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STOCK-BASED COMPENSATION PLAN
 3 Months Ended
Mar. 31, 2022
Share-based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION PLAN STOCK-BASED COMPENSATION PLAN
2021 Equity Incentive Plan
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. The stock awards may be issued as Incentive Stock Options (“ISO”), Non-statutory Stock Options (“NSO”), Stock Appreciation Rights, Restricted Stock Awards, or Restricted Stock Unit Awards. Only employees are eligible to receive ISO awards. Employees, directors, and consultants who are providing 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 will be 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) 15,260,000 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. Under the 2021 Plan, the Company is authorized to issue 17,610,000 shares of common stock as of March 31, 2022.
Option prices for incentive stock options are set at the fair market value of the Company’s common stock at the date of grant. Employee new hire options generally cliff vest at the end of the first year and then 1/48th of the original grant over the remaining three years. Grants expire 10 years from the date of grant.
No ISOs, NSOs, Restricted Stock Awards, nor Stock Appreciation Rights were outstanding as of March 31, 2022.
Shares Available for Future Grant
As of March 31, 2022, there were 13,021,489 shares available for future grant under the 2021 Plan.
Stock option and RSU activity, prices, and values during the three months ended March 31, 2022 is as follows (in thousands, except for share, per share, and contractual term data):
Options OutstandingRSUs
Number of
shares		Weighted
average
exercise price		Weighted
average
remaining
 contractual
term
(years)		Aggregate
intrinsic
values
($'000s)		Number of plan shares outstandingWeighted average
grant date fair value
per Share
Balances as of December 31, 2021
3,796,530 $0.83 8.08$40,274 3,392,153 $10.69 
Options and RSUs granted65,717 8.00 2,150,859 5.46 
Options exercised and RSUs released(138,617)0.30 (873,070)11.12 
Options and RSUs forfeited(16,517)0.36 (35,974)10.15 
Balances as of March 31, 2022
3,707,113 $0.98 8.03$17,012 4,633,968 $8.82 
Options vested and exercisable - December 31, 2021
1,827,374 $0.31 7.20$20,337 
Options vested and exercisable - March 31, 2022
1,626,013 $0.56 7.41$8,140 
In accordance with ASC 718, Compensation – Stock Compensation, the fair value of each option grant has been estimated as of the date of grant using the following weighted average assumptions:
Three Months Ended March 31,
20222021
Risk-free rate1.64 %0.75 %
Expected dividends— — 
Expected term6 years6 years
Expected volatility73.95 %74.80 %
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 to employees on the Company’s consolidated statements of operations and comprehensive loss (in thousands):
Three Months Ended March 31,
20222021
Research and development$587 $64 
Sales and marketing54 16 
General and administrative2,119 49 
Total stock-based compensation$2,760 $129 
As of March 31, 2022, there was approximately $24,071 thousand of unamortized stock-based compensation expense related to unvested stock options and RSUs, which was expected to be recognized over a weighted average period of 3.11 years.