offset by decreases in accrued and other current liabilities, deferred revenue, accounts payable, operating lease liabilities, and an increase in prepaid and other current assets.
Current wording
Net cash used in operating activities was $30.6 million for the six months ended June 30, 2025, which is comprised of net loss of $29.1 million partially offset by depreciation and amortization expense of $3.1 million and stock-based compensation of $2.7 million. Net changes in operating assets and liabilities used $7.0 million of cash driven by decreases in deferred revenue, accrued and other current liabilities, and accrued product warranties, partially offset by an increase in inventory and accounts payable.
Previous wording
Net cash used in operating activities was $18.2 million for the three months ended March 31, 2025, which is comprised of net loss of $18.0 million, inventory write-downs and losses on noncancellable purchase commitments of $0.8 million, and noncash interest income of $0.1 million, partially offset by stock-based compensation of $1.2 million and depreciation and amortization expense of $1.5 million. Net changes in operating assets and liabilities used $2.6 million of cash driven by decreases in accrued and other current liabilities, accrued product warranties, inventory, operating lease liabilities, deferred revenue, and cash collections on accounts receivable, partially offset by an increase in accounts payable and prepaid and other current assets.
Current wording
Net cash used in operating activities was $34.1 million for the six months ended June 30, 2024, which is comprised of net loss of $40.3 million, and noncash interest income of $1.6 million, partially offset by stock-based compensation of $5.9 million, inventory write-downs and losses on noncancellable purchase commitments of $1.5 million, and depreciation and amortization expense of $2.5 million. Net changes in operating assets and liabilities used $2.8 million of cash driven by decreases in inventory, accrued and other current liabilities, deferred revenue, operating lease liabilities, and an increase in prepaid and other current assets, partially offset by cash collections on accounts receivable, an increase in accounts payable, and an increase in accrued product warranties.
Previous wording
Net cash provided by investing activities was $13.3 million for the three months ended March 31, 2025, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Current wording
Net cash provided by investing activities was $16.9 million for the six months ended June 30, 2025, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Previous wording
Net cash provided by investing activities was $34.7 million for the three months ended March 31, 2024, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Current wording
Net cash provided by investing activities was $50.2 million for the six months ended June 30, 2024, which relates to maturities of short-term investments partially offset by purchases of property and equipment.
Previous wording
Net cash used in financing activities was $81 thousand for the three months ended March 31, 2024, which consisted of repurchases for shares from employees for income tax withholding purposes.
Current wording
Net cash provided by financing activities was $803 thousand for the six months ended June 30, 2025, which consisted of proceeds from the issuances of common stock under the ATM Offering and proceeds from our ESPP, offset by repurchases of shares from employees for income tax withholding purposes.
Previous wording
Net cash used in financing activities was $13 thousand for the three months ended March 31, 2025, which consisted of proceeds from stock options exercised offset by repurchases for shares from employees for income tax withholding purposes.
Current wording
Net cash provided by financing activities was $57 thousand for the six months ended June 30, 2024, which consisted of proceeds from our ESPP and stock options exercised, offset by repurchases of shares from employees for income tax withholding purposes.
Previous wording
Our contractual obligations and other commitments as of March 31, 2025 consist of lease commitments and two standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement and in support of our customs and duties due on imported materials and are secured by a total of $0.8 million pledged as collateral. Our obligations under the Credit Agreement are secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a certain portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were no draws against the letters of credit or under the Credit Agreement during the three months ended March 31, 2025 and 2024. Additionally, we are committed to non-cancellable purchase commitments of $0.3 million as of March 31, 2025 and to reimburse UOP a minimum of $8.0 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).
Current wording
Our contractual obligations and other commitments as of June 30, 2025 consist of lease commitments and two standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement and in support of our customs and duties due on imported materials and are secured by a total of $0.8 million pledged as collateral. Financial obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were no draws against the letters of credit or under the Credit Agreement during the three and six months ended June 30, 2025 and 2024. Additionally, we are committed to noncancellable purchase commitments of $0.2 million as of June 30, 2025 and to reimburse UOP a minimum of $8.0 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
22 - delays in timing of payments under our existing customer contracts, further reduction or delays in purchasing decisions by our customers, potential losses of customers as a result of economic distress or bankruptcy, and increased costs for raw materials and freight resulting from inflationary cost pressures.
Current report — wording carried from elsewhere
Revenue decreased slightly by $0.1 million or 4% from $3.1 million for the six months ended June 30, 2024 to $3.0 million for the six months ended June 30, 2025. During the six months ended June 30, 2025, we delivered and recognized revenue for Energy Warehouses, Energy Centers, and other related equipment and recognized revenue for extended warranty services. During the six months ended June 30, 2024, we delivered and recognized revenue for Energy Warehouses and recognized revenue for extended warranty services.
Current report — wording carried from elsewhere
Interest income, net decreased by $2.0 million or 89% from $2.3 million for the six months ended June 30, 2024 to $0.2 million for the six months ended June 30, 2025. The decrease resulted from a decrease in interest income earned on our short-term investment portfolio due to lower investment balances.
Current report — wording carried from elsewhere
The change in fair value of common stock warrant liabilities resulted in gains of $0.3 million and $0.1 million for the six months ended June 30, 2025 and June 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
2025 we had no outstanding borrowings under the Credit Agreement. See Note 8, Commitments and Contingencies, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.