Delaware | 3690 | 98-1550150 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Mark B. Baudler Andrew D. Hoffman Brian Dillavou Lillian Jenks Alexandra Perry Christoph Luschin Wilson Sonsini Goodrich & Rosati Professional Corporation 650 Page Mill Road Palo Alto, California 94304 (650) 493-9300 | Amir Moftakhar Chief Financial Officer 26440 SW Parkway Ave., Bldg. 83 Wilsonville, Oregon 97070 (888) 423-9920 | Daniel J. Bursky Andrew B. Barkan Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York 10004 (212) 859-8000 |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
| Emerging growth company | ☒ | |||||
Title of Each Class of Securities to be Registered | Amount to be Registered (1) | Proposed Maximum Offering Price Per Share (2) | Proposed Maximum Aggregate Offering Price (1)(2) | Amount of Registration Fee (3)(4) | ||||
Common Stock, par value $0.0001 per share | 6,500,000 | $11.49 | $74,692,800 | $6,925 | ||||
| (1) | Includes the offering of additional shares of Common Stock pursuant to the underwriters’ option to purchase additional shares. |
| (2) | Estimated solely for purposes of calculating the registration fee according to Rule 457(c) under the Securities Act of 1933, as amended (the “Securities Act”), based on the average of the high and low prices of the Registrant’s Common Stock quoted on the New York Stock Exchange on December 20, 2021. |
| (3) | Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0000927. |
| (4) | Includes an aggregate of 6,500,000 shares of Common Stock offered by the Registrant. As set forth below, an additional 5,000,000 shares of the Registrant’s Common Stock previously registered for resale on Registration No. 333-260693 are being carried forward to this Registration Statement pursuant to Rule 429 under the Securities Act and are being offered by the Selling Stockholder named herein. A filing fee of $192,067 was previously paid in connection with the prior registration statement. |
PRELIMINARY PROSPECTUS | Subject to Completion | December 27, 2021 |
Per Share | Total | |||||||
Public offering price | $ | $ | �� | |||||
Underwriting discounts and commissions (1) | $ | $ | ||||||
Proceeds, before expenses, to us | $ | $ | ||||||
Proceeds, before expenses, to the Selling Stockholder | $ | $ | ||||||
| (1) | See “ Underwriting |
Goldman Sachs & Co. LLC | J.P. Morgan | Wolfe | Nomura Alliance |
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| F-1 | ||||
| • | our financial and business performance, including financial projections and business metrics; |
| • | changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; |
| • | the implementation, market acceptance and success of our technology implementation and business model; |
| • | our ability to scale in a cost-effective manner; |
| • | developments and projections relating to our competitors and industry; |
| • | the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto; |
| • | our expectations regarding our ability to obtain and maintain intellectual property protection and not infringe on the rights of others; |
| • | expectations regarding the time during which we will be an emerging growth company under the JOBS Act; |
| • | our future capital requirements and sources and uses of cash; |
| • | our ability to obtain funding for our operations; |
| • | our business, expansion plans and opportunities; |
| • | our relationships with third-parties, including our suppliers; |
| • | the outcome of any known and unknown litigation and regulatory proceedings; |
| • | our ability to successfully deploy the proceeds from this offering; and |
| • | our ability to manage other risks and uncertainties set forth in the section titled “ Risk Factors |
| • | Simple, Revolutionary Technology |
| • | Compelling Value Proposition |
| • | Most Sustainable Solution 2 ”) emissions thanlithium-ion batteries. Our batteries provide a dramatically cleaner solution compared to other energy storage options, particularlylithium-ion batteries, owing to our use of predominantly earth-abundant materials, a far longer operating life and easyend-of-life |
| • | Rapid Expansion Capability lithium-ion because of the relative simplicity of our production process relative to the production process forlithium-ion. Our operations require onlypick-and-place lithium-ion batteries. We estimate that our automated and semi-automated production lines will be able to produce one gigawatt hour (“GWh”) of annual production capacity at an estimated capital cost of approximately $30 million and $4 million, respectively, based on the capital costs associated with our recent contracted purchases. This compares favorably tolithium-ion technologies, which require approximately $140 million in capital for one GWh of annual production capacity, according to Lux Research. Ourlow-cost manufacturing approach will allow us to scale more rapidly and with lower capital expenditures in the future as new opportunities arise. |
| • | Significant and Proprietary Technology Head Start |
| • | Expanded Scale |
| • | Technology Improvements |
| • | Energy Center Sales |
| • | International Growth Potential lithium-ion batteries are unable to compete due to their shortcomings on operational reliability. For example, Australia and Spain are particularly promising markets that we intend to enter over time. The relatively hot climates in these countries creates challenges for deployment of lithiumion batteries, as these function optimally at 20 – 25°C and otherwise require temperature control units, which erodes battery efficiency. In contrast, our batteries can operate in ambient temperatures ranging from -5°C to 50°C without requiring heating or cooling systems. Additionally, we may implement a franchising business model, or Energy Franchises, where we will ship various components of our energy storage products to third parties with whom we develop partnerships, who will then assemble completed units for system integrators andend-use customers. |
| • | Leasing |
| • | Service |
November 30, 2020 | November 30, 2021 | |||||||
Annualized production capacity (MWh) | 150 | 250 | ||||||
Primary product | | Series 100 Energy Warehouse (prototype) | | Energy Warehouse S200 | ||||
Production facility size (square feet) | 103,000 | 203,000 | ||||||
# of patents filed | 96 | 137 | ||||||
| • | Our expectations for future operating and financial results and market growth rely in large part upon assumptions and analyses developed by us. If these assumptions or analyses prove to be incorrect, our actual operating results may be materially different from our anticipated results; |
| • | We face significant barriers in our attempts to produce our energy storage products, our energy storage products are still under development, and we may not be able to successfully develop our energy storage products at commercial scale. If we cannot successfully overcome those barriers, our business will be negatively impacted and could fail; |
| • | We are in the early stage of commercialization. In addition, certain aspects of our technology have not been fully field tested. If we are unable to develop our business and effectively commercialize our energy storage products as anticipated, we may not be able to generate revenues or achieve profitability; |
| • | We may experience delays, disruptions, or quality control problems in our manufacturing operations; |
| • | Our ability to expand depends on our ability to hire, train and retain an adequate number of manufacturing employees, in particular employees with the appropriate level of knowledge, background and skills; |
| • | We have experienced disruption related to COVID-19, which continues to cause significant uncertainty; |
| • | We depend on third-party suppliers for the development and supply of key raw materials and components for our energy storage products. In 2020 and during 2021 to date, we have seen significant disruptions to key supply chains, shipping times, manufacturing times, and associated costs; |
| • | Continued delays in our supply chain or the inability to procure needed raw materials and components could further harm our ability to manufacture and commercialize our energy storage products; |
| • | We may be unable to adequately control the costs associated with our operations and the components necessary to build our energy storage products, and if we are unable to reduce our cost structure and effectively scale our operations in the future, our ability to become profitable may be impaired; |
| • | We rely on complex technology for our operations, and the production of our iron flow batteries involves a significant degree of risk and uncertainty in terms of operational performance and costs; |
| • | We have a history of losses and have to deliver significant business growth to achieve sustained, long-term profitability and long-term commercial success; |
| • | Our warranty insurance provided by Munich Re is important to many potential customers. Should we be unable to maintain our relationship with Munich Re and be unable to find a similar replacement, demand for our products may suffer; |
| • | Failure to deliver the benefits offered by our technology, or the emergence of improvements to competing technologies, could reduce demand for our energy storage products and harm our business; |
| • | Our plans are dependent on the development of a market acceptance of our products and the development of a market for long-duration batteries; |
| • | We may face regulatory challenges to or limitations on our ability to sell our Energy Centers and Energy Warehouses directly in certain markets. Expanding operations internationally could expose us to additional risks; |
| • | If we fail to protect, or incur significant costs in defending, our intellectual property and other proprietary rights, then our business and results of operations could be materially harmed; and |
| • | As we endeavor to expand our business, we will incur significant costs and expenses, which could outpace our cash reserves. Unfavorable conditions or disruptions in the capital and credit markets may adversely impact business conditions and the availability of credit. |
Shares of Common Stock offered by us | 5,000,000 shares (or 6,500,000 shares if the underwriters’ option to purchase additional shares is exercised in full). |
Shares of Common Stock offered by the Selling Stockholder hereunder | 5,000,000 shares. |
Option to purchase additional shares of Common Stock | We have granted the underwriters an option to purchase up to an aggregate of 1,500,000 shares of Common Stock from us. This option is exercisable, in whole or in part, within 30 days after the date of this prospectus. |
Shares of Common Stock to be outstanding after this offering | 156,809,201 shares. |
Use of proceeds | We estimate that after deducting underwriting discounts and commissions and estimated offering expenses payable by us, we will receive approximately $ million of net proceeds from this offering, based upon the assumed public offering price of $13.50 per share, the last reported sale price of our Common Stock on the NYSE on December 23, 2021. We currently intend to use the net proceeds from the offering for our expansion plans and general corporate purposes. |
| We will not receive any proceeds from the sale of our Common Stock offered by the Selling Stockholder. |
| See the section of this prospectus titled “ Use of Proceeds |
Risk factors | See the section titled “ Risk Factors |
NYSE symbol | “GWH” for our Common Stock. |
Lock-up restrictions | The shares of Common Stock that may be offered or sold by our executive officers, directors and certain stockholders, including the Selling Stockholder, are subject to certain lock-up restrictions as identified in the sections titled “Restrictions on Resale of Securities—Lock-Up Restrictions. |
| • | Assumes no exercise of the underwriters’ option to purchase additional shares. |
| • | Includes 15,674,969 shares of Common Stock to be issued to eligible ESS securityholders representing Earnout Stock. The Earnout Milestone Events (as defined herein) were met on November 9, 2021, and we have issued shares of Earnout Stock to all eligible ESS securityholders except where regulatory approval is still pending. |
| • | Includes 125,958 shares of Common Stock to be issued to eligible ESS securityholders under the terms of the Merger Agreement (the “Expense Adjustment Stock”). Subsequent to Closing, we 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 in the Merger Agreement), which increased the Adjusted Equity Value (as defined in the Merger Agreement) of Legacy ESS. |
| • | The expansion or construction of any manufacturing facilities will be subject to the risks inherent in the development and construction of new facilities, including risks of delays and cost overruns as a result of factors outside our control, which may include delays in government approvals, burdensome permitting conditions, and delays in the delivery or installation of manufacturing equipment and subsystems that we manufacture or obtain from suppliers, similar to or more severe than what we have experienced recently. |
| • | In order for us to expand internationally, we anticipate entering into strategic partnerships, joint venture and licensing agreements that allow us to add manufacturing capability outside of the United States. Adding manufacturing capacity in any international location will subject us to new laws and regulations including those pertaining to labor and employment, environmental and export / import. In addition, any such expansion brings with it the risk of managing larger scale foreign operations. |
| • | We may be unable to achieve the production throughput necessary to achieve our target annualized production run rate at our current and future manufacturing facilities. |
| • | Manufacturing equipment may take longer and cost more to engineer and build than expected, and may not operate as required to meet our production plans. |
| • | We may depend on third-party relationships in the development and operation of additional production capacity, which may subject us to the risk that such third parties do not fulfill their obligations to us under our arrangements with them. |
| • | We may be unable to attract or retain qualified personnel. |
| • | the cost competitiveness of our products including availability and output expectations and total cost of ownership; |
| • | the future costs associated with renewable energies; |
| • | perceived complexity and novelty of our technology and customer reluctance to try a new product; |
| • | the market for energy storage solutions and government policies that affect those markets; |
| • | government incentives, mandates or other programs favoring zero carbon energy sources; |
| • | local permitting and environmental requirements; |
| • | customer preference for lithium-ion based technologies, including but not limited to the power density offeredby lithium-ion batteries; and |
| • | the emergence of newer, more competitive technologies and products. |
| • | cost competitiveness, reliability and performance of our products compared to lithium-ion products; |
| • | levels of investment by end users of energy storage products, which may decrease when economic growth or energy demand slows resulting in a reduction in battery purchases generally; |
| • | strength of the renewable energy industry and associated integration opportunities for our products; |
| • | a favorable regulatory landscape, including: the upholding by the states in the United States of the Federal Energy Regulatory Commission’s Order 841, which mandates that battery storage can participate in the demand response and ancillary markets; incentives for the implementation of battery storage by state regulators; and adoption by Congress of an investment tax credit for standalone battery storage; and |
| • | the emergence, continuance or success of other alternative energy storage technologies and products. |
| • | the pervasiveness of electric grid congestion, creating an opportunity to deploy batteries to reduce the peak energy usage of a customer in specific locations where infrastructure constraints create a need for transmission and/or distribution upgrades; |
| • | increasing demand for longer duration energy storage of more than four hours; |
| • | global interest in achieving higher penetration of renewable energy such as wind and solar power, which are fluctuating in nature and dependent upon effective energy storage solutions; |
| • | the demand for co-location of battery assets on solar or wind farms tostore off-peak intermittent renewable energy production andprovide on-peak energy at higher prices than alternative energy; |
| • | utilities turning to energy storage as an alternative to expanded transmission; |
| • | C&I end users’ adoption of alternative energy generation technologies to supplement or replace on-the-grid energy |
| • | microgrid expansion including for means of preventing wildfires in California and Australia; and |
| • | the existence of various market mechanisms that would allow the owners and operators of our products to monetize their investments in our products, such as ancillary service markets, capacity markets and others. |
| • | gain access to our network or Energy Warehouses or networks of our customers; |
| • | steal proprietary information related to our business, products, employees, and customers; or |
| • | interrupt our systems or those of our customers. |
| • | the loss of key employees; |
| • | the disruption of operations and business; |
| • | the retention or transition of customers and vendors; |
| • | the integration of corporate cultures and maintenance of employee morale; |
| • | inability to maintain and increase competitive presence; |
| • | customer loss and revenue loss; |
| • | possible inconsistencies in standards, control procedures and policies; |
| • | problems with the assimilation of new operations, sites or personnel, which could divert resources from our regular operations; |
| • | integration of financial reporting and regulatory reporting functions; and/or |
| • | potential unknown liabilities. |
| • | we may enter into contracts between us, on the one hand, and related parties, on the other, that are not as a result of arm’s-length transactions; |
| • | our executive officers and directors that hold positions of responsibility with related parties may be aware of certain business opportunities that are appropriate for presentation to us as well as to such other related parties and may present such business opportunities to such other parties; and |
| • | our executive officers and directors that hold positions of responsibility with related parties may have significant duties with, and spend significant time serving, other entities and may have conflicts of interest in allocating time. |
| • | incur additional debt, including providing guarantees or credit support; |
| • | incur liens securing indebtedness or other obligations; |
| • | make certain investments; |
| • | dispose of assets; |
| • | make certain acquisitions; |
| • | pay dividends or make distributions and make other restricted payments; and |
| • | engage in any new businesses. |
| • | changes in the industries in which we and our customers operate; |
| • | variations in our operating performance and the performance of our competitors in general; |
| • | material and adverse impact of the COVID-19 pandemic on the markets and the broader global economy; |
| • | actual or anticipated fluctuations in our quarterly or annual operating results; |
| • | the public’s reaction to our press releases, our other public announcements and our filings with the SEC; |
| • | our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; |
| • | additions and departures of key personnel; |
| • | changes in laws and regulations affecting our business; |
| • | commencement of, or involvement in, litigation involving us; |
| • | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
| • | publication of research reports by securities analysts about us or our competitors or our industry; |
| • | sales of shares of our Common Stock by our existing stockholders; |
| • | the volume of shares of our Common Stock available for public sale, including as a result of the termination of lock-up restrictions; and |
| • | general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism. |
| • | a limited availability of market quotations for our securities; |
| • | reduced liquidity for our securities; |
| • | a limited amount of news and analyst coverage; and |
| • | a decreased ability to issue additional securities or obtain additional financing in the future. |
| • | Legacy ESS on an actual basis; |
| • | ESS on a pro forma basis after giving effect to the Business Combination; and |
| • | ESS on a pro forma as adjusted basis after giving effect to the sale by us of 5,000,000 shares of Common Stock in this offering, based on an assumed public offering price of $13.50 per share, the last reported sale price of our common stock on the NYSE on December 23, 2021, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
As of September 30, 2021 | ||||||||||||
Legacy ESS Actual | ESS (Pro Forma) | ESS (Pro Forma As Adjusted) | ||||||||||
(in thousands) | ||||||||||||
Cash and cash equivalents | $ | 8,019 | $ | 246,109 | $ | 309,175 | ||||||
Notes payable, current | 23,415 | 1,983 | 1,983 | |||||||||
Notes payable, non-current | 2,253 | 2,253 | 2,253 | |||||||||
Legacy ESS redeemable convertible preferred stock | 90,073 | — | — | |||||||||
Stockholders’ equity: | ||||||||||||
Legacy ESS common stock | 1 | — | — | |||||||||
Preferred stock, $0.0001 par value per share, 200,000,000 shares authorized, no shares issued or outstanding, actual, pro forma and as adjusted | — | — | — | |||||||||
Common Stock, $0.0001 par value per share; 2,000,000,000 shares authorized, 151,558,074 issued and outstanding, pro forma, 156,558,074 issued and outstanding, pro forma as adjusted | — | 1,638 | 1,639 | |||||||||
Additional paid-in capital | 2,516 | 750,372 | 813,437 | |||||||||
Accumulated deficit | (360,178 | ) | (527,232 | ) | (527,232 | ) | ||||||
Total stockholders’ equity (deficit) | (357,661 | ) | 224,778 | 287,844 | ||||||||
Total capitalization | $ | (241,920 | ) | $ | 229,014 | $ | 292,080 | |||||
| (1) | Each $1.00 increase (decrease) in the assumed public offering price of $13.50 per share, the last reported sale price of our Common Stock on the NYSE on December 23, 2021, would increase (decrease) our pro forma as adjusted cash and cash equivalents, additional paid-in capital, accumulated deficit, total stockholders’ equity (deficit), and total capitalization by approximately $4,725 thousand, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions. Each increase (decrease) of 1.0 million shares in the number of shares sold in this offering by us would increase (decrease) our pro forma as adjusted cash and cash equivalents, additional paid-in capital, accumulated deficit, total stockholders’ equity (deficit), and total capitalization by approximately $12,758 thousand, assuming the public offering price of |
| $13.50 per share, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
| • | Assumes no exercise of the underwriters’ option to purchase additional shares. |
| • | Includes 15,675,002 shares of Common Stock to be issued to eligible ESS securityholders representing Earnout Stock. The Earnout Milestone Events (as defined herein) were met on November 9, 2021. |
| • | Excludes 125,958 shares of Expense Adjustment Stock to be issued to eligible ESS securityholders under the terms of the Merger Agreement. |
| • | Includes 67,090,925 shares of Common Stock issued to holders of an aggregate of 45,622,439 shares of Legacy ESS Common Stock (as defined herein) and Legacy ESS Preferred Stock (as defined herein) adjusted using the Per Share Consideration (as defined herein), including net settlement adjustment as applicable. |
| • | Includes 3,354,867 shares of Common Stock issued to holders of 2,280,661 Legacy ESS warrants adjusted using the Per Share Consideration and 824,998 shares (net of settlement adjustment) of Common Stock upon the settlement of ESS RSUs, which were issued at the Closing and vested on November 9, 2021 upon the occurrence of the Earnout Milestone Events. |
| • | Includes the issuance of 29,117,001 shares of Common Stock resulting from the conversion of 5,427,464 shares of Legacy ESS Series C-2 Preferred Stock and related 14,365,207 Legacy ESSSeries C-2 Preferred Stock warrants, adjusted using the Per Share Consideration. |
| • | Includes 6,250,000 shares subscribed for by the Sponsor in return for STWO Class B Ordinary Shares (as defined herein) and excludes 583,334 shares related to the Private Placement Warrants earnout. |
| • | Includes 4,245,281 shares held by the STWO public shareholders. |
| • | Includes 25,000,000 shares held by the PIPE Investors. |
Assumed public offering price per share | $13.50 | |||||||
Net tangible pro forma book value per share as of September 30, 2021 | $1.48 | |||||||
Increase in pro forma net tangible book value per share attributable to investors in this offering | $0.36 | |||||||
As adjusted pro forma net tangible book value per share as of September 30, 2021 after this offering | $1.84 | |||||||
Dilution in pro forma net tangible book value per share to investors purchasing Common Stock in this offering | $11.66 |
| • | Assumes no exercise of the underwriters’ option to purchase additional shares. |
| • | Includes 15,675,002 shares of Common Stock to be issued to eligible ESS securityholders representing Earnout Stock. The Earnout Milestone Events (as defined herein) were met on November 9, 2021. |
| • | Excludes 125,958 shares of Expense Adjustment Stock to be issued to eligible ESS securityholders under the terms of the Merger Agreement. |
| • | Includes 67,090,925 shares of Common Stock issued to holders of an aggregate of 45,622,439 shares of Legacy ESS Common Stock (as defined herein) and Legacy ESS Preferred Stock (as defined herein) adjusted using the Per Share Consideration (as defined herein), including net settlement adjustment as applicable. |
| • | Includes 3,354,867 shares of Common Stock issued to holders of 2,280,661 Legacy ESS warrants adjusted using the Per Share Consideration and 824,998 shares (net of settlement adjustment) of Common Stock upon the settlement of ESS RSUs, which were issued at the Closing and vested on November 9, 2021 upon the occurrence of the Earnout Milestone Events. |
| • | Includes the issuance of 29,117,001 shares of Common Stock resulting from the conversion of 5,427,464 shares of Legacy ESS Series C-2 Preferred Stock and related 14,365,207 Legacy ESS SeriesC-2 Preferred Stock warrants, adjusted using the Per Share Consideration. |
| • | Includes 6,250,000 shares subscribed for by the Sponsor in return for STWO Class B Ordinary Shares (as defined herein) and excludes 583,334 shares related to the Private Placement Warrants earnout. |
| • | Includes 4,245,281 shares held by the STWO public shareholders. |
| • | Includes 25,000,000 shares held by the PIPE Investors. |
| • | Each issued and outstanding share of Legacy ESS Preferred Stock was converted into shares of Common Stock at the then-effective conversion rate as calculated pursuant to the ESS Certificate of Incorporation; |
| • | Each issued and outstanding Legacy ESS Warrant was exercised in full in exchange for the issuance of shares of Common Stock; |
| • | Each issued and outstanding share of Legacy ESS Common Stock (including shares of Legacy ESS Common Stock resulting from the conversion of Legacy ESS Preferred Stock and the exercise and settlement of all outstanding Legacy ESS Warrants) was cancelled and converted into the right to receive a number of shares of Common Stock equal to the Per Share Consideration; |
| • | Each issued and outstanding vested and unvested Legacy ESS Option was converted into ESS Options exercisable for shares of Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Per Share Consideration; and |
| • | Each issued and outstanding vested and unvested Legacy ESS RSU was converted into ESS RSUs for shares of Common Stock with the same terms except for the number of shares, which was adjusted using the Per Share Consideration. |
| • | The issuance and sale of 25,000,000 shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $250.0 million pursuant to the PIPE Financing; |
| • | The issuance to ESS employees of 824,998 (net of settlement adjustment) ESS restricted stock units (“RSUs”), which vested on November 9, 2021 upon the occurrence of the Earnout Milestone Events; |
| • | During the Earnout Period (as defined in the Merger Agreement), eligible ESS securityholders are also entitled to Earnout Stock comprising up to 16,500,000 shares of additional Common Stock, consisting of two separate tranches of 8,250,000 shares per tranche, upon the occurrence of the respective Earnout Milestone Event. As the Earnout Milestone Events were met on November 9, 2021, a total of 15,675,002 shares of Common Stock are being issued, and accordingly, are reclassified from liability classified equity instruments to equity classified equity instruments in the unaudited pro forma financial information; |
| • | The repayment of the outstanding STWO working capital loan to the Sponsor and ESS bridge loan as a result of the Business Combination; and |
| • | 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 in the Merger Agreement), which increased the Adjusted Equity Value (as defined in the Merger Agreement) of Legacy ESS. As a result, 125,958 shares of Common Stock are being issued to eligible ESS securityholders under the terms of the Merger Agreement. |
Number of Shares | % Ownership | |||||||
Legacy ESS Stockholders (1)(2)(3)(4)(5) | 116,062,793 | 76.6 | % | |||||
STWO Public Shareholders | 4,245,281 | 2.8 | % | |||||
STWO Initial Shareholders (6) | 6,250,000 | 4.1 | % | |||||
PIPE Investors | 25,000,000 | 16.5 | % | |||||
Total | 151,558,074 | 100.0 | % | |||||
| (1) | Includes 15,675,002 shares of Common Stock to be issued to eligible ESS securityholders representing Earnout Stock. The Earnout Milestone Events were met on November 9, 2021. |
| (2) | Excludes 125,958 shares of Expense Adjustment Stock to be issued to eligible ESS securityholders under the terms of the Merger Agreement. |
| (3) | Includes 67,090,925 shares of Common Stock issued to holders of an aggregate of 45,622,439 shares of Legacy ESS Common Stock and Legacy ESS Preferred Stock adjusted using the Per Share Consideration, including net settlement adjustment as applicable. |
| (4) | Includes 3,354,867 shares of Common Stock issued to holders of 2,280,661 Legacy ESS warrants adjusted using the Per Share Consideration and 824,998 shares (net of settlement adjustment) of Common Stock upon the settlement of ESS RSUs, which were issued at the Closing and vested on November 9, 2021 upon the occurrence of the Earnout Milestone Events. All outstanding vested and unvested Legacy ESS Options were converted into ESS Options exercisable for shares of Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Per Share Consideration. |
| (5) | Includes the issuance of 29,117,001 shares of Common Stock resulting from the conversion of 5,427,464 shares of Legacy ESS Series C-2 Preferred Stock and related 14,365,207 Legacy ESSSeries C-2 Preferred Stock warrants, adjusted using the Per Share Consideration. |
| (6) | Includes 6,250,000 shares subscribed for by the Sponsor in return for STWO Class B Ordinary Shares and excludes 583,334 shares related to the Private Placement Warrants earnout. |
ESS (Historical) | ESS Transaction Accounting Adjustments | ESS As Adjusted | STWO (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | |||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||
Current assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 8,019 | $ | 16,000 | A | $ | 24,020 | $ | 1 | $ | 250,017 | C | $ | 246,109 | ||||||||||||||||||
| — | 1 | B | — | — | 250,000 | D | — | |||||||||||||||||||||||||
| — | — | — | — | (14,550 | ) | J | — | |||||||||||||||||||||||||
| — | — | — | — | (25,250 | ) | K | — | |||||||||||||||||||||||||
| — | — | — | — | (8,750 | ) | L | — | |||||||||||||||||||||||||
| — | — | — | — | (207,547 | ) | Q | — | |||||||||||||||||||||||||
| (21,832 | ) | R | — | |||||||||||||||||||||||||||||
Restricted cash | 1,217 | — | 1,217 | — | — | 1,217 | ||||||||||||||||||||||||||
Prepaid expenses and other current assets | 6,506 | — | 6,506 | 160 | (3,471 | ) | J | 3,195 | ||||||||||||||||||||||||
Total current assets | 15,742 | 16,001 | 31,743 | 161 | 218,617 | 250,521 | ||||||||||||||||||||||||||
Non-current assets: | ||||||||||||||||||||||||||||||||
Property and equipment, net | 2,007 | — | 2,007 | — | — | 2,007 | ||||||||||||||||||||||||||
Cash equivalents held in Trust Account | — | — | — | 250,017 | (250,017 | ) | C | — | ||||||||||||||||||||||||
Restricted cash | 75 | — | 75 | — | — | 75 | ||||||||||||||||||||||||||
Other assets | — | — | — | 41 | — | 41 | ||||||||||||||||||||||||||
Total non-current assets | 2,082 | — | 2,082 | 250,058 | (250,017 | ) | 2,123 | |||||||||||||||||||||||||
TOTAL ASSETS | $ | 17,824 | $ | 16,001 | $ | 33,825 | $ | 250,219 | $ | (31,400 | ) | $ | 252,644 | |||||||||||||||||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||||||||||||||
Accounts payable | $ | 3,037 | $ | — | $ | 3,037 | $ | 223 | $ | — | $ | 3,260 | ||||||||||||||||||||
Accrued and other current liabilities | 4,595 | — | 4,595 | 1,428 | (1,742 | ) | J | 4,243 | ||||||||||||||||||||||||
| — | — | — | — | (38 | ) | R | — | |||||||||||||||||||||||||
Accrued liabilities—related party | — | — | — | 130 | — | 130 | ||||||||||||||||||||||||||
Working capital loan | — | — | — | 362 | (362 | ) | R | — | ||||||||||||||||||||||||
Notes payable, current | 23,415 | — | 23,415 | — | (21,432 | ) | R | 1,983 | ||||||||||||||||||||||||
Total current liabilities | 31,047 | — | 31,047 | 2,143 | (23,574 | ) | 9,616 | |||||||||||||||||||||||||
Non-current liabilities: | ||||||||||||||||||||||||||||||||
Earnout liability | — | — | — | — | 104,053 | O | — | |||||||||||||||||||||||||
| — | — | — | — | (104,053 | ) | T | — | |||||||||||||||||||||||||
Derivative liabilities | 248,450 | — | 248,450 | — | (222,925 | ) | M | — | ||||||||||||||||||||||||
| — | — | — | — | (25,525 | ) | S | — | |||||||||||||||||||||||||
Derivative warrant liabilities | — | 1 | B | 1 | 20,217 | (1 | ) | M | 12,335 | |||||||||||||||||||||||
| — | — | — | — | (1,167 | ) | N | — | |||||||||||||||||||||||||
| — | — | — | — | (6,715 | ) | P | — | |||||||||||||||||||||||||
| — | — | — | — | — | T | |||||||||||||||||||||||||||
Deferred underwriting commissions | — | — | — | 8,750 | (8,750 | ) | L | — | ||||||||||||||||||||||||
Other non-current liabilities | 3,662 | — | 3,662 | — | — | 3,662 | ||||||||||||||||||||||||||
Notes payable, non-current | 2,253 | — | 2,253 | — | — | 2,253 | ||||||||||||||||||||||||||
Total non-current liabilities | 254,365 | 1 | 254,366 | 28,967 | (265,083 | ) | 18,250 | |||||||||||||||||||||||||
Total liabilities | 285,412 | 1 | 285,413 | 31,110 | (288,657 | ) | 27,866 | |||||||||||||||||||||||||
ESS (Historical) | ESS Transaction Accounting Adjustments | ESS As Adjusted | STWO (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | |||||||||||||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||||||||||||||
Redeemable convertible preferred stock | 90,073 | 16,000 | A | 106,073 | — | (106,073 | ) | G | — | |||||||||||||||||||||||
Class A common stock subject to possible redemption | — | — | — | 250,000 | (250,000 | ) | E | — | ||||||||||||||||||||||||
Stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||||
Class A common stock | — | — | — | — | — | — | ||||||||||||||||||||||||||
Class B common stock | — | — | — | 1 | (1 | ) | F | — | ||||||||||||||||||||||||
Legacy ESS common stock | 1 | — | 1 | — | (1 | ) | H | — | ||||||||||||||||||||||||
ESS common stock | — | — | — | — | 3 | D | 1,638 | |||||||||||||||||||||||||
| — | — | — | — | 3 | E | — | ||||||||||||||||||||||||||
| — | — | — | — | 1 | F | — | ||||||||||||||||||||||||||
| — | — | — | — | 6 | G | — | ||||||||||||||||||||||||||
| — | — | — | — | 1 | H | — | ||||||||||||||||||||||||||
| — | — | — | — | (2 | ) | Q | — | |||||||||||||||||||||||||
| — | — | — | — | 1,626 | T | — | ||||||||||||||||||||||||||
Additional paid-in capital | 2,516 | — | 2,516 | — | 249,997 | D | 750,372 | |||||||||||||||||||||||||
| — | — | — | — | 249,997 | E | — | ||||||||||||||||||||||||||
| — | — | — | — | (1,786 | ) | I | — | |||||||||||||||||||||||||
| — | — | — | — | (11,971 | ) | J | — | |||||||||||||||||||||||||
| — | — | — | — | (25,250 | ) | K | — | |||||||||||||||||||||||||
| — | — | — | — | 1 | M | — | ||||||||||||||||||||||||||
| — | — | — | — | 222,925 | M | — | ||||||||||||||||||||||||||
| — | — | — | — | 1,167 | N | — | ||||||||||||||||||||||||||
| — | — | — | — | (104,053 | ) | O | — | |||||||||||||||||||||||||
| — | — | — | — | 106,067 | G | — | ||||||||||||||||||||||||||
| — | — | — | — | (502 | ) | P | — | |||||||||||||||||||||||||
| — | — | — | — | (207,545 | ) | Q | — | |||||||||||||||||||||||||
| — | — | — | — | 261,714 | T | — | ||||||||||||||||||||||||||
| — | — | — | — | 7,095 | U | — | ||||||||||||||||||||||||||
Accumulated deficit | (360,178 | ) | — | (360,178 | ) | (30,892 | ) | 1,786 | I | (527,232 | ) | |||||||||||||||||||||
| — | — | — | — | (4,308 | ) | J | ||||||||||||||||||||||||||
| — | — | — | — | 7,217 | P | — | ||||||||||||||||||||||||||
| — | — | — | — | 25,525 | S | — | ||||||||||||||||||||||||||
| — | — | — | — | (159,287 | ) | T | — | |||||||||||||||||||||||||
| — | — | — | — | (7,095 | ) | U | — | |||||||||||||||||||||||||
Total stockholders’ equity (deficit) | (357,661 | ) | — | (357,661 | ) | (30,891 | ) | 613,330 | 224,778 | |||||||||||||||||||||||
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 17,824 | $ | 16,001 | $ | 33,825 | $ | 250,219 | $ | (31,400 | ) | $ | 252,644 | |||||||||||||||||||
ESS (Historical) | STWO (Historical) | Transaction Accounting Adjustments | Pro Forma Combined | |||||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | $ | 19,546 | $ | — | $ | — | $ | 19,546 | ||||||||||||
Sales and marketing | 2,261 | — | — | 2,261 | ||||||||||||||||
General and administrative | 7,667 | 2,625 | 4,308 | EE | 14,360 | |||||||||||||||
| — | — | (240 | ) | HH | ||||||||||||||||
Total operating expenses | 29,474 | 2,625 | 4,068 | 36,167 | ||||||||||||||||
Loss from operations | (29,474 | ) | (2,625 | ) | (4,068 | ) | (36,167 | ) | ||||||||||||
Other income (expense), net | ||||||||||||||||||||
Gain on marketable securities, net, and dividends held in Trust Account | — | 13 | (13 | ) | AA | — | ||||||||||||||
Change in fair value of derivative warrant liabilities | (17,753 | ) | 1,137 | 313 | BB | 8,667 | ||||||||||||||
| — | — | 17,753 | CC | |||||||||||||||||
| 7,217 | FF | |||||||||||||||||||
Change in fair value of derivative liability | (248,691 | ) | — | 223,166 | CC | — | ||||||||||||||
| — | — | 25,525 | GG | |||||||||||||||||
Interest expense, net | (1,693 | ) | — | 1,533 | HH | (160 | ) | |||||||||||||
Other income, net | 926 | — | — | 926 | ||||||||||||||||
Total other income (expense), net | (267,211 | ) | 1,150 | 275,494 | 9,433 | |||||||||||||||
Net loss | $ | (296,685 | ) | $ | (1,475 | ) | $ | 271,426 | $ | (26,734 | ) | |||||||||
Basic and diluted net loss per share—ESS | — | — | — | $ | (0.18 | ) | ||||||||||||||
Weighted average shares outstanding of ESS common stock—basic and diluted | — | — | — | 151,558,074 | ||||||||||||||||
Basic and diluted net loss per share—Legacy ESS | $ | (35.08 | ) | — | — | |||||||||||||||
Weighted average shares outstanding of Legacy ESS common stock—basic and diluted | 8,458,054 | — | — | |||||||||||||||||
Basic and diluted net loss per share—Class A common stock subject to redemption | — | $ | (0.05 | ) | — | |||||||||||||||
Weighted average shares outstanding of Class A common stock subject to redemption—basic and diluted | — | 25,000,000 | — | |||||||||||||||||
Basic and diluted net loss per share—Class B common stock, non-redeemable ordinary shares | — | $ | (0.05 | ) | — | |||||||||||||||
Weighted average shares outstanding of Class B common stock, non-redeemable ordinary shares | — | 6,250,000 | ||||||||||||||||||
ESS (Historical) | STWO (Historical) (As Restated) (1) | Transaction Accounting Adjustments | Pro Forma Combined | |||||||||||||||||
Operating expenses | ||||||||||||||||||||
Research and development | $ | 12,896 | $ | — | $ | 2,851 | II | $ | 15,747 | |||||||||||
Sales and marketing | 1,158 | — | 275 | II | 1,433 | |||||||||||||||
General and administrative | 3,338 | 709 | 3,968 | II | 8,015 | |||||||||||||||
Total operating expenses | 17,392 | 709 | 7,094 | 25,195 | ||||||||||||||||
Loss from operations | (17,392 | ) | (709 | ) | (7,094 | ) | (25,195 | ) | ||||||||||||
Other income (expense), net | ||||||||||||||||||||
Gain on marketable securities, net, and dividends held in Trust Account | — | 4 | (4 | ) | AA | — | ||||||||||||||
Change in fair value of derivative warrant liabilities | (1,296 | ) | (1,854 | ) | 182 | BB | (1,672 | ) | ||||||||||||
| — | — | 1,296 | CC | — | ||||||||||||||||
Change in fair value of derivative liability | (11,532 | ) | — | 11,532 | — | |||||||||||||||
Financing costs—derivative warrant liabilities | — | (735 | ) | 735 | DD | — | ||||||||||||||
Other income (expense), net | (199 | ) | — | — | (199 | ) | ||||||||||||||
Total other income (expense), net | $ | (13,027 | ) | $ | (2,585 | ) | $ | 13,741 | $ | (1,871 | ) | |||||||||
Net loss | (30,419 | ) | (3,294 | ) | 6,647 | $ | (27,066 | ) | ||||||||||||
Basic and diluted net loss per share—ESS | — | — | — | $ | (0.18 | ) | ||||||||||||||
Weighted average shares outstanding of ESS common stock—basic and diluted | — | — | — | 151,558,074 | ||||||||||||||||
Basic and diluted net loss per share—Legacy ESS | $ | (4.28 | ) | — | — | — | ||||||||||||||
Weighted average shares outstanding of Legacy ESS common stock—basic and diluted | 7,108,389 | — | — | — | ||||||||||||||||
Basic and diluted net loss per share—Class A common stock subject to possible redemption | — | $ | (0.15 | ) | — | — | ||||||||||||||
Weighted average shares outstanding of Class A common stock subject to possible redemption—basic and diluted | — | 16,139,241 | — | — | ||||||||||||||||
Basic and diluted net loss per share—Class B common stock, non-redeemable ordinary shares | — | $ | (0.15 | ) | — | — | ||||||||||||||
Weighted average shares outstanding of Class B common stock, non-redeemable ordinary shares | — | 6,250,000 | — | — | ||||||||||||||||
| (1) | STWO’s financial statements for the period from July 21, 2020 (inception) through December 31, 2020 and for the period from July 21, 2020 (inception) through September 30, 2020 (the “Affected Periods”), are restated in its Annual Report on Form 10-K to correct the misapplication of accounting guidance related to STWO’s warrants in STWO’s previously issued audited and unaudited condensed financial statements for such periods. |
Nine Months Ended September 30, 2021 | Year Ended December 31, 2020 | |||||||
Pro Forma Combined | Pro Forma Combined | |||||||
(in thousands, except share and per share data) | ||||||||
Numerator: | ||||||||
Net loss | $ | (26,734 | ) | $ | (27,066 | ) | ||
Net loss attributable to common stockholders—basic and diluted | $ | (26,734 | ) | $ | (27,066 | ) | ||
Denominator: | ||||||||
Legacy ESS Stockholders | 116,062,793 | 116,062,793 | ||||||
STWO Public Shareholders | 4,245,281 | 4,245,281 | ||||||
STWO Initial Shareholders | 6,250,000 | 6,250,000 | ||||||
PIPE investors | 25,000,000 | 25,000,000 | ||||||
Weighted average shares outstanding—basic | 151,558,074 | 151,558,074 | ||||||
STWO’s warrants | — | — | ||||||
ESS RSUs | — | — | ||||||
Weighted average shares outstanding—diluted | 151,558,074 | 151,558,074 | ||||||
Net loss attributable to common stockholders—basic and diluted | $ | (0.18 | ) | $ | (0.18 | ) | ||
Nine Months Ended September 30, 2021 | Year Ended December 31, 2020 | |||||||
Pro Forma Combined | Pro Forma Combined | |||||||
STWO warrants (1) | 11,833,333 | 11,833,333 | ||||||
| 11,833,333 | 11,833,333 | |||||||
| (1) | Includes STWO 8,333,333 Public Warrants and 3,500,000 Private Placement Warrants vesting at the Closing, which are all antidilutive, as their exercise price is $11.50. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | 2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||||||||
Research and development | $ | 7,672 | $ | 3,935 | $ | 3,737 | 95.0 | % | $ | 19,546 | $ | 8,903 | $ | 10,643 | 119.5 | % | ||||||||||||||||
Sales and marketing | 1,048 | 279 | 769 | 275.6 | 2,261 | 876 | 1,385 | 158.1 | ||||||||||||||||||||||||
General and administrative | 2,316 | 630 | 1,686 | 267.6 | 7,667 | 2,178 | 5,489 | 252.0 | ||||||||||||||||||||||||
Total operating expenses | 11,036 | 4,844 | 6,192 | 127.8 | 29,474 | 11,957 | 17,517 | 146.5 | ||||||||||||||||||||||||
Loss from operations | (11,036 | ) | (4,844 | ) | (6,192 | ) | 127.8 | (29,474 | ) | (11,957 | ) | (17,517 | ) | 146.5 | ||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||||||||
Interest expense, net | (1,582 | ) | (38 | ) | (1,544 | ) | N/M | (1,693 | ) | (106 | ) | (1,587 | ) | N/M | ||||||||||||||||||
(Loss) gain on revaluation of warrant liabilities | (2,949 | ) | 24 | (2,973 | ) | N/M | (17,753 | ) | 78 | (17,831 | ) | N/M | ||||||||||||||||||||
(Loss) gain on revaluation of derivative liabilities | (36,703 | ) | 2,089 | (38,792 | ) | N/M | (248,691 | ) | 5,849 | (254,540 | ) | N/M | ||||||||||||||||||||
Other income (expense), net | 945 | (2 | ) | 947 | N/M | 926 | (64 | ) | 990 | N/M | ||||||||||||||||||||||
Total other (expense) income | (40,289 | ) | 2,073 | (42,362 | ) | N/M | (267,211 | ) | 5,757 | (272,968 | ) | N/M | ||||||||||||||||||||
Net loss: | $ | (51,325 | ) | $ | (2,771 | ) | $ | (48,554 | ) | N/M | $ | (296,685 | ) | $ | (6,200 | ) | $ | (290,485 | ) | N/M | ||||||||||||
Year Ended December 31, | ||||||||||||||||
2020 | 2019 | $ Change | % Change | |||||||||||||
($ in thousands) | ||||||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | $ | 12,896 | $ | 6,660 | $ | 6,236 | 93.6 | |||||||||
Sales and marketing | 1,158 | 908 | 250 | 27.5 | ||||||||||||
General and administrative | 3,338 | 2,321 | 1,017 | 43.8 | ||||||||||||
Total operating expenses | 17,392 | 9,889 | 7,503 | 75.9 | ||||||||||||
Loss from operations | (17,392 | ) | (9,889 | ) | 7,503 | 75.9 | ||||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (132 | ) | (1,019 | ) | (887 | ) | (87.0 | ) | ||||||||
Loss on revaluation of warrant liabilities | (1,296 | ) | (341 | ) | 955 | N/M | (1) | |||||||||
Loss on revaluation of derivative liabilities | (11,532 | ) | (19 | ) | 11,513 | N/M | (1) | |||||||||
Other income (expense), net | (67 | ) | (199 | ) | (132 | ) | (66.3 | ) | ||||||||
Total other income (expense) | (13,027 | ) | (1,578 | ) | 11,449 | N/M | (1) | |||||||||
Net loss | $ | (30,419 | ) | $ | (11,467 | ) | $ | 18,952 | 165.3 | |||||||
(1) | N/M = Not meaningful |
Nine Months Ended September 30, | Fiscal Year Ended December 31, | |||||||||||||||
2021 | 2020 | 2020 | 2019 | |||||||||||||
($ in thousands) | ||||||||||||||||
Net cash used in operating activities | $ | (28,343 | ) | $ | (12,109 | ) | $ | (16,645 | ) | $ | (6,675 | ) | ||||
Net cash used in investing activities | (288 | ) | (464 | ) | (502 | ) | (851 | ) | ||||||||
Net cash provided by financing activities | 31,548 | 4,792 | 4,722 | 22,254 | ||||||||||||
| • | Expected term |
and contractual expiration period, as we do not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. |
| • | Expected volatility |
| • | Risk-free interest rate |
| • | Expected dividend yield |
| • | Simple, Revolutionary Technology |
| • | Compelling Value Proposition |
| • | Most Sustainable Solution 2 emissions thanlithium-ion batteries. Our batteries provide a dramatically cleaner solution compared to other energy storage options, particularlylithium-ion batteries, owing to our use of predominantly earth-abundant materials, a far longer operating life and easyend-of-life |
| • | Rapid Expansion Capability lithium-ion because of the relative simplicity of our production process relative to the production process forlithium-ion. Our operations require onlypick-and- lithium-ion batteries. We estimate that our automated and semi-automated production lines will be able to produce one GWh of annual production capacity at an estimated capital cost of approximately $30 million and $4 million, respectively, based on the capital costs associated with our recent contracted purchases. This compares favorably tolithium-ion technologies, which require approximately $140 million in capital for one GWh of annual production capacity, according to Lux Research. Our lower-cost manufacturing approach will allow us to scale more rapidly and with lower capital expenditures in the future as new opportunities arise. |
| • | Significant and Proprietary Technology Head Start |
| • | Expanded Scale |
| • | Technology Improvements |
| • | Energy Center Sales |
| • | International Growth Potential |
customers have the greatest need for long-duration energy storage. We are particularly focused on markets where lithium-ion batteries are unable to compete due to their shortcomings on operational reliability. For example, Australia and Spain are particularly promising markets that we intend to enter over time. The relatively hot climates in these countries creates challenges for deployment of lithium-ion batteries, as these function optimally at 20 – 25°C and otherwise require temperature control units, which erodes battery efficiency. In contrast, our batteries can operate in ambient temperatures ranging from -5°C to 50°C without requiring heating or cooling systems. Additionally, we may implement a franchising business model, or Energy Franchises, where we will ship various components of our energy storage products to third parties with whom we develop partnerships, who will then assemble completed units for system integrators andend-use customers. |
| • | Leasing |
| • | Service |
Customer | Domestic Utility | Siemens-Gamesa | ||
Project Location | California | Denmark | ||
Use Case | Microgrid solutions required to mitigate Public Safety Power Shutdown impacts Solar + storage microgrid Selected Energy Warehouse ™ product (540kW/3MWh storage) | Wind + Solar + Storage + H2 generation Selected Energy Warehouse ™ product | ||
Project Benefits | Multi-day resiliency for critical needs customers during PSPS events | Flexible project package that can be optimized for sustainable resource availability and market conditions (for H2) | ||
Why ESS Won | Safety (non-flammability, non-explosive) Ability to participate in CAISO market Ability to provide distribution grid ancillary services duringnon-PSPS events | No battery degradation due to cycling Operational flexibility enables any duty cycle (starts, stops, duration, etc.) Lowest total cost of ownership | ||
| • | Munich Re ten-year performance guarantee which is backed by investment-grade,ten-year warranty and project insurance policies from Munich Re, a leading provider of reinsurance, primary insurance and insurance-related risk solutions, which stands behind the performance of our energy storage products. We are the first long-duration energy storage company to receive this type of insurance, which provides a warranty backstop for our proprietary flow battery technology, supporting our performance guarantee regardless of project size or location andde-risking the technology for our customers. We have also collaborated with Munich Re to develop separate project finance coverage. This allows us to secure project finance when installing our energy storage products, reducing the cost of capital for deployment, and which can be extended in order to provide long-term assurance of project performance to our customers, investors and lenders. |
| • | Aon and OneBeacon Insurance |
| • | Export-Import Bank of the United States |
| • | Strategic investments in the supply chain to grow capacity; |
| • | Rollout of redesigned automation cells, which we expect will increase efficiency in production; |
| • | Energy Warehouse and Energy Center production expansion to Europe and/or Australia; |
| • | Production of power modules in Europe; and |
| • | Vertical integration of power module comportments. |
Name | Age | Position | ||||||
Executive Officers: | ||||||||
Eric P. Dresselhuys | 56 | Chief Executive Officer and Director | ||||||
Craig Evans | 45 | President, Co-Founder and Director | ||||||
Julia Song | 43 | Chief Technology Officer and Co-Founder | ||||||
Amir Moftakhar | 44 | Chief Financial Officer | ||||||
Non-Employee Directors: | ||||||||
Raffi Garabedian (2) | 55 | Director | ||||||
Rich Hossfeld (1) | 42 | Director | ||||||
Michael R. Niggli (3) | 72 | Director | ||||||
Shirley Speakman (1) | 53 | Director | ||||||
Kyle Teamey (2) | 45 | Director | ||||||
Alexi Wellman (1) | 51 | Director | ||||||
Daryl Wilson (3) | 62 | Director | ||||||
| (1) | Member of the audit committee |
| (2) | Member of the compensation committee |
| (3) | Member of the corporate governance and nominating committee |
| • | appointing and overseeing our independent auditor; |
| • | approving audit and non-audit services; |
| • | evaluating the independence and qualifications of our independent auditor; |
| • | reviewing our internal controls and the integrity of our financial statements; |
| • | reviewing presentation of financial information, earnings press releases and guidance; |
| • | overseeing the design, implementation and performance of our internal audit function; |
| • | reviewing the responsibilities, functions, qualifications, budget, performance, objectivity, and the scope and results of internal audits; |
| • | setting hiring policies with regard to the hiring of employees or former employees of our independent auditor and overseeing compliance with such policies; |
| • | reviewing, approving and monitoring related party transactions involving directors or executive officers; |
| • | adopting and overseeing procedures to address complaints received by us regarding accounting, internal accounting controls or auditing matters; |
| • | reviewing and discussing with management and our independent auditor (a) the overall adequacy and effectiveness of our legal, regulatory and ethical compliance programs, including our Code of Business Conduct and Ethics, compliance with anti-bribery and anti-corruption laws and regulations, and compliance with export control regulations and (b) reports regarding compliance with applicable laws, regulations and internal compliance programs; and |
| • | reviewing and discussing with management, including our internal audit function, if applicable, and our independent auditor guidelines and policies to identify, monitor, and address enterprise risks. |
| • | reviewing and approving the compensation for our executive officers, including our chief executive officer; |
| • | reviewing, approving and administering, including the termination of, our employee benefit and equity incentive plans; |
| • | advising the Board on management proposals to stockholders on executive compensation matters including advisory votes on executive compensation; |
| • | establishing, and periodically reviewing, our employee compensation plans, policies and practices; and |
| • | approving or making recommendations to our Board regarding the creation or revision of any clawback policy. |
| • | reviewing and assessing and making recommendations to the Board regarding desired qualifications, expertise and characteristics sought of board members; |
| • | identifying, evaluating, selecting or making recommendations to the Board regarding nominees for election to the Board; |
| • | developing policies and procedures for considering stockholder nominees for election to the Board; |
| • | reviewing our succession planning process for our chief executive officer, and assisting in evaluating potential successors to the chief executive officer; |
| • | reviewing and making recommendations to the Board regarding the composition, organization and governance of the Board and its committees; |
| • | reviewing and making recommendations to the Board regarding our corporate governance guidelines and corporate governance framework; |
| • | overseeing director orientation for new directors and continuing education for our directors; |
| • | overseeing the evaluation of the performance of the Board and its committees; |
| • | reviewing and monitoring compliance with our Code of Business Conduct and Ethics; and |
| • | administering policies and procedures for communications with the non-management members of the Board. |
| • | Craig Evans, President, Co-Founder and director; former Chief Executive Officer |
| • | Dr. Julia Song, Chief Technology Officer and Co-Founder |
| • | Amir Moftakhar, Chief Financial Officer |
Name and Principal Position | Year | Salary ($) | Option Awards ($) (2) | Nonequity Incentive Compensation ($) (1) | All Other Compensation ($) (3) | Total ($) | ||||||||||||||||||
Craig Evans | 2020 | 175,000 | 91,250 | 92,000 | 10,724 | 368,974 | ||||||||||||||||||
President, Co-Founder and Director; former Chief Executive Officer | ||||||||||||||||||||||||
Dr. Julia Song | 2020 | 175,000 | 167,900 | 82,000 | 9,895 | 434,795 | ||||||||||||||||||
Chief Technology Officer & Co-Founder | ||||||||||||||||||||||||
Amir Moftakhar | 2020 | 210,000 | 152,500 | 58,500 | 7,700 | 428,700 | ||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||||||
| (1) | The amounts reported represent cash bonuses earned under our 2020 bonus plan based upon the achievement of company objectives for the year ended December 31, 2020, which were paid in 2021. The bonus plans are more fully described below under the section titled “—Bonus Plan.” |
| (2) | The amounts in this column represent the aggregate grant-date fair value of awards granted to each named executive officer, computed in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 718. See Note 12 to ESS’ audited financial statements included elsewhere in this prospectus for a discussion of the assumptions made by ESS in determining the grant-date fair value of ESS’ equity awards. |
| • | 15,260,000 shares of Common Stock; |
| • | 5% of the total number of shares of all classes of Common Stock as of the last day of our immediately preceding fiscal year; or |
| • | Such lesser amount determined by the administrator. |
| • | immediately after the grant would own capital stock and/or hold outstanding options to purchase such stock possessing 5% or more of the total combined voting power or value of all classes of capital stock of ours or of any parent or subsidiary of ours; or |
| • | holds rights to purchase shares of Common Stock under all employee stock purchase plans of ours or any parent or subsidiary of ours that accrue at a rate that exceeds $25,000 worth of shares of Common Stock for each calendar year in which such rights are outstanding at any time. |
Option Awards (1) | ||||||||||||||||||||
Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
Craig Evans | 1/22/2016 | (2) | 30,000 | — | 0.15 | 1/22/2026 | ||||||||||||||
| 4/20/2018 | (3) | 216,459 | — | 0.4503 | 4/20/2028 | |||||||||||||||
| 7/24/2020 | (4) | — | 125,000 | 0.4862 | 7/24/2030 | |||||||||||||||
Dr. Julia Song | 1/22/2016 | (2) | 64,500 | — | 0.15 | 1/22/2026 | ||||||||||||||
| 4/20/2018 | (3) | 236,459 | — | 0.4503 | 4/20/2028 | |||||||||||||||
| 7/24/2020 | (5) | 23,958 | 206,042 | 0.4862 | 7/24/2030 | |||||||||||||||
Amir Moftakhar | 1/11/2020 | (6) | 177,099 | 209,299 | 0.4862 | 1/10/2030 | ||||||||||||||
| 12/18/2020 | (7) | 5,208 | 119,792 | 0.49 | 12/18/2030 | |||||||||||||||
| (1) | All stock options were granted pursuant to the 2014 Equity Incentive Plan. |
| (2) | The option was fully vested at grant. |
| (3) | 1/36 th of the total shares vested each month beginning on February 1, 2017. |
| (4) | 1/48 th of the total shares vested or will vest each month beginning on February 22, 2021, subject to the holder’s continuous service through each vesting date. |
| (5) | 1/48 th of the total shares vested or will vest each month beginning on August 24, 2020, subject to the holder’s continuous service through each vesting date. |
| (6) | 1/4 th of the total shares vested on February 18, 2020, and 1/48th vested or will vest each month thereafter, subject to the holder’s continuous service through each vesting date. |
| (7) | 1/48 th of the total shares vested or will vest each month beginning on November 23, 2020, subject to the holder’s continuous service through each vesting date. |
| • | An initial option grant covering a number of shares equal to 0.2% of the anticipated fully-diluted shares of ESS as of the Closing, with an exercise price per share equal to the fair market value of a share on the date of grant (the “initial option”). The initial option will vest as to 1/4th of the shares subject to the initial option on the one-year anniversary of Mr. Dresselhuys’s start date, and 1/48th monthly thereafter, subject to Mr. Dresselhuys’s continued service through each vesting date. |
| • | An award of restricted stock units equal to 0.64% of the anticipated fully-diluted shares of ESS as of the Closing (the “time-based RSU award”). The time-based RSU award will vest as to 1/4th of the shares subject to the time-based RSU award on the one-year anniversary of Mr. Dresselhuys’s start date, and 1/16th monthly thereafter, subject to Mr. Dresselhuys’s continued service through each vesting date. |
| • | An award of restricted stock units equal to 0.2% of the anticipated fully-diluted shares of ESS as of the Closing (the “stock-based RSU award”). The stock-based RSU award will vest as to 50% of the shares subject to the performance-based RSU award upon a “stock price target” (as defined in and determined under Mr. Dresselhuys’s employment agreement) of $12.50, and 50% upon a stock price target of $15.00, in case, subject to Mr. Dresselhuys’s continued service through each vesting date. |
| • | An award of restricted stock units equal to 0.4% of the anticipated fully-diluted shares of ESS as of the Closing (the “revenue-based RSU award”). The revenue-based RSU award will vest against achievement with respect to an annual revenue target, with no portion vesting if annual revenue is below $600 million, 100% vesting if annual revenue is $800 million, and 200% vesting if annual revenue is $1.6 billion, subject to Mr. Dresselhuys’s continued service through each vesting date. Linear interpolation will apply for achievement between annual revenue targets. Annual revenue will be determined based on the previous quarters preceding the end of any quarter, with the revenue-based RSU award terminating to the extent not vested on December 31, 2016. |
Name | All Other Compensation ($) | Total ($) | ||||||
Michael R. Niggli | — | — | ||||||
Raffi Garabedian | — | — | ||||||
Rich Hossfeld | — | — | ||||||
Shirley Speakman | — | — | ||||||
Kyle Teamey | — | — | ||||||
Daryl Wilson | $ | 24,000 | (1) | $ | 24,000 | |||
Ken Schultz (2) | $ | 19,436 | (1) | $ | 19,463 | |||
| (1) | Represents fees for advisor services. |
| (2) | Ken Shultz resigned from the Legacy ESS board of directors on October 23, 2020. |
| • | Legacy ESS has been or is to be a participant; |
| • | the amount involved exceeded or exceeds $120,000; and |
| • | any of Legacy ESS’ directors, executive officers, or beneficial holders of more than 5% of any class of Legacy ESS capital stock, or any immediate family member of, or person sharing the household with, any of these individuals or entities, had or will have a direct or indirect material interest. |
Investor | Shares of ESS Series C-1 Preferred Stock upon Conversion | Aggregate Principal Amount and Accrued Interest ($) | Warrant to Purchase Shares of ESS Series B Preferred Stock upon Issuance | |||||||||
Pangaea Ventures Fund III, LP | 334,167 | 572,542 | 97,517 | |||||||||
Entities affiliated with Michael Niggli (1) | 578,170 | 520,493 | 88,652 | |||||||||
Cycle Capital Fund III, L.P. | 1,207,425 | 2,070,575 | 354,609 | |||||||||
BASF Venture Capital GmbH | 1,388,538 | 2,381,162 | 407,801 | |||||||||
Presidio-IPM j.s.a | 1,030,601 | 828,907 | 144,709 | |||||||||
| (1) | Michael Niggli is a member of the ESS board of directors. |
Stockholder | Shares of ESS Series C-1 Preferred Stock | Total Purchase Price Commitment | ||||||
BASF Venture Capital GmbH* | 1,388,538 | $ | 2,506,685 | |||||
Breakthrough Energy Ventures, LLC | 5,427,467 | $ | 9,999,999 | |||||
Cycle Capital Fund III, L.P.* | 2,455,742 | $ | 4,479,725 | |||||
Entities affiliated with Michael Niggli* | 578,170 | $ | 1,053,328 | |||||
Pangaea Ventures Fund III, LP* | 334,167 | $ | 602,559 | |||||
Presidio-IPM j.s.a* | 1,790,446 | $ | 3,284,545 | |||||
SB Energy Global Holdings One Ltd. (1) | 814,120 | $ | 1,500,000 | |||||
| * | Includes shares issued upon conversion of the 2018 Convertible Notes. |
| (1) | Rich Hossfeld is a member of the Legacy ESS board of directors and an affiliate of SB Energy Global Holdings One Ltd. |
Stockholder | Shares of ESS Series C-2 Preferred Stock | Warrant Shares | Total Purchase Price Commitment | |||||||||
Breakthrough Energy Ventures, LLC | 2,544,124 | 381,618 | $ | 7,500,001 | ||||||||
Cycle Capital Fund III, L.P. | 254,412 | 38,161 | $ | 749,999 | ||||||||
Pangaea Ventures Fund III, LP | 169,608 | 25,441 | $ | 499,999 | ||||||||
Presidio-IPM j.s.a. | 339,216 | 50,882 | $ | 999,999 | ||||||||
| • | the risks, costs, and benefits to ESS; |
| • | the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
| • | the terms of the transaction; |
| • | the availability of other sources for comparable services or products; and |
| • | the terms available to or from, as the case may be, unrelated third parties. |
| • | each of our executive officers; |
| • | each of our directors; |
| • | all of our executive officers and directors as a group; |
| • | each person known by us to be the beneficial owner of more than 5% of our outstanding shares; and |
| • | the Selling Stockholder. |
Shares Beneficially Owned Prior to the Offering | Shares Sold in the Offering | Shares Beneficially Owned After the Offering (Assuming No Exercise of the Underwriters’ Option) | Shares Beneficially Owned After the Offering (Assuming Full Exercise of the Underwriters’ Option) | |||||||||||||||||||||||||
Name of Beneficial Owner | Shares | % | Shares | % | Shares | % | ||||||||||||||||||||||
Executive Officers and Directors: | ||||||||||||||||||||||||||||
Eric Dresselhuys (1) | 130,059 | * | — | 130,059 | * | 130,059 | * | |||||||||||||||||||||
Craig Evans (2) | 5,437,199 | 3.6 | — | 5,437,199 | 3.5 | 5,437,199 | 3.4 | |||||||||||||||||||||
Amir Moftakhar (3) | 623,542 | * | — | 623,542 | * | 616,186 | * | |||||||||||||||||||||
Julia Song (4) | 2,401,542 | 1.6 | — | 2,401,542 | 1.5 | 2,401,542 | 1.5 | |||||||||||||||||||||
Raffi Garabedian (5) | 24,868 | * | — | 24,868 | * | 24,868 | * | |||||||||||||||||||||
Rich Hossfeld | — | — | — | — | — | — | — | |||||||||||||||||||||
Michael R. Niggli (6) | 1,189,634 | * | — | 1,189,634 | * | 1,190,877 | * | |||||||||||||||||||||
Shirley Speakman | — | — | — | — | — | — | — | |||||||||||||||||||||
Kyle Teamey | — | — | — | — | — | — | — | |||||||||||||||||||||
Alexi Wellman | — | — | — | — | — | — | — | |||||||||||||||||||||
Daryl Wilson (7) | 183,499 | * | — | 183,499 | * | 183,499 | * | |||||||||||||||||||||
All executive officers and directors as a group(11 persons) (8) | 9,991,586 | 6.6 | — | 9,991,586 | 6.4 | 9,991,586 | 6.3 | |||||||||||||||||||||
Shares Beneficially Owned Prior to the Offering | Shares Sold in the Offering | Shares Beneficially Owned After the Offering (Assuming No Exercise of the Underwriters’ Option) | Shares Beneficially Owned After the Offering (Assuming Full Exercise of the Underwriters’ Option) | |||||||||||||||||||||||||
Name of Beneficial Owner | Shares | % | Shares | % | Shares | % | ||||||||||||||||||||||
5% or Greater Stockholders: | ||||||||||||||||||||||||||||
BASF Venture Capital GmbH (9) | 9,214,562 | 6.1 | — | 9,214,562 | 5.9 | 9,214,562 | 5.8 | |||||||||||||||||||||
Breakthrough Energy Ventures, LLC (10) | 18,558,721 | 12.2 | — | 18,558,721 | 11.8 | 18,558,721 | 11.7 | |||||||||||||||||||||
Cycle Capital Fund III, L.P. (11) | 11,291,652 | 7.4 | — | 11,291,652 | 7.2 | 11,291,652 | 7.1 | |||||||||||||||||||||
Entities affiliated with Pangaea Ventures III LLC (12) | 13,000,782 | 8.6 | — | 13,000,782 | 8.3 | 13,000,782 | 8.2 | |||||||||||||||||||||
Entities affiliated with Fidelity (13) | 13,200,000 | 8.7 | — | 13,200,000 | 8.4 | 13,200,000 | 8.3 | |||||||||||||||||||||
Selling Stockholder: | ||||||||||||||||||||||||||||
SB Energy Global Holdings One Ltd. (14) | 35,953,699 | 23.7 | 5,000,000 | 30,953,699 | 19.7 | 30,953,699 | 19.6 | |||||||||||||||||||||
| * | Represents less than one percent. |
| (1) | Consists of 130,059 restricted stock units held by Mr. Dresselhuys. |
| (2) | Consists of (i) 5,332,700 shares held by Mr. Evans, (ii) 58,984 restricted stock units, and (iii) options to purchase 45,515 shares exercisable within 60 days of November 30, 2021. |
| (3) | Consists of (i) 315,588 shares held by Mr. Moftakhar, (ii) 101,026 restricted stock units, and (iii) options to purchase 206,928 shares exercisable within November 30, 2021. |
| (4) | Consists of (i) 2,221,405 shares held by Dr. Song, (ii) 56,626 restricted stock units, and (iii) options to purchase 123,511 shares exercisable within 60 days of November 30, 2021. |
| (5) | Consists of 24,868 restricted stock units held by Mr. Garabedian. |
| (6) | Consists of (i) 480,166 shares held by Mr. Niggli, (ii) 227,400 shares held by the Michael R. Niggli Family Trust to which Mr. Niggli is the trustee, (iii) 85,225 shares held by the Chloe D Niggli 2021 Gift Trust to which Mr. Niggli is the trustee, (iv) 85,225 shares held by the Ian M Niggli 2021 Gift Trust to which Mr. Niggli is the trustee, (v) 85,225 shares held by the Lorelei A Niggli 2021 Gift Trust to which Mr. Niggli is the trustee, (vi) 85,225 shares held by the Michael R Jr Niggli 2021 Gift Trust to which Mr. Niggli is the trustee, (vii) 30,053 restricted stock units held by Mr. Niggli, and (viii) options to purchase 111,115 shares exercisable within 60 days of November 30, 2021. |
| (7) | Consists of (i) 46,364 restricted stock units held by Mr. Wilson and (ii) options to purchase 137,135 shares exercisable within 60 days of November 30, 2021. |
| (8) | Consists of (i) 8,918,159 shares beneficially owned by our executive officers and directors, (ii) 447,980 restricted stock units and (iii) 624,204 shares exercisable within 60 days of November 30, 2021. |
| (9) | Consists of 9,214,562 shares held directly by BASF Ventures Capital GmbH. The address for BASF Ventures Capital GmbH is BE 01, Benckiserplatz 1, Ludwigshagen/Rhine, Germany 67059. |
| (10) | Consists of (i) 16,037,874 shares held directly by Breakthrough Energy Ventures, LLC, (ii) 2,500,751 shares of Earnout Stock to be issued following regulatory approvals and (iii) 20,096 shares of Expense Adjustment Stock to be issued following regulatory approvals. Breakthrough Energy Ventures, LLC is managed by Breakthrough Energy Investments, LLC, its manager, which may be deemed to have beneficial ownership over the shares and exercises voting and investment control through its investment committee. The address for each of Breakthrough Energy Ventures, LLC and Breakthrough Energy Investments, LLC is 250 Summer Street, 4th Floor, Boston, Massachusetts 02210. |
| (11) | Consists of 11,291,652 shares held directly by Cycle Capital Fund III, L.P. (Cycle Capital Fund III). Cycle Capital Management II Inc. is the general manager of Cycle Capital III, L.P., which is the general partner of Cycle Capital Fund III. Andrée-Lise Methot and Claude Vachet, as managing partners of Cycle Capital III, L.P., may be deemed to share beneficial ownership over the shares held by Cycle Capital Fund III. The address for each of the Cycle Capitalentities, Andrée-Lise Methot and Claude Vachet is 100 Sherbrooke West, Suite 1610, Montreal, Québec, Canada H3A 3G4. |
| (12) | Consists of (i) 12,546,771 shares held by Pangaea Ventures Fund III, LP, (ii) 166,230 shares held by Pangaea Partners LLC, (iii) 220,892 shares held by Monoc Capital Ltd. (“Monoc”), and (iv) 66,889 shares held by Vicap LLC (“Vicap”). Pangaea Venture Funds III, LP is managed by its general partner, Pangaea Ventures III LLC (“Pangaea GP”). Pangaea GP is managed and controlled by Vicap, PSee Ventures LLC and Monoc, which are owned and controlled by Chris Erickson, Purnesh Seegopaul and Andrew Haughian, respectively. Chris Erickson and Andrew Haughian share voting and dispositive control over the shares held by Pangaea Partners LLC. The address for each of these entities and individuals is c/o Pangaea Ventures III LLC, 5080 North 40th Street, Unit 105, Phoenix, Arizona 85018. |
| (13) | Consists of (i) 290,522 shares held by Variable Insurance Products Fund III: VIP Growth Opportunities Portfolio, (ii) 2,025,800 shares held by Fidelity Advisor Series I: Fidelity Advisor Growth Opportunities Fund, (iii) 72,010 shares held by Fidelity Advisor Series I: Fidelity Advisor Series Growth Opportunities Fund, (iv) 29,680 shares held by Fidelity U.S. Growth Opportunities Investment Trust, by its manager Fidelity Investments Canada ULC, (v) 81,897 shares held by Fidelity NorthStar Fund—Sub D by its manager Fidelity Investments Canada ULC, (vi) 1,473,815 shares held by Fidelity Securities Fund: Fidelity Blue Chip Growth Fund, (vii) 56,602 shares held by Fidelity Blue Chip Growth Commingled Pool, by Fidelity Management Trust Company, as Trustee, (viii) 3,460 shares held by Fidelity Securities Fund: Fidelity Flex Large Cap Growth Fund, (ix) 162,758 shares held by Fidelity Securities Fund: Fidelity Blue Chip Growth K6 Fund, (x) 4,228 shares held by Fidelity Blue Chip Growth Institutional Trust, by its manager Fidelity Investments Canada ULC, (xi) 178,663 shares held by Fidelity Securities Fund: Fidelity Series Blue Chip Growth Fund, (xii) 120,473 shares held by FIAM Target Date Blue Chip Growth Commingled Pool, by Fidelity Institutional Asset Management Trust Company as Trustee, (xiii) 4,351,467 shares held by Fidelity Global Innovators Investment Trust by its manager Fidelity Investments Canada ULC, (xiv) 726,171 shares held by FIDELITY SPECIAL SITUATIONS FUND by its manager Fidelity Investments Canada ULC, (xv) 2,085,746 shares held by Fidelity Canadian Growth Company Fund, by its manager Fidelity Investments Canada ULC, (xvi) 28,452 shares held by Fidelity Summer Street Trust: Fidelity Women’s Leadership Fund, (xvii) 8,166 shares held by Fidelity Women’s Leadership Fund, (xviii) 787,286 shares held by Fidelity Select Portfolios: Select Technology Portfolio, (xix) 546,945 shares held by Fidelity Puritan Trust: Fidelity Balanced Fund—Information Technology Sub, (xx) 76,562 shares held by Fidelity Advisor Series I: Fidelity Advisor Balanced Fund—Information Technology Sub, (xxi) 80,820 shares held by Variable Insurance Products Fund III: VIP Balanced Portfolio—Information Technology Sub, and (xxii) 8,387 shares held by Fidelity Puritan Trust: Fidelity Balanced K6 Fund—Information Technology Sub-portfolio shares direct. Each of these entities is managed by direct or indirect subsidiaries of FMR LLC. Abigail P. Johnson is a Director, the Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. The address for each of these entities is c/o FMR LLC, 88 Black Falcon Ave., Suite 167, V12F, Boston, MA 02210. |
| (14) | Consists of (i) 31,714,972 shares held directly by SB Energy Global Holdings One Ltd., an affiliate of Softbank Group Corp., (ii) 4,204,936 shares of Earnout Stock to be issued following regulatory approvals and (iii) 33,791 shares of Expense Adjustment Stock to be issued following regulatory approvals. The address for SB Energy Global Holdings One Ltd. is 69 Grosvenor Street, London, United Kingdom, W1K 3JP. The address of SoftBank Group Corp. is 1-9-1, Higashi-Shimbashi Minato-ku, Tokyo 105-7303 Japan. |
| • | 2,000,000,000 shares are designated as Common Stock, par value $0.0001 per share; and |
| • | 200,000,000 shares are designated as preferred stock, par value $0.0001 per share. |
| • | in whole and not in part; |
| • | at a price of $0.01 per Public Warrant; |
| • | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
| • | if, and only if, the closing price of our Common Stock equals or exceeds $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders. |
| • | in whole and not in part; |
| • | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares determined by reference to the table below, based on the redemption date and the “fair market value” of our Common Stock (as defined below) except as otherwise described below; |
| • | if, and only if, the closing price of our Common Stock equals or exceeds $10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “— Anti-dilution Adjustments 30-trading day period ending three trading days before we send the notice of redemption to the warrant holders; and |
| • | if the closing price of our Common Stock for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which we send the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant as described under the heading “—Anti-dilution Adjustments |
Redemption Date | Fair Market Value of Common Stock | |||||||||||||||||||||||||||||||||||
(period to expiration of warrants) | $10.00 | 11.00 | 12.00 | 13.00 | 14.00 | 15.00 | 16.00 | 17.00 | 18.00 | |||||||||||||||||||||||||||
60 months | 0.261 | 0.281 | 0.297 | 0.311 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
57 months | 0.257 | 0.277 | 0.294 | 0.310 | 0.324 | 0.337 | 0.348 | 0.358 | 0.361 | |||||||||||||||||||||||||||
54 months | 0.252 | 0.272 | 0.291 | 0.307 | 0.322 | 0.335 | 0.347 | 0.357 | 0.361 | |||||||||||||||||||||||||||
51 months | 0.246 | 0.268 | 0.287 | 0.304 | 0.320 | 0.333 | 0.346 | 0.357 | 0.361 | |||||||||||||||||||||||||||
48 months | 0.241 | 0.263 | 0.283 | 0.301 | 0.317 | 0.332 | 0.344 | 0.356 | 0.361 | |||||||||||||||||||||||||||
45 months | 0.235 | 0.258 | 0.279 | 0.298 | 0.315 | 0.330 | 0.343 | 0.356 | 0.361 | |||||||||||||||||||||||||||
42 months | 0.228 | 0.252 | 0.274 | 0.294 | 0.312 | 0.328 | 0.342 | 0.355 | 0.361 | |||||||||||||||||||||||||||
39 months | 0.221 | 0.246 | 0.269 | 0.290 | 0.309 | 0.325 | 0.340 | 0.354 | 0.361 | |||||||||||||||||||||||||||
36 months | 0.213 | 0.239 | 0.263 | 0.285 | 0.305 | 0.323 | 0.339 | 0.353 | 0.361 | |||||||||||||||||||||||||||
33 months | 0.205 | 0.232 | 0.257 | 0.280 | 0.301 | 0.320 | 0.337 | 0.352 | 0.361 | |||||||||||||||||||||||||||
30 months | 0.196 | 0.224 | 0.250 | 0.274 | 0.297 | 0.316 | 0.335 | 0.351 | 0.361 | |||||||||||||||||||||||||||
27 months | 0.185 | 0.214 | 0.242 | 0.268 | 0.291 | 0.313 | 0.332 | 0.350 | 0.361 | |||||||||||||||||||||||||||
24 months | 0.173 | 0.204 | 0.233 | 0.260 | 0.285 | 0.308 | 0.329 | 0.348 | 0.361 | |||||||||||||||||||||||||||
21 months | 0.161 | 0.193 | 0.223 | 0.252 | 0.279 | 0.304 | 0.326 | 0.347 | 0.361 | |||||||||||||||||||||||||||
18 months | 0.146 | 0.179 | 0.211 | 0.242 | 0.271 | 0.298 | 0.322 | 0.345 | 0.361 | |||||||||||||||||||||||||||
15 months | 0.130 | 0.164 | 0.197 | 0.230 | 0.262 | 0.291 | 0.317 | 0.342 | 0.361 | |||||||||||||||||||||||||||
12 months | 0.111 | 0.146 | 0.181 | 0.216 | 0.250 | 0.282 | 0.312 | 0.339 | 0.361 | |||||||||||||||||||||||||||
9 months | 0.090 | 0.125 | 0.162 | 0.199 | 0.237 | 0.272 | 0.305 | 0.336 | 0.361 | |||||||||||||||||||||||||||
6 months | 0.065 | 0.099 | 0.137 | 0.178 | 0.219 | 0.259 | 0.296 | 0.331 | 0.361 | |||||||||||||||||||||||||||
3 months | 0.034 | 0.065 | 0.104 | 0.150 | 0.197 | 0.243 | 0.286 | 0.326 | 0.361 | |||||||||||||||||||||||||||
0 months | — | — | 0.042 | 0.115 | 0.179 | 0.233 | 0.281 | 0.323 | 0.361 | |||||||||||||||||||||||||||
| • | prior to the date of the transaction, the board of directors approved either the Business Combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
| • | upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| • | at or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. |
| • | 1% of the then outstanding equity shares of the same class; and |
| • | the average weekly trading volume of Common Stock or Public Warrants, as applicable, during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC. |
| • | the issuer of the securities that was formerly a shell company has ceased to be a shell company; |
| • | the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; |
| • | the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and |
| • | at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. |
| • | banks, insurance companies, regulated investment companies, real estate investment trusts or other financial institutions; |
| • | persons subject to the alternative minimum tax; |
| • | tax-exempt organizations; |
| • | pension plans and tax-qualified retirement plans; |
| • | controlled foreign corporations, passive foreign investment companies and corporations that accumulate earnings to avoid U.S. federal income tax; |
| • | entities or arrangements classified as partnerships for U.S. federal income tax purposes or other pass through entities (or investors in such entities or arrangements); |
| • | brokers or dealers in securities or currencies; |
| • | traders in securities that elect to use a mark-to-market |
| • | persons who own, or are deemed to own, more than five percent of our capital stock (except to the extent specifically set forth below); |
| • | U.S. expatriates and certain former citizens or long-term residents of the United States; |
| • | persons who hold our Common Stock as a position in a hedging transaction, “straddle,” “conversion transaction,” or other risk reduction transaction; |
| • | persons who hold or receive our Common Stock pursuant to the exercise of any option or otherwise as compensation; |
| • | persons who do not hold our Common Stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment); |
| • | persons deemed to sell our Common Stock under the constructive sale provisions of the Code; or |
| • | persons subject to special tax accounting rules as a result of any item of gross income with respect to our Common Stock being taken into account in an “applicable financial statement” as defined in Section 451(b) of the Code. |
| • | an individual who is a citizen or resident of the United States; |
| • | a corporation or other entity taxable as a corporation created or organized in the United States , any state thereof or the District of Columbia; |
| • | an estate whose income is subject to U.S. federal income tax regardless of its source; or |
| • | a trust (x) whose administration is subject to the primary supervision of a U.S. court and that has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (y) that has made a valid election under applicable Treasury Regulations to be treated as a U.S. person. |
| • | the gain is effectively connected with your conduct of a U.S. trade or business (and, if an applicable income tax treaty so provides, the gain is attributable to a permanent establishment or fixed base maintained by you in the United States); |
| • | you are an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year in which the sale or disposition occurs (but not treated as a resident of the United States under specific rules) and certain other conditions are met; or |
| • | our Common Stock constitutes a United States real property interest by reason of our status as a “United States real property holding corporation” (“USRPHC”) for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding your disposition of, or your holding period for, our Common Stock. |
Underwriters | Number of Shares | |||
Goldman Sachs & Co. LLC | ||||
J.P. Morgan Securities LLC | ||||
Nomura Securities International, Inc. | ||||
WR Securities, LLC | ||||
Total | 10,000,000 | |||
Paid by the Company | ||||||||
No Exercise | Full Exercise | |||||||
Per Share | $ | $ | ||||||
Total | $ | $ | ||||||
Paid by the Selling Stockholder | ||||||||
No Exercise | Full Exercise | |||||||
Per Share | $ | $ | ||||||
Total | $ | $ | ||||||
| (a) | to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation; |
| (b) | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or |
| (c) | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
| (a) | it is a qualified investor within the meaning of Articles 2(e) of the Prospectus Regulation; and |
| (b) | in the case of any shares of the Company’s Common Stock acquired by it as a financial intermediary, as that term is used in Article 5 of the Prospectus Regulation, (i) the shares of the Company’s Common Stock acquired by it in this offering have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant State other than qualified investors, as that term is defined in the Prospectus Regulation, or have been acquired in other circumstances falling within the points (a) to (d) of Article 1(4) of the Prospectus Regulation and the prior consent of the representatives has been given to the offer or resale; or (ii) where the shares of the Company’s Common Stock have been acquired by it on behalf of persons in any Relevant State other than qualified investors, the offer of those shares of the Company’s Common Stock to it is not treated under the Prospectus Regulation as having been made to such persons. |
| (a) | to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation; |
| (b) | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of the representatives for any such offer; or |
| (c) | in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 |
Page | ||||
ESS Tech, Inc. Audited Financial Statements | ||||
| F-2 | ||||
| F-3 | ||||
| F-4 | ||||
| F-5 | ||||
| F-6 | ||||
| F-7 | ||||
ESS Tech, Inc. Unaudited Condensed Financial Statements | ||||
| F-29 | ||||
| F-30 | ||||
| F-31 | ||||
| F-32 | ||||
| F-33 | ||||
STWO FINANCIAL STATEMENTS | ||||
STWO Audited Financial Statements | ||||
| F-48 | ||||
| F-50 | ||||
| F-51 | ||||
| F-52 | ||||
| F-53 | ||||
| F-54 | ||||
STWO Unaudited Condensed Financial Statements | ||||
| F-77 | ||||
| F-78 | ||||
| F-79 | ||||
| F-80 | ||||
| F-81 | ||||
2020 | 2019 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 4,901 | $ | 18,290 | ||||
Restricted cash | 1,167 | — | ||||||
Prepaid expenses and other current assets | 793 | 658 | ||||||
Total current assets | 6,861 | 18,948 | ||||||
Property and equipment, net | 1,836 | 1,663 | ||||||
Restricted cash | 326 | 529 | ||||||
TOTAL ASSETS | $ | 9,023 | $ | 21,140 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 522 | $ | 697 | ||||
Accrued and other current liabilities | 2,194 | 1,826 | ||||||
Notes payable | 5,678 | 365 | ||||||
Total current liabilities | 8,394 | 2,888 | ||||||
Notes payable | 19 | 463 | ||||||
Customer deposits | 2,258 | 2,207 | ||||||
Derivative liabilities | 22,911 | 11,379 | ||||||
Warrant liabilities | 3,329 | 1,989 | ||||||
TOTAL LIABILITIES | 36,911 | 18,926 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 9) | 0 | 0 | ||||||
REDEEMABLE CONVERTIBLE PREFERRED STOCK: | ||||||||
Redeemable preferred stock, $0.0001 par value, 61,436,037 shares authorized, 32,865,949 shares issued and outstanding as of December 31, 2020 and 2019, liquidation preferences of $46,391 as of December 31, 2020 and 2019 | 34,372 | 34,372 | ||||||
STOCKHOLDERS’ DEFICIT: | ||||||||
Common stock ($0.0001 par value; 79,000,000 shares authorized as of December 31, 2020 and 2019, 7,134,668 and 7,060,668 shares issued and outstanding as of December 31, 2020 and 2019, respectively) | 1 | 1 | ||||||
Common stock warrants | 153 | 153 | ||||||
Additional paid-in capital | 1,079 | 762 | ||||||
Accumulated deficit | (63,493 | ) | (33,074 | ) | ||||
Total stockholders’ deficit | (62,260 | ) | (32,158 | ) | ||||
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | $ | 9,023 | $ | 21,140 | ||||
2020 | 2019 | |||||||
Operating expenses | ||||||||
Research and development | $ | 12,896 | $ | 6,660 | ||||
Sales and marketing | 1,158 | 908 | ||||||
General and administrative | 3,338 | 2,321 | ||||||
Total operating expenses | 17,392 | 9,889 | ||||||
Loss from operations | (17,392 | ) | (9,889 | ) | ||||
Other income (expenses) | ||||||||
Interest expense, net | (132 | ) | (1,019 | ) | ||||
(Loss) on revaluation of warrant liabilities | (1,296 | ) | (341 | ) | ||||
(Loss) on revaluation of derivative liabilities | (11,532 | ) | (19 | ) | ||||
Other expense, net | (67 | ) | (199 | ) | ||||
Total other income (expenses) | (13,027 | ) | (1,578 | ) | ||||
Net loss and comprehensive loss | (30,419 | ) | (11,467 | ) | ||||
Series B Redeemable Preferred Stock accretion | — | (79 | ) | |||||
Net loss and comprehensive loss to Common Stockholders | $ | (30,419 | ) | $ | (11,546 | ) | ||
Net loss per share - basic and diluted | $ | (4.28 | ) | $ | (1.64 | ) | ||
Weighted average shares used in per share calculation - basic and diluted | 7,108,389 | 7,043,575 | ||||||
| Redeemable Convertible Preferred Stock | Common Stock | Common Stock Warrants | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance as of December 31, 2018 | 16,590,261 | $ | 15,897 | 7,030,668 | $ | 1 | $ | 153 | $ | 660 | $ | (21,607 | ) | $ | (20,793 | ) | ||||||||||||||||
Stock options exercised | — | — | 30,000 | — | — | 6 | — | 6 | ||||||||||||||||||||||||
Issuance of Series C Redeemable Convertible Preferred Stock | 16,275,688 | 18,396 | — | — | — | — | — | — | ||||||||||||||||||||||||
Series B Redeemble Convertible Preferred Stock accretion | — | 79 | — | — | — | (79 | ) | — | (79 | ) | ||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 175 | — | 175 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | (11,467 | ) | (11,467 | ) | |||||||||||||||||||||||
Balance as of December 31, 2019 | 32,865,949 | 34,372 | 7,060,668 | 1 | 153 | 762 | (33,074 | ) | (32,158 | ) | ||||||||||||||||||||||
Stock options exercised | — | — | 74,000 | — | — | 7 | — | 7 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 310 | — | 310 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (30,419 | ) | (30,419 | ) | ||||||||||||||||||||||
Balance as of December 31, 2020 | 32,865,949 | $ | 34,372 | 7,134,668 | $ | 1 | $ | 153 | $ | 1,079 | $ | (63,493 | ) | $ | (62,260 | ) | ||||||||||||||||
2020 | 2019 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (30,419 | ) | $ | (11,467 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 436 | 260 | ||||||
Non-cash interest expense | 91 | 976 | ||||||
Stock-based compensation expense | 310 | 175 | ||||||
Loss on extinguishment of debt | 62 | 116 | ||||||
Change in fair value of warrant liabilities | 1,296 | 341 | ||||||
Change in fair value of derivative liabilities | 11,532 | 19 | ||||||
Changes in operating assets and liabilities: | ||||||||
Grant receivable | — | 423 | ||||||
Prepaid expenses and other current assets | (135 | ) | (499 | ) | ||||
Accounts payable | (221 | ) | 521 | |||||
Accrued and other current liabilities | 352 | 1,122 | ||||||
Customer deposits | 51 | 1,338 | ||||||
Net cash used in operating activities | (16,645 | ) | (6,675 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (502 | ) | (851 | ) | ||||
Net cash used in investing activities | (502 | ) | (851 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Borrowings on notes payable | 4,936 | — | ||||||
Principal payments on notes payable | (221 | ) | (262 | ) | ||||
Borrowing on convertible notes payable, net of debt issuance cost | — | 2,722 | ||||||
Proceeds from stock options exercised | 7 | 6 | ||||||
Proceeds from sale of redeemable convertible preferred stock, net of issuance costs | — | 19,788 | ||||||
Net cash provided by financing activities | 4,722 | 22,254 | ||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (12,425 | ) | 14,728 | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR | 18,819 | 4,091 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR | $ | 6,394 | $ | 18,819 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid during the year for: | ||||||||
Interest | $ | 111 | $ | 38 | ||||
Non-cash investing and financing transactions: | ||||||||
Property and equipment purchases financed with term loan | $ | 52 | $ | 79 | ||||
Conversion of convertible notes payable and accrued interest to Series B Redeemable Convertible Preferred Stock | $ | — | $ | 9,845 | ||||
Purchase of property and equipment included in accounts payable and accrued and other current liabilities | $ | 55 | $ | 87 | ||||
Cash and cash equivalents | $ | 4,901 | $ | 18,290 | ||||
Restricted cash, current | 1,167 | — | ||||||
Restricted cash, non-current | 326 | 529 | ||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ | 6,394 | $ | 18,819 | ||||
1. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Emerging | Growth Company |
Liquidity | and Going concern |
2. | CUSTOMER DEPOSITS |
2020 | 2019 | |||||||
Customer deposits - beginning balance | $ | 2,207 | $ | 869 | ||||
Additions | 506 | 1,983 | ||||||
Cancellations | (455 | ) | (645 | ) | ||||
Customer deposits - ending balance | $ | 2,258 | $ | 2,207 | ||||
3. | LOSS PER SHARE |
2020 | 2019 | |||||||
Net loss | $ | (30,419 | ) | $ | (11,467 | ) | ||
Series B Redeemable Convertible Preferred Stock accretion | — | (79 | ) | |||||
Net Loss to Common Stockholders | $ | (30,419 | ) | $ | (11,546 | ) | ||
Weighted-average shares outstanding – Basic and Diluted | 7,108,389 | 7,043,575 | ||||||
Net loss per share – Basic and Diluted | $ | (4.28 | ) | $ | (1.64 | ) | ||
2020 | 2019 | |||||||
Stock options | 3,891,768 | 2,104,223 | ||||||
Preferred stock | 32,865,949 | 32,865,949 | ||||||
Warrants | 1,738,382 | 1,668,382 | ||||||
| 38,496,099 | 36,638,554 | |||||||
4. | PREPAID EXPENSES AND OTHER CURRENT ASSETS |
2020 | 2019 | |||||||
Vendor advances | $ | 473 | $ | 507 | ||||
IT services and other office expenses | 157 | 50 | ||||||
Insurance | 107 | 41 | ||||||
Other | 56 | 60 | ||||||
Total prepaids and other current assets | $ | 793 | $ | 658 | ||||
5. | PROPERTY AND EQUIPMENT, NET |
2020 | 2019 | |||||||
Machinery and equipment | $ | 2,217 | $ | 1,430 | ||||
Furniture and fixtures | 90 | 60 | ||||||
Leasehold improvements | 677 | 496 | ||||||
Construction in process | — | 389 | ||||||
Total property and equipment | 2,984 | 2,375 | ||||||
Less accumulated depreciation | (1,148 | ) | (712 | ) | ||||
Total property and equipment, net | $ | 1,836 | $ | 1,663 | ||||
6. | ACCRUED AND OTHER CURRENT LIABILITIES |
2020 | 2019 | |||||||
Payroll and related benefits | $ | 777 | $ | 351 | ||||
Materials and related purchases | 464 | 474 | ||||||
Deferred rent | 462 | 524 | ||||||
Professional & consulting fees | 248 | 103 | ||||||
Customer refund | — | 352 | ||||||
Other | 243 | 22 | ||||||
Total accrued and other current liabilities | $ | 2,194 | $ | 1,826 | ||||
7. | LEASES |
2021 | $ | 840 | ||
2022 | 865 | |||
2023 | 891 | |||
2024 | 917 | |||
2025 | 157 | |||
Future Operating Lease Payments | $ | 3,670 | ||
8. | BORROWINGS |
2020 | 2019 | |||||||
Notes payable | $ | 4,761 | $ | 828 | ||||
PPP loan | 936 | — | ||||||
Total notes payable | 5,697 | 828 | ||||||
Less current portion of notes payable | 5,678 | 365 | ||||||
Long-term notes payable, net of current portion | $ | 19 | $ | 463 | ||||
2021 | $ | 48 | ||
2022 | 18 | |||
2023 | 1 | |||
Total principal payments on notes payable | $ | 67 | ||
9. | COMMITMENTS AND CONTINGENCIES |
10. | REDEEMABLE CONVERTIBLE PREFERRED STOCK |
| Shares Authorized | Shares Issued and Outstanding | Issuance Price | Net Carrying Value | Aggregate Liquidation Preference | ||||||||||||||||
Series A | 5,941,109 | 5,941,109 | $ | 0.56 | $ | 3,228 | $ | 3,321 | ||||||||||||
Series B | 12,011,923 | 10,649,152 | 1.22848 | 12,746 | 13,082 | |||||||||||||||
Series C- 1 | 16,345,688 | 16,275,688 | 1.84248 | 18,398 | 29,988 | |||||||||||||||
Series C- 2 | 27,137,317 | — | 0— | 0— | 0— | |||||||||||||||
| 61,436,037 | 32,865,949 | $ | 34,372 | $ | 46,391 | |||||||||||||||
2020 | 2019 | |||||||
Common Stock Warrants | 305,611 | 305,611 | ||||||
Series B Preferred Warrants | 1,362,771 | 1,362,771 | ||||||
Series C Preferred Warrants | 70,000 | — | ||||||
Total Warrants | 1,738,382 | 1,668,382 | ||||||
At issuance date | ||||||||||||
Common Warrants | Preferred B warrants | Preferred C-1 warrants | ||||||||||
Expected volatility | 80 | % | 80 | % | 80 | % | ||||||
Expected term (in years) | 5.00 | 5.00 | 3.75 | |||||||||
Risk-free interest rate | 2.20 | % | 2.20 - 2.73 | % | 0.29 | % | ||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
As of December 31, 2020 | ||||||||||
Common Warrants | Preferred B warrants | Preferred C-1 warrants | ||||||||
Expected volatility | N/A | 80 | % | 80 | % | |||||
Expected term (in years) | N/A | 2.00 | 2.00 | |||||||
Risk-free interest rate | N/A | 0.13 | % | 0.13 | % | |||||
Dividend yield | N/A | 0 | % | 0 | % | |||||
As of December 31, 2019 | ||||||||||
Common Warrants | Preferred B warrants | Preferred C-1 warrants | ||||||||
Expected volatility | N/A | 80 | % | 80 | % | |||||
Expected term (in years) | N/A | 4.00 | 4.00 | |||||||
Risk-free interest rate | N/A | 1.66 | % | 1.66 | % | |||||
Dividend yield | N/A | 0 | % | 0 | % | |||||
11. | COMMON STOCK |
12. | STOCK-BASED COMPENSATION PLAN |
2020 | 2019 | |||||||
Shares Available for future grant | 5,993,465 | 7,855,010 | ||||||
| Options Outstanding | ||||||||||||||||
| Number of shares | Weighted average exercise price | Weighted average remaining contractual term (years) | Aggregate intrinsic values ($‘000s) | |||||||||||||
Balances as of December 31, 2018 | 2,238,598 | $ | 0.37 | 8.83 | $ | 332 | ||||||||||
Granted | 17,500 | $ | 0.45 | |||||||||||||
Exercised | (30,000) | $ | 0.22 | |||||||||||||
Forfeited | (121,875) | $ | 0.45 | |||||||||||||
Balances as of December 31, 2019 | 2,104,223 | $ | 0.37 | 7.82 | $ | 821 | ||||||||||
Granted | 2,221,278 | $ | 0.49 | |||||||||||||
Exercised | (74,000) | $ | 0.09 | |||||||||||||
Forfeited | (359,733) | $ | 0.43 | |||||||||||||
Balances as of December 31, 2020 | 3,891,768 | $ | 0.44 | 8.23 | $ | 4,333 | ||||||||||
Options vested and exercisable - December 31, 2019 | 1,424,380 | $ | 0.34 | 7.48 | $ | 604 | ||||||||||
Options vested and exercisable - December 31, 2020 | 1,918,067 | $ | 0.39 | 7.21 | $ | 2,215 | ||||||||||
2020 | 2019 | |||||||
Risk-free rate | 0.93 | % | 2.63 | % | ||||
Expected dividends | 0 | 0 | ||||||
Expected term | 6 years | 6 years | ||||||
Expected volatility | 71.06 | % | 76.77 | % | ||||
2020 | 2019 | |||||||
Research and development | $ | 79 | $ | 59 | ||||
Sales and marketing | 47 | 38 | ||||||
General and administrative | 184 | 78 | ||||||
Total stock-based compensation | $ | 310 | $ | 175 | ||||
13. | FAIR VALUE MEASUREMENTS |
| December 31, 2020 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents and restricted cash: | ||||||||||||||||
Money market funds | $ | 3,046 | $ | — | $ | — | $ | 3,046 | ||||||||
Certificate of deposit | — | 326 | — | 326 | ||||||||||||
Total Assets | $ | 3,046 | $ | 326 | $ | — | $ | 3,372 | ||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 22,911 | $ | 22,911 | ||||||||
Warrant liabilities | — | — | 3,329 | 3,329 | ||||||||||||
Total Liabilities | $ | — | $ | — | $ | 26,240 | $ | 26,240 | ||||||||
| December 31, 2019 | ||||||||||||||||
Assets: | ||||||||||||||||
Restricted cash: | ||||||||||||||||
Certificate of deposit | $ | — | $ | 529 | $ | — | $ | 529 | ||||||||
Total Assets | $ | — | $ | 529 | $ | — | $ | 529 | ||||||||
| December 31, 2020 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Liabilities: | ||||||||||||||||
Derivative liabilities | $ | — | $ | — | $ | 11,379 | $ | 11,379 | ||||||||
Warrant liabilities | — | — | 1,989 | 1,989 | ||||||||||||
Total Liabilities | $ | — | $ | — | $ | 13,368 | $ | 13,368 | ||||||||
2020 | 2019 | |||||||
Warrant liabilities: | ||||||||
Beginning balance January 1 | $ | 1,989 | $ | 1,648 | ||||
Change in fair value | 1,296 | 341 | ||||||
Fair value of warrants issued | 44 | — | ||||||
Ending balance December 31 | 3,329 | 1,989 | ||||||
2018 Convertible Note Automatic Conversion Rights liability: | ||||||||
Beginning balance January 1 | — | 9 | ||||||
Change in fair value | — | 19 | ||||||
Fair value of derivatives extinguished upon note conversion | — | (28 | ) | |||||
Ending balance December 31 | — | — | ||||||
Series C-2 Convertible Preferred Stock Issuance Right liability: | ||||||||
Beginning balance January 1 | 11,379 | — | ||||||
Change in fair value | 11,532 | — | ||||||
Fair value of derivatives issued | — | 11,379 | ||||||
Ending balance December 31 | 22,911 | 11,379 | ||||||
Total | $ | 26,240 | $ | 13,368 | ||||
14. | INCOME TAXES |
As of December 31, | ||||||||
2020 | 2019 | |||||||
Deferred Tax Assets: | ||||||||
Net operating losses | $ | 11,566 | $ | 7,365 | ||||
Tax credit carryforward | 47 | 12 | ||||||
Other | 837 | 513 | ||||||
Deferred tax assets | 12,450 | 7,890 | ||||||
Valuation allowance | (12,450 | ) | (7,890 | ) | ||||
Deferred tax assets, net of valuation allowance | $ | 0 | $ | 0 | ||||
Years Ended December 31, | ||||||||
2020 | 2019 | |||||||
Tax computed at federal statutory rate | 21.0 | % | 21.0 | % | ||||
State tax, net of federal tax benefit | 3.0 | 4.4 | ||||||
Stock compensation | (0.2 | ) | (0.2 | ) | ||||
Permanent differences | (8.9 | ) | (2.3 | ) | ||||
163(I) Interest | 0 | (0.9 | ) | |||||
R&D tax credits | 0.1 | 0.1 | ||||||
Other | 0 | (0.1 | ) | |||||
Valuation allowance | (15.0 | ) | (22.0 | ) | ||||
Income tax expense (benefit) | 0.0 | % | 0.0 | % | ||||
Balance as of December 31, 2018 | $ | 0 | ||
Additions in 2019 | 12 | |||
Balance as of December 31, 2019 | 12 | |||
Additions in 2020 | 35 | |||
Balance as of December 31, 2020 | $ | 47 | ||
15. | DEFINED CONTRIBUTION PLAN |
16. | RELATED PARTY TRANSACTIONS |
17. | SUBSEQUENT EVENTS |
As of | ||||||||
September 30, 2021 (Unaudited) | December 31, 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 8,019 | $ | 4,901 | ||||
Restricted cash | 1,217 | 1,167 | ||||||
Prepaid expenses and other current assets | 6,506 | 793 | ||||||
Total current assets | 15,742 | 6,861 | ||||||
Property and equipment, net | 2,007 | 1,836 | ||||||
Restricted cash | 75 | 326 | ||||||
TOTAL ASSETS | $ | 17,824 | $ | 9,023 | ||||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | $ | 3,037 | $ | 522 | ||||
Accrued and other current liabilities | 4,595 | 2,194 | ||||||
Notes payable, current | 23,415 | 5,678 | ||||||
Total current liabilities | 31,047 | 8,394 | ||||||
Notes payable, non-current | 2,253 | 19 | ||||||
Other non-current liabilities | 3,662 | 2,258 | ||||||
Derivative liabilities | 248,450 | 22,911 | ||||||
Warrant liabilities | — | 3,329 | ||||||
Total liabilities | 285,412 | 36,911 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 5) | 0 | 0 | ||||||
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) | 90,073 | 34,372 | ||||||
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) | 1 | 1 | ||||||
Common stock warrants | — | 153 | ||||||
Additional paid-in capital | 2,516 | 1,079 | ||||||
Accumulated deficit | (360,178 | ) | (63,493 | ) | ||||
Total stockholders’ deficit | (357,661 | ) | (62,260 | ) | ||||
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | $ | 17,824 | $ | 9,023 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Operating expenses | ||||||||||||||||
Research and development | $ | 7,672 | $ | 3,935 | $ | 19,546 | $ | 8,903 | ||||||||
Sales and marketing | 1,048 | 279 | 2,261 | 876 | ||||||||||||
General and administrative | 2,316 | 630 | 7,667 | 2,178 | ||||||||||||
Total operating expenses | 11,036 | 4,844 | 29,474 | 11,957 | ||||||||||||
Loss from operations | (11,036 | ) | (4,844 | ) | (29,474 | ) | (11,957 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense, net | (1,582 | ) | (38 | ) | (1,693 | ) | (106 | ) | ||||||||
Gain (loss) on revaluation of warrant liabilities | (2,949 | ) | 24 | (17,753 | ) | 78 | ||||||||||
Gain (loss) on revaluation of derivative liabilities | (36,703 | ) | 2,089 | (248,691 | ) | 5,849 | ||||||||||
Other income (expense), net | 945 | (2 | ) | 926 | (64 | ) | ||||||||||
Total other income (expense) | (40,289 | ) | 2,073 | (267,211 | ) | 5,757 | ||||||||||
Net loss and comprehensive loss | $ | (51,325 | ) | $ | (2,771 | ) | $ | (296,685 | ) | $ | (6,200 | ) | ||||
Net loss per share - basic and diluted | $ | (5.82 | ) | $ | (0.39 | ) | $ | (35.08 | ) | $ | (0.87 | ) | ||||
Weighted average shares used in per share calculation - basic and diluted | 8,823,458 | 7,102,536 | 8,458,054 | 7,099,532 | ||||||||||||
Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Common Stock Warrants | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance as of June 30, 2020 | 32,865,949 | $ | 34,372 | 7,100,668 | $ | 1 | $ | 153 | $ | 942 | $ | (36,503 | ) | $ | (35,407 | ) | ||||||||||||||||
Stock options exercised | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 77 | — | 77 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (2,771 | ) | (2,771 | ) | ||||||||||||||||||||||
Balance as of September 30, 2020 | 32,865,949 | $ | 34,372 | 7,100,668 | $ | 1 | $ | 153 | $ | 1,019 | $ | (39,274 | ) | $ | (38,101 | ) | ||||||||||||||||
Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Common Stock Warrants | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance as of December 31, 2019 | 32,865,949 | $ | 34,372 | 7,060,668 | $ | 1 | $ | 153 | $ | 762 | $ | (33,074 | ) | $ | (32,158 | ) | ||||||||||||||||
Stock options exercised | — | — | 40,000 | — | — | 6 | — | 6 | ||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 251 | — | 251 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (6,200 | ) | (6,200 | ) | ||||||||||||||||||||||
Balance as of September 30, 2020 | 32,865,949 | $ | 34,372 | 7,100,668 | $ | 1 | $ | 153 | $ | 1,019 | $ | (39,274 | ) | $ | (38,101 | ) | ||||||||||||||||
Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Common Stock Warrants | Additional Paid- In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance as of June 30, 2021 | 36,809,092 | $ | 64,257 | 8,784,265 | $ | 1 | $ | 153 | $ | 2,093 | $ | (308,853 | ) | $ | (306,606 | ) | ||||||||||||||||
Stock options exercised | — | — | 36,789 | — | — | 10 | — | 10 | ||||||||||||||||||||||||
Warrants exercised | 1,959,297 | 25,816 | 304,900 | — | (153 | ) | 153 | — | — | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 260 | — | 260 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (51,325 | ) | (51,325 | ) | ||||||||||||||||||||||
Balance as of September 30, 2021 | 38,768,389 | $ | 90,073 | 9,125,954 | $ | 1 | $ | — | $ | 2,516 | $ | (360,178 | ) | $ | (357,661 | ) | ||||||||||||||||
Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||
| Redeemable Convertible Preferred Stock | Common Stock | Common Stock Warrants | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||
Balance as of December 31, 2020 | 32,865,949 | $ | 34,372 | 7,134,668 | $ | 1 | $ | 153 | $ | 1,079 | $ | (63,493 | ) | $ | (62,260 | ) | ||||||||||||||||
Issuance of Series C-2 Redeemable Convertible Preferred Stock | 3,900,988 | 29,516 | — | — | — | — | — | — | ||||||||||||||||||||||||
Stock options exercised | — | — | 1,685,675 | — | — | 664 | — | 664 | ||||||||||||||||||||||||
Warrants exercised | 2,001,452 | 26,185 | 305,611 | — | (153 | ) | 153 | — | — | |||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | 620 | — | 620 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (296,685 | ) | (296,685 | ) | ||||||||||||||||||||||
Balance as of September 30, 2021 | 38,768,389 | $ | 90,073 | 9,125,954 | $ | 1 | $ | — | $ | 2,516 | $ | (360,178 | ) | $ | (357,661 | ) | ||||||||||||||||
For nine months ended September 30, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (296,685 | ) | $ | (6,200 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation | 404 | 306 | ||||||
Non-cash interest expense | 1,495 | 65 | ||||||
Stock-based compensation expense | 620 | 251 | ||||||
(Gain) loss on extinguishment of debt | (948 | ) | 62 | |||||
Change in fair value of warrant liabilities | 17,753 | (78 | ) | |||||
Change in fair value of derivative liabilities | 248,691 | (5,849 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses and other current assets | (5,713 | ) | 161 | |||||
Accounts payable | 2,441 | (534 | ) | |||||
Accrued and other current liabilities | 2,195 | 153 | ||||||
Other non-current liabilities | 1,404 | (446 | ) | |||||
Net cash used in operating activities | (28,343 | ) | (12,109 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (288 | ) | (464 | ) | ||||
Net cash used in investing activities | (288 | ) | (464 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Principal payments on notes payable | (584 | ) | (150 | ) | ||||
Proceeds from sale of redeemable convertible preferred stock, net of issuance costs | 11,461 | — | ||||||
Borrowing on notes payable, net of debt issuance cost | 20,000 | 4,936 | ||||||
Proceeds from stock options exercised | 664 | 6 | ||||||
Proceeds from warrants exercised | 7 | — | ||||||
Net cash provided by financing activities | 31,548 | 4,792 | ||||||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 2,917 | (7,781 | ) | |||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 6,394 | 18,819 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 9,311 | $ | 11,038 | ||||
SUPPLEMENTAL DISCLOSURE OF CASHFLOW INFORMATION: | ||||||||
Cash paid during the year for: | ||||||||
Interest | $ | 237 | $ | 62 | ||||
Non-cash investing and financing transactions: | ||||||||
Property and equipment purchases financed with term loan | $ | — | $ | 52 | ||||
PPP loan forgiven | $ | 948 | ||||||
Non-cash extinguishment of derivative liabilities upon sale of SeriesC-2 redeemable convertible preferred stock, net of amount allocated to warrants | $ | 18,055 | $ | — | ||||
Non-cash extinguishment of warrant liabilities upon exercise of Series B and SeriesC-2 redeemable convertible preferred stock warrants | $ | 26,178 | $ | — | ||||
Purchase of property and equipment included in accounts payable and accrued and other current liabilities | $ | 343 | $ | 8 | ||||
Cash and cash equivalents | $ | 8,019 | $ | 9,286 | ||||
Restricted cash, current | 1,217 | 1,217 | ||||||
Restricted cash, non- current | 75 | 535 | ||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ | 9,311 | $ | 11,038 | ||||
1. | DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | CUSTOMER DEPOSITS |
September 30, 2021 | December 31, 2020 | |||||||
Customer deposits, beginning balance | $ | 2,258 | $ | 2,207 | ||||
Additions | 850 | 506 | ||||||
Cancellations | — | (455 | ) | |||||
Customer deposits, ending balance | $ | 3,108 | $ | 2,258 | ||||
3. | LOSS PER SHARE |
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net loss | $ | (51,325 | ) | $ | (2,771 | ) | ||
Weighted-average shares outstanding – Basic and Diluted | 8,823,458 | 7,102,536 | ||||||
Net loss per share - Basic and Diluted | $ | (5.82 | ) | $ | (0.39 | ) | ||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Net loss | $ | (296,685 | ) | $ | (6,200 | ) | ||
Weighted-average shares outstanding – Basic and Diluted | 8,458,054 | 7,099,532 | ||||||
Net loss per share - Basic and Diluted | $ | (35.08 | ) | $ | (0.87 | ) | ||
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Stock options | 2,792,655 | 3,562,417 | ||||||
Redeemable convertible preferred stock | 38,768,389 | 32,865,949 | ||||||
Warrants | 0 | 1,738,382 | ||||||
| 41,561,044 | 38,166,748 | |||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Stock options | 2,792,655 | 3,562,417 | ||||||
Redeemable convertible preferred stock | 38,768,389 | 32,865,949 | ||||||
Warrants | 0 | 1,738,382 | ||||||
| 41,561,044 | 38,166,748 | |||||||
4. | BORROWINGS |
September 30, 2021 | December 31, 2020 | |||||||
Notes payable | $ | 4,236 | $ | 4,761 | ||||
Bridge loan | 21,432 | — | ||||||
PPP loan | — | 936 | ||||||
Total notes payable | 25,668 | 5,697 | ||||||
Less notes payable, current | 23,415 | 5,678 | ||||||
Notes payable, non-current | $ | 2,253 | $ | 19 | ||||
5. | COMMITMENTS AND CONTINGENCIES |
6. | REDEEMABLE CONVERTIBLE PREFERRED STOCK |
| Shares Authorized | Shares Issued and Outstanding | Issuance Price | Net Carrying Value | Aggregate Liquidation Preference | ||||||||||||||||
Series A | 5,941,109 | 5,941,109 | $ | 0.56 | $ | 3,228 | $ | 3,321 | ||||||||||||
Series B | 12,011,923 | 12,005,442 | 1.23 | 30,659 | 14,748 | |||||||||||||||
Series C-1 | 16,345,688 | 16,335,705 | 1.84 | 19,178 | 30,098 | |||||||||||||||
Series C-2 | 27,773,344 | 4,486,133 | 2.95 | 37,008 | 13,225 | |||||||||||||||
| 62,072,064 | 38,768,389 | $ | 90,073 | $ | 61,392 | |||||||||||||||
| As of September 30, 2021 | ||||||||||||
| Quantity | Price | Proceeds | ||||||||||
Series C-2 Redeemable Convertible Preferred Stock Purchase Right | 23,236,328 | $ | 2.95 | $ | 68,499,998 | |||||||
| As of September 30, 2021 | ||||||||||||
| Upon Completion of SPAC merger | ||||||||||||
| Quantity | Price | Proceeds | ||||||||||
Series C-2 Redeemable Convertible Preferred Stock Purchase Right | 5,427,464 | $ | 2.95 | $ | 16,000,000 | |||||||
Series C-2 Warrant exercisable upon SPAC merger | 14,365,207 | 0.0001 | 1,437 | |||||||||
Total Proceeds Upon Exercise | $ | 16,001,437 | ||||||||||
| As of September 30, 2021 | ||||||||||||
| Milestones without SPAC merger | ||||||||||||
| Quantity | Price | Proceeds | ||||||||||
Series C-2 Redeemable Convertible Preferred Stock Purchase Right | 22,897,111 | $ | 2.95 | $ | 67,499,996 | |||||||
September 30, 2021 | December 31, 2020 | |||||||
Common Stock Warrants | 0 | 305,611 | ||||||
Series B Preferred Warrants | 0 | 1,362,771 | ||||||
Series C Preferred Warrants | 0 | 70,000 | ||||||
Total Warrants | 0 | 1,738,382 | ||||||
December 31, 2020 | Issued | Exercised | September 30, 2021 | |||||||||||||
Common Stock Warrants | 305,611 | 0 | 305,611 | 0 | ||||||||||||
Series B Preferred Stock Warrants | 1,362,771 | 0 | 1,362,771 | 0 | ||||||||||||
Series C Preferred Stock Warrants | 70,000 | 585,145 | 655,145 | 0 | ||||||||||||
Total Warrants | 1,738,382 | 585,145 | 2,323,527 | 0 | ||||||||||||
As of and for nine months ended September 30, 2021 | ||||||||
Common Warrants | Series B warrants | Series C-1 warrants | Series C-2 warrants | |||||
Expected volatility | N/A | 80% | 80% | 80% | ||||
Expected term (in years) | N/A | 2 | 2 | 2 | ||||
Risk-free interest rate | N/A | 0.16% - 0.28% | 0.16% - 0.28% | 0.16% - 0.28% | ||||
Dividend yield | N/A | 0% | 0% | 0% | ||||
As of December 31, 2020 | ||||||||||||
Common Stock Warrants | Series B Preferred warrants | Series C-1 Preferred warrants | Series C-2 Preferred warrants | |||||||||
Expected volatility | N/A | 80 | % | 80 | % | N/A | ||||||
Expected term (in years) | N/A | 2 | 2 | N/A | ||||||||
Risk-free interest rate | N/A | 0.13 | % | 0.13 | % | N/A | ||||||
Dividend yield | N/A | 0 | % | 0 | % | N/A | ||||||
7. | STOCK-BASED COMPENSATION PLAN |
| Options Outstanding | ||||||||||||||||
| Number of shares | Weighted average exercise price | Weighted average remaining contractual term (years) | Aggregate intrinsic values ($‘000s) | |||||||||||||
Balances as of December 31, 2020 | 3,891,768 | $ | 0.44 | 8.23 | $ | 4,333 | ||||||||||
Granted | 987,500 | $ | 2.57 | |||||||||||||
Exercised | (1,685,675 | ) | $ | 0.40 | ||||||||||||
Forfeited | (400,938 | ) | $ | 0.69 | ||||||||||||
Balances as of September 30, 2021 | 2,792,655 | $ | 1.18 | 8.53 | $ | 30,331 | ||||||||||
Options vested and exercisable - September 30, 2021 | 702,291 | $ | 0.44 | 3.37 | $ | 8,150 | ||||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Risk-free rate | 1.01 | % | 1.12 | % | ||||
Expected dividends | 0 | 0 | ||||||
Expected term | 6 years | 6 years | ||||||
Expected volatility | 75 | % | 70 | % | ||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Research and development | $ | 223 | $ | 54 | ||||
Sales and marketing | 48 | 33 | ||||||
General and administrative | 349 | 164 | ||||||
Total stock-based compensation | $ | 620 | $ | 251 | ||||
8. | FAIR VALUE MEASUREMENTS |
| September 30, 2021 | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Assets: | ||||||||||||||||
Cash equivalents and restricted cash: | ||||||||||||||||
Money market funds | $ | 6,986 | $ | — | $ | — | $ | 6,986 | ||||||||
Certificate of deposit | — | 75 | — | 75 | ||||||||||||
Total Assets | $ | 6,986 | $ | 75 | $ | — | $ | 7,061 | ||||||||
Liabilities: | ||||||||||||||||
Bridge loan | $ | — | $ | — | $ | 21,432 | $ | 21,432 | ||||||||
Derivative liabilities | — | — | 248,450 | 248,450 | ||||||||||||
Warrant liabilities | — | — | — | — | ||||||||||||
Total Liabilities | $ | — | $ | — | $ | 269,882 | $ | 269,882 | ||||||||
December 31, 2020 | ||||||||||||||||
Assets: | ||||||||||||||||
Cash equivalents and restricted cash: | ||||||||||||||||
Money market funds | $ | 3,046 | $ | — | $ | — | $ | 3,046 | ||||||||
Certificate of deposit | — | 326 | — | 326 | ||||||||||||
Total Assets | $ | 3,046 | $ | 326 | $ | — | $ | 3,372 | ||||||||
Liabilities: | ||||||||||||||||
Bridge loan | $ | — | $ | — | $ | — | $ | — | ||||||||
Derivative liabilities | — | — | 22,911 | 22,911 | ||||||||||||
Warrant liabilities | — | — | $ | 3,329 | 3,329 | |||||||||||
Total Liabilities | $ | — | $ | — | $ | 26,240 | $ | 26,240 | ||||||||
Three Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Bridge loan: | ||||||||
Beginning balance June 30 | $ | — | $ | — | ||||
Fair value of Bridge loan funded | 20,000 | — | ||||||
Accrued PIK and final payment | 1,432 | — | ||||||
Change in fair value | — | — | ||||||
Ending balance September 30 | 21,432 | — | ||||||
Warrant liabilities: | ||||||||
Beginning balance June 30 | 22,860 | 1,979 | ||||||
Change in fair value | 2,949 | (24 | ) | |||||
Fair value of warrants issued | — | — | ||||||
Fair value of warrants exercised | (25,809 | ) | — | |||||
Ending balance September 30 | — | 1,955 | ||||||
Series C-2 Convertible Preferred Stock Issuance Right liability: | ||||||||
Beginning balance June 30 | 211,747 | 7,619 | ||||||
Change in fair value | 36,703 | (2,089 | ) | |||||
Fair value of derivatives extinguished | — | — | ||||||
Ending balance September 30 | 248,450 | 5,530 | ||||||
Total | $ | 269,882 | $ | 7,485 | ||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Bridge loan: | ||||||||
Beginning balance December 31 | $ | — | $ | — | ||||
Fair value of Bridge loan funded | 20,000 | — | ||||||
Accrued PIK and final payment | 1,432 | — | ||||||
Change in fair value | — | — | ||||||
Ending balance September 30 | 21,432 | — | ||||||
Warrant liabilities: | ||||||||
Beginning balance December 31 | 3,329 | 1,989 | ||||||
Change in fair value | 17,753 | (78 | ) | |||||
Fair value of warrants issued | 5,096 | 44 | ||||||
Fair value of warrants exercised | (26,178 | ) | — | |||||
Ending balance September 30 | — | 1,955 | ||||||
Series C-2 Convertible Preferred Stock Issuance Right liability: | ||||||||
Beginning balance December 31 | 22,911 | 11,379 | ||||||
Change in fair value | 248,691 | (5,849 | ) | |||||
Fair value of derivatives extinguished | (23,152 | ) | — | |||||
Ending balance September 30 | 248,450 | 5,530 | ||||||
Total | $ | 269,882 | $ | 7,485 | ||||
9. | INCOME TAXES |
10. | SUBSEQUENT EVENTS |
| • | Each issued and outstanding share of the Company’s preferred stock was converted into shares of ESS Common Stock at the then-effective conversion rate as calculated pursuant to the Company’s Certificate of Incorporation immediately prior to the closing; |
| • | Each issued and outstanding warrant of the Company was exercised in full in exchange for the issuance of shares of ESS Common Stock immediately prior to the closing; |
| • | Each issued and outstanding share of ESS Common Stock (including shares of ESS Common Stock resulting from the conversion of preferred stock and the exercise and settlement of all outstanding warrants) was cancelled and converted into the right to receive a number of shares of New ESS Common Stock equal to the Per Share Consideration; |
| • | Each issued and outstanding vested and unvested Company option was converted into options of New ESS exercisable for shares of New ESS Common Stock with the same terms except for the number of shares exercisable and the exercise price, each of which was adjusted using the Per Share Consideration; and |
| • | Each issued and outstanding vested and unvested restricted stock unit (“RSU”) of the Company was converted into New ESS RSUs for the same number of shares of New ESS Common Stock with the same terms. |
| • | The issuance and sale of 25,000,000 shares of New ESS Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $250,000 thousand pursuant to the PIPE; |
| • | The issuance to ESS employees and other service providers of 824,998 RSUs (the “Incentive RSU Pool”), which vest subject to meeting certain future earnout milestone events and continued service; |
| • | Pursuant to the Merger Agreement, up to 54 months after October 8, 2021, New ESS may issue to eligible ESS securityholders, on a pro rata basis, up to 16,500,000 shares of additional New ESS Common Stock less any ESS RSUs issued pursuant to the Incentive RSU Pool, issuable in two equal tranches upon the occurrence of the respective Earnout Milestone Events; and |
| • | Repayment of $20,000 thousand in principal plus accrued interest to settle amounts outstanding under the Company’s Bridge Loan, following the Closing. |
Assets | ||||
Current assets: | ||||
Cash | $ | 470,073 | ||
Prepaid expenses | 215,972 | |||
Total current assets | 686,045 | |||
Other assets | 136,991 | |||
Investments held in Trust Account | 250,004,454 | |||
Total Assets | $ | 250,827,490 | ||
Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | ||||
Current liabilities: | ||||
Accrued expenses | $ | 99,107 | ||
Accrued expenses - related party | 40,000 | |||
Total current Liabilities | 139,107 | |||
Deferred underwriting commissions | 8,750,000 | |||
Derivative warrant liabilities | 21,354,400 | |||
Total Liabilities | 30,243,507 | |||
Commitments and Contingencies | 0 | |||
Class A ordinary shares; 25,000,000 shares subject to possible redemption at $10.00 per share | 250,000,000 | |||
Shareholders’ Deficit: | ||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding | 0— | |||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized | 0— | |||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,250,000 shares issued and outstanding | 625 | |||
Additional paid-in capital | — | |||
Accumulated deficit | (29,416,642 | ) | ||
Total Shareholders’ Deficit | (29,416,017 | ) | ||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Deficit | $ | 250,827,490 | ||
General and administrative expenses | $ | 708,829 | ||
Loss from operations | (708,829 | ) | ||
Other income (loss) | ||||
Change in fair value of derivative warrant liabilities | (1,854,400 | ) | ||
Financing costs – derivative warrant liabilities | (735,490 | ) | ||
Gain on marketable securities (net) and dividends held in Trust Account | 4,454 | |||
Total other loss | (2,585,436 | ) | ||
Net loss | $ | (3,294,265 | ) | |
Weighted average Class A ordinary shares subject to redemption, basic and diluted | 16,139,241 | |||
Basic and diluted net income per share, Class A ordinary shares | $ | (0.15 | ) | |
Weighted average Class B ordinary shares outstanding, basic and diluted | 6,250,000 | |||
Basic and diluted net loss per share, Class B ordinary shares | $ | (0.15 | ) | |
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - July 21, 2020 (inception) | — | $ | — | 0— | $ | 0— | $ | 0— | $ | 0— | $ | 0— | ||||||||||||||||
Issuance of ordinary shares to Sponsor | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Forfeiture of Class B ordinary shares | — | — | (937,500 | ) | (94 | ) | 94 | — | — | |||||||||||||||||||
Remeasurement adjustment on Class A ordinary shares subject to possible redemption | — | — | — | — | (24,375 | ) | (26,122,377 | ) | (26,146,752 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (3,294,265 | ) | (3,294,265 | ) | |||||||||||||||||||
Balance - December 31, 2020 | — | $ | — | 6,250,000 | $ | 625 | $ | — | $ | (29,416,642 | ) | $ | (29,416,017 | ) | ||||||||||||||
Cash Flows from Operating Activities: | ||||
Net loss | $ | (3,294,265 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | 16,000 | |||
Gain on marketable securities,(net) and dividends held in Trust Account | (4,454 | ) | ||
Change in fair value of derivative warrant liabilities | 1,854,400 | |||
Financing costs – derivative warrant liabilities | 735,490 | |||
Changes in operating assets and liabilities: | ||||
Prepaid expenses and other assets | (352,963 | ) | ||
Accrued expenses | 29,107 | |||
Accrued expenses - related party | 40,000 | |||
Net cash used in operating activities | (976,685 | ) | ||
Cash Flows from Investing Activities: | ||||
Cash deposited in Trust Account | (250,000,000 | ) | ||
Net cash used in investing activities | (250,000,000 | ) | ||
Cash Flows from Financing Activities: | ||||
Proceeds from note payable to related party | 25,000 | |||
Repayment of note payable to related party | (111,542 | ) | ||
Proceeds received from initial public offering, gross | 250,000,000 | |||
Proceeds received from private placement | 7,000,000 | |||
Offering costs paid | (5,466,700 | ) | ||
Net cash provided by financing activities | 251,446,758 | |||
Net increase in cash | 470,073 | |||
Cash - beginning of the period | — | |||
Cash - ending of the period | $ | 470,073 | ||
Supplemental disclosure of noncash investing and financing activities: | ||||
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ | 9,000 | ||
Offering costs included in accrued expenses | $ | 70,000 | ||
Offering costs included in note payable - related party | $ | 86,542 | ||
Deferred underwriting commissions | $ | 8,750,000 | ||
Remeasurement adjustment on Class A ordinary shares subject to possible redemption | $ | 26,146,752 | ||
Forfeiture of Class B ordinary shares | $ | 94 |
| • | the misapplication of accounting guidance related to the Company’s warrants in the Company’s previously issued audited and unaudited condensed financial statements for such periods. The restated financial statements are indicated as “Restated” in the audited and unaudited condensed financial statements and accompanying notes, as applicable (Amendment No. 1); and |
| • | the misapplication of accounting guidance related to the Company’s Public Shares in the Company’s previously issued audited and unaudited condensed financial statements for such periods. The restated financial statements are indicated as “Restated” in the audited and unaudited condensed financial statements and accompanying notes, as applicable. (Amendment No. 2). |
As of December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Balance Sheet | ||||||||||||
Total assets | $ | 250,827,490 | $ | 0 | $ | 250,827,490 | ||||||
Liabilities and shareholders’ equity | ||||||||||||
Total current liabilities | $ | 139,107 | $ | 0 | $ | 139,107 | ||||||
Deferred underwriting commissions | 8,750,000 | 0 | 8,750,000 | |||||||||
Derivative warrant liabilities | 0 | 21,354,400 | 21,354,400 | |||||||||
Total liabilities | 8,889,107 | 21,354,400 | 30,243,507 | |||||||||
Class A ordinary share, $0.0001 par value; shares subject to possible redemption | 236,938,380 | (21,354,400 | ) | 215,583,980 | ||||||||
Shareholders’ equity | ||||||||||||
Preference shares—$0.0001 par value | 0 | 0 | — | |||||||||
Class A ordinary shares—$0.0001 par value | 131 | 213 | 344 | |||||||||
Class B ordinary shares—$0.0001 par value | 625 | 0 | 625 | |||||||||
Additional paid-in-capital | 5,703,622 | 2,589,677 | 8,293,299 | |||||||||
Accumulated deficit | (704,375 | ) | (2,589,890 | ) | (3,294,265 | ) | ||||||
Total shareholders’ equity | 5,000,003 | 0 | 5,000,003 | |||||||||
Total liabilities and shareholders’ equity | $ | 250,827,490 | $ | 0 | $ | 250,827,490 | ||||||
| �� | ||||||||||||
Period From July 21, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Operations | ||||||||||||
Loss from operations | $ | (708,829 | ) | $ | — | $ | (708,829 | ) | ||||
Other (expense) income: | ||||||||||||
Change in fair value of derivative warrant liabilities | 0 | (1,854,400 | ) | (1,854,400 | ) | |||||||
Financing costs—derivative warrant liabilities | 0 | (735,490 | ) | (735,490 | ) | |||||||
Gain on marketable securities (net), and dividends held in Trust Account | 4,454 | — | 4,454 | |||||||||
Total other (expense) income | 4,454 | (2,589,890 | ) | (2,585,436 | ) | |||||||
Net loss | $ | (704,375 | ) | $ | (2,589,890 | ) | $ | (3,294,265 | ) | |||
Basic and Diluted weighted-average Class A ordinary share outstanding | 23,734,800 | 21,719,426 | ||||||||||
Basic and Diluted net income per Class A ordinary shares | $ | 0.00 | $ | — | ||||||||
Basic and Diluted weighted-average Class B ordinary share outstanding | 7,052,256 | 8,310,766 | ||||||||||
Basic and Diluted net loss per Class B ordinary shares | $ | (0.10 | ) | $ | (0.40 | ) | ||||||
Period From July 21, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Cash Flows | ||||||||||||
Net loss | $ | (704,375 | ) | $ | (2,589,890 | ) | $ | (3,294,265 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities | 11,546 | 2,589,890 | 2,601,436 | |||||||||
Net cash used in operating activities | (976,685 | ) | — | (976,685 | ) | |||||||
Net cash used in investing activities | (250,000,000 | ) | — | (250,000,000 | ) | |||||||
Net cash provided by financing activities | 251,446,758 | — | 251,446,758 | |||||||||
Net change in cash | $ | 470,073 | $ | — | $ | 470,073 | ||||||
As of September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Unaudited Condensed Balance Sheet | ||||||||||||
Total assets | $ | 252,167,049 | $ | — | $ | 252,167,049 | ||||||
Liabilities and shareholders’ equity | ||||||||||||
Total current liabilities | $ | 816,145 | $ | — | $ | 816,145 | ||||||
Deferred underwriting commissions | 8,750,000 | 0 | 8,750,000 | |||||||||
Derivative warrant liabilities | — | 19,500,000 | 19,500,000 | |||||||||
Total liabilities | 9,566,145 | 19,500,000 | 29,066,145 | |||||||||
Class A ordinary share, $0.0001 par value; shares subject to possible redemption | 237,600,900 | (19,500,000 | ) | 218,100,900 | ||||||||
Shareholders’ equity | ||||||||||||
Preference shares—$0.0001 par value | 0 | 0 | 0 | |||||||||
Class A ordinary shares—$0.0001 par value | 124 | 195 | 319 | |||||||||
Class B ordinary shares—$0.0001 par value | 719 | — | 719 | |||||||||
Additional paid-in-capital | 5,041,015 | 735,295 | 5,776,310 | |||||||||
Accumulated deficit | (41,854 | ) | (735,490 | ) | (777,344 | ) | ||||||
Total shareholders’ equity | 5,000,004 | — | 5,000,004 | |||||||||
Total liabilities and shareholders’ equity | $ | 252,167,049 | $ | — | $ | 252,167,049 | ||||||
Period From July 21, 2020 (Inception) Through September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Unaudited Condensed Statement of Operations | ||||||||||||
Loss from operations | $ | (41,854 | ) | $ | — | $ | (41,854 | ) | ||||
Other (expense) income: | ||||||||||||
Change in fair value of derivative warrant liabilities | — | — | — | |||||||||
Financing costs—derivative warrant liabilities | — | (735,490 | ) | (735,490 | ) | |||||||
Total other (expense) income | — | (735,490 | ) | (735,490 | ) | |||||||
Net loss | $ | (41,854 | ) | $ | (735,490 | ) | $ | (777,344 | ) | |||
Basic and Diluted weighted-average Class A ordinary share outstanding | — | 21,810,415 | ||||||||||
Basic and Diluted net income per Class A ordinary shares | $ | — | $ | — | ||||||||
Basic and Diluted weighted-average Class B ordinary share outstanding | 6,437,865 | 6,732,994 | ||||||||||
Basic and Diluted net loss per Class B ordinary shares | $ | (0.01 | ) | $ | (0.12 | ) | ||||||
Period From July 21, 2020 (Inception) Through September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Unaudited Condensed Statement of Cash Flows | ||||||||||||
Net loss | $ | (41,854 | ) | $ | (735,490 | ) | $ | (777,344 | ) | |||
Adjustment to reconcile net loss to net cash used in operating activities | 16,000 | 735,490 | 751,490 | |||||||||
Net cash used in operating activities | (26,800 | ) | — | (26,800 | ) | |||||||
Net cash used in investing activities | (250,000,000 | ) | — | (250,000,000 | ) | |||||||
Net cash provided by financing activities | 251,773,258 | — | 251,773,258 | |||||||||
Net change in cash | $ | 1,746,458 | $ | — | $ | 1,746,458 | ||||||
As of September 21, 2020 | ||||||||||||
As Reported, | ||||||||||||
As Restated | Adjustment | As Restated | ||||||||||
Balance Sheet | ||||||||||||
Total assets | $ | 252,174,258 | $ | — | $ | 252,174,258 | ||||||
Total liabilities | $ | 29,049,500 | $ | — | $ | 29,049,500 | ||||||
Class A ordinary shares subject to possible redemption | 218,124,750 | 31,875,250 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | — | |||||||||
Class A ordinary shares | 319 | (319 | ) | — | ||||||||
Class B ordinary shares | 719 | — | 719 | |||||||||
Additional paid-in capital | 5,747,460 | (5,747,460 | ) | — | ||||||||
Accumulated deficit | (748,490 | ) | (26,127,471 | ) | (26,875,961 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,008 | $ | (31,875,250 | ) | $ | (26,875,242 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible | ||||||||||||
Redemption and Shareholders’ Equity (Deficit) | $ | 252,174,258 | $ | — | $ | 252,174,258 | ||||||
As of December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Balance Sheet | ||||||||||||
Total assets | $ | 250,827,490 | $ | — | $ | 250,827,490 | ||||||
Total liabilities | 30,243,507 | — | 30,243,507 | |||||||||
Class A ordinary shares subject to possible redemption | 215,583,980 | 34,416,020 | 250,000,000 | |||||||||
Shareholders’ equity | ||||||||||||
Preference shares - $0.0001 par value | 0 | — | — | |||||||||
Class A ordinary shares - $0.0001 par value | 344 | (344 | ) | — | ||||||||
Class B ordinary shares - $0.0001 par value | 625 | — | 625 | |||||||||
Additional paid-in-capital | 8,293,299 | (8,293,299 | ) | — | ||||||||
Accumulated deficit | (3,294,265 | ) | (26,122,377 | ) | (29,416,642 | ) | ||||||
Total shareholders’ equity | 5,000,003 | (34,416,020 | ) | (29,416,017 | ) | |||||||
Total liabilities and shareholders’ equity | $ | 250,827,490 | $ | — | $ | 250,827,490 | ||||||
Period From July 21, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Operations | ||||||||||||
Earnings (loss) allocable to ordinary shares subject to possible redemption | $ | 3,841 | (2,378,506 | ) | $ | (2,374,665 | ) | |||||
Basic and Diluted weighted-average Class A ordinary share outstanding | 21,719,416 | (5,580,185 | ) | 16,139,241 | ||||||||
Basic and Diluted net income per Class A ordinary shares | $ | 0.00 | (0.15 | ) | $ | (0.15 | ) | |||||
Loss allocable to non-redeemable ordinary shares | $ | (3,298,105 | ) | 2,378,505 | $ | (919,600 | ) | |||||
Basic and Diluted weighted-average Class B ordinary share outstanding | 8,310,766 | (2,060,766 | ) | 6,250,000 | ||||||||
Basic and Diluted net loss per Class B ordinary shares | $ | (0.40 | ) | 0.25 | $ | (0.15 | ) | |||||
Period From July 21, 2020 (Inception) Through December 31, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Shareholders’ Deficit | ||||||||||||
Sale of units in initial public offering, gross | $ | 237,500,000 | $ | (237,500,000 | ) | $ | — | |||||
Offering costs | (13,646,752 | ) | 13,646,752 | — | ||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | — | (26,146,471 | ) | (26,146,471 | ) | |||||||
Shares subject to possible redemption | (215,583,980 | ) | 215,583,980 | — | ||||||||
As of September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Unaudited Condensed Balance Sheet | ||||||||||||
Total assets | $ | 252,167,049 | $ | — | $ | 252,167,049 | ||||||
Total liabilities | 29,066,145 | — | 29,066,145 | |||||||||
Class A ordinary share, $0.0001 par value; shares subject to possible redemption | 218,100,900 | 31,899,100 | 250,000,000 | |||||||||
Shareholders’ equity | ||||||||||||
Preference shares - $0.0001 par value | 0 | — | — | |||||||||
Class A ordinary shares - $0.0001 par value | 319 | (319 | ) | — | ||||||||
Class B ordinary shares - $0.0001 par value | 719 | — | 719 | |||||||||
Additional paid-in-capital | 5,776,310 | (5,776,310 | ) | — | ||||||||
Accumulated deficit | (777,344 | ) | (26,122,471 | ) | (26,899,815 | ) | ||||||
Total shareholders’ equity | 5,000,004 | (31,899,100 | ) | (26,899,096 | ) | |||||||
Total liabilities and shareholders’ equity | $ | 252,167,049 | $ | — | $ | 252,167,049 | ||||||
Period From July 21, 2020 (Inception) Through September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Unaudited Statement of Operations | ||||||||||||
Earnings (loss) allocable to ordinary shares subject to possible redemption | $ | 0 | (293,337 | ) | $ | (293,337 | ) | |||||
Basic and Diluted weighted-average Class A ordinary share outstanding | 21,810,415 | (18,022,536 | ) | 3,787,879 | ||||||||
Basic and Diluted net income (loss) per Class A ordinary shares | $ | 0 | (0.08 | ) | $ | (0.08 | ) | |||||
Loss allocable to non-redeemable ordinary shares | $ | (777,344 | ) | 293,337 | $ | (484,007 | ) | |||||
Basic and Diluted weighted-average Class B ordinary share outstanding | 6,732,994 | (482,994 | ) | 6,250,000 | ||||||||
Basic and Diluted net loss per Class B ordinary shares | $ | (0.12 | ) | 0.04 | $ | (0.08 | ) | |||||
Period From July 21, 2020 (Inception) Through September 30, 2020 | ||||||||||||
As Previously Reported | Restatement Adjustment | As Restated | ||||||||||
Statement of Shareholders’ Deficit | ||||||||||||
Sale of units in initial public offering, gross | $ | 237,500,000 | $ | (237,500,000 | ) | $ | — | |||||
Offering costs | (13,646,752 | ) | 13,646,752 | — | ||||||||
Remeasurement of Class A ordinary shares subject to possible redemption | 0 | (26,146,471 | ) | (26,146,471 | ) | |||||||
Shares subject to possible redemption | 218,124,750 | (218,124,750 | ) | — | ||||||||
| • | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the period from July 21, 2020 | ||||||||
(inception) through December 31, 2020 | ||||||||
Class A | Class B | |||||||
(restated) | ||||||||
Basic and diluted net loss per common share: | ||||||||
Numerator: | ||||||||
Allocation of net loss | $ | (2,374,665 | ) | $ | (919,600 | ) | ||
Denominator: | ||||||||
Basic and diluted weighted average common shares outstanding | 16,139,241 | 6,250,000 | ||||||
Basic and diluted net loss per common share | $ | (0.15 | ) | $ | (0.15 | ) | ||
Gross Proceeds | $ | 250,000,000 | ||
Less: | ||||
Offering costs allocated to Class A shares subject to possible redemption | (13,646,752 | ) | ||
Proceeds allocated to Public Warrants at issuance | (12,500,000 | ) | ||
Plus: | ||||
Remeasurement adjustment on Class A ordinary shares subject to possible redemption | 26,146,752 | |||
Class A ordinary shares subject to possible redemption | $ | 250,000,000 | ||
| • | in whole and not in part; |
| • | at a price of $0.01 per warrant; |
| • | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
| • | if, and only if, the last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
| • | in whole and not in part; |
| • | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided |
| • | if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per Public Share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
| • | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | ||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 250,004,454 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Derivative warrant liabilities – Public Warrants | $ | 13,625,000 | $ | — | $ | — | ||||||
Derivative warrant liabilities – Private Warrants | $ | — | $ | — | $ | 7,729,400 | ||||||
As of September 21, 2020 | As of September 30, 2020 | As of December 31, 2020 | ||||||||||
Stock price | $ | 9.42 - $9.64 | $ | 9.42 - $9.64 | $ | 10.08 | ||||||
Volatility | 10.00 | % | 10.00 | % | 10.00 | % | ||||||
Expected life of the options to convert | 6.0 | 6.0 | 5.9 | |||||||||
Risk-free rate | 0.37 | % | 0.37 | % | 0.48 | % | ||||||
Dividend yield | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Probability of merger | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Public Warrants | Private Warrants | Total | ||||||||||
Derivative warrant liabilities at July 3, 2020 (inception) | $ | — | $ | — | $ | — | ||||||
Issuance of Warrants | 12,500,000 | 7,000,000 | 19,500,000 | |||||||||
Change in fair value of derivative warrant liabilities | 1,125,000 | 729,400 | 1,854,400 | |||||||||
Transfer of Public Warrants to level 1 | (13,625,000 | ) | — | (13,625,000 | ) | |||||||
Derivative warrant liabilities at December 31, 2020 | $ | — | $ | 7,729,400 | $ | 7,729,400 | ||||||
September 30, 2021 | December 31, 2020 | |||||||
(restated) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 1,177 | $ | 470,073 | ||||
Prepaid expenses | 160,186 | 215,972 | ||||||
Total current assets | 161,363 | 686,045 | ||||||
Other assets | 40,741 | 136,991 | ||||||
Cash equivalents held in Trust Account | 250,016,847 | 250,004,454 | ||||||
Total Assets | $ | 250,218,951 | $ | 250,827,490 | ||||
Liabilities and Shareholders’ Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 222,866 | $ | 0— | ||||
Accrued expenses | 1,428,762 | 99,107 | ||||||
Accrued expenses - related party | 130,000 | 40,000 | ||||||
Working capital loan - related party, at fair value | 361,751 | 0— | ||||||
Total current liabilities | 2,143,379 | 139,107 | ||||||
Deferred underwriting commissions | 8,750,000 | 8,750,000 | ||||||
Derivative warrant liabilities | 20,217,050 | 21,354,400 | ||||||
Total liabilities | 31,110,429 | 30,243,507 | ||||||
Commitments and Contingencies | 0 | 0 | ||||||
Class A ordinary shares 25,000,000 shares subject to possible redemption at $10.00 per share at September 30, 2021 and December 31, 2020, respectively | 250,000,000 | 250,000,000 | ||||||
Shareholders’ Deficit: | ||||||||
Preference shares, $0.0001 par value; 5,000,000 shares authorized; 0ne issued and outstanding | 0— | 0— | ||||||
Class A ordinary shares, $0.0001 par value; 500,000,000 shares authorized at September 30, 2021 and December 30, 2020, respectively | 0— | 0— | ||||||
Class B ordinary shares, $0.0001 par value; 50,000,000 shares authorized; 6,250,000 shares issued and outstanding at September 30, 2021 and December 31, 2020 | 625 | 625 | ||||||
Additional paid-in capital | 94 | 94 | ||||||
Accumulated deficit | (30,892,197 | ) | (29,416,736 | ) | ||||
Total shareholders’ deficit | (30,891,478 | ) | (29,416,017 | ) | ||||
Total Liabilities and Shareholders’ Deficit | $ | 250,218,951 | $ | 250,827,490 | ||||
For the three months ended September 30, 2021 | For the nine months ended September 30, 2021 | For the period from July 21, 2020 (inception) through September 30, 2020 | ||||||||||
(restated) | ||||||||||||
General and administrative expenses | $ | 1,702,053 | $ | 2,625,204 | $ | 41,854 | ||||||
Loss from operations | (1,702,053 | ) | (2,625,204 | ) | (41,854 | ) | ||||||
Other income (expense) | ||||||||||||
Change in fair value of derivative warrant liabilities | (2,232,690 | ) | 1,137,350 | — | ||||||||
Financing costs – derivative warrant liabilities | — | — | (735,490 | ) | ||||||||
Gain on marketable securities (net), and dividends held in Trust Account | 4,925 | 12,393 | — | |||||||||
Total other income (expense) | (2,227,765 | ) | 1,149,743 | (735,490 | ) | |||||||
Net loss | $ | (3,929,818 | ) | $ | (1,475,461 | ) | $ | (777,344 | ) | |||
Weighted average shares outstanding of common stock subject to redemption, basic and diluted | 25,000,000 | 25,000,000 | 3,787,879 | |||||||||
Basic and diluted net loss per share, common stock subject to redemption | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.08 | ) | |||
Weighted average shares outstanding of common stock, basic and diluted | 6,250,000 | 6,250,000 | 6,250,000 | |||||||||
Basic and diluted net loss per share, common stock | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.08 | ) | |||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - December 31, 2020 (unaudited) (restated) | — | $ | — | 6,250,000 | $ | 625 | $ | 94 | $ | (29,416,736 | ) | $ | (29,416,017 | ) | ||||||||||||||
Net income | — | — | — | — | — | 9,238,963 | 9,238,963 | |||||||||||||||||||||
Balance - March 31, 2021 (unaudited) (restated) | — | $ | — | 6,250,000 | $ | 625 | $ | 94 | $ | (20,177,773 | ) | $ | (20,177,054 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (6,784,606 | ) | (6,784,606 | ) | |||||||||||||||||||
Balance - June 30, 2021 (unaudited) (restated) | — | $ | — | 6,250,000 | $ | 625 | $ | 94 | $ | (26,962,379 | ) | $ | (26,961,660 | ) | ||||||||||||||
Net loss | — | — | — | — | — | (3,929,818 | ) | (3,929,818 | ) | |||||||||||||||||||
Balance - September 30, 2021 (unaudited) | — | $ | — | 6,250,000 | $ | 625 | $ | 94 | $ | (30,892,197 | ) | $ | (30,891,478 | ) | ||||||||||||||
Ordinary Shares | Additional | Total | ||||||||||||||||||||||||||
Class A | Class B | Paid-in | Accumulated | Shareholders’ | ||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
Balance - July 21, 2020 (inception) | — | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Issuance of ordinary shares to Sponsor (1) | — | — | 7,187,500 | 719 | 24,281 | — | 25,000 | |||||||||||||||||||||
Remeasurement adjustment on Class A ordinary shares subject to possible redemption | — | — | — | — | (24,281 | ) | (26,122,471 | ) | (26,146,752 | ) | ||||||||||||||||||
Net loss | — | — | — | — | — | (777,344 | ) | (777,344 | ) | |||||||||||||||||||
Balance - September 30, 2020 (restated) | — | $ | — | 7,187,500 | $ | 719 | $ | — | $ | (26,899,815 | ) | $ | (26,899,096 | ) | ||||||||||||||
(1) | This number includes 937,500 Class B ordinary shares subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters. The over-allotment expired unexercised on October 31, 2020, thus the 937,500 of Class B ordinary shares were forfeited. |
For the nine months ended September 30, 2021 | For the period from July 21, 2020 (inception) through September 30, 2020 | |||||||
(restated) | ||||||||
Cash Flows from Operating Activities: | ||||||||
Net loss | $ | (1,475,461 | ) | $ | (777,344 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Gain on marketable securities (net), and dividends held in Trust Account | (12,393 | ) | — | |||||
Change in fair value of derivative warrant liabilities | (1,137,350 | ) | — | |||||
Financing costs – derivate warrant liabilities | — | 735,490 | ||||||
Expenses paid by sponsor in exchange for working capital loan | 361,751 | |||||||
General and administrative expenses paid by Sponsor in exchange for issuance of Class B ordinary shares | — | 16,000 | ||||||
Changes in operating assets and liabilities: | ||||||||
Prepaid expenses | 152,036 | (420,591 | ) | |||||
Accounts payable | 222,866 | 406,145 | ||||||
Accrued expenses | 1,329,655 | 3,500 | ||||||
Accrued expenses – related party | 90,000 | 10,000 | ||||||
Net cash used in operating activities | (468,896 | ) | (26,800 | ) | ||||
Cash Flows from Investing Activities: | ||||||||
Cash deposited in Trust Account | — | (250,000,000 | ) | |||||
Net cash provided by (used in) investing activities | — | (250,000,000 | ) | |||||
Cash Flows from Financing Activities: | ||||||||
Proceeds from note payable to related party | — | 25,000 | ||||||
Repayment of note payable to related party | — | (111,542 | ) | |||||
Proceeds received from initial public offering, gross | — | 250,000,000 | ||||||
Proceeds received from private placement | — | 7,000,000 | ||||||
Offering costs paid | — | (5,140,200 | ) | |||||
Net cash provided by financing activities | — | 251,773,258 | ||||||
Net increase in cash | (468,896 | ) | 1,746,458 | |||||
Cash - beginning of the period | 470,073 | — | ||||||
Cash - end of the period | $ | 1,177 | $ | 1,746,458 | ||||
Supplemental disclosure of noncash investing and financing activities: | ||||||||
Operating expenses paid by Sponsor included in working capital loan | $ | 361,751 | $ | — | ||||
Offering costs paid by Sponsor in exchange for issuance of Class B ordinary shares | $ | — | $ | 9,000 | ||||
Offering costs included in accounts payable | $ | — | $ | 5,000 | ||||
Offering costs included in accrued liabilities | $ | — | $ | 391,500 | ||||
Offering costs included in note payable - related party | $ | — | $ | 86,542 | ||||
Deferred underwriting commissions | $ | — | $ | 8,750,000 | ||||
Remeasurement adjustment on Class A ordinary shares subject to possible redemption | $ | — | $ | 26,146,752 | ||||
As of September 21, 2020 | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 252,174,258 | $ | 252,174,258 | ||||||||
Total liabilities | $ | 29,049,500 | $ | 29,049,500 | ||||||||
Class A ordinary shares subject to possible redemption | 218,124,750 | 31,875,250 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 319 | (319 | ) | 0 | ||||||||
Class B ordinary shares | 719 | 0 | 719 | |||||||||
Additional paid-in capital | 5,747,460 | (5,747,460 | ) | 0 | ||||||||
Accumulated deficit | (748,490 | ) | (26,127,471 | ) | (26,875,961 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,008 | $ | (31,875,250 | ) | $ | (26,875,242 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 252,174,258 | $ | 0 | $ | 252,174,258 | ||||||
As of September 30, 2020 | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 252,167,049 | $ | 252,167,049 | ||||||||
Total liabilities | $ | 29,066,145 | $ | 29,066,145 | ||||||||
Class A ordinary shares subject to possible redemption | 218,100,900 | 31,899,100 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 319 | (319 | ) | 0 | ||||||||
Class B ordinary shares | 719 | 0 | 719 | |||||||||
Additional paid-in capital | 5,776,310 | (5,776,310 | ) | 0 | ||||||||
Accumulated deficit | (777,344 | ) | (26,122,471 | ) | (26,899,815 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,004 | $ | (31,899,100 | ) | $ | (26,899,096 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 252,167,049 | $ | 0 | $ | 252,167,049 | ||||||
Statement of changes in Stockholders’ equity for the period from July 21, 2020 (inception) through September 30, 2020 (unaudited) | As Previously Reported | Adjustment | As Restated | |||||||||
Sale of units in initial public offering, gross | $ | 237,500,000 | $ | (237,500,000 | ) | $ | 0 | |||||
Offering costs | $ | (13,646,752 | ) | 13,646,752 | 0 | |||||||
Remeasurement of Class A ordinary shares subject to possible redemption | 0 | (26,146,752 | ) | (26,146,752 | ) | |||||||
Shares subject to possible redemption | 218,100,900 | (218,100,900 | ) | — | ||||||||
As of December 31, 2020 | As Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 250,827,490 | $ | 250,827,490 | ||||||||
Total liabilities | $ | 30,243,507 | $ | 30,243,507 | ||||||||
Class A ordinary shares subject to possible redemption | 215,583,980 | 34,416,020 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 344 | (344 | ) | 0 | ||||||||
Class B ordinary shares | 625 | 0 | 625 | |||||||||
Additional paid-in capital | 8,293,299 | (8,293,299 | ) | 0 | ||||||||
Accumulated deficit | (3,294,265 | ) | (26,122,377 | ) | (29,416,642 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,003 | $ | (34,416,020 | ) | $ | (29,416,017 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 250,827,490 | $ | 0 | $ | 250,827,490 | ||||||
Statement of changes in Stockholders’ equity for the period from July 21, 2020 (inception) through December 31, 2020 (unaudited) | As Previously Reported | Adjustment | As Restated | |||||||||
Sale of units in initial public offering, gross | $ | 237,500,000 | $ | (237,500,000 | ) | $ | 0 | |||||
Offering costs | $ | (13,646,752 | ) | 13,646,752 | 0 | |||||||
Remeasurement of Class A ordinary shares subject to possible redemption | 0 | (26,146,752 | ) | (26,146,752 | ) | |||||||
Shares subject to possible redemption | (215,583,980 | ) | 215,583,980 | — | ||||||||
As of March 31, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 250,663,379 | $ | 250,663,379 | ||||||||
Total liabilities | $ | 20,840,433 | $ | 20,840,433 | ||||||||
Class A ordinary shares subject to possible redemption | 224,822,940 | 25,177,060 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 252 | (252 | ) | 0 | ||||||||
Class B ordinary shares | 625 | 0 | 625 | |||||||||
Additional paid-in capital | 0 | 0 | 0 | |||||||||
Accumulated deficit | 4,999,129 | (25,176,808 | ) | (20,177,679 | ) | |||||||
Total shareholders’ equity (deficit) | $ | 5,000,006 | $ | (25,177,060 | ) | $ | (20,177,054 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 250,663,379 | $ | 0 | $ | 250,663,379 | ||||||
For the three months ended March 31, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Shares subject to redemption | $ | (9,238,960 | ) | $ | 9,238,960 | $ | 0 | |||||
As of June 30, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Total assets | $ | 250,304,732 | $ | 250,304,732 | ||||||||
Total liabilities | $ | 27,266,392 | $ | 27,266,392 | ||||||||
Class A ordinary shares subject to possible redemption | 218,038,330 | 31,961,670 | 250,000,000 | |||||||||
Preference shares | 0 | 0 | 0 | |||||||||
Class A ordinary shares | 320 | (320 | ) | 0 | ||||||||
Class B ordinary shares | 625 | 0 | 625 | |||||||||
Additional paid-in capital | 6,784,542 | (6,784,542 | ) | 0 | ||||||||
Accumulated deficit | (1,785,477 | ) | (25,176,808 | ) | (26,962,285 | ) | ||||||
Total shareholders’ equity (deficit) | $ | 5,000,010 | $ | (31,961,670 | ) | $ | (26,961,660 | ) | ||||
Total Liabilities, Class A Ordinary Shares Subject to Possible Redemption and Shareholders’ Equity (Deficit) | $ | 250,304,732 | $ | 0 | $ | 250,304,732 | ||||||
For the six months ended June 30, 2021 | As Previously Reported | Adjustment | As Restated | |||||||||
Shares subject to redemption | $ | 6,784,610 | $ | (6,784,610 | ) | $ | 0 | |||||
EPS for Class A ordinary shares (redeemable) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Form 10-Q (March 31, 2021) - three months ended March 31, 2021 | ||||||||||||
Earnings allocable to ordinary shares subject to possible redemption | $ | 3,321 | $ | 7,387,849 | $ | 7,391,170 | ||||||
Weighted average shares outstanding | 21,568,664 | 3,431,336 | 25,000,000 | |||||||||
Basic and diluted earnings per share | $ | 0 | $ | 0.30 | $ | 0.30 | ||||||
Form 10-Q (June 30, 2021) - three months ended June 30, 2021 | ||||||||||||
Earnings (loss) allocable to ordinary shares subject to possible redemption | $ | 3,293 | $ | (5,430,978 | ) | $ | (5,427,685 | ) | ||||
Weighted average shares outstanding | 22,474,838 | 2,525,162 | 25,000,000 | |||||||||
Basic and diluted earnings per share | $ | 0 | $ | (0.22 | ) | $ | (0.22 | ) | ||||
Form 10-Q (June 30, 2021) - six months ended June 30, 2021 | ||||||||||||
Earnings allocable to ordinary shares subject to possible redemption | $ | 6,514 | $ | 1,956,972 | $ | 1,963,486 | ||||||
Weighted average shares outstanding | 22,024,254 | 2,975,746 | 25,000,000 | |||||||||
Basic and diluted earnings per share | $ | 0 | $ | 0.08 | $ | 0.08 | ||||||
EPS for Class B ordinary shares (non-redeemable) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Form 10-Q (March 31, 2021) - three months ended March 31, 2021 | ||||||||||||
Earnings allocable to non-redeemable ordinary shares | $ | 9,235,642 | $ | (7,387,849 | ) | $ | 1,847,793 | |||||
Weighted average shares outstanding | 9,681,336 | (3,431,336 | ) | 6,250,000 | ||||||||
Basic and diluted earnings per share | $ | 0.95 | $ | (0.65 | ) | $ | 0.30 | |||||
Form 10-Q (June 30, 2021) - three months ended June 30, 2021 | ||||||||||||
Loss allocable to non-redeemable ordinary shares | $ | (6,787,899 | ) | $ | 5,430,978 | $ | (1,356,921 | ) | ||||
Weighted average shares outstanding | 8,775,162 | (2,525,162 | ) | 6,250,000 | ||||||||
Basic and diluted earnings per share | $ | (0.77 | ) | $ | 0.55 | $ | (0.22 | ) | ||||
Form 10-Q (June 30, 2021) - six months ended June 30, 2021 | ||||||||||||
Earnings allocable to non-redeemable ordinary shares | $ | 2,447,843 | $ | (1,956,972 | ) | $ | 490,871 | |||||
Weighted average shares outstanding | 9,225,746 | (2,975,746 | ) | 6,250,000 | ||||||||
Basic and diluted earnings per share | $ | 0.27 | $ | (0.19 | ) | $ | 0.08 | |||||
EPS for Class A ordinary shares (redeemable) | ||||||||||||
As Previously Reported | Adjustment | As Restated | ||||||||||
Form 10-Q (September 30, 2020) - the period from July 21, 2020 (inception) through September 30, 2020 | ||||||||||||
Earnings (loss) allocable to ordinary shares subject to possible redemption | $ | 3,841 | $ | (2,378,506 | ) | $ | (2,374,665 | ) | ||||
Weighted average shares outstanding | 21,810,415 | (18,022,536 | ) | 3,787,879 | ||||||||
Basic and diluted earnings per share | $ | 0 | $ | (0.08 | ) | $ | (0.08 | ) | ||||
Form 10-K/A (December 31, 2020) - the period from July 21, 2020 (inception) through December 31, 2020 | ||||||||||||
Earnings (loss) allocable to ordinary shares subject to possible redemption | $ | 0 | $ | (293,337 | ) | $ | (293,337 | ) | ||||
Weighted average shares outstanding | 21,719,426 | (5,580,185 | ) | 16,139,241 | ||||||||
Basic and diluted earnings per share | $ | 0 | $ | (0.15 | ) | $ | (0.15 | ) | ||||
EPS for Class B ordinary shares (non- redeemable) | ||||||||||||
As Previously Reported, As Restated | Adjustment | As Restated | ||||||||||
Form 10-Q (September 30, 2020) - the period from July 21, 2020 (inception) through September 30, 2020 | ||||||||||||
Loss allocable to non-redeemable ordinary shares | $ | (777,344 | ) | $ | 293,337 | $ | (484,007 | ) | ||||
Weighted average shares outstanding | 6,732,994 | (482,994 | ) | 6,250,000 | ||||||||
Basic and diluted earnings per share | $ | (0.12 | ) | $ | 0.04 | $ | (0.08 | ) | ||||
Form 10-K/A (December 31, 2020) - the period from July 21, 2020 (inception) through December 31, 2020 | ||||||||||||
Loss allocable to non-redeemable ordinary shares | $ | (3,298,105 | ) | $ | 2,378,505 | $ | (919,600 | ) | ||||
Weighted average shares outstanding | 8,310,766 | (2,060,766 | ) | 6,250,000 | ||||||||
Basic and diluted earnings per share | $ | (0.40 | ) | $ | 0.25 | $ | (0.15 | ) | ||||
| • | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
For the Three Months Ended September 30, 2021 | For the Nine Months Ended September 30, 2021 | |||||||||||||||
Class A | Class B | Class A | Class B | |||||||||||||
Basic and diluted net loss per common share: | ||||||||||||||||
Numerator: | ||||||||||||||||
Allocation of net loss | $ | (3,143,854 | ) | $ | (785,964 | ) | $ | (1,180,369 | ) | $ | (295,092 | ) | ||||
Denominator: | ||||||||||||||||
Basic and diluted weighted average common shares outstanding | 25,000,000 | 6,250,000 | 25,000,000 | 6,250,000 | ||||||||||||
Basic and diluted net loss per common share | $ | (0.13 | ) | $ | (0.13 | ) | $ | (0.05 | ) | $ | (0.05 | ) | ||||
For the period from July 21, 2020 (inception) through September 30, 2020 | ||||||||
Class A | Class B | |||||||
(restated) | ||||||||
Basic and diluted net loss per common share: | ||||||||
Numerator: | ||||||||
Allocation of net loss | $ | (293,337 | ) | $ | (484,007 | ) | ||
Denominator: | ||||||||
Basic and diluted weighted average common shares outstanding | 3,787,879 | 6,250,000 | ||||||
Basic and diluted net loss per common share | $ | (0.08 | ) | $ | (0.08 | ) | ||
Gross Proceeds | $ | 250,000,000 | ||
Less: | — | |||
Offering costs allocated to Class A shares subject to possible redemption | (13,646,752 | ) | ||
Proceeds allocated to Public Warrants at issuance | (12,500,000 | ) | ||
Plus: | ||||
Remeasure adjustment on Class A ordinary shares subject to possible redemption amount | 26,146,752 | |||
Class A ordinary shares subject to possible redemption | $ | 250,000,000 | ||
| • | in whole and not in part; |
| • | at a price of $0.01 per warrant; |
| • | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
| • | if, and only if, the last reported sale price (the “closing price”) of Class A ordinary shares equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. |
| • | in whole and not in part; |
| • | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided |
| • | if, and only if, the closing price of Class A ordinary shares equals or exceeds $10.00 per Public Share (as adjusted) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders; and |
| • | if the closing price of the Class A ordinary shares for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. |
September 30, 2021 | Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 250,016,847 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Warrant liabilities - Public warrants | $ | 10,333,330 | $ | — | $ | — | ||||||
Warrant liabilities - Private warrants | $ | — | $ | — | $ | 9,883,720 | ||||||
Working capital loan - Related party | $ | — | $ | — | $ | 361,751 | ||||||
December 31, 2020 | Quoted Prices in Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||
Description | (Level 1) | (Level 2) | (Level 3) | |||||||||
Assets: | ||||||||||||
Investments held in Trust Account | $ | 250,004,454 | $ | — | $ | — | ||||||
Liabilities: | ||||||||||||
Warrant liabilities - Public warrants | $ | 13,625,000 | $ | — | $ | — | ||||||
Warrant liabilities - Private warrants | $ | — | $ | — | $ | 7,729,400 | ||||||
As of September 30, 2021 | As of December 31 2020 | |||||||
Stock price | $ | 9.97 | $ | 10.08 | ||||
Volatility | 42.2 | % | 10.0 | % | ||||
Expected life of the options to convert | 5.02 | 5.9 | ||||||
Risk-free rate | 0.98 | % | 0.48 | % | ||||
Dividend yield | 0 | 0 | ||||||
Derivative warrant liabilities at December 31, 2020 | $ | 7,729,400 | ||
Change in fair value of derivative warrant liabilities | 2,154,320 | |||
Derivative warrant liabilities at September 30, 2021 | $ | 9,883,720 | ||
Fair value of working capital loan - related party at December 31, 2020 | $ | 0 | ||
Initial fair value of working capital loan - related party | 361,751 | |||
Change in fair value of working capital loan - related party | 0 | |||
Fair value of working capital loan - related party, September 30, 2020 | $ | 361,751 | ||
Item 13. | Other Expenses of Issuance and Distribution |
Amount to be Paid | ||||
SEC registration fee | $ | 6,925 | ||
FINRA filing fee | 11,704 | |||
Accountant’s fees and expenses | 90,000 | |||
Legal fees and expenses | 500,000 | |||
Financial printing and miscellaneous expenses | 112,500 | |||
Total | $ | 721,129 | ||
Item 14. | Indemnification of Directors and Officers |
Item 15. | Recent Sales of Unregistered Securities |
Item 16. | Exhibits and Financial Statement Schedules |
Incorporated By Reference | ||||||||||
Exhibit | Description | Form | File No. | Exhibit No. | Filing Date | |||||
| 23.3 | Consent of Wilson Sonsini Goodrich & Rosati, P.C. (included in Exhibit 5.1) | |||||||||
| 24.1 | Powers of Attorney (included on signature page hereto) | |||||||||
| * | To be filed by amendment. |
| † | Indicates management contract or compensatory plan or arrangement. |
| # | Portions of this exhibit have been omitted in accordance with Item 601 of Regulation S-K. |
Item 17. | Undertakings |
| (1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; |
| (2) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. |
ESS TECH, INC. | ||
| By: | /s/ Eric P. Dresselhuys | |
Eric P. Dresselhuys | ||
Chief Executive Officer | ||
Signature | Title | Date | ||
/s/ Eric P. Dresselhuys Eric P. Dresselhuys | Chief Executive Officer and Director (Principal Executive Officer) | December 27, 2021 | ||
/s/ Amir Moftakhar Amir Moftakhar | Chief Financial Officer (Principal Financial Officer) | December 27, 2021 | ||
/s/ Jeff Bodner Jeff Bodner | Chief Accounting Officer (Principal Accounting Officer) | December 27, 2021 | ||
/s/ Craig Evans Craig Evans | Director | December 27, 2021 | ||
/s/ Raffi Garabedian Raffi Garabedian | Director | December 27, 2021 | ||
/s/ Rich Hossfeld Rich Hossfeld | Director | December 27, 2021 | ||
Signature | Title | Date | ||
/s/ Michael R. Niggli Michael R. Niggli | Director | December 27, 2021 | ||
/s/ Shirley Speakman Shirley Speakman | Director | December 27, 2021 | ||
/s/ Kyle Teamey Kyle Teamey | Director | December 27, 2021 | ||
/s/ Alexi Wellman Alexi Wellman | Director | December 27, 2021 | ||
/s/ Daryl Wilson Daryl Wilson | Director | December 27, 2021 | ||
