Long duration energy storage company ESS said it plans to “vigorously defend” itself against a “meritless lawsuit” which alleges violations of Federal securities laws.
In a statement, ESS said the class action is based on a report containing errors by Grizzly Research, an investment company based in Delaware, US.
ESS said: “This meritless lawsuit, which ESS intends to vigorously defend, is based upon a report by Grizzly Research, a self-described short seller, which was issued in December. The report alleges that ESS is a related party of Energy Storage Industries Asia Pacific, our customer in Australia.
“That assertion is false. The report contains numerous errors, unsupported speculation, and draws misleading and flawed conclusions. ESS was not contacted during the development of the report nor given the opportunity to provide factual information that would have easily refuted the incorrect claims made throughout the report.”
In its report, Grizzly claimed “ESS Tech Inc.’s biggest customer is really an undisclosed related party without operations.”
It further claimed:
- ESS’s claims about its technology are overstated and targeted at creating investor hype
- ESI is a de-facto subsidiary of ESS masquerading as third-party client
- ESS took significant efforts to conceal its relationship with ESI before announcing their big agreement which makes us believe that management is trying to deliberately mislead investors.
ESS spokesperson Morgan Pitts said the primary claim is that ESS improperly disclosed its relationship with Energy Storage Industries Asia Pacific (ESI), and that ESI is in fact a subsidiary of ESS.
“This is false,” said Pitts. “ESI is a customer of ESS. Under the terms of our agreement with ESI, ESS initially will supply complete Energy Warehouse systems to ESI in 2022 and 2023. ESS began shipping systems to ESI in 2022. Concurrently, ESI is expected to construct a manufacturing facility in Queensland, Australia, equipped to conduct final assembly of ESS systems from 2024 onward, using core components supplied by ESS.”