Stock-based compensation expense is allocated on a departmental basis based on the classification of the award holder. The following table presents the amount of stock-based compensation related to stock-based awards issued to employees on the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Cost of revenue	$	62	$	530	$	133	$	329
Research and development	106		127		205		502
Sales and marketing	13		316		26		922
General and administrative	433		697		1,039		1,151
Total stock-based compensation	$	614	$	1,670	$	1,403	$	2,904

In October 2021, the Board of Directors of the Company adopted the ESS Tech, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan became effective upon consummation of the Business Combination. Stock awards under the plan may be issued as Incentive Stock Options (“ISO”), Non-statutory Stock Options (“NSO”), Stock Appreciation Rights, and Restricted Stock Awards (“RSU”). Only employees are eligible to receive ISO awards. Employees, directors, and consultants who provide continuous service to the Company are eligible to receive stock awards other than ISOs. The number of shares available for issuance under the 2021 Plan is increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending with the 2031 fiscal year, in an amount equal to the lesser of (i) 1,017,333 shares, (ii) five percent (5%) of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Company no later than the last day of the immediately preceding fiscal year. As of January 1, 2026, the number of shares available for issuance under the 2021 Plan was increased by 1,017,333 shares in accordance with the plan and as approved by the Board. Under the 2021 Plan, the Company is authorized to issue 3,370,658 shares of common stock as of June 30, 2026.

Option prices for incentive stock options are set at the fair market value of the Company’s common stock at the date of grant. The fair market value of RSUs is set at the closing sales price of the Company’s common stock at the date of grant. Employee new hire grants generally cliff vest 1/4th at the end of the first year and then vest 1/16th each quarter over the remaining three years. All other grants generally vest quarterly over four years. Option grants expire 10 years from the date of grant.


	Options Outstanding						RSUs
	Number of shares	Weighted average exercise price		Weighted average remaining contractual term (years)	Aggregate intrinsic values ($'000s)		Number of plan shares outstanding	Weighted average grant date fair value per Share
Balances as of December 31, 2025	128,858	$	9.63	3.83	$	—	786,188	$	7.40
Options and RSUs granted	989,985	1.57					906,611	1.41
Options exercised and RSUs released	—	—					(123,320)	7.63
Options and RSUs forfeited	(60,635)	10.02					(480,888)	2.35
Balances as of June 30, 2026	1,058,208	$	2.07	8.88	$	—	1,088,591	$	4.62

Options vested and exercisable - December 31, 2025	124,742	$	9.24	3.70	$	—
Options vested and exercisable - June 30, 2026	141,969	$	4.63	4.34	$	—

The aggregate intrinsic value of stock options is the fair market value on the reporting date less the exercise price for each option. The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes Merton option-pricing model. For options granted during the six months ended June 30, 2026, the weighted average estimated fair value using the Black-Scholes Merton option pricing model was $1.57 per option. No options were granted during the three and six months ended June 30, 2025.

In May 2022, the Company commenced its first offering period under the ESS Tech, Inc. Employee Stock Purchase Plan (the “ESPP”), which assists employees in acquiring a stock ownership interest in the Company. The ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during specified offering periods. No employee may purchase more than $25,000 worth of stock in any calendar year. The price of shares purchased under the ESPP is equal to 85% of the fair market value of the common stock on the first or last day of the offering period, whichever is lower. Total ESPP expense for the three and six months ended June 30, 2026 was $5 thousand and $24 thousand, respectively. Total ESPP expense for the three and six months ended June 30, 2025 was $36 thousand and $87 thousand, respectively.

The number of shares available for issuance under the ESPP is increased on the first day of each fiscal year beginning with the 2022 fiscal year and ending with the 2041 fiscal year, in an amount equal to the lesser of (i) 204,000 shares, (ii) one percent (1%) of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the Company no later than the last day of the immediately preceding fiscal year. As of January 1, 2026, the number of shares available for issuance under the ESPP was increased by 204,000 shares in

During the three and six months ended June 30, 2026, the Company compensated certain vendors and third parties, including MZHCI, LLC pursuant to an agreement to provide investor relations consulting services to the Company, for services rendered and assets purchased partially through issuance of common stock. Stock-based compensation expense to nonemployees for the three and six months ended June 30, 2026 was $0.1 million and $0.3 million, respectively. No stock-based compensation expense to nonemployees was incurred for the three and six months ended June 30, 2025.