0001819438False00018194382023-09-252023-09-250001819438wk:CommonStock0.0001ParValuePerShareMember2023-09-252023-09-250001819438wk:WarrantsEachWholeWarrantExercisableForOneShareOfCommonStockAtAnExercisePriceOf11.50Member2023-09-252023-09-25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 25, 2023
ESS TECH, INC.
(Exact Name of Registrant as Specified in Charter)
| | | | | | | | | | | | | | |
| Delaware | | 001-39525 | | 98-1550150 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
| | | | | | | | |
26440 SW Parkway Ave., Bldg. 83 Wilsonville, Oregon | | 97070 |
| (Address of principal executive offices) | | (Zip code) |
(855) 423-9920
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| | | | | |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| | | | | |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| | | | | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| | | | | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, $0.0001 par value per share | | GWH | | The New York Stock Exchange |
| Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 | | GWH.W | | The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On September 21, 2023, ESS Tech, Inc. (the “Company”) entered into a Common Stock and Warrant Purchase Agreement (the “Purchase Agreement”) with Honeywell ACS Ventures LLC (“Honeywell Ventures”), an affiliate of Honeywell International Inc. (“Honeywell”). Pursuant to the Purchase Agreement, Honeywell has invested $27.5 million in the Company and the Company issued 16,491,754 shares of common stock, $0.0001 par value per share (“Common Stock”), and a warrant to issue up to 10,631,633 shares of Common Stock (the “Investment Warrant”) to Honeywell Ventures. Pursuant to the Purchase Agreement and also as further consideration for the licensing by UOP LLC (“UOP”), an affiliate of Honeywell, of certain intellectual property to the Company pursuant to the License Agreement (defined below), the Company has issued a warrant to issue up to 6,269,955 shares of Common Stock (the “IP Warrant”) to UOP. The Investment Warrant has an exercise price of $1.89, and the IP Warrant has an exercise price of $2.90. Each warrant will expire on September 21, 2028. The Purchase Agreement also contains representations, warranties and covenants in connection with the transaction.
The description of the Purchase Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2023.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure required by this Item is included in Item 1.01 of this report and is incorporated herein by reference.
On September 21, 2023, the Company and UOP also entered into a Master Supply Agreement, pursuant to which UOP may purchase equipment supplied by the Company (the “Supply Agreement”). Pursuant to the Supply Agreement, the Company has also agreed to issue additional warrants to purchase Common Stock to UOP, consisting of (i) an initial performance warrant to issue up to 775,760 shares of Common Stock, issued on September 21, 2023 in exchange for a pre-payment of equipment by UOP in the amount of $15,000,000, and (ii) additional performance warrants (not to exceed an aggregate value of $15,000,000 based on target purchase amounts of up to $300,000,000 by 2030) to be issued on an annual basis for the five-year period beginning in 2026, based on UOP’s purchase of additional equipment after execution of the Supply Agreement (the “Performance Warrants”). The initial Performance Warrant has an exercise price of $1.45 and the additional Performance Warrants will have an exercise price equal to the volume-weighted average price of the Company’s Common Stock for the last fifteen (15) trading days of the relevant calendar year for which such Performance Warrant is being issued. The initial Performance Warrant will expire on September 21, 2028 and each additional Performance Warrant will have a five-year term from its respective date of issuance.
The description of the warrants is qualified in its entirety by reference to the full text of such documents, copies of which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2023.
The shares of Common Stock and the warrants were offered and sold pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 thereunder, in a transaction not involving any public offering. The Company will rely on this exemption from registration based in part on representations made by Honeywell Ventures and UOP. The shares of Common Stock, warrants, and warrant shares have not been registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration under the Securities Act or an exemption from such registration requirements. Neither this Current Report on Form 8-K nor any exhibit attached hereto shall constitute an offer to sell or the solicitation of an offer to buy shares of Common Stock, warrants or warrant shares or any other securities of the Company.
Item 7.01 Regulation FD Disclosure.
On September 25, 2023, the Company issued a press release (the “Press Release”) announcing the partnership with Honeywell. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 8.01 Other Events.
On September 21, 2023, the Company and UOP also entered into a Joint Development Agreement (the “Joint Development Agreement”), pursuant to which the Company and UOP have agreed to work together to collaborate and engage in certain research and development activities generally related to flow battery technology, (the “License Agreement”), and a Patent License Agreement, pursuant to which UOP will license certain licenses to the Company. The Company and Honeywell Ventures also entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company will use its commercially reasonable efforts to file a registration statement with the Securities and Exchange Commission for the resale of shares of Common Stock, warrants and warrant shares issued and issuable to Honeywell
Ventures and UOP under the Purchase Agreement and Supply Agreement. Under the Registration Rights Agreement, Honeywell Ventures is also entitled to piggyback registration rights.
The description of the Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which will be filed as an exhibit to the Company’s Quarterly Report on Form 10-Q for the quarter ending September 30, 2023.
Cautionary Note on Forward-Looking Statements
This Current Report contains forward-looking statements that are subject to a number of risks and uncertainties related to the Company, including related to the Company’s collaboration with Honeywell, UOP’s future purchases of equipment from the Company, and the future issuances of Performance Warrants. Actual results may differ materially from those set forth herein, including due to issues related to the Company’s collaboration with Honeywell, Honeywell’s opting not to purchase additional equipment under the Supply Agreement, and other risks and uncertainties detailed in the risk factors included in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and in other filings with the SEC made by the Company. Except as required by law, the Company undertakes no obligation to revise or update information herein to reflect events or circumstances in the future, even if new information becomes available.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| | | | | | | | |
Exhibit
No. | | |
| 99.1 | | |
| 104 | | Cover page interactive data file |
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: September 25, 2023
| | | | | |
| ESS TECH, INC. |
| |
| By: | /s/ Anthony Rabb |
| Name: | Anthony Rabb |
| Title: | Chief Financial Officer |
Media Contacts:
Honeywell:
Mike Hockey
+1 (832) 285-4933
mike.hockey@honeywell.com
ESS:
Morgan Pitts
+1 (503) 568-0755
morgan.pitts@essinc.com
HONEYWELL AND ESS TECH, INC. COLLABORATE TO ACCELERATE COMMERCIAL DEPLOYMENT OF IRON FLOW BATTERY ENERGY STORAGE SYSTEMS
CHARLOTTE, NC and WILSONVILLE, OR – September 25, 2023 - Honeywell (Nasdaq: HON) today announced a strategic collaboration with ESS Tech, Inc. (ESS) (NYSE: GWH) to advance technology development and market adoption of iron flow battery (IFB) energy storage systems. Honeywell has made an investment in ESS as part of this collaboration.
The relationship builds upon each company’s development of energy storage systems, and brings together ESS’ market-leading, patented IFB design with Honeywell’s advanced materials and energy systems expertise.
“The demand for long-duration energy storage represents a compelling market opportunity within the energy transition and the combination of Honeywell and ESS technology can accelerate decarbonization for the commercial, industrial and utility sectors,” said Bryan Glover, chief growth officer, Honeywell Performance Materials and Technology (PMT) group. “Our strategic collaboration with ESS will accelerate Honeywell’s ability to bring comprehensive solutions to our customers while working to advance long-duration energy storage across all industries requiring expansive energy storage.”
“Today, we are creating superior technology in the critical long-duration energy storage industry,” said Eric Dresselhuys, CEO of ESS. “Combining ESS’ innovative technology and deployment experience with Honeywell’s storage and control system expertise will enable us to drive the clean energy transition and deliver value to our customers, shareholders and communities.”
Honeywell and ESS are working together to meet growing global demand for long-duration energy storage (LDES), driven by the rapid increase in renewable power generation. This is creating a substantial and fast-growing market as countries worldwide transition to zero carbon energy. The
current global energy storage market is estimated to be $50 billion per year and is forecast to grow significantly with a cumulative investment of up to $3 trillion by 2040, according to the LDES Council and McKinsey & Co.
As the shift to renewable energy accelerates, challenges associated with the intermittency of wind and solar energy are becoming more apparent. Safe and sustainable IFB technology enables the transition to clean energy using Earth-abundant materials – iron, salt and water – to provide energy storage without reliance upon limited minerals such as lithium, cobalt or vanadium.
Conference Call Details
ESS will hold a webcast conference call on Monday, September 25, 2023 at 9:00 a.m. EDT to discuss the partnership with Honeywell. Interested parties may join the conference call beginning at 8:45 a.m. EDT on Monday, September 25, 2023 via telephone by calling 888-272-2741 in the U.S., or for international callers, by calling +1-848-280-6390. A live webcast of the conference call will be available on ESS’ Investor Relations website at http://investors.essinc.com/.
A replay of the webcast can be accessed at http://investors.essinc.com/.
About ESS Inc.:
At ESS (NYSE: GWH), our mission is to accelerate global decarbonization by providing safe, sustainable, long-duration energy storage that powers people, communities, and businesses with clean, renewable energy anytime and anywhere it’s needed. As more renewable energy is added to the grid, long-duration energy storage is essential to providing the reliability and resiliency we need when the sun is not shining, and the wind is not blowing.
Our technology uses earth-abundant iron, salt and water to deliver environmentally safe solutions capable of providing up to 12 hours of flexible energy capacity for commercial and utility-scale energy storage applications. Established in 2011, ESS Inc. enables project developers, independent power producers, utilities and other large energy users to deploy reliable, sustainable long-duration energy storage solutions. For more information visit www.essinc.com.
About Honeywell:
Honeywell (www.honeywell.com) is a technology company that delivers industry-specific solutions that include aerospace products and services; control technologies for buildings and industry; and performance materials globally. Our technologies help aircraft, buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit Honeywell | Newsroom.
Forward-Looking Statements
This communication contains certain forward-looking statements regarding ESS and its management team’s expectations, hopes, beliefs, or intentions regarding the future. The words “estimate”, “expect”, “will” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a
statement is not forward-looking. Examples of forward-looking statements include, among others, statements regarding the collaboration between ESS and Honeywell and Honeywell purchasing products from ESS. These forward-looking statements are based on ESS’ current expectations and beliefs concerning future developments. Many factors could cause actual future events to differ materially from such expectations, including, but not limited to, disruptions, or quality control problems in the Company’s manufacturing operations; challenges related to the collaboration between ESS and Honeywell; as well as those risks and uncertainties set forth in the section entitled “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2023, filed with the Securities and Exchange Commission (the “SEC”) on August 8, 2023, and its other filings filed with the SEC. Except as required by law, ESS is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
