San Francisco, CA – ESS Tech Inc., a company specializing in grid-scale battery energy storage systems, recently made headlines for its new partnership with Honeywell. Based in San Francisco, the company went public through a SPAC merger in late 2021, with shareholders such as Bill Gates’ Breakthrough Energy Ventures and Softbank. The recent investment of $27.5 million by Honeywell has sparked interest in the company’s future prospects.
One of the key offerings of ESS Tech Inc. is a grid-scale battery made from iron and salt water, which are more environmentally friendly and easier to obtain than traditional lithium-based technologies. Despite significant investments, the company’s revenues remain in the single-digit millions each quarter. However, during their third-quarter earnings call, management projected a record result for the upcoming fourth quarter.
The company’s stock has recently been trading below $1, which could potentially lead to delisting from the New York Stock Exchange. To address this issue, ESS Tech Inc. may consider a reverse stock split to prevent delisting, although the performance of stocks after reverse splits is often uncertain.
The partnership with Honeywell, a Fortune 100 company with significant industrial clout and a vast customer base in over 100 countries, could be a game-changer for ESS Tech Inc. Despite challenges in pursuing front-of-the-meter applications due to interconnection waiting times, Honeywell’s extensive customer network may pave the way for ESS Tech Inc. to secure more behind-the-meter installations.
Looking ahead, ESS Tech CFO Tony Rabb projected a revenue of $9 million for the full year, with $1.5 million recognized in the third quarter. However, questions remain about the nature of installations secured, and the transparency of the company in disclosing vital information to its shareholders.
The involvement of Honeywell presents a significant opportunity for ESS Tech Inc. to establish itself in the energy storage market, but transparency issues and stock performance continue to be areas of concern for investors. With the stock under $1 and an earnings call on the horizon, the company’s future remains uncertain, leaving shareholders to weigh the risks associated with microcap stocks.