Item 2.02
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Results of Operations and Financial Condition
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The information set forth under Item 4.02 is incorporated into this Item 2.02 by reference.
Item 4.01
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Changes in Registrants Certifying Accountant
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On October 28, 2021, ESS Tech, Inc. (ESS or the Company, f/k/a ACON S2 Acquisition Corp., or STWO) filed a
Current Repot on Form 8-K stating that Marcum, LLP (Marcum), the Companys independent registered public accounting firm, would be dismissed following its review of the Companys
quarter ended September 30, 2021, which consists only of the accounts of the pre-business combination special purpose acquisition company. Marcum will now remain engaged by the Company to effect the restatement for the Affected Period, as discussed
below.
Item 4.02
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Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review
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The management of ESS has
re-evaluated the Companys application of ASC 480-10-S99-3A to its accounting
classification of the redeemable shares of Class A Ordinary Shares, par value $0.0001 per share (the Class A Ordinary Shares), issued as part of the units sold in STWOs initial public offering (the IPO) on
September 21, 2020. Historically, a portion of the Class A Ordinary Shares was classified as permanent equity to maintain net tangible assets greater than $5,000,000 on the basis that STWO would consummate its initial business combination
only if it had net tangible assets of at least $5,000,001. Pursuant to such re-evaluation, the Companys management has determined that the Class A Ordinary Shares include certain provisions that
require classification of the Class A Ordinary Shares as temporary equity regardless of the minimum net tangible assets required to complete STWOs initial business combination.
Marcum was the independent registered public accounting firm during the Affected Period (as defined below) and for the life of STWO, which
consummated a business combination with ESS Tech Subsidiary, Inc. (Legacy ESS) on October 8, 2021, pursuant to that certain Agreement and Plan of Merger dated May 6, 2021, by and among STWO, SCharge Merger Sub, Inc. and Legacy
ESS.
Therefore, on November 22, 2021, the Companys management and the Audit Committee of the Board of Directors of the Company
(the Audit Committee), after consultation with Marcum, concluded that STWOs previously issued (i) audited balance sheet as of September 21, 2020, as previously restated, as reported in the Current Report on Form 8-K filed on September 25, 2020, (ii) audited financial statements as of December 31, 2020, and for the period from July 21, 2020 (inception) to December 31, 2020, as previously restated, as
reported in the Annual Report on Form 10-K/A filed on May 24, 2021, (iii) unaudited interim financial statements as of September 30, 2020, and for the period from
July 21, 2020 (inception) through September 30, 2020 as previously restated, as reported in Quarterly Report on Form 10-Q filed on November 16, 2020, (iv) unaudited interim financial statements
as of March 31, 2021, and for the period from January 1, 2021 through March 31, 2021, as reported in Quarterly Report on Form 10-Q filed on May 24, 2021, and (v) unaudited interim
financial statements as of June 30, 2021, and for the period from April 1, 2021 through June 30, 2021, as reported in Quarterly Report on Form 10-Q filed on May 24, 2021, (the
Affected Period) should no longer be relied upon and should be restated to report Class A Ordinary Shares as liabilities, restate the statement of changes in shareholders equity and restate EPS to allocate income and losses
pro rata between the two classes of shares outstanding. Similarly, Report of Independent Registered Public Accounting Firm dated March 31, 2021, except for the effects of the restatement discussed in Note 2, as to which date is May 24,
2021, on the financial statements as of December 31, 2020 and for the period from July 21, 2020 (date of inception) through December 31, 2020, Report of Independent Registered Public Accounting Firm dated September 25, 2020 on
the balance sheet as of September 21, 2020, and the registration statements, shareholder communications, investor presentations or other communications describing relevant portions of STWOs financial statements for these periods should no
longer be relied upon. As such, the Company will restate its audited financial statements as of December 31, 2020, and for the period from July 21, 2020 to December 31, 2020, and amend its Form 10-K/A as previously filed on May 24, 2021.
The historical financial statements of Legacy ESS are not affected by the above changes.
The Companys management has concluded that in light of the classification error described above, a material weakness exists in the
Companys internal control over financial reporting and that the Companys disclosure controls and procedures were not effective.
The Audit Committee and the Companys management have discussed the matters disclosed in this Item 4.02(a) with Marcum.