Small Bet on a Big Idea.
Let me start with a warning: the company featured in this month's issue is a risky bet. It’s a tiny company with a big vision — real technology, a compelling product, and a shot at solving one of the most pressing problems of the next decade. But it’s also burning through cash and barely staying afloat. I’m capping my initial investment at $500, and that’s intentional. I’ve learned the hard way that no matter how exciting the story sounds, micro-cap stocks with unproven economics are more likely to disappoint than deliver. Some fade slowly. Others vanish overnight.
I first came across this opportunity at the end of May, just as the stock was in freefall — dropping from $1.96 to $0.86 in a matter of days. It looked like the end. But then, almost out of nowhere, the company announced that it had secured enough funding to keep the lights on — at least for now. The stock doubled overnight. I took a small position at $1.20, not because I think it’s safe… but because I think it’s interesting.
Since then, it’s been classic micro-cap chaos — sharp moves, low volume, high emotion. On July 22, the stock popped 33% in a single day, and as I write this, it’s trading above $2 per share. That doesn’t mean the risk is gone. But it does mean the story isn’t over.
In this issue, I’ll walk you through what this company does, why the timing caught my attention, and how it fits into one of the most powerful megatrends of the decade. If you're curious — read on.
A Bet on the Surge in Electricity Demand
If you've been reading Trendpost this year, you know this isn't just a passing concern. AI, data centers, EVs, and global electrification are converging into a megatrend that will reshape the grid as we know it. In simple terms: demand is going vertical.
This creates two opportunities. First, to invest in companies that generate or transmit more power. Second — and this is the more interesting angle — to invest in the infrastructure that makes power reliable. That’s where battery energy storage systems (BESS) comes in.
Certain facilities — like data centers, hospitals, utilities, and critical infrastructure — can’t afford to lose power, even for a few seconds. Others, like solar and wind farms, need a way to store excess energy when the sun is shining or the wind is blowing, and deliver it later — when it isn’t. Whether it’s for backup, smoothing out volatility, or meeting peak demand, batteries are becoming essential to how the modern grid operates.
The company featured in this month’s issue — ESS Inc. (NYSE: GWH) — is tackling that problem with a battery unlike anything else on the market.
ESS makes a different kind of battery. It’s not lithium-ion. It’s not flammable. It doesn’t degrade with time. And it doesn’t rely on rare earths or materials controlled by China. Instead, it’s built with iron, salt, and water. Safe, cheap, and — at least on paper — scalable.
To be clear, ESS is still early. It had less than $13 million in liquidity at the end of Q1, and it needs to raise more money just to stay alive. But it's also made real progress: automated production lines, improved battery performance, and the ability to manufacture in the U.S., tariff-free. It even reached break-even margins on an older product last year — a rare thing in this space.
All that said, this is not a core holding. It’s a $500 flyer on a vision I believe in: a world that needs clean, reliable, long-duration energy storage, built with abundant materials, by American hands. If ESS can make that vision real — even a little — the upside could be massive. If not? I’ll lose a small bet.
And that’s a trade I’m willing to make.
What ESS Does — and Why It Might Matter
ESS is based in Wilsonville, Oregon, a quiet suburb just outside Portland. But the problem they’re trying to solve is anything but small: how to store clean electricity for hours at a time — safely, affordably, and at massive scale.
Their technology is called an iron flow battery. It’s built using iron, salt, and water, which makes it non-toxic, non-flammable, and fully recyclable. Unlike lithium-ion batteries, which tend to degrade over time and carry a risk of overheating or fire, ESS batteries can run for 25+ years with zero capacity fade. They’re also safer to install near homes, businesses, and critical infrastructure.
Over the years, ESS has developed three core products. The Energy Warehouse was their first commercial system — a containerized unit designed for behind-the-meter use, ideal for pilot projects or small-scale grid support.
Then came the Energy Center, a larger solution aimed at utility and front-of-the-meter applications. And now, they’ve launched their most ambitious product yet: the Energy Base. It’s a fully modular, scalable platform designed to deliver 10 to 22 hours of energy storage, making it a natural fit for AI data centers, utilities, and renewable projects that need reliable power even when the sun isn’t shining or the wind isn’t blowing.
Each product builds on the same core tech — but Energy Base is where the company sees the future.
Energy Base.
This is ESS’s next-generation platform. It uses the same iron flow battery modules, but it’s designed to be infinitely scalable. Instead of squeezing the system into shipping containers, the Energy Base breaks out the components — tanks, pumps, and power modules — and configures them to fit whatever the site needs. It’s a kit, not a box. And that shift in design lets them go from 5 megawatts to 100+ megawatts of storage, with 10 to 22 hours of duration.
Why does that matter? Because grid-scale renewables — like wind and solar — don’t generate power when you need it. They generate power when they can. If you want to build a power system that’s both clean and dependable, you need batteries that can shift massive amounts of energy from when it's generated to when it’s needed. Not for minutes. Not even for four hours. But for ten, twelve, maybe twenty hours. Lithium struggles with that. ESS is aiming straight at it.
Their target customers are the ones who feel the crunch of this problem every day:
They’ve already delivered systems to utilities like Portland General Electric, and they’ve signed on big-name collaborators like Honeywell, who is both an investor and a design partner helping them improve efficiency, sourcing, and scale.
The story here isn’t just about a better battery. It’s about who they’re building for — and how critical that customer base is becoming in the age of electrification and AI.
A Company Under Pressure - But Maybe Turning the Corner?
Let’s not sugarcoat it — ESS has been on the ropes. Earlier this year, they warned that without new capital, they might have to shut down operations altogether. That’s the reality of being a small hardware company trying to scale in an industry that eats money fast and rewards results slowly.
But just when it looked like the lights might go out, the company pulled in enough unexpected funding to keep the factory humming — at least for now. Their Wilsonville facility is still open, and a second automated production line is being commissioned for launch later this year. Once it's up and running, it’ll triple labor productivity and make it easier for ESS to fulfill big orders without blowing through cash.
They’re also moving in a more capital-efficient direction. The old Energy Warehouse required ESS to build and ship full systems — containers, tanks, everything. That tied up a lot of money and space. With Energy Base, they’re focusing only on the core components — the batteries, pumps, and modules — while third-party vendors supply the rest. This lightens their balance sheet and speeds up deployment. It also shifts more cost to the customer, which helps ESS protect margins.
And speaking of margins — here’s something rare for a company at this stage: their older product actually reached breakeven gross margin in Q4 of last year. That tells me they’re learning, improving, and bringing costs down with every build. Even better, most of those cost improvements — like redesigned electrodes, cheaper electrolytes, and simplified supply chains — are now being carried over to the Energy Base.
They’ve also started to build a real moat around their tech. Their proprietary “Proton Pump” solves a key problem in iron flow batteries — keeping the electrolyte balanced and efficient over long periods. That’s helped extend battery life and avoid the kind of performance fade that plagues other designs.
Still, none of this changes the big picture: ESS needs customers, contracts, and capital. Fast. They have momentum, but it’s fragile. If they can close major deals — especially in the data center world — and prove the Energy Base works at scale, the stock could re-rate in a big way. If not, they’ll either dilute shareholders with another funding round… or worse.
But at least now, the technology is proven, the manufacturing is improving, and the story is aligned with one of the biggest megatrends of the decade: the race to build a new power grid for a data-driven world.
Powering the Machines That Power Everything
If you want to understand where electricity demand is going, look no further than the rise of data centers — especially those being built to power AI.
These facilities are growing like wildfire, and they’re energy hogs. In 2023, U.S. data centers used 4.4% of all electricity. By 2028, that number could triple to 12%. The growth is so fast that some grid operators are turning down new projects — not because they don't want the business, but because they physically can't supply enough power.
That’s where long-duration storage comes in.
Data centers aren’t just big — they’re mission-critical. A power outage doesn’t just flicker the lights. It can crash entire platforms, wipe out computing jobs, or cause millions in downtime losses. In fact, 54% of all major data center outages last year were caused by power disruptions — more than IT failures, network issues, or cooling combined.
ESS sees an opening here.
Their Energy Base platform is being pitched as a smarter, safer alternative to gas generators and long strings of lithium-ion batteries. Unlike diesel or nat gas backup, ESS batteries are quiet, clean, and can be placed right next to the data center without zoning issues. Unlike lithium, they don’t degrade over time, can discharge for 10 to 22 hours, and have no risk of fire.
They’re also modular and quick to deploy — a key advantage when hyperscalers are racing to build new facilities in places where the grid hasn’t caught up.
The idea is simple: pair solar or wind generation with an ESS Energy Base, and you get green baseload power on-site, with the flexibility to cycle as needed and the safety to operate 24/7. Whether you're Microsoft, Amazon, or a fast-scaling AI startup, that's an offer worth looking at.
If ESS can close even a few contracts in this space, it could be a game-changer.
Not Lithium — and That’s the Point. Why ESS Batteries Might Be the Better Fit for the Next Grid
Let’s be honest: lithium-ion owns the energy storage market right now. It’s mature, mass-produced, and backed by massive supply chains. But it’s not perfect — and ESS is betting that the cracks are starting to show.
Lithium batteries degrade with time. Even when used within warranty, they tend to lose 2%+ of capacity every year, which means you’re constantly replacing, rebalancing, or “augmenting” them to keep performance steady. ESS batteries, by contrast, can cycle unlimited times with zero capacity fade — which means fewer headaches and lower lifetime cost.
Lithium is also flammable. That’s why so many projects require special spacing, cooling systems, or safety permits. ESS batteries use water-based electrolytes. There’s no thermal runaway, no risk of explosion, and no need to engineer a bunker just to house them.
Then there’s depth of discharge. Most lithium systems only allow for 80–90% usage before performance starts to suffer. ESS batteries can be fully drained, daily, with no damage. That might sound minor, but over the life of a system, it can mean tens of thousands of dollars in extra usable energy.
And finally — cost. Lithium-ion is still cheaper upfront, thanks to decades of mass production, global supply chains, and scale efficiencies. But that’s only part of the story. Once you factor in tariffs, capacity degradation, and the extra spend on safety systems, the real cost of ownership is climbing. Meanwhile, ESS is working to bring its own costs down — not just through cheaper, earth-abundant materials like iron, salt, and water, but also with better manufacturing, smarter design, and domestic sourcing that qualifies for U.S. tax credits. The upfront gap may still exist today, but over the full life of the system, iron flow could prove to be the more economical and reliable choice.
This isn’t about replacing lithium across the board. It’s about using the right battery for the job. Lithium will always win for EVs and short-term storage. But for grid-scale projects, data centers, and anything needing 10+ hours of power, iron flow might be the better tool.
Made in America - Policy Tailwinds and a Strategic Advantage
There’s another reason I’m watching ESS closely: the geopolitical energy shift is real, and ESS is one of the few companies positioned squarely on the right side of it.
Right now, most lithium-ion batteries are made in China — or with Chinese-controlled materials. That’s become a problem for both economic and national security reasons. In response, the U.S. has started slapping on tariffs north of 40% for non-EV lithium batteries imported from China. And more restrictions are coming, especially around “foreign entities of concern.”
ESS doesn’t have that problem.
Their batteries are built with iron, salt, and water — all readily available, low-risk materials. Their components are manufactured in Oregon, with plans to expand domestic capacity. That means they qualify for U.S. tax credits, dodge import tariffs, and aren’t exposed to the same supply chain risks.
They also benefit from the 45X Production Tax Credit, which gives incentives for building clean energy components in America. These credits don’t just help ESS financially — they help their customers too, which could make their offering more attractive when competing for utility and government-backed projects.
Add in the fact that many states — like New York and California — are pushing forward with their own long-duration storage mandates regardless of federal politics, and you get a policy environment that quietly favors companies like ESS.
It’s rare for a micro-cap to be aligned with such massive policy and market forces. But that’s exactly where ESS finds itself — for now.
Financials
ESS isn’t a revenue story — not yet. It’s still early days. In 2023, the company generated $7.5 million in revenue, followed by $6.3 million in 2024. For Q1 2025, revenue came in at just $599,000, a sharp drop from the $2.7 million reported in the same quarter last year. Most of that came from final deliveries of the older Energy Center product. The new Energy Base platform — where the company’s future is focused — hasn’t started generating meaningful revenue yet, though management says larger contracts are in the pipeline.
ESS posted a net loss of $18 million in the first quarter — roughly flat year-over-year — but the company has made notable progress on cost control. Operating expenses are down 10%, and the Energy Center platform reached gross margin breakeven in Q4 of last year, showing that production efficiencies are improving. More importantly, the company has cut its monthly cash burn by 80% as of June, a major milestone in its strategic pivot.
On July 11, ESS announced a $31 million insider-led funding package to help stabilize operations and buy time. The package includes loans and warrant participation from board members and insiders, a production tax credit sale, an equipment leaseback for $4 million in cash, and a standby equity agreement allowing ESS to raise up to $25 million over the next three years. Directors have also waived their 2025 compensation — a strong vote of internal confidence.
And there’s more good news: the company also secured its first Energy Base order — an 8 MWh project — and is reporting a nearly 300% increase in Q2 revenue, along with lower operating costs, improved margins, and a 43% improvement in net loss, based on preliminary results. It’s still early, but it’s a big step in the right direction.
Of course, the core risk remains: cash. As of the end of Q1, ESS had just $12.8 million in liquidity, and even with the recent funding boost, it will likely need to raise more capital to fully execute its plan. The company is chasing large Energy Base contracts — and if those start to land, the second half of the year could look very different.
So again: this is not a safe stock. It’s a micro-cap with lumpy revenues, negative cash flow, and a need for more funding. But if ESS can continue cutting costs, signing deals, and proving the value of its battery tech — the upside could be substantial.
That’s why I'm only staking a small sum for now.
Waiting, Watching, and Getting Paid
It’s now been just over two years since I launched Trendpost in May 2023 — and in that time, I’ve spent a lot of energy waiting for the crash that never came.
For most of 2023, I sat on a large cash position — sometimes as high as 80% — expecting a bigger correction that never really materialized. But markets have a way of humbling those who try to time them, and somewhere along the way, I stopped waiting. I adapted, and began shifting my strategy toward income generation while still keeping a defensive posture.
That shift has paid off. Over the past year, I’ve built a more stable, income-producing portfolio that’s done well over the last six months. I rotated into large-cap names, monthly income ETFs, and dividend-focused strategies — all while letting my cash position gradually fall to about 50% today. And while I’m not eager to go much lower, I’m comfortable letting it drop to around 45% — but only if we see a major market pullback.
I won’t pretend to know when the next correction is coming. But I do know where I want to be positioned when it does.
Over the past year, I’ve leaned into sectors I believe are underappreciated or misunderstood:
And then there’s what I call the 10x zone — the part of the portfolio reserved for asymmetric moonshots. Right now, that focus is squarely on energy and electricity. AI and robots are getting all the headlines, but I believe that by 2026, the conversation will shift. Everyone will be talking about electricity demand. The infrastructure needed to power this next era is still being built — and I want to be ahead of that curve.
Over the next few months, I’ll be focusing on wealth compounders — companies with strong balance sheets, no debt, fat gross margins, solid cash flow, and management teams that actually know how to allocate capital. I think I’ve found one. It checks all the boxes — and I plan to add it to the portfolio soon.
Until then, stay tuned. Be patient. The real move is coming.
Trendpost Portfolio Holdings
| HOLDING | EXPOSURE/PURPOSE |
| Cash | Over 55% of portfolio in money market ETFs and GICs. Not going below 45%. Dry powder for volatility. |
| EQT | Direct exposure to U.S. natural gas. |
| ENCC.TO | ETF: 10%+ yield, monthly income. Energy sector exposure. |
| BASE.TO | ETF: 10%+ yield, monthly income. Exposure to base metals like copper and steel. |
| SILJ | ETF: Exposure to junior silver miners. |
| ARG.TO | Amerigo Resources — copper exposure. 6% yield. |
| WCP.TO | Whitecap Resources — Canadian oil and gas. 8% yield. |
| LIF.TO | Labrador Iron Ore Royalty — exposure to iron, a foundational material. 7% yield. |
| NB | NIOCORP - Early-stage U.S. miner with exposure to niobium, scandium, and rare earths. Not yet in production. |
| ETHY.TO | ETF: 18%+ yield, monthly income. Ethereum exposure. |
| BTCY.TO | ETF: 9%+ yield, monthly income. Bitcoin exposure. |
| ZWEN.TO | ETF: 10+ yield, monthly income. Large-cap global energy companies. More energy exposure. |
| ALAB | Exposure to the AI boom. |
| RMBS | Exposure to the AI boom. |
| SHLS | Exposure to energy transition (solar) and a potential play on the surge in electricity demand driven by AI and data centers. |
| GWH | A potential play on the surge in electricity demand driven by AI and data centers. |
Remember that the content of this newsletter is neither a stock recommendation nor investment advice. This is just something to consider. You can access my watchlist and portfolio through the link below. By clicking the link below you accept all responsibility for any potential losses that might result from buying any of the stocks mentioned in this newsletter.