ESS is heading into life as a publicly traded company in "strong financial condition" despite investors yanking $208 million out of its SPAC merger, the company said Wednesday.
The Wilsonville grid-scale battery maker cited the $250 million it raised last spring in a private placement as part of the SPAC deal.
That was $100 million more than it went to the market seeking, ESS said. And while it's not the $465 million ESS expected in a best-case scenario when all was said and done, it's plenty to pursue major objectives, the company said.
ESS said four key investments it was eyeing remained viable: manufacturing expansion, expanded sales footprint, launching its Energy Center product and research and development.
"Because manufacturing capacity expansion is very capital efficient, ESS expects no near-term impact as it builds out fully automated lines in 2022 into 2023," the company said in an email. "The 2022 expansion, which will accommodate more Energy Warehouses and the Energy Center, is already under contract."
ESS had also hoped to strengthen its balance sheet through the merger deal. That's an area where the lower total capital raise comes into play, it said.
"More cash would certainly increase balance sheet strength, but ESS sees no near-term impacts to their growth plan," the company said.
ESS and its special-purpose acquisition company partner, ACON S2, expect the merger to close on Friday at the latest. ESS listing on the New York Stock Exchange under the GWH ticker symbol is expected to follow on Monday.
The company will emerge from the process with less money than it hoped for because holders of nearly 20.8 million ACON S2 shares — out of 25 million — redeemed their shares for $10 rather than staying in the deal and seeing them converted to ESS stock.
Ten dollars is the initial price of SPAC shares, which can then be publicly traded. Investor funds are held in trust pending a merger, and shareholders can redeem shares for $10 plus interest up to two days before the merger vote.
On Wednesday, ACON S2 stock (Nasdaq: STWO) fell 16% and closed at $7.51.
