Ess Tech, Inc. · NYSE:GWH

Ess Tech — SPAC Merger (May 2021)

47 slides from Ess Tech's SPAC merger presentation, May 2021

1. Slide 1: Long Duration Energy Storage for a Cleaner Future

   Long Duration Energy Energy Storage Systems Storage for for a Cleaner Future a Cleaner Future MAY 2021 CONFIDENTIAL ***S ubsequent to the date of this presentation, certain estimates and assumptions with relation to ESS' financial projections have changed. See footnote disclosure on Slide 43.

2. Slide 2: Disclaimers

   Disclaimers This presentation (this “Presentation”) was prepared for informational purposes only to assist interested parties in making their own evaluation of the proposed transaction (the “Transaction”) between Acon S2 Acquisition Corp. (“ACON”, “we”, or “our”) and ESS Inc. (“ESS”). This Presentat

3. Slide 3: Game Changing Technology

   Game Changing Technology The Power Grid of the Future – Feasible Today STABLE. SECURE. CLEAN. CONFIDENTIAL 2 2

4. Slide 4: Transaction Overview

   Transaction Overview Category Catalyst in Long Duration Energy Storage Solutions Leadership ESS  Founded in 2011 to enable the stable, decentralized and decarbonized power grid of the future Offering Size  ACON S2 (NASDAQ: STWO): a special purpose acquisition company  $250 million cash in trust 

5. Slide 5: We Must Reimagine the Grid

   We Must Reimagine the Grid Aging Infrastructure Severe Weather Events Rising Renewables Penetration Growing Energy Demand CONFIDENTIAL 4

6. Slide 6: Energy Transition is Building Momentum

   Energy Transition is Building Momentum Stakeholders are aligned to accelerate the energy transition towards a more sustainable future Consumer “Anybody who has the breakthrough on battery storage is Preferences going to have the key to the future” John Kerry (U.S. Special Presidential Envoy for Clim

7. Slide 7: ESS is a Game Changer in Long Duration Energy Storage

   ESS is a Game Changer in Long Duration Energy Storage Enables up to 100% Allows Proliferation Stabilizes the Grid Renewable Penetration of Microgrids CONFIDENTIAL 6

8. Slide 8: ESS: A Category Defining Investment Opportunity

   ESS: A Category Defining Investment Opportunity 1 Large and Fast-Growing TAM: ~$56bn by 2027 growing at a 33% CAGR1 2 Simple Yet Revolutionary Technology: Iron, salt and water; strong patent portfolio 3 Compelling Value Proposition: Highest performance, lowest cost2 and most sustainable 4 Low Risk E

9. Slide 9: Market Opportunity

   Market Opportunity CONFIDENTIAL 8

10. Slide 10: What Is Long Duration Storage?

    What Is Long Duration Storage? Low Cost to Enable Shift Supply to Meet Reliable Replacement of Alternatives Demand from 4 – 12 Hours (Grid Stability) (Peaker Plants) CONFIDENTIAL 9

11. Slide 11: ESS Transforms the Value Proposition for Long Duration Storage

    ESS Transforms the Value Proposition for Long Duration Storage What Customers Demand How ESS Transforms the Grid  Can replace coal and natural gas with solar and  Up to 12 hours Longer Duration wind power  Flexibility allows multiple revenue streams  Greater resiliency to unexpected events  Ste

12. Slide 12: Stabilize the Grid and Accelerate Renewables

    Stabilize the Grid and Accelerate Renewables US Renewable Energy Penetration (2015-2050)1 Renewable intermittency creates a 57% 65% massive problem for the grid, 36% 40% 47% particularly >25% penetration 31% 23% 15%  Carbon-free is the goal 2015 2020 2025 2030 2035 2040 2045 2050  Intermittency an

13. Slide 13: Fortify the Grid for Climate Change

    Fortify the Grid for Climate Change Climate change will result in more unpredictable weather events including extreme temperatures, hurricanes and wildfires1 Texas Freeze ESS batteries operate efficiently in extreme hot and cold weather and still maintain grid stability Texas was seconds away from c

14. Slide 14: Strong and Growing Demand for Energy Storage

    Strong and Growing Demand for Energy Storage Cumulative Additions to Global Storage Capacity (GWh) Global Total Addressable Market ($bn) Front of the meter +43% Front of the meter 534 Behind of the meter CAGR Behind of the meter +33% $56 CAGR 397 $46 301 +44% +32% CAGR $39 $28 CAGR 287 $33 $22 226 $

15. Slide 15: ESS Wins on Performance

    ESS Wins on Performance Operational 4-12 hrs 16+ hrs Compelling Performance Flexibility Li-Ion <4 hrs  Can cycle when needed with no impact to asset life Longer Asset Life Unlimited cycles, no capacity loss  Operates at peak efficiency independent of outside Li-Ion 6,000 cycles1 environment Superi

16. Slide 16: ESS Wins on Cost

    ESS Wins on Cost Illustrative Cost Comparison Versus Li-Ion How ESS’ Technology Delivers Superior Economics1 4 hours 12 hours Competitive with Li-Ion at 4 hours; No scaling Li-Ion ESS wins thereafter $200/kWh $200/kWh Marginal cost of $20/kWh Capital Cost ($/kWh) $200/kWh $80/kWh Li-Ion LCOS at 4 ho

17. Slide 17: ESS Wins on Sustainability

    ESS Wins on Sustainability Sustainability Focus Areas Raw ingredients of iron, salt and water are Responsibly Sourced Materials earth-abundant Global Warming Potential (GWP) 67% lower CO2 emissions than Li-Ion1 Contains no toxic materials and Recyclability requires no special permits for disposal2 N

18. Slide 18: ESS is a Category Defining Technology for Long Duration Storage

    ESS is a Category Defining Technology for Long Duration Storage Vanadium, Sodium Compressed Pumped Li-Ion Li Metal Zinc Bromine Sulfur Air Hydro Low cost at 4 – 12 hours Field proven1 Earth abundant materials Unlimited cycling Zero capacity fade Wide operational temperature range Environmentally sus

19. Slide 19: ESS Technology is Proven and Insured

    ESS Technology is Proven and Insured Munich RE Aon One Beacon Insurance Investment-Grade 10-year extended Surety and Corporate Bonding Warranty warranty covering battery modules Growing project surety capacity Investment-Grade Warranty continuity Project Insurance insurance provides additional suret

20. Slide 20: ESS is Winning in the Market Today

    ESS is Winning in the Market Today Customer in California Customer in Patagonia Use Case Use Case  Microgrid solutions required to mitigate Public Safety  Remote grid served by RoR hydro + diesel gensets Power Shutdown impacts  Storage systems required to minimize genset usage  Li-Ion solutions

21. Slide 21: Technology Overview

    Technology Overview CONFIDENTIAL 20

22. Slide 22: Technological Breakthrough, Field Proven and Shipping Now

    Technological Breakthrough, Field Proven and Shipping Now Technological R&D roadmap for breakthrough – Iron Flow first conceived But “dirty” electrolyte Field proven1; S200 additional breakthroughs Proton Pump eliminates in 1970s caused rapid degradation shipping now to extend technology power fade

23. Slide 23: Robust Intellectual Property Portfolio

    Robust Intellectual Property Portfolio ESS Critical Technology ESS IP Portfolio (-) (+) Power Module Electrode Electrode Current 125+ Patents Granted Collector and in Pipeline Pending Applications Proton Pump Pressure Plate Undisclosed Number of Trade Secrets and Identified Patents Conductive Porous

24. Slide 24: Business Overview

    Business Overview CONFIDENTIAL 23

25. Slide 25: Strong Team Positioned to Grow the Business

    Strong Team Positioned to Grow the Business Management Team CRAIG EVANS ERIC DRESSELHUYS AMIR MOFTAKHAR DR. JULIA SONG President & Founder Chief Executive Officer Chief Financial Officer CTO & Founder (March 2021) HUGH MCDERMOTT MATT BERKEBILE BRIAN LISIECKI RANDY LEWIS Senior Vice President Vice Pr

26. Slide 26: One Technology – Two Products of Different Scale

    One Technology – Two Products of Different Scale Energy Warehouse at Jean Airport Energy Warehouse™ Energy Center™  Behind the meter solution  Front of the meter solution  50kW – 90kW configurable range  Customizable configuration range  First commercial deployment in 2015  Customer trials sta

27. Slide 27: Validated by a Blue-Chip Customer Base

    Validated by a Blue-Chip Customer Base Utilities IPPs/Developers Commercial & Industrial EW EC EW EC EW EC  Peaker replacements  Peaker replacements  Energy cost savings Demand  T&D upgrade deferrals  Resource adequacy & grid reliability  Operational resiliency Drivers  Wildfire resiliency 

28. Slide 28: Strategy to Scale Globally

    Strategy to Scale Globally ESS’ ability to grow is supported by  Relationships in Europe and Asia-Pacific  Automated manufacturing process Manufacturing Capacity (MWh)  Supply chain of readily sourced components and raw materials ~16,000 ~10,000 ~5,000 ~2,000 ~150 2021 2022 2023 2024 2025 150,000

29. Slide 29: 97% Less Capital Required – Ready to Scale Globally

    97% Less Capital Required – Ready to Scale Globally Simple, automated Simple, Low-cost Production in the USA ESS manufacturing line $in millions/GWh of Battery Module Production Capacity ~$140 Expensive, complex Li-Ion battery manufacturing line ~$4 Li-Ion competitor Source Lux Research. CONFIDENTIA

30. Slide 30: Capital Investment Will Enable Rapid Expansion

    Capital Investment Will Enable Rapid Expansion Net Cash for Growth Increase Expand Sales Footprint Manufacturing Capacity Hire new sales team members and ~$493m1 Fully funds capital plan to increase capacity from >250MWh in 2021 to expand production footprint into Europe and Australia 16GWh by 2025

31. Slide 31: Financial Forecast

    Financial Forecast CONFIDENTIAL 30

32. Slide 32: High Quality Pipeline

    High Quality Pipeline Projected Pipeline for Energy Center™ Global Identified Opportunities and Energy Warehouse™ Qualifying Negotiating Qualifying 28% 40% Booked 100% Awarded 66% Negotiating Negotiating 40% Awarded Awarded Booked 6% 5% 20% Energy Center™ Opportunities 2021E 2022E 2023E Energy Wareh

33. Slide 33: ESS' Robust Revenue Growth

    ESS’ Robust Revenue Growth Projected Revenue by Product Offering ($in millions) $3,562  Growth accelerates as Energy Center deployments start in EC EW EF Services 2023 $2,572  Forecast driven by identified pipeline of near-term opportunities $1,645  ESS expansion into Australia (2023) and Europe

34. Slide 34: ESS Delivers Compelling Profitability

    ESS Delivers Compelling Profitability Projected Gross Margin ($in millions) Projected EBITDA ($in millions) $1,332 $1,059 $950 $739 $508 $360 $217 $131 ($2) ($13) $47 ($20) ($43) $2 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2021E 2022E 2023E 2024E 2025E 2026E 2027E % Margin 16% 27% 31% 37% 37% % Mar

35. Slide 35: Potential Upside to Business Plan

    Potential Upside to Business Plan New US federal and state policies on infrastructure, decarbonization and national security Emerging mandates in EU and Asia-Pacific on decarbonization and storage Demand impact of USTDA, Power Africa, UNDP and World Bank targets Further economies of scale and techno

36. Slide 36: Valuation Overview

    Valuation Overview CONFIDENTIAL 35

37. Slide 37: Detailed Transaction Overview

    Detailed Transaction Overview Transaction Overview Illustrative Pro Forma Valuation and Sources & Uses ($ in millions, except per share data; shares in millions)  Pro forma enterprise value of $1,072 million (0.7x 2025E Revenue) Total Enterprise Value Summary P ro forma s ha re s outs ta nding 156.

38. Slide 38: Selected Public Comparable Universe

    Selected Public Comparable Universe Battery Storage Fuel Cell and Electrolyzers Renewable Technologies Supporting Supporting Supporting Considerations Considerations Considerations Characteristics Characteristics Characteristics  Growth stage  Primarily  Technology  Not reliant on  Growth is ti

39. Slide 39: Selected Operational Benchmarking

    Selected Operational Benchmarking Battery Storage Fuel Cell and Electrolyzers Renewable Technologies Average: 121% Average: 58% Average: 25% Revenue CAGR ’21-24 594.5% 170.4% 72.0% 53.7% 105.8% NM 47.3% 23.8% 15.3% 17.2% 43.4% Average: 31% Average: 26% Average: 32% 37.4% 40.7% 35.3% 33.4% Gross marg

40. Slide 40: Selected Valuation Benchmarking

    Selected Valuation Benchmarking Battery Storage Fuel Cell and Electrolyzers Renewable Technologies Average: 3.3x Average: 9.8x Average: 12.1x 24.6x 14.2x 14.6x EV / Revenue 7.6x 7.8x 4.7x 4.6x 3.8x 2.8x 0.7x 0.6x 2025E 2027E 2024E 2024E 2024E 2024E 2024E 2024E 2021E 2021E 2021E Average: 13.3x Averag

41. Slide 41: Transaction Priced at a Discount to Peer Multiples

    Transaction Priced at a Discount to Peer Multiples Implied EV Based on Selected Comparable Companies Trading Transaction Value ($ in millions; implied future and discounted EV rounded to the nearest $5m) Implied Future EV Implied Discounted EV Implied Post-Money EV $8,225 84% discount $3,965 $4,935

42. Slide 42: Energy Storage for a Cleaner Future

    Energy Storage for a Cleaner Future

43. Slide 43: Appendix

    Appendix CONFIDENTIAL | 42

44. Slide 44: PF Summary Financials

    PF Summary Financials* Values in 000s 2021 2022 2023 2024 2025 2026 2027 Revenue Product - EW Purchase & Lease $2,381 $22,679 $34,520 $47,203 $66,328 $94,808 $135,248 Product - EC Purchase – $14,224 $256,249 $696,998 $1,447,504 $2,222,420 $2,986,242 Product - EF Purchase – – $4,177 $28,696 $41,797 $

45. Slide 45: ACON S2 Overview

    ACON S2 Overview Strategic Sustainability Platform for Success  ACON S2 Acquisition Corp. (NASDAQ: STWO)  $250mm IPO in September 2020  Domain Expertise  Public Markets  Criteria: authentic sustainability leader, significant  Sustainability  Governance value creation potential, strong competi

46. Slide 46: Energy Warehouse Overview

    Energy Warehouse™ Overview Product Summary Product Deployments  Behind the meter solution  Containerized design for turnkey delivery  First commercial deployment in 2015  Fast to build and commission  Generation II launched in 2020 Current Specifications Stone Edge Farms USACE UCSD (CA) 10 kW/6

47. Slide 47: Energy Center Overview

    Energy Center™ Overview Product Summary  Front of the meter solution  Modular design for utility-  Customer trials starting in class 2021  Power capacities starting at 3MW  “Battery in a Building” platform Building Blocks for Existing Products Current Specifications Configurable Range: Customiz

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