ESS Tech Secures Funding and Major Defense Contract in Strategic Pivot

ESS Tech Inc. is embarking on a significant strategic realignment for the current fiscal year, underscored by a fresh capital infusion and a substantial contract award from the U.S. military. These moves are designed to address the escalating demand for long-duration energy storage and represent a concerted effort to strengthen the company's financial foundation and market position for its iron flow battery technology.

A key element of the company's restructuring is a change in executive leadership. Drew Buckley assumed the role of Chief Executive Officer effective January 1, 2026. His mandate includes instilling greater operational discipline as part of a broader organizational reset.

Financial Restructuring: Raising Capital and Reducing Debt

Concurrent with the leadership transition, ESS Tech undertook decisive financial actions in January to bolster its balance sheet.

• Capital Raise: The company generated approximately $15 million through a direct share offering, with shares priced at $1.75 each.
• Debt Reduction: A major portion of outstanding debt was retired, with ESS Tech repaying about $24.4 million of a $30 million promissory note.

This capital raise was a critical step to ensure liquidity. Prior to this financing, the company's year-end 2025 cash position stood near $22 million. With preliminary, unaudited revenue for 2025 reported at only around $1.6 million, the influx of capital highlights the company's current reliance on external funding during its growth phase. The simultaneous debt repayment expands financial flexibility for upcoming projects.

Should investors sell immediately? Or is it worth buying ESS Tech?

Technology Validation via U.S. Air Force Project

A major operational milestone is a new contract awarded through Concurrent Technologies Corporation and the U.S. Air Force Research Laboratory. Valued at $9.9 million, the agreement calls for ESS Tech to install energy storage systems with a capacity of up to 27 MWh at the Clear Space Force Station in Alaska.

For the company, this project serves as more than a revenue source; it is a pivotal validation of its technology's reliability within critical infrastructure. Successfully operating its iron flow batteries under Alaska's extreme environmental conditions could significantly boost acceptance among other governmental and commercial clients. Compared to conventional lithium-ion batteries, ESS Tech's technology emphasizes longer storage cycles and reduced fire risk—factors of paramount importance for defense installations.

Upcoming Investor Engagement

ESS Tech's management is scheduled to engage with the investment community in the near term. They will participate in the ROTH Conference from March 22 to 24, 2026. Furthermore, an investor day is planned for later in the year at the company's headquarters in Wilsonville, where deeper insights into the technology and future business strategy are expected to be shared.