ESS Tech, Inc. reported significant financial challenges in its latest 10-Q filing for the quarter ending September 30, 2024. The company, which specializes in long-duration energy storage using iron flow battery technology, experienced a substantial decline in revenue. For the three months ended September 30, 2024, ESS generated revenue of $359,000, a 77% decrease from $1,545,000 in the same period of 2023. For the nine months, total revenue fell to $3,445,000 from $4,744,000, marking a 27% decline.

The company's gross loss for the third quarter was $(12.4 million), compared to $(8.6 million) in the prior year, while total operating expenses increased to $11.3 million from $9.5 million. This led to a loss from operations of $(23.7 million) for the quarter, up from $(18.1 million) in 2023. The net loss attributable to common stockholders for Q3 2024 was $(22.5 million), compared to $(16.6 million) in Q3 2023, reflecting a 35% increase in losses.

For the nine months ended September 30, 2024, the net loss was $(62.7 million), slightly higher than the $(61.4 million) reported for the same period in 2023. The company’s cash position also deteriorated, with cash and cash equivalents dropping to $12.8 million from $20.2 million at the end of 2023, and total current assets decreasing to $68.6 million from $118.1 million.

Strategically, ESS transitioned to commercial inventory accounting as of July 1, 2023, marking a shift from research and development. This transition has led to increased research and development expenses in the latest quarter, which rose to $2.7 million from $1.6 million in Q3 2023. The company also reported inventory write-downs of $16.3 million as of September 30, 2024.

In terms of financing, ESS is exploring various alternatives to raise capital, as it faces substantial doubt regarding its ability to continue as a going concern over the next 12 months. The company has also engaged in strategic partnerships, including a significant investment from Honeywell Ventures amounting to $27.5 million, which included the issuance of shares and warrants.

The company executed a 1-for-15 reverse stock split on August 23, 2024, to comply with NYSE listing standards, following a notice received in March for not meeting the average closing stock price requirement. Despite these efforts, ESS continues to face operational challenges, including supply constraints and increased costs, which may hinder its path to profitability.