SES AI Corp 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ​ Report of Independent Registered Public Accounting Firm (Grant Thornton LLP, PCAOB ID Number 248 ) 45 Report of Independent Registered Public Accounting Firm (KPMG LLP, PCAOB ID Number 185 ) 49 Consolidated Balance Sheets as of December 31, 2023 and 2022 50 Consolidated Statements of Operations and Comprehensive Loss for the Years ended December 31, 2023, 2022 and 2021 51 Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the Years ended December 31, 2023, 2022 and 2021 52 Consolidated Statements of Cash Flows for the Years ended December 31, 2023, 2022 and 2021 53 Notes to Consolidated Financial Statements 54 ​ ​ ​ 44 Table of Contents Report of Independent Registered Public Accounting Firm ​ Board of Directors and Shareholders SES AI Corporation ​ Opinion on the financial statements We have audited the accompanying consolidated balance sheets of SES AI Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 27, 2024 expressed an adverse opinion. ​ Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ​ Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. ​ Valuation of Sponsor Earn-Out Liabilities As described further in Notes 2 and 11 to the consolidated financial statements, the Company has issued Sponsor Earn-Out Shares that are accounted for as a derivative liability (the “Sponsor Earn-Out Liabilities”) measured at fair value, with changes in fair value recorded in the consolidated statement of operations and comprehensive loss each reporting period. The fair value of the Sponsor Earn-Out Liabilities is estimated using a Monte Carlo simulation model. The fair value of the Sponsor Earn-Out Liabilities was determined to be $4,166,000 at December 31, 2023. The gain on change in fair value of Sponsor Earn-Out Liabilities was $6,795,000 for the year ended December 31, 2023. We identified the assessment of the fair value of the Sponsor Earn-Out Liabilities as a critical audit matter. The principal considerations for our determination that the valuation of the Sponsor Earn-Out Liabilities is a critical audit matter were (1) the high degree of subjective auditor judgment required due to the complex valuation model and volatility and expected term assumptions used in the determination of fair value; and (2) the specialized skills and knowledge required to evaluate the Company’s determination of the fair value of the Sponsor Earn-Out Liabilities. Our audit procedures related to the valuation of the Sponsor Earn-Out Liabilities included the following, among others. 45 Table of Contents ● We evaluated the peer group public companies used in the determination of volatility and the judgments and assumptions made by management in the determination of the expected term. ● With the assistance of our valuation specialists, we: o Evaluated the appropriateness of the Monte Carlo simulation model. o Performed independent calculations of volatility using peer group public companies’ data and comparing to volatility assumptions utilized in management’s estimate. o Performed an independent calculation of the fair value using management’s assumptions and comparing to the fair value of the Sponsor Earn-Out Liabilities determined by the Company. /s/ GRANT THORNTON LLP ​ We have served as the Company’s auditor since 2023. ​ Boston, Massachusetts February 27, 2024 ​ 46 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors SES AI Corporation: Opinion on internal control over financial reporting We have audited the internal control over financial reporting of SES AI Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, because of the effect of the material weaknesses described in the following paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. ​ A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in management’s assessment. ​ The Company did not design and maintain sufficient user access and monitoring controls to ensure appropriate segregation of duties and adequately restrict access to a financial application. In addition, a management review control associated with the valuation of the sponsor earn-out liability did not operate effectively as it did not evaluate a key assumption used in the valuation at an appropriate level of precision. ​ We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2023. The material weaknesses identified above were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and this report does not affect our report dated February 27, 2024 which expressed an unqualified opinion on those financial statements. ​ Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Controls over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ​ Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 47 Table of Contents ​ Other information We do not express an opinion or any other form of assurance on the remediation plans or related actions described in Management’s Annual Report on Internal Controls Over Financial Reporting. /s/ GRANT THORNTON LLP ​ Boston, Massachusetts February 27, 2024 ​ ​ ​ 48 Table of Contents ​ Report of Independent Registered Public Accounting Firm ​ To the Stockholders and Board of Directors SES AI Corporation: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of SES AI Corporation and subsidiaries (the Company) as of December 31, 2022, the related consolidated statements of operations and comprehensive loss, redeemable convertible preferred stock and stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. ​ /s/ KPMG LLP We served as the Company’s auditor from 2021 to 2023. Boston, Massachusetts March 16, 2023 ​ ​ ​ 49 Table of Contents SES AI Corporation Consolidated Balance Sheet s ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except share and per share amounts) ​ December 31, 2023 December 31, 2022 Assets ​ ​ ​ Current Assets ​ ​ ​ Cash and cash equivalents ​ $ 85,671 ​ $ 106,623 Short-term investments ​ ​ 246,775 ​ ​ 283,460 Receivable from related party ​ ​ 3,911 ​ ​ 2,383 Inventories ​ ​ 558 ​ ​ 383 Prepaid expenses and other assets ​ 11,712 ​ 3,792 Total current assets ​ 348,627 ​ 396,641 Property and equipment, net ​ 37,959 ​ 27,756 Intangible assets, net ​ 1,345 ​ 1,473 Right-of-use assets, net ​ ​ 13,099 ​ ​ 11,363 Deferred tax assets ​ ​ 1,057 ​ ​ — Other assets, non-current ​ 4,723 ​ 3,206 Total assets ​ $ 406,810 ​ $ 440,439 Liabilities and Stockholders’ Equity ​ ​ Current Liabilities ​ ​ Accounts payable ​ $ 4,830 ​ $ 6,187 Operating lease liabilities ​ ​ 2,404 ​ ​ 1,899 Accrued expenses and other liabilities ​ 13,121 ​ 11,271 Total current liabilities ​ 20,355 ​ 19,357 Sponsor Earn-Out liabilities ​ ​ 4,166 ​ ​ 10,961 Operating lease liabilities, non-current ​ ​ 11,316 ​ ​ 10,165 Unearned government grant ​ ​ 9,270 ​ ​ 6,657 Other liabilities, non-current ​ 2,753 ​ 1,760 Total liabilities ​ ​ 47,860 ​ ​ 48,900 Commitments and contingencies (Note 14) ​ ​ Stockholders’ Equity ​ ​ Preferred stock, $ 0.0001 par value; 20,000,000 shares authorized, none issued and outstanding as of December 31, 2023 and 2022, respectively ​ ​ — ​ ​ — Common stock: Class A shares, $ 0.0001 par value, 2,100,000,000 shares authorized; 310,266,922 and 305,833,589 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively; Class B shares, $ 0.0001 par value, 200,000,000 shares authorized; 43,881,251 shares issued and outstanding as of December 31, 2023 and December 31, 2022 ​ ​ 35 ​ ​ 35 Additional paid-in capital ​ 559,214 ​ 538,041 Accumulated deficit ​ ( 198,686 ) ​ ( 145,286 ) Accumulated other comprehensive loss ​ ( 1,613 ) ​ ( 1,251 ) Total stockholders' equity ​ 358,950 ​ 391,539 Total liabilities and stockholders' equity ​ $ 406,810 ​ $ 440,439 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 50 Table of Contents SES AI Corporation Consolidated Statements of Operations and Comprehensive Loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands, except share and per share amounts) ​ 2023 2022 2021 Operating expenses: ​ ​ ​ ​ ​ Research and development ​ $ 30,675 ​ $ 27,967 ​ $ 15,514 General and administrative ​ 47,483 ​ 51,606 ​ 16,492 Total operating expenses ​ 78,158 ​ 79,573 ​ 32,006 Loss from operations ​ ( 78,158 ) ​ ( 79,573 ) ​ ( 32,006 ) Other income (expense): ​ ​ ​ Interest income ​ ​ 16,685 ​ ​ 6,196 ​ ​ 248 Gain on change in fair value of Sponsor Earn-Out liabilities ​ ​ 6,795 ​ ​ 25,432 ​ ​ — Miscellaneous income (expense), net ​ ​ 425 ​ ​ ( 1,793 ) ​ ​ ( 312 ) Gain on forgiveness of PPP note ​ ​ — ​ ​ — ​ ​ 840 Total other income, net ​ 23,905 ​ 29,835 ​ 776 Loss before income taxes ​ ( 54,253 ) ​ ( 49,738 ) ​ ( 31,230 ) Benefit (provision) from income taxes ​ 853 ​ ( 1,255 ) ​ ( 25 ) Net loss ​ ​ ( 53,400 ) ​ ( 50,993 ) ​ ( 31,255 ) Other comprehensive (loss) income, net of tax: ​ ​ ​ Foreign currency translation adjustment ​ ( 937 ) ​ ( 1,373 ) ​ 234 Unrealized gain (loss) on short-term investments ​ ​ 575 ​ ​ ( 245 ) ​ ​ — Total other comprehensive (loss) income, net of tax ​ ​ ( 362 ) ​ ​ ( 1,618 ) ​ ​ 234 Total comprehensive loss ​ $ ( 53,762 ) ​ $ ( 52,611 ) ​ $ ( 31,021 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share attributable to common stockholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ $ ( 0.17 ) ​ $ ( 0.18 ) ​ $ ( 0.51 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic and diluted ​ 315,051,508 ​ 288,304,750 ​ 61,089,065 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 51 Table of Contents SES AI Corporation Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Redeemable Convertible ​ Class A and Class B ​ ​ ​ ​ ​ ​ ​ Accumulated ​ Total ​ Preferred Stock ​ Common Stock ​ Additional ​ Accumulated ​ Other Comprehensive ​ Stockholders’ (in thousands, except share and per share amounts) Shares Amount Shares Amount Paid-in-Capital Deficit Income (Loss) Equity Balance – December 31, 2020 174,994,140 ​ 82,044 ​ 60,781,975 ​ 6 ​ 830 ​ ( 63,038 ) ​ 133 ​ ( 62,069 ) Issuance of Series D and Series D plus redeemable convertible preferred stock, net of issuance costs of $ 608 38,966,146 ​ ​ 187,897 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Issuance of common stock upon exercise of stock options — ​ ​ — ​ 1,360,960 ​ ​ — ​ ​ 197 ​ ​ — ​ ​ — ​ ​ 197 Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 4,571 ​ ​ — ​ ​ — ​ ​ 4,571 Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 31,255 ) ​ ​ — ​ ​ ( 31,255 ) Foreign currency translation adjustments — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 234 ​ ​ 234 Balance – December 31, 2021 213,960,286 $ 269,941 ​ 62,142,935 $ 6 $ 5,598 $ ( 94,293 ) $ 367 $ ( 88,322 ) Conversion of redeemable convertible preferred stock to common stock in connection with reverse recapitalization upon Business Combination ( 213,960,286 ) ​ ​ ( 269,941 ) ​ 213,960,286 ​ ​ 21 ​ ​ 269,920 ​ ​ — ​ ​ — ​ ​ 269,941 Business Combination and PIPE Financing, net of redemptions and transaction costs (1) — ​ ​ — ​ 71,767,824 ​ ​ 7 ​ ​ 234,514 ​ ​ — ​ ​ — ​ ​ 234,521 Post close adjustment of transaction costs related to Business Combination and PIPE Financing — ​ ​ — ​ — ​ ​ — ​ ​ 4,905 ​ ​ — ​ ​ — ​ ​ 4,905 Issuance of common stock upon exercise of stock options — ​ ​ — ​ 2,089,351 ​ ​ 1 ​ ​ 329 ​ ​ — ​ ​ — ​ ​ 330 Restricted stock units vested — ​ ​ — ​ 185,944 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Forfeitures of Restricted Stock Awards — ​ ​ — ​ ( 44,495 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Forfeitures of Earn-Out restricted shares — ​ ​ — ​ ( 387,005 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 22,775 ​ ​ — ​ ​ — ​ ​ 22,775 Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 50,993 ) ​ ​ — ​ ​ ( 50,993 ) Foreign currency translation adjustments — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 1,373 ) ​ ​ ( 1,373 ) Unrealized loss on short-term investments — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 245 ) ​ ​ ( 245 ) Balance — December 31, 2022 — $ — ​ 349,714,840 $ 35 $ 538,041 $ ( 145,286 ) $ ( 1,251 ) $ 391,539 Issuance of common stock upon exercise of stock options — ​ ​ — ​ 3,691,340 ​ ​ — ​ ​ 524 ​ ​ — ​ ​ — ​ ​ 524 Restricted stock units vested — ​ ​ — ​ 1,063,863 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Forfeitures of Restricted Stock Awards — ​ ​ — ​ ( 10,824 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Forfeitures of Earn-Out restricted shares — ​ ​ — ​ ( 311,046 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Stock-based compensation — ​ ​ — ​ — ​ ​ — ​ ​ 20,649 ​ ​ — ​ ​ — ​ ​ 20,649 Net loss — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 53,400 ) ​ ​ — ​ ​ ( 53,400 ) Foreign currency translation adjustments — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 937 ) ​ ​ ( 937 ) Unrealized gain on short-term investments — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 575 ​ ​ 575 Balance — December 31, 2023 — $ — ​ 354,148,173 $ 35 $ 559,214 $ ( 198,686 ) $ ( 1,613 ) $ 358,950 (1) Includes issuance of 33,793,878 restricted shares of Class A common stock and 3,999,796 restricted shares of Class B common stock, subject to vesting. ​ The accompanying notes are an integral part of these consolidated financial statements. 52 Table of Contents SES AI Corporation Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 ​ 2022 2021 Cash Flows From Operating Activities ​ ​ ​ ​ Net loss $ ( 53,400 ) ​ $ ( 50,993 ) ​ $ ( 31,255 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ Gain on change of fair value of Sponsor Earn-Out liabilities ( 6,795 ) ​ ( 25,432 ) ​ — Stock-based compensation ​ 20,649 ​ ​ 22,775 ​ ​ 4,571 Depreciation and amortization ​ 5,541 ​ ​ 2,596 ​ ​ 1,662 Accretion income from available-for-sale short-term investments ​ ( 11,050 ) ​ ​ ( 2,350 ) ​ ​ — Other ​ ( 244 ) ​ ​ 490 ​ ​ 95 Gain on forgiveness of PPP note ​ — ​ ​ — ​ ​ ( 840 ) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Receivable from related party ( 1,528 ) ​ 5,525 ​ ( 7,910 ) Inventories ​ ( 184 ) ​ ​ ( 383 ) ​ ​ — Prepaid expenses and other assets ​ ( 8,170 ) ​ ​ ( 1,586 ) ​ ​ ( 1,666 ) Deferred tax assets ​ ( 1,057 ) ​ ​ — ​ ​ — Accounts payable ( 62 ) ​ ( 3,975 ) ​ 1,287 Accrued expenses and other liabilities ​ ( 112 ) ​ ​ 6,833 ​ ​ 4,065 Net cash used in operating activities ( 56,412 ) ​ ( 46,500 ) ​ ( 29,991 ) Cash Flows From Investing Activities ​ ​ ​ ​ ​ Purchases of property and equipment ( 15,763 ) ​ ( 14,654 ) ​ ( 8,951 ) Purchase of short-term investments ( 281,518 ) ​ ( 411,355 ) ​ ( 150,810 ) Proceeds from the maturities of short-term investments 330,000 ​ 130,000 ​ 163,101 Purchases of intangible assets — ​ — ​ ( 26 ) Net cash provided by (used in) investing activities 32,719 ​ ( 296,009 ) ​ 3,314 Cash Flows From Financing Activities ​ ​ ​ ​ ​ ​ ​ Proceeds from Business Combination and PIPE Financing, net of issuance costs ​ — ​ ​ 282,940 ​ ​ — Proceeds from government grant ​ 2,751 ​ ​ 6,657 ​ ​ — Proceeds from stock option exercises ​ 524 ​ ​ 330 ​ ​ 197 Proceeds from issuance of Series D and Series D plus redeemable convertible preferred stock, net of issuance costs — ​ — ​ 187,897 Payment of deferred offering costs ​ — ​ ​ — ​ ​ ( 3,334 ) Net cash provided by financing activities ​ 3,275 ​ ​ 289,927 ​ ​ 184,760 Effect of exchange rates on cash ( 552 ) ​ ( 526 ) ​ 233 Net (decrease) increase in cash, cash equivalents and restricted cash ( 20,970 ) ​ ( 53,108 ) ​ 158,316 Cash, cash equivalents and restricted cash at beginning of period (Note 5) 107,936 ​ 161,044 ​ 2,728 Cash, cash equivalents and restricted cash at end of period (Note 5) $ 86,966 ​ $ 107,936 ​ $ 161,044 ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental Cash and Non-Cash Information: ​ ​ ​ ​ ​ ​ ​ ​ Incomes taxes paid $ 222 ​ $ — ​ $ — Conversion of Redeemable Convertible Preferred Stock to shares of Class A common stock $ — ​ $ ( 269,941 ) ​ $ — Release of accrued transaction costs related to Business Combination and PIPE Financing $ — ​ $ 6,061 ​ $ — Accounts payable and accrued expenses related to purchases of property and equipment $ 6,008 ​ $ 4,349 ​ $ 378 Lease liabilities arising from obtaining right-of-use assets $ 3,808 ​ $ 1,547 ​ $ — Liabilities of Ivanhoe acquired in the Business Combination $ — ​ $ ( 387 ) ​ $ — Deferred offering costs included in accounts payable and accrued expenses and other liabilities $ — ​ $ — ​ $ 2,377 ​ The accompanying notes are an integral part of these consolidated financial statements. ​ 53 Table of Contents SES AI Corporation Notes to Consolidated Financial Statements ​ Note 1. Nature of Business SES AI Corporation, and consolidated subsidiaries (together the “Company”) consists of SES AI Corporation (“SES”) and its wholly-owned subsidiary SES Holdings Pte. Ltd. (“SES Holdings” or “Old SES”), along with its wholly owned subsidiaries SolidEnergy Systems, LLC (“SES LLC”), SES (Shanghai) Co., Ltd. (“SES Shanghai”), SolidEnergy Systems Securities Corporation (“SES Securities”), Viking Power Systems Pte. Ltd. (“SES Viking”), SES AI Korea Co., Ltd. (“SES Korea”) and SES Energy Pte. Ltd. (“SES Energy”). SES Holdings is a Singapore private company limited by shares formed in November 2018. SES LLC is a Delaware limited liability company formed in November 2018 as a result of the conversion from a corporation to a limited liability company by SolidEnergy Systems Corp, a Delaware corporation formed in April 2012. SES Shanghai was registered in Shanghai, China in August 2018. SES Securities was incorporated in December 2017 as a Massachusetts Security Corporation. SES Viking is a Singapore private company limited by shares and was formed in May 2019. SES Korea, formerly known as Massachusetts Solid Energy Co., Ltd., was registered in South Korea in November 2021. SES Energy is a Singapore private company and was incorporated in September 2022. The Company is engaged in the development of high-performance, Lithium-Metal (“Li-Metal”) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”) and other applications. The Company’s mission is to facilitate the widespread adoption of sustainable electric transportation, both on land and in air, by creating best-in-class, high energy density Li-Metal batteries centered around long-range performance and safety. The Company’s differentiated battery technology has been designed to combine the high energy density of Li-Metal with the cost-effective, large-scale manufacturability of conventional Lithium-ion (“Li-ion”) batteries which will help to promote the transition from the global dependence on fossil fuel-based automotive vehicles to clean and efficient EVs. The Company’s headquarter is located in Woburn, Massachusetts with research and development facilities located there, in Shanghai, China, and in Chungju, South Korea. Principal operations have not yet commenced as of December 31, 2023, and the Company has not derived revenue from its principal business activities. Prior to the closing of the Business Combination (the “Closing”), Ivanhoe Capital Acquisition Corp. (“Ivanhoe”), a Cayman Islands exempted company, migrated out of the Cayman Islands and domesticated as a Delaware corporation (the “Domestication”) and changed its name to “SES AI Corporation.” On February 3, 2022 (the “Closing Date”), SES AI Corporation, formerly known as Ivanhoe, and Wormhole Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares and a direct, wholly-owned subsidiary of Ivanhoe (“Amalgamation Sub”), consummated the previously announced Business Combination (the “Business Combination”) pursuant to which, among other things, Amalgamation Sub merged with and into Old SES, with Old SES surviving the Business Combination as a wholly-owned subsidiary of SES. See “Note 3 – Business Combination” for additional information. ​ Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and have been prepared on a going concern basis and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). The Company’s fiscal year ends on December 31 . Principles of Consolidation The consolidated financial statements include the accounts of SES and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of commitments and contingencies, and the reported amounts of revenues, if any, and expenses. The Company bases its estimates on available historical experience and on various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the 54 Table of Contents carrying values of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from those estimates. Significant estimates and assumptions include those related to the valuation of (i) certain equity awards, including common stock awards prior to the Business Combination, the Sponsor Earn-Out Shares, the Earn-Out Restricted Shares, and performance stock units, (ii) deferred tax assets and uncertain income tax positions, and (iii) the measurement of operating lease liabilities. On an ongoing basis, the Company evaluates these judgments and estimates for reasonableness. Foreign Currency Translation For the foreign subsidiaries of the Company, assets and liabilities are translated into U.S. dollars using exchange rates as of the balance sheet date, and income and expenses are translated using the average exchange rates in effect for the related month. The net effect of these translation adjustments is reported in accumulated other comprehensive (loss) income within total stockholders’ equity on the consolidated balance sheets. Net realized and unrealized gains (losses) from foreign currency transactions are included in miscellaneous income (expense), net in the consolidated statement of operations and comprehensive loss and were $ 0.3 million, $ 0.1 million, and $( 0.2 ) million for the years ended years ended December 31, 2023, 2022 and 2021, respectively. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments that have original maturity periods of 90 days or less at the time of purchase that are readily convertible to known amounts of cash. Restricted Cash Restricted cash includes cash held in checking and money market funds as collateral to secure certain insurance policies and a letter of credit for corporate lease activity. The letter of credit is required to be maintained throughout the term of the lease. If the date of availability or disbursement is less than one year, restricted cash is reported within prepaid expenses and other current assets on the consolidated balance sheets. If the date of availability or disbursement is longer than one year and the balances are maintained under an agreement that legally restricts the use of such funds, restricted cash is reported within other assets on the consolidated balance sheets. As of December 31, 2023, no amount has been drawn under the letter of credit. As of December 31, 2023 and 2022, the Company had restricted cash balances of $ 1.3 million, respectively. Investments The Company has investments in short-term marketable debt and marketable equity securities. Investments in marketable debt securities consist of U.S. treasury securities, are classified as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. These available-for-sale marketable securities are recorded at fair value, with any unrealized gains and losses included as a component of accumulated other comprehensive (loss) income in total stockholders’ equity on the consolidated balance sheets until realized or until a determination is made that an other-than-temporary decline in market value has occurred. The amortized cost of U.S. treasury securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are reported within interest income in the consolidated statement of operations and comprehensive loss. Investments in marketable debt securities with a stated maturity date of less than one year are classified as short-term investments, while these with a stated maturity date of more than one year, and that are not expected to be used in current operations, are classified as long-term investments on the consolidated balance sheet, respectively. Investments in marketable equity securities are classified as short-term investments when the Company’s intention is to sell within a year of purchase, otherwise they will be classified as long-term investments. Investments in marketable equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with changes to fair value reported within miscellaneous income (expense), net in the consolidated statements of operations and comprehensive loss. Inventories Inventories consist of raw materials and are stated at the lower of average cost or net realizable value. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and short-term investments. The Company seeks to mitigate its credit risk with respect to such concentrations by holding its deposits with 55 Table of Contents large, reputable, domestic financial institutions and investing in high credit rated shorter-term instruments. The account balances at these institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and as a result, there may be a concentration of risk related to amounts invested in excess of FDIC insurance coverage. As of December 31, 2023 and 2022, the amount of cash, cash equivalents and restricted cash held by our subsidiaries in foreign bank accounts was $ 11.1 million and $ 21.0 million, respectively. Fair Value Measurements Fair value is defined as an exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. GAAP establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: Level 1 Observable inputs such as quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Unobservable inputs in which there are little or no market data and which require the Company to develop its own assumptions. ​ 56 Table of Contents Certain of the Company’s financial instruments, including cash and cash equivalents, accounts payable, accrued expenses and other current liabilities are carried at cost, which approximates their fair value because of their short-term nature. The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Level 1 Level 2 Level 3 Total December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents in money market funds (Note 5) $ 74,997 ​ $ — ​ $ — ​ $ 74,997 U.S. treasury securities ​ 246,127 ​ ​ — ​ ​ — ​ ​ 246,127 Equity securities (1) ​ 648 ​ ​ — ​ ​ — ​ ​ 648 Total current assets at fair value $ 321,772 ​ $ — ​ $ — ​ $ 321,772 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash in money market funds $ 614 ​ $ — ​ $ — ​ $ 614 Total non-current assets at fair value $ 614 ​ $ — ​ $ — ​ $ 614 Total assets at fair value $ 322,386 ​ $ — ​ $ — ​ $ 322,386 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsor Earn-Out liabilities $ — ​ $ — ​ $ 4,166 ​ $ 4,166 Total non-current liabilities at fair value $ — ​ $ — ​ $ 4,166 ​ $ 4,166 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash equivalents in money market funds (Note 5) $ 46,308 ​ $ — ​ $ — ​ $ 46,308 U.S. treasury securities ​ 283,460 ​ ​ — ​ ​ — ​ ​ 283,460 Total current assets at fair value $ 329,768 ​ $ — ​ $ — ​ $ 329,768 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Restricted cash in money market funds $ 614 ​ $ — ​ $ — ​ $ 614 Total non-current assets at fair value $ 614 ​ $ — ​ $ — ​ $ 614 Total assets at fair value $ 330,382 ​ $ — ​ $ — ​ $ 330,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-current liabilities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sponsor Earn-Out liabilities $ — ​ $ — ​ $ 10,961 ​ $ 10,961 Total non-current liabilities at fair value $ — ​ $ — ​ $ 10,961 ​ $ 10,961 (1) Fair value was determined using publicly quoted market prices obtained from third-party sources in their respective markets. There were no transfers in or out of Level 3 measurements during the years ended December 31, 2023 and 2022. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation for property and equipment, other than construction in progress, is based upon the following useful lives using the straight-line method: ​ ​ ​ ​ Laboratory machinery and equipment 5 – 10 years Office and computer equipment 3 – 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term ​ The Company periodically assesses the useful lives of the assets to determine whether events or circumstances may indicate that a revision to the useful life is warranted. Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to placing the asset in service. Additionally, reimbursements received by the Company under its A-Sample joint development agreement (“JDA”) related to property and 57 Table of Contents equipment constructed and owned by the Company are recognized as a reduction of the cost of the related asset in the consolidated balance sheets as discussed in “Note 4 – Partnerships” below. Intangible Assets Intangible assets purchased are recorded at cost and stated at cost less accumulated amortization. Intangibles assets with finite useful lives are amortized based on the pattern in which the economic benefits of the assets are estimated to be consumed over the following estimated useful lives: ​ ​ ​ ​ Intellectual property 15 years ​ Amortization expense is included in general and administrative expenses in the consolidated statement of operations and comprehensive loss. Impairment of Long-Lived Assets The Company evaluates long-lived assets, including amortizable intangible assets and ROU assets, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such events or circumstances arise, the Company will compare the carrying amount of the asset group comprising the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the asset group. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the asset group, an impairment charge is recorded as the amount by which the carrying amount of the asset group exceeds the fair value of the assets, as based on the expected discounted future cash flows attributable to those assets. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. There were no impairments of long-lived assets during the years ended December 31, 2023, 2022 and 2021. Deferred Offering Costs Deferred offering costs consist of legal, accounting, and other costs incurred through the balance sheet date that are directly related to the Company becoming a publicly traded company are capitalized. Deferred offering costs were charged to stockholders’ equity upon the completion of the transaction. Leases The Company determines if an arrangement includes a lease at inception. Lease arrangements generally have lease and non-lease components, which the Company has elected to account for as a single lease component. At the lease commencement date, the Company recognizes an operating lease liability and an operating lease asset, which represents the right to use the underlying asset for the lease term (the “ROU asset”). The operating lease liability is equal to the present value of (1) fixed lease payments for the noncancelable lease term, (2) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (3) variable lease payments that depend on an underlying index or rate in effect at lease commencement. Variable lease payments as the difference between underlying index and the actual index, or that do not depend on an underlying index or rate in effect at lease commencement, such as common area maintenance, insurance, and property tax, are recognized in operating expenses when incurred. The operating ROU asset is initially measured at cost, which primarily comprises the initial amount of the lease liability and lease payments made prior to lease commencement, less any lease incentives received. As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The Company’s incremental borrowing rate estimates a secured rate that reflects the term of the lease, the nature of the underlying asset and the economic environment. The Company recognizes rent expense on a straight-line basis over the lease term, with any lease incentives amortized as a reduction of rent expense over the lease term. All ROU assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheets. See “Note 12 – Leases” for additional information about the Company’s leases. 58 Table of Contents Government Grants The Company occasionally receives government grants that provide financial assistance for certain eligible expenditures. Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to it, and that the grant will be received. The Company records such grants either as a reduction of the related expense or as other income, depending on the nature of the grant, in the consolidated statement of operations and comprehensive loss or as a reduction of the cost of the related asset in the consolidated balance sheet. If a grant amount is received but not earned, then such amount is deferred and shown as a liability in the consolidated balance sheet. See “Note 10 – Government Grant” for additional information about government grants awarded to the Company. Sponsor Earn-Out Liabilities On February 2, 2022, in connection with the Domestication, 6,900,000 of Ivanhoe’s Class B ordinary shares held by Ivanhoe Capital Sponsor LLC (the “Sponsor”) converted into an equal number of shares of duly authorized, validly issued, fully paid and nonassessable Class B common stock, par value $ 0.0001 per share (the “Class B common stock”), of the Company. At Closing, these 6,900,000 shares of Class B common stock converted into an equal number of shares of duly authorized, validly issued, fully paid and nonassessable Class A common stock, par value $ 0.0001 per share (the “Class A common stock,” and together with the Class B common stock, “common stock”), of the Company (the “Sponsor Earn-Out Shares”) . These Sponsor Earn-Out Shares are subject to certain transfer restrictions and forfeiture terms following the Closing, which will be released as follows: ● 20 % are subject to transfer restrictions until the date that is 180 days after the Closing (“Tranche 1”); ● 20 % are subject to transfer restrictions until SES’s closing stock price equals or exceeds $ 12.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 2”); ● 20 % are subject to transfer restrictions until SES’s closing stock price equals or exceeds $ 14.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 3”); ● 20 % are subject to transfer restrictions until SES’s closing stock price equals or exceeds $ 16.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 4”); and ● 20 % are subject to transfer restrictions until SES’s closing stock price equals or exceeds $ 18.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 5”). ​ If there is a change in control of SES at a per share value of greater than $ 18.00 , then 100 % of the Sponsor Earn-Out Shares will be released from these transfer restrictions; however if the per share value is less than $ 18.00 upon a change in control, then the Sponsor Earn-Out Shares will be released pro rata based on the per share value of the change in control and the stock price thresholds for release specified above. Any Sponsor Earn-Out Shares not released will be forfeited and cancelled. The Sponsor Earn-Out Shares in Tranche 1 are accounted for as equity instruments because they are legally owned by the Sponsor, cannot be forfeited and were subject only to transfer restrictions that lapsed 180 days after the Closing Date, which occurred on August 2, 2022, and as such meet the equity classification criteria in accordance with ASC 505, Equity . The Sponsor Earn-Out Shares under Tranche 2 through Tranche 5 are accounted for as a derivative liability measured at fair value , with changes in fair value reported within other expense, net on the consolidated statement of operations and comprehensive loss at each reporting period, because the earn-out triggering events that determine the number of Sponsor Earn-Out Shares to be earned back by the Sponsor include events that are not solely indexed to the shares of Class A common stock. As of December 31, 2023, the earn-out triggering events were not achieved for any of Tranche 2 through Tranche 5. See “Note 11 – Sponsor Earn-Out Liabilities” for further information on fair value. Earn-Out Shares In connection with the Business Combination, holders of Old SES common stock, redeemable convertible preferred stock, options and restricted shares received 29,999,947 earn-out shares of common stock, including (i) 23,691,182 shares of Class A common stock (the “Earn-Out Shares”) issued for the benefit of the former holders of Old SES common and redeemable convertible preferred stock; (ii) 2,308,969 shares of restricted Class A common stock (the “Earn-Out Restricted Shares”) issued to Old SES option holders and pre-Closing recipients of Old SES restricted shares; and (iii) 3,999,796 shares of Class B common stock (“Founder Earn-Out Shares”) issued to the CEO and certain entities affiliated with the CEO (the “SES Founder Group”). 59 Table of Contents The Earn-Out Shares and the Founder Earn-Out Shares (collectively, the “Escrowed Earn-Out Shares”) were placed into escrow at the Closing and shall vest on the date that the closing price of shares of Class A common stock is equal to or greater than $ 18.00 (“Triggering Event”) during the period beginning on the date that is one year following the Closing and ending on the date that is five years following the Closing (the “Earn-Out Period”). If a Triggering Event has not occurred by the expiration of the Earn-Out Period, then the Escrowed Earn-Out Shares shall be cancelled, and holders of such shares shall have no right to receive such Escrowed Earn-Out Shares. The Earn-Out Restricted Shares are subject to vesting based on the same terms as the Escrowed Earn-Out Shares and are also subject to forfeiture if such recipient’s service with the Company terminates prior to vesting. Any such forfeited Earn-Out Restricted Shares shall be available for grant pursuant to the Company’s incentive plan. If, during the earn-out period of five years , there is a change in control transaction at a per share price of greater than or equal to $ 18.00 per share, then all 29,999,947 earn-out shares will vest immediately prior to the consummation of such change in control, otherwise, all earn-out shares will be forfeited. The Escrowed Earn-Out Shares to be released upon achievement of the vesting condition are classified as equity instruments and recorded at fair value in stockholders’ equity as vesting is indexed to the common stock of the Company. The Earn-Out Restricted Shares are accounted for as a single tranche equity award. See “Note 17 – Stock-Based Compensation” for further information on fair value of the Earn-Out Restricted Shares . Common Stock Warrants Prior to the Business Combination, Ivanhoe had issued 9,200,000 public warrants (“Public Warrants”) and 5,013,333 private placement warrants (“Private Warrants” and collectively with the Public Warrants, the “Warrants”) which were assumed by the Company at Closing. On February 1, 2022, prior to Closing, the Ivanhoe warrant holders approved certain amendments to the terms of the Warrants such that the Warrants met the derivative scope exception for contracts in the Company’s own stock and were recorded in stockholders’ equity. Prior to the amendment, the Warrants were accounted for as derivative liabilities measured at fair value, with changes in fair value recorded in the consolidated statement of operations and comprehensive loss at each reporting period. Each whole Warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 per share. Pursuant to the Warrant agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of Class A common stock. This means only a whole Warrant may be exercised at a given time by a warrant holder. The amendments, among other things, include the following: ● amendments to the rights specific to the Private Warrants such that (a) the rights specific to Private Warrants are retained by the holder thereof regardless of such holder’s identity, (b) the Private Warrants are no longer subject to redemption by the Company when such warrants are trading at a price equal to or in excess of $ 10.00 per share but less than $ 18.00 per share and (c) the Private Warrants are no longer generally exercisable on a “cashless basis”; ● eliminates the Company’s ability to redeem any Public Warrants unless the Class A common stock is trading at a price equal to or in excess of $ 18.00 per share; and ● removes certain language related to the treatment of Warrants in the event of a tender offer for the shares underlying such Warrants. Subsequent to the Closing, the Company registered 14,213,280 shares of Class A common stock issuable upon the exercise of the Warrants . Redeemable Convertible Preferred Stock The Company records all shares of redeemable convertible preferred stock at their respective fair values less issuance costs on the dates of issuance. Upon closing of the Business Combination, the redeemable convertible preferred shares were cancelled and converted into shares of Class A common stock, as discussed in “Note 3 – Business Combination.” Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating and reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. See “Note 20 – Segment and Geographic Information” for additional information . 60 Table of Contents Research and Development Costs Research and development costs with no alternative future use are expensed as incurred. Research and development costs are comprised of expenses incurred in performing research and development activities, including compensation and benefits for employees, materials and supplies, payments to consultants, patent related legal costs, facility costs, depreciation, and travel expenses. Additionally, payments received by the Company under its JDAs are recognized as a reduction to research and development expense in the consolidated statement of operations and comprehensive loss. Stock-Based Compensation The Company measures compensation expense for all stock-based awards made to employees, directors, and non-employees, based on estimated fair values as of the grant date and recognizes the compensation expense using the straight-line method over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures when they occur. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. The inputs used in valuation models to estimate the fair value of certain stock-based awards are subjective and generally require significant analysis and judgment to develop. See “Note 17 – Stock-Based Compensation” for additional information about stock-based awards. Income Taxes Income tax expense has been provided using the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts and tax bases of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax asset and liability. The Company provides a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that the deferred tax assets will not be realized. In evaluating the Company’s ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including historical operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Company’s consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related income tax liability within accrued expenses and other current liabilities on the consolidated balance sheets. Other Comprehensive Income (Loss) Other Comprehensive income (loss) includes changes in the balances of items that are reported directly as a separate component of stockholders’ equity on the consolidated balance sheets. The components of comprehensive loss are net loss, foreign currency translation adjustments and unrealized gains and losses from available-for-sale marketable debt securities. The Company does not provide for income taxes on foreign currency translation adjustments since it does not provide for taxes on the unremitted earnings of its foreign subsidiaries. The tax effects of unrealized gains and loss from available-for-sale marketable debt securities is recorded in deferred tax assets (liabilities) and fully offset by the valuation allowance. The changes in accumulated other comprehensive income (loss) are included in the Company’s consolidated statement of operations and comprehensive loss. Net Income (Loss) Per Share Upon recapitalization, net loss per share calculations for all periods prior to the Business Combination have been retrospectively restated to the equivalent number of shares by multiplying by 5.9328 (the “Exchange Ratio) established in the Business Combination, including the issuance of Class A common stock and Class B common stock to Old SES common stockholders. Under the two-class method, the net loss attributable to common stockholders was not allocated to the redeemable convertible preferred stock as the holders of its redeemable convertible preferred stock do not have a contractual obligation to share in the Company’s losses. As the liquidation and dividend rights of Class A common stock and Class B common stock are identical, the net loss attributable to common stockholders is allocated on a proportionate basis, and the resulting net loss per share is identical for Class A common stock and Class B common stock under the two-class method. 61 Table of Contents Basic net income or loss per share attributable to Class A common stock and Class B common stock stockholders is computed by dividing the net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The diluted net income or loss per share attributable to common stockholders is calculated by giving effect to all potentially dilutive common stock equivalents outstanding during the period. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-7, Improvements to Reportable Segment Disclosures , which requires disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. We are currently evaluating the provisions and impact this ASU will have when adopted for the year ended December 31, 2024 and anticipate it will likely result in inclusion of additional required disclosures in our consolidated financial statements. ​ In December 2023, the FASB issued ASU 2023-9, Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. We are currently evaluating the impact this ASU will have when adopted and anticipate this ASU will likely result in the required additional disclosures being included in our consolidated financial statements. ​ The Company has reviewed all other accounting pronouncements issued during the year ended December 31, 2023 and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements. ​ Note 3. Business Combination On February 3, 2022, SES consummated the previously discussed business combination. The Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, SES, formerly known as Ivanhoe, was treated as the “acquired” company for financial reporting purposes. Accordingly, the financial statements of the Company represent a continuation of the financial statements of Old SES with the Business Combination treated as the equivalent of Old SES issuing stock for the net assets of Ivanhoe, accompanied by a recapitalization. The net assets of Ivanhoe are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Old SES. As a result, the consolidated financial statements included in this report reflect (i) the historical operating results of Old SES prior to the Business Combination; (ii) the combined results of SES and Old SES following the Closing; (iii) the assets and liabilities of Old SES at their historical cost; and (iv) SES’s equity structure for all periods presented as discussed below. At Closing, the following occurred: ● Each share of Old SES common stock, excluding shares held by the SES Founder Group, and each redeemable convertible preferred share that was outstanding immediately prior to the Closing was cancelled and converted into a number of fully paid and nonassessable shares of Class A common stock equal to the Exchange Ratio, rounded down to the nearest whole number; ● Each share of Old SES common stock held by the SES Founder Group that was outstanding immediately prior to the Closing was cancelled and converted into a number of fully paid and nonassessable shares of Class B common stock equal to the Exchange Ratio, rounded down to the nearest whole number; ● Each Old SES restricted share that was granted and subject to restrictions (including vesting) immediately prior to the Closing was assumed by the Company and converted into a number of shares of restricted Class A common stock equal to the Exchange Ratio, rounded down to the nearest whole number, which remain subject to the same terms and conditions as were applicable prior to the Closing; and ● Each Old SES option that was outstanding immediately prior to the Closing, whether vested or unvested, was assumed by the Company and converted into an option to acquire Class A common stock with the same terms as were applicable prior to the Closing, except for the number of shares exercisable and the exercise price, each of which was adjusted using the Exchange Ratio, rounded down to the nearest whole number; 62 Table of Contents ● Holders of Old SES common stock, redeemable convertible preferred stock, options and restricted shares received 29,999,947 earn-out shares of the Company’s common stock. Additionally, in connection with the Domestication on February 2, 2022, 6,900,000 shares of Ivanhoe’s Class B ordinary shares held by the Sponsor converted, on a one -for-one basis, into shares of Class B common stock and at Closing converted into an equal number of Class A common stock. In connection with the Business Combination, the Company received $ 326.1 million in gross proceeds, including a contribution of $ 51.6 million of cash held in Ivanhoe’s trust account net of redemption of Ivanhoe Class A common stock held by Ivanhoe’s public stockholders and a $ 274.5 million private investment in public equity (the “PIPE Financing”) at $ 10.00 per share of Class A common stock, prior to the payment of transaction costs and other amounts. The Company incurred $ 46.3 million of transaction costs, consisting of underwriting, legal, and other professional fees, of which $ 41.6 million was recorded to additional paid-in capital as a reduction of proceeds and the remaining $ 4.7 million was expensed immediately. Of the total amount of transaction costs incurred, $ 13.0 million was unpaid, which was included in accrued expenses as of the Closing Date. Subsequent to the Closing, $ 4.9 million of net transaction costs recorded to additional paid-in capital was released and adjusted. The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statements of redeemable convertible preferred stock and stockholders’ equity as of the date of closing: ​ ​ ​ ​ ​ ​ (in thousands) Cash - Ivanhoe's trust and cash, net of redemptions $ 51,590 Cash - PIPE Financing ​ 274,500 Less: Non-Transaction costs relating to Ivanhoe in conjunction with Closing ​ ( 13,149 ) Less: Transaction costs and advisory fees paid ​ ( 26,972 ) Net proceeds from Business Combination and PIPE Financing at Closing ​ 285,969 Less: Transaction costs paid post Closing ​ ( 3,029 ) Financing cash inflow from Business Combination and PIPE Financing ​ 282,940 Add: Transaction costs expensed relating to liabilities assumed upon the Business Combination ​ 4,649 Less: Transactions costs paid on or before December 31, 2021 ​ ( 3,334 ) Less: Sponsor Earn-Out liability ​ ( 36,393 ) Less: Liabilities assumed from Ivanhoe ​ ( 387 ) Less: Accrued transaction costs ​ ( 12,954 ) Net contributions from Business Combination and PIPE Financing $ 234,521 The number of shares of common stock issued immediately following the consummation of the Business Combination: ​ ​ ​ ​ ​ Number of Shares Ivanhoe Class A common stock, outstanding prior to Business Combination ​ 27,600,000 Less: Redemption of Ivanhoe Class A common stock ​ ( 22,455,850 ) Ivanhoe Class A common stock, net of redemptions ​ 5,144,150 Ivanhoe Class B ordinary shares, converted to Class A common stock upon Closing ​ 6,900,000 Total Ivanhoe Class A Common Stock ​ 12,044,150 PIPE Investors — Class A common stock ​ 27,450,000 Old SES common and redeemable convertible preferred shares (other than SES Founder Group) converted to Class A common stock ​ 236,221,766 SES Founder Group shares of common stock converted to shares of Class B common stock ​ 39,881,455 Old SES Restricted Shares converted to restricted shares of Class A common stock ​ 2,273,727 Founder Earn-Out Shares (Class B common stock) ​ 3,999,796 Earn-Out Shares (Class A common stock) ​ 23,691,182 Earn-Out Restricted Shares (Class A common stock) ​ 2,308,969 Total ​ 347,871,045 Less: Shares of Old SES outstanding prior to Business Combination and PIPE Financing ​ ( 276,103,221 ) Business Combination and PIPE Financing Shares ​ 71,767,824 ​ 63 Table of Contents Note 4. Partnerships In December 2020, the Company established a partnership with Hyundai Motor Company (“Hyundai”) when it entered into a joint development agreement (“JDA”) to jointly research and develop (“R&D”) Li-Metal battery technology, which concluded in November 2023. Further, in May 2021, the Company executed another JDA with Hyundai to jointly develop an A-Sample Li-Metal battery effective August 31, 2021, which has an initial term of three years . In February 2021, the Company established a partnership with GM Global Technology Operations LLC (“GM Technology”), an affiliate of GM Ventures LLC (“GM Ventures”), and General Motors Holdings LLC (“GM Holdings”) (collectively, “General Motors” or “GM”) when it entered into a JDA to jointly R&D an A-Sample Li-Metal battery cell and build-out a prototype manufacturing line for GM Technology. The JDA has an initial term of three years . In December 2021, the Company established a partnership with Honda Motor Company, Ltd. (“Honda”) when it entered into a JDA to jointly R&D an A-Sample Li-Metal battery cell, which has an initial term of one and half years. In November 2023, the Company entered into a B-Sample JDA with one of our OEM partners which includes technical milestones and timeline for delivery of B-Sample cells. The JDA has an initial term of two and half years. ​ Under the terms of certain JDAs, the Company will fund research and development activities and capital expenditures related to the buildout of pilot manufacturing lines and the JDA partner will be required to refund such expenses to the Company, regardless of the results of the R&D activities. The following table summarizes credits to research and development recorded in accordance to the terms of the JDA agreements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 2021 Research and development (related party) $ 10,594 ​ $ 8,758 ​ $ 13,972 Research and development ​ 12,471 ​ ​ 5,431 ​ ​ 2,004 Total credits to research and development $ 23,065 ​ $ 14,189 ​ $ 15,976 Additionally, the Company recorded $ 9.9 million as a credit to property and equipment in the consolidated balance sheets for the year ended December 31, 2022, which represents reimbursements received from related party for property and equipment constructed and purchased by the Company. No credits to fixed assets were recorded in the year ended December 31, 2023 or the year ended December 31, 2021. As of December 31, 2023 and 2022, there were $ 3.9 million and $ 2.4 million, respectively, outstanding as a receivable from related party as disclosed in the consolidated balance sheets. As of December 31, 2023, there was a non-related party receivable of $ 5.1 million outstanding compared to no amount outstanding as of December 31, 2022. As of December 31, 2023, there was no deferred income for non-related party JDAs compared to the $ 4.2 million recorded as deferred income as of December 31, 2022. Amounts for non-related party receivables and deferred income are recorded within prepaid expenses and other current assets and accrued expenses and other current liabilities, respectively, in the consolidated balance sheets . ​ Note 5. Cash and Cash Equivalents The following table presents information about the Company’s cash, cash equivalents, and restricted cash: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) December 31, 2023 December 31, 2022 Cash $ 10,674 ​ $ 60,315 Money market funds 74,997 ​ 46,308 Total cash and cash equivalents ​ 85,671 ​ ​ 106,623 Restricted cash included in other assets 1,295 ​ 1,313 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 86,966 ​ $ 107,936 ​ ​ 64 Table of Contents Note 6. Short-Term Investments The following table provides amortized costs, gross unrealized gains and losses, and fair values for the Company’s investments in available-for-sale U.S treasury securities as of December 31, 2023 and December 31, 2022, which had maturity dates that range from 1 month to 10 months and 1 month to 11 months , respectively. Fair value was determined using market prices obtained from third-party sources. The Company had no investments as of December 31, 2021. Realized gains or losses were insignificant for the years ended December 31, 2023, 2022 and 2021. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ Gross ​ Gross ​ ​ ​ (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Short-term U.S. treasury securities $ 245,797 ​ $ 337 ​ $ ( 7 ) ​ $ 246,127 Total $ 245,797 ​ $ 337 ​ $ ( 7 ) ​ $ 246,127 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ Gross ​ Gross ​ ​ ​ (in thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value Short-term U.S. treasury securities $ 283,705 ​ $ 2 ​ $ ( 247 ) ​ $ 283,460 Total $ 283,705 ​ $ 2 ​ $ ( 247 ) ​ $ 283,460 ​ ​ ​ ​ The Company has $ 0.6 million marketable equity securities as of December 31, 2023, with an initial cost of $ 0.5 million. Total unrealized gain/loss of $ 0.1 million is recorded under miscellaneous income (expense), net in the consolidated statement of operations and comprehensive loss. The Company did not have any marketable equity securities as of December 31, 2022. ​ ​ ​ ​ ​ Note 7. Property and Equipment, Net Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (in thousands) 2023 2022 Laboratory machinery and equipment ​ $ 21,762 ​ $ 18,133 Office and computer equipment ​ 1,169 ​ 358 Leasehold improvements ​ 18,228 ​ 11,443 Construction in progress ​ ​ 9,773 ​ ​ 5,422 Total property and equipment ​ 50,932 ​ 35,356 Less: accumulated depreciation ​ ( 12,973 ) ​ ( 7,600 ) Property and equipment, net ​ $ 37,959 ​ $ 27,756 Depreciation expense was $ 5.4 million, $ 2.5 million, and $ 1.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. Construction in progress primarily consists of leasehold improvement projects associated with the Company’s Shanghai pilot facility and a new lab facility in Woburn, MA. ​ Note 8. Intangible Assets, Net Intangible assets, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (in thousands) 2023 2022 Intellectual property ​ $ 1,918 ​ $ 1,918 Less: accumulated amortization ​ ( 573 ) ​ ( 445 ) Intangible assets, net ​ $ 1,345 ​ $ 1,473 ​ 65 Table of Contents Amortization expense was $ 0.1 million for each of the years ended December 31, 2023, 2022 and 2021, respectively. Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheet as of December 31, 2023 is expected to be as follows: ​ ​ ​ ​ ​ Years Ending December 31, ​ (in thousands) 2024 ​ $ 128 2025 ​ 128 2026 ​ 128 2027 ​ 128 2028 ​ 128 Thereafter ​ ​ 705 Total ​ $ 1,345 ​ Note 9. Accrued Expenses and Other Current Liabilities The components of accrued expenses and other current liabilities consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) December 31, 2023 December 31, 2022 Employee compensation and related costs $ 7,022 ​ $ 3,115 Construction in process ​ 3,182 ​ ​ 229 Income taxes payable ​ 288 ​ ​ 1,422 Professional and consulting services ​ 1,273 ​ ​ 1,566 Deferred income received under joint development agreements ​ — ​ ​ 4,189 Other 1,356 ​ 750 Accrued expenses and other current liabilities $ 13,121 ​ $ 11,271 ​ ​ ​ ​ Note 10. Government Grant In December 2022, the Company was awarded a grant (the “Grant”) from certain government agencies. The incentives received under the Grant, which is in the form of cash, can be used for facilities related expenses and the purchase of property and equipment. The Company is required to adhere to the following conditions attached to the incentives, which include purchase of a government grant guarantee insurance policy, required minimum investments into specified spending categories and the creation of a minimum amount of permanent full-time jobs in a certain geographical location over the next five years , with the option to extend to 10 years by remaining in a certain geographical location. If determined that we were ineligible to receive the Grant, we could be required to pay the Grant in its entirety with interest. The Company has yet to fulfill the required minimum investment, and the compliance with this condition will continue to be monitored over the remaining grant period. ​ During the year ended December 31, 2023, the Company received cash grants of 3.6 billion Korean won, or $ 2.8 million after translation, which is the remaining balance of the awarded grant. The Company has received, but not yet earned 12 billion Korean won and 8.4 billion Korean won, as of December 31, 2023 and December 31, 2022, respectively. These balances are equivalent to $ 9.3 million and $ 6.7 million, after translation, as of December 31, 2023 and December 31, 2022, respectively, which is disclosed as a noncurrent liability in the consolidated balance sheet. ​ ​ ​ ​ 66 Table of Contents Note 11. Sponsor Earn-Out Liabilities The Sponsor Earn-Out shares in Tranche 2 through Tranche 5 have been measured at their estimated fair value using a Monte Carlo simulation valuation model. Inherent in the valuation model are assumptions related to expected stock price volatility, risk-free interest rate, expected life, and dividend yield. The key inputs used in the Monte Carlo simulation model for the Sponsor Earn-Out liabilities at their measurement dates were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ December 31, 2022 Expected term (in years) ​ 3.1 ​ ​ 4.1 Risk free rate ​ 4.04 % ​ ​ 4.09 % Expected volatility ​ 91.0 % ​ ​ 85.0 % Expected dividends ​ 0 % ​ ​ 0 % Stock price $ 1.83 ​ $ 3.15 The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. The Company estimates the volatility of its common stock by using a weighted average of historical volatilities of SES’s shares and warrants and select peer companies’ common stock that matches the expected term of the awards (range of the weighted average of volatility is 83.8 % - 96.2 % and 85.0 % - 101.4 % for the years ended December 31, 2023 and 2022, respectively). The expected term is derived from the probability weighted model, considering the number of inputs, including the probability of a change in control. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. The following table provides a reconciliation of the beginning and ending balances for the Sponsor Earn-Out liabilities: ​ ​ ​ ​ ​ ​ (in thousands) Balance as of December 31, 2021 $ — Additions during the period 36,393 Change in fair value ​ ( 25,432 ) Balance as of December 31, 2022 ​ 10,961 Change in fair value ( 6,795 ) Balance as of December 31, 2023 $ 4,166 ​ Note 12. Leases The Company’s operating leases consist primarily of leases for office and plant spaces. Certain of the Company’s operating leases include escalating rental payments, some of which include the option to extend the lease term for up to 5 years , and some include options to terminate the lease at certain times within the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company’s total operating lease cost was $ 2.9 million for the year ended December 31, 2023. For the years ended December 31, 2022 and 2021 total rental expense was $ 2.5 million and $ 1.8 million, respectively. Cash paid for amounts included in the measurement of lease liabilities was $ 2.9 million and $ 2.4 million for the years ended December 31, 2023 and 2022. 67 Table of Contents The following table summarizes the future minimum undiscounted lease payments under existing operating leases as of December 31, 2023: ​ ​ ​ ​ Years Ending December 31, (in thousands) 2024 $ 3,574 2025 ​ 3,652 2026 ​ 2,986 2027 ​ 2,096 2028 ​ 1,680 Thereafter ​ 3,076 Total future minimum lease payments ​ 17,064 Less: imputed interest ​ ( 3,344 ) Total future minimum lease payments $ 13,720 As of December 31, 2023 and 2022, the weighted average remaining lease term for operating leases was 5.6 years and 6.3 years, respectively, and the weighted average discount rate used to determine the operating lease liability was 7.4 % and 6.2 % , respectively. Woburn Lease In August 2016, the Company entered into an operating lease agreement to lease an office space in Woburn, Massachusetts with the original lease term expiring in August 2021. The lease agreement has one five-year renewal option and has variable lease payment that depends on the CPI index and is measured annually. In May 2020, the Company extended the term of the lease by 5 years through August 2026. In February and March 2021, the Company amended the lease agreement increasing the leased space. In December 2021, the Company further amended the lease agreement reducing the leased space. The amendment includes an obligation to pay monthly relinquishment charges (equal to the total rental obligation for the duration of the lease term), only if the new tenant does not pay monthly rental amount and lessor has provided a notice to collect the relinquishment charges from the Company. As of December 31, 2023, the Company assessed the probability of any liability to be incurred for relinquishment charges as remote. Total future minimum lease payments under this lease are $ 6.8 million. In October 2022, the Company entered into an amendment to the operating lease agreement for its Woburn facility to add additional space and is accounted for as a separate lease (Addition Lease). Pursuant to the amendment, the landlord has agreed to construct an addition to the existing facility for such additional space, which commenced in June 2023 and expires at the same time as the original lease. The Addition Lease also contains a variable lease payment that depends on the CPI Index and is measured annually. The additional space consists of approximately 5,000 square feet and the total undiscounted future minimum lease payments for the addition through the expected 8 -year term will be approximately $ 1.5 million. Electrolyte Foundry Lease In June 2023, the Company entered into an operating lease agreement to lease a lab space in Woburn, Massachusetts with the original lease term expiring five years after the delivery date upon completion of the build-out. The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least six months before the expiry and has variable lease payment that depends on the CPI index and is measured annually. In January 2024, the Company started using the lab space. Total future minimum lease payments under this lease are $ 2.8 million. Shanghai Lease In September 2018, the Company entered into an operating lease agreement to lease a manufacturing space in Shanghai, China with the original lease term expiring in August 2023. In September 2021, the Company amended the lease agreement. The amendment increased the amount of leased space and extended the term of the lease by three years through August 2026. Total future minimum lease payments under this lease are $ 3.9 million. The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least 90 days before the expiry and provides for annual cost of living increases of up to 3 %. 68 Table of Contents South Korea Leases In November 2022, the Company entered into an operating lease agreement with a lease commencement date of July 2022 to lease a manufacturing building in the Chungju, South Korea industrial complex with the original lease term expiring in September 2024. The lease agreement has renewal terms that can extend the lease term by our providing application for renewal at least 30 days before the expiry and provides for annual cost of living increases in rent. Total future minimum lease payments under this lease are $ 1.5 million. In February 2023, the Company entered into an operating lease agreement with a commencement date of February 1, 2023 to lease a second manufacturing space in the Chungju, South Korea industrial complex with the original lease term expiring in December 2024. The lease agreement has renewal terms that can extend the lease term by our providing application for renewal at least 30 days before the expiry and provides for annual cost of living increases in rent. Total future minimum lease payments under this lease are $ 0.7 million. ​ ​ ​ Note 13. Note Payable In April 2020, the Company applied for and received a loan in the amount of $ 0.8 million under the Paycheck Protection Program (the "PPP"), established and pursuant to the Coronavirus Aid, Relief, and Economic Security Act and administered by the Small Business Administration (the "PPP Note"). In February 2021, the principal and interest were forgiven for the PPP Note, for which the Company recorded a gain on forgiveness of PPP Note of $ 0.8 million in its consolidated statement of operations and comprehensive loss. ​ Note 14. Commitments and Contingencies Commitments Under the terms of one of the JDAs entered into in 2021, the Company is committed to undertake certain research and development activities to the benefit of both itself and its OEM Partners which involves expenditures related to engineering efforts and purchases of related equipment. The JDA has an agreed-upon value of up to $ 50 million, of which the Company has spent $ 5.9 million as of December 31, 2023. Legal Contingencies From time-to-time, the Company may be subject to claims arising in the ordinary course of business or become involved in litigation or other legal proceedings. While the outcome of such claims or other proceedings cannot be predicted with certainty, the Company’s management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Company’s financial condition, results of operations or cash flows. Indemnifications The Company enters into indemnification provisions under agreements with other companies in the ordinary course of business, including, but not limited to, partnerships, landlords, vendors, and contractors. Pursuant to these arrangements, the Company agrees to indemnify, defend, and hold harmless the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Company’s activities. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. In addition, the Company indemnifies its officers, directors, and certain key employees against claims made with respect to matters that arise while they are serving in their respective capacities as such, subject to certain limitations set forth under applicable law, and applicable indemnification agreements. The Company maintains insurance, including commercial general liability insurance, product liability insurance, and directors and officers insurance to offset certain potential liabilities under these indemnification provisions. To date, there have been no claims under these indemnification provisions. ​ Note 15. Redeemable Convertible Preferred Stock The Company had the following redeemable convertible preferred stock issued and outstanding as of December 31, 2021. Upon closing of the Business Combination, all outstanding redeemable convertible preferred stock were converted into shares of the Company’s common 69 Table of Contents stock in an amount determined by application of the Exchange Ratio, as discussed further in “Note 3 – Business Combination,” and as a result, the following share and per share amounts have been retroactively converted. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in thousands, except share and per share amounts) ​ Issue Price ​ Shares ​ Shares Issued ​ Liquidation ​ Carrying Series per share Authorized and Outstanding Amount Amount Series A ​ $ 0.1406 32,011,403 32,011,403 ​ $ 4,500 ​ $ 4,413 Series B ​ $ 0.3795 30,305,065 30,305,065 ​ 11,500 ​ ​ 11,362 Series C ​ $ 0.4829 75,874,600 75,874,600 ​ 36,643 ​ ​ 36,324 Series C plus ​ $ 0.8151 36,803,072 36,803,072 ​ 30,000 ​ ​ 29,945 Series D ​ $ 4.7939 28,891,766 28,891,766 ​ 138,505 ​ ​ 138,257 Series D plus ​ $ 4.9631 10,074,380 10,074,380 ​ 50,000 ​ ​ 49,640 Total ​ ​ ​ 213,960,286 213,960,286 ​ $ 271,148 ​ $ 269,941 In April 2021, the Company entered into a stock purchase agreement whereby certain investors agreed to purchase $ 138.5 million in Series D redeemable convertible preferred stock, $ 0.000001 par value per share. Upon closing of the financing transaction in April 2021, the investors purchased 28,891,766 shares of Series D redeemable convertible preferred stock. In May 2021, the Company entered into a stock purchase agreement whereby an investor agreed to purchase $ 50.0 million in Series D plus redeemable convertible preferred stock, $ 0.000001 par value per share. Upon closing of the financing transaction in May 2021, the investor purchased 10,074,380 shares of Series D plus redeemable convertible preferred stock. Conversion Shares of redeemable convertible preferred stock were converted into common stock at the holders’ option at any time after the date of issuance of such share or automatically (i) immediately prior to the closing of a firm commitment underwritten public offering of the Company’s common stock at a price per share at least 2 times the Series D and Series D plus issuance price and with gross proceeds to the Company of at least $ 100 million, net of underwriting commission and discounts or (ii) upon the vote or receipt by the Company of a written request for such conversion from the holders of the 66 % of the redeemable convertible preferred stock then outstanding, voting as a single class and on an as-converted basis. Each share of the Series A, Series B, Series C, Series C plus, Series D and Series D plus redeemable convertible preferred stock was converted into the number of shares of common stock at the then effective conversion ratio. The initial conversion price per share for the Series A, Series B, Series C, Series C plus, Series D and Series D plus redeemable convertible preferred stock was subject to anti-dilution adjustments, if any. ​ Note 16. Stockholders’ Equity On February 4, 2022, the Class A common stock and Warrants began trading on the New York Stock Exchange under the ticker symbols “SES” and “SES WS,” respectively. Class A and Class B Common Stock Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 2,100,000,000 shares of Class A common stock, par value $ 0.0001 per share and 200,000,000 shares of Class B common stock, par value $ 0.0001 per share. Class A common stock and Class B common stock are referred to as common stock throughout the notes to these financial statements, unless otherwise noted. The rights of holders of Class A common stock and Class B common stock are identical, except with respect to voting. The holder of each share of Class A common stock is entitled to one vote , while the holder of each share of Class B common stock is entitled to ten votes . Each share of Class B common stock is convertible on a one -for-one basis into a share of Class A common stock at the holder’s option or otherwise automatically upon the occurrence of certain events, namely: (i) each share of Class B common stock that is transferred by SES Founder Group, or certain permitted transferee holders (“Qualified Holders”), will convert into a share of Class A common stock ; (ii) all outstanding shares of Class B common stock will convert into shares of Class A c ommon stock if the SES Founder Group or Qualified Holders collectively cease to beneficially own at least 20 percent of the number of shares of Class B common stock (as such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision, combination or recapitalization of the Class B common stock ) collectively held by the SES Founder Group and Qualified Holders of Class B c ommon stock as of the time the Business Combination took effect; or (iii) all outstanding shares of Class B c ommon stock will convert into shares of Class A common stock upon the date specified by the affirmative vote of the holders of at least two-thirds of the then-outstanding shares of Class B c ommon stock , voting as a separate class. Each outstanding share of Class B c ommon stock is entitled to ten votes per share and each outstanding share of Class A common stock is entitled to one vote per share. 70 Table of Contents As of December 31, 2023, the Company had 310,266,922 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively and as of December 31, 2022 had 305,833,589 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively. For accounting purposes, only shares that are fully vested or that are not subject to repurchase are considered issued and outstanding. Below is a reconciliation of shares of common stock issued and outstanding: ​ ​ ​ ​ ​ ​ December 31, 2023 ​ December 31, 2022 Total shares of common stock legally issued and outstanding 354,148,173 ​ 349,714,840 Less: Shares subject to future vesting: ​ ​ ​ Escrowed Earn-Out Shares ( 27,690,978 ) ​ ( 27,690,978 ) Sponsor Earn-Out Shares ( 5,520,000 ) ​ ( 5,520,000 ) Earn-Out Restricted Shares ( 1,619,998 ) ​ ( 1,931,044 ) RSAs ( 649,567 ) ​ ( 1,270,726 ) Total shares issued and outstanding 318,667,630 ​ 313,302,092 ​ Preferred Stock Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 20,000,000 shares of preferred stock having a par value of $ 0.0001 per share. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights of such preferred stock. As of December 31, 2023 and 2022, no shares of the Company’s preferred stock were issued and outstanding. Dividends Common stock is entitled to dividends when and if declared by the Company’s board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of its business and has no current plans to pay cash dividends for the foreseeable future. Common Stock Warrants Prior to the Business Combination, Ivanhoe issued 9,200,000 Public Warrants and 5,013,333 Private Warrants and prior to the Closing, Ivanhoe amended the terms of the Warrants, as discussed in “Note 2 – Summary of Significant Accounting Policies,” which resulted in the Warrants being classified as a component of stockholders’ equity. There is an effective registration statement and prospectus relating to the shares issuable upon exercise of the Warrants. Public Warrants Public Warrants have an exercise price of $ 11.50 and the Company may, in its sole discretion, reduce the exercise price of the Public Warrants to induce early exercise, provided that adequate notice is provided to warrant holders pursuant to the terms of the Warrant Agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. In no event is the Company required to net cash settle the Public Warrants. The Public Warrants became exercisable 30 days following the Business Combination and expire at the earliest of five years following the Business Combination, liquidation of the Company, or the date of redemption elected at our option provided that the value of the Class A common stock exceeds $ 18.00 per share. Under certain circumstances, the Company may elect to redeem the Public Warrants at a redemption price of $ 0.01 per Public Warrant at any time during the term of the Warrant in which the Class A common stock share trading price has been at least $ 18.00 per share for 20 trading days within the 30 trading-day period. If the Company elects to redeem the Warrants, it must notify the Public Warrant holders in advance, who would then have at least 30 days from the date of notification to exercise their respective Warrants. If any such Warrants are not exercised within that 30 -day period, they will be redeemed pursuant to this provision. As of December 31, 2023 and 2022, the Company had outstanding Public Warrants to purchase 9,199,947 shares of Class A common stock. 71 Table of Contents Private Warrants The Private Warrants have similar terms to the Public Warrants, except that the Private Warrants are not redeemable. As of December 31, 2023 and 2022, the Company had outstanding Private Warrants to purchase 5,013,333 shares of Class A common stock. The Company has the following shares of common stock available for future issuance on an as-if converted basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Shares reserved for issuance under the SES AI Corporation 2021 Plan 34,965,909 ​ 32,738,052 Common stock options outstanding 13,619,793 ​ 18,308,233 Public Warrants 9,199,947 ​ 9,199,947 Private Warrants 5,013,333 ​ 5,013,333 RSUs 6,359,474 ​ 2,807,660 PSUs 3,364,810 ​ 2,116,942 Total common stock available for future issuance 72,523,266 ​ 70,184,167 ​ Note 17. Stock-Based Compensation Equity Award Plan Old SES established its initial share incentive plan in 2013 (the “2013 Plan”), which was subsequently replaced with a new share incentive plan in 2018 (the “2018 Plan”). Under the terms of the 2013 Plan and 2018 Plan, certain number of shares were reserved for the issuance of incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) to employees, officers, directors, consultants and advisors. On March 30, 2021, the Company amended the 2018 Plan with the SES Holdings Pte. Ltd. 2021 Share Incentive Plan (the “2021 Plan”) and increased the total shares reserved for future issuance by 486,975 shares. Upon approval of the 2021 Plan, any shares that, as of the date of stockholder approval, were reserved but not issued pursuant to any awards granted under the Company’s 2018 Plan were rolled into the 2021 Plan. In addition, any shares issued pursuant to or subject to stock options or similar awards granted under the 2018 Plan that expired or otherwise terminated without having been exercised in full or that were forfeited or repurchased by the Company, rolled into the 2021 Plan. The 2021 Plan provided for the discretionary grant of ISOs, NSOs, and Restricted Share Awards (“RSAs”). In connection with the Business Combination, the 2021 Plan was terminated and the remaining unallocated share reserve was cancelled, and no new awards will be granted under the 2021 Plan. At Closing, a total of 20,748,976 ISOs and NSOs and 2,273,727 RSAs (as converted, due to retroactive application of reverse recapitalization) outstanding under the 2021 Plan were assumed by the Company under the SES AI Corporation 2021 Plan (defined below). SES AI Corporation 2021 Plan In connection with the Business Combination, the Company adopted the SES AI Corporation 2021 Incentive Award Plan (the “SES 2021 Plan”) under which 36,862,002 shares of Class A common stock were initially reserved for issuance of ISOs, NSOs, stock appreciation rights (“SARs”), RSAs, restricted stock units (“RSUs”), performance compensation awards (“PSUs”), other stock-based and cash-based awards, and dividend equivalents. In addition, and subject to certain limitations, any shares issued pursuant to or subject to awards granted under the 2021 Plan that expired or otherwise terminated without having been exercised in full or that were forfeited or repurchased by the Company, rolled into the SES 2021 Plan. The SES 2021 Plan allows for the maximum number of shares issuable to automatically increase on January 1st of each year for a period of ten years commencing on January 1, 2022 and ending on (and including) January 1, 2031, in an amount equal to two percent of the total number of shares of stock outstanding on December 31 st of the preceding year. As of December 31, 2023, 34,965,909 shares remain available for future issuance under the SES 2021 Plan. Stock-Based Compensation Expense Compensation expense related to stock-based awards was recorded as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 ​ 2021 Research and development $ 3,796 ​ $ 6,630 ​ $ 344 General and administrative 16,853 ​ ​ 16,145 ​ ​ 4,227 Total $ 20,649 ​ $ 22,775 ​ $ 4,571 72 Table of Contents ​ The following table summarizes share-based compensation expense by award type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 ​ 2021 Earn-Out Restricted Shares $ 2,689 ​ $ 7,890 ​ $ — RSUs ​ 9,644 ​ ​ 7,136 ​ ​ — PSUs ​ 4,781 ​ ​ 3,786 ​ ​ — RSAs ​ 3,133 ​ ​ 3,510 ​ ​ 1,540 Stock options ​ 402 ​ ​ 453 ​ ​ 3,031 Total $ 20,649 ​ $ 22,775 ​ $ 4,571 Restricted Stock Units RSUs granted under the SES 2021 Plan vest in equal annual installments over a three-year period and have only service vesting conditions. The fair value of RSUs is estimated based on the closing price of the Company’s Class A common stock at the date of grant and is amortized to expense on a straight-line basis over the vesting period. RSU activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Weighted Average Fair Value Outstanding at December 31, 2021 ​ — ​ $ — Granted ​ 3,438,233 ​ $ 8.41 Vested ​ ( 185,944 ) ​ $ 4.27 Forfeited and canceled ​ ( 444,629 ) ​ $ 8.93 Outstanding at December 31, 2022 ​ 2,807,660 ​ $ 8.61 Granted ​ 5,365,427 ​ $ 2.25 Vested ​ ( 1,063,863 ) ​ $ 8.41 Forfeited and canceled ​ ( 749,750 ) ​ $ 4.95 Outstanding at December 31, 2023 ​ 6,359,474 ​ $ 3.71 The total fair value of RSUs vested was $ 8.9 million and $ 0.8 million for the years ended December 31, 2023 and 2022, respectively. No RSUs were granted or vested in the year ended December 31, 2021. As of December 31, 2023, there was $ 16.5 million of unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.2 years. Restricted Stock Awards RSAs granted under the 2021 Plan and assumed under the SES 2021 Plan generally vest 1/4 th upon completion of one year of service and 1/48 th per month thereafter and have only service vesting conditions. The fair value of RSAs is estimated based on the closing price of the Company’s Class A common stock at the date of grant and is amortized to expense on a straight-line basis over the vesting period. RSA activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Weighted Average Fair Value Outstanding at December 31, 2021 ​ 2,261,862 ​ $ 5.12 Granted ​ 11,865 ​ $ 5.30 Vested ​ ( 958,506 ) ​ $ 5.16 Forfeited and canceled ​ ( 44,495 ) ​ $ 5.30 Outstanding at December 31, 2022 ​ 1,270,726 ​ $ 5.09 Granted ​ — ​ $ — Vested ​ ( 610,335 ) ​ $ 5.14 Forfeited and canceled ​ ( 10,824 ) ​ $ 5.13 Outstanding at December 31, 2023 ​ 649,567 ​ $ 5.05 The total fair value of RSAs vested was $ 3.1 million and $ 4.9 million for the years ended December 31, 2023 and 2022. No RSAs vested during the year ended December 31, 2021. 73 Table of Contents As of December 31, 2023, there was $ 3.2 million of unrecognized compensation cost related to RSAs, which is expected to be recognized over a weighted-average period of 0.8 years. Performance Stock Units PSUs granted under the SES 2021 Plan generally vest over a three-year period and have both service and market vesting conditions. PSUs are measured at their estimated fair value using a Monte Carlo simulation valuation model with the effect of the market condition reflected in the grant date fair value of the award. The fair value of PSU awards is amortized to expense on a straight-line basis over the requisite service period, irrespective of whether the market vesting condition is satisfied, which is generally two to three years . The key inputs used in the Monte Carlo simulation model for PSUs granted during the years ended December 31, 2023 and 2022 at their measurement date were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 Expected term (in years) ​ 5.0 ​ ​ 5.0 Risk free rate ​ 3.57 % ​ ​ 2.79 % Expected volatility ​ 80.0 % ​ ​ 75.7 % Expected dividends ​ 0 % ​ ​ 0 % Stock price $ 2.25 ​ $ 9.10 The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. The Company estimates the volatility of its common stock by using a weighted average of historical volatilities of SES’s shares and select peer companies’ common stock that matches the expected term of the awards. The expected term is derived from the vesting period. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. PSU activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Weighted Average Fair Value Outstanding at December 31, 2021 ​ — ​ $ — Granted ​ 2,340,405 ​ $ 5.89 Vested ​ — ​ $ — Forfeited and canceled ​ ( 223,463 ) ​ $ 5.09 Outstanding at December 31, 2022 ​ 2,116,942 ​ $ 5.98 Granted ​ 1,631,800 ​ $ 0.58 Vested ​ — ​ $ — Forfeited and canceled ​ ( 383,932 ) ​ $ 3.86 Outstanding at December 31, 2023 ​ 3,364,810 ​ $ 3.60 ​ There were no PSUs granted or vested in the year ended December 31, 2021. ​ As of December 31, 2023, there was $ 3.6 million of unrecognized compensation cost related to PSUs, which is expected to be recognized over a weighted-average period of 1.5 years. Earn-Out Restricted Shares The Earn-Out Restricted Shares granted in connection with the Business Combination have a contractual term of five years and have both service and market vesting conditions. The Earn-Out Restricted Shares have been measured at their estimated fair value using a Monte Carlo simulation valuation model with t he effect of the market condition reflected in the grant date fair value of the award. The aggregate grant date fair value of the Earn-Out Restricted Shares is $ 15.0 million and is amortized to expense on a straight-line basis over the requisite service period, irrespective of whether the market vesting condition is satisfied, which is 1.45 years. The key inputs used in the Monte Carlo simulation model for the Earn-Out Restricted Shares at their measurement dates were as follows: ​ ​ ​ ​ ​ February 3, 2022 (Closing Date) Contractual term (in years) ​ 5.0 74 Table of Contents Risk-free rate ​ 1.63 % Expected volatility ​ 81.0 % Expected dividends ​ 0 % Stock price $ 7.68 The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. The Company estimates the volatility of its common stock by using select peer companies’ common stock that matches the contractual term of the awards. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the contractual term of the restricted shares. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero. Earn-Out Restricted Shares activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Shares ​ Weighted Average Fair Value Outstanding at December 31, 2021 ​ — ​ $ — Granted ​ 2,308,969 ​ $ 6.50 Vested ​ — ​ $ — Forfeited and canceled ​ ( 377,925 ) ​ $ 6.37 Outstanding at December 31, 2022 ​ 1,931,044 ​ $ 6.53 Granted/vested ​ — ​ $ — Forfeited and canceled ​ ( 311,046 ) ​ $ 6.53 Outstanding at December 31, 2023 ​ 1,619,998 ​ $ 6.53 ​ During the year ended December 31, 2023, the Earn-Out Restricted Shares met the requisite service period and the related expense was fully amortized. Stock Options Options granted under the 2021 Plan and assumed under the SES 2021 Plan vest 1/4th upon completion of one year of service and 1/48th per month thereafter, however in certain instances options have been granted with immediate vesting. Options under the Plan generally expire 10 years from the date of grant and have only service vesting conditions. Stock option activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of Options ​ ​ Weighted Average Exercise Price ​ ​ Weighted Average Remaining Contractual Term (in years) ​ ​ Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2021 ​ 20,750,755 ​ $ 0.17 ​ ​ 8.5 ​ $ 106.5 Granted ​ — ​ $ — ​ ​ ​ ​ ​ ​ Exercised ​ ( 2,089,351 ) ​ $ 0.14 ​ ​ ​ ​ $ 10.8 Forfeited and canceled ​ ( 353,171 ) ​ $ 0.26 ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2022 ​ 18,308,233 ​ $ 0.17 ​ ​ 7.6 ​ $ 54.6 Granted ​ — ​ $ — ​ ​ ​ ​ ​ ​ Exercised ​ ( 3,691,340 ) ​ $ 0.14 ​ ​ ​ ​ $ 7.0 Forfeited and canceled ​ ( 997,100 ) ​ $ 0.18 ​ ​ ​ ​ ​ ​ Outstanding at December 31, 2023 ​ 13,619,793 ​ $ 0.17 ​ ​ 6.8 ​ $ 22.7 Vested, December 31, 2023 ​ 9,828,750 ​ $ 0.17 ​ ​ 6.6 ​ $ 16.4 Vested or expected to vest, December 31, 2023 ​ 13,619,793 ​ $ 0.17 ​ ​ 6.8 ​ $ 22.7 No income tax benefit was recognized for stock options exercised as the Company does not anticipate realizing any such benefit in the near future. The fair value of stock options vested for the years ended December 31, 2023 and 2022 were $ 16.4 million and $ 29.3 million, respectively. The Company uses the Black-Scholes pricing model to determine the fair value of options granted. The calculation of the fair value of stock options is affected by the stock price on the grant date, the expected volatility of the Company’s stock over the expected term of the award, the expected life of the award, the risk-free interest rate and the dividend yield. As there were no options granted in 2023 and 2022, the 75 Table of Contents assumptions used in the Black-Scholes pricing model for options granted during 2021, along with the weighted-average grant-date fair value, were as follows: ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2021 Expected term of options (in years) ​ 5.6  –  6.1 Risk-free interest rate ​ 0.6 % to 1.1 % Expected volatility ​ 68.0 % to 69.9 % Expected dividends ​ 0 % Weighted-average grant date fair value per option $ 0.12 As of December 31, 2023, there was $ 0.4 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 1.1 years. ​ Note 18. Income Taxes As discussed in “Note 1 – Nature of Business,” SES Holdings Pte. Ltd. is a Singapore private limited company and was formed in November 2018. As a result of the reorganization the Company undertook in 2018, SES Holdings Pte. Ltd. is also treated as a U.S. taxpayer for U.S. Federal income tax purposes in accordance with Internal Revenue Code Section 7874. SES Holdings Pte. Ltd. is the parent of the U.S. Federal consolidated income tax group. The U.S. and foreign components of loss before income taxes were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 ​ 2021 U.S. $ ( 15,314 ) $ ( 35,543 ) ​ $ ( 4,508 ) Foreign ​ ( 38,939 ) ​ ( 14,195 ) ​ ( 26,722 ) Loss before income taxes ​ $ ( 54,253 ) ​ $ ( 49,738 ) ​ $ ( 31,230 ) ​ Income tax expense consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands) 2023 2022 ​ 2021 Current: ​ ​ ​ ​ Federal ​ $ — ​ $ — ​ $ — State ​ 89 ​ 55 ​ — Foreign ​ 115 ​ 1,200 ​ 25 Total current expense ​ 204 ​ 1,255 ​ 25 Deferred: ​ ​ ​ Federal ​ — ​ — ​ — State ​ — ​ — ​ — Foreign ​ ( 1,057 ) ​ — ​ — Total deferred expense ​ ​ ( 1,057 ) ​ ​ — ​ ​ — Income tax (benefit) expense ​ $ ( 853 ) ​ $ 1,255 ​ $ 25 ​ Reconciliations of the federal statutory income tax rate to the Company’s effective income tax rate are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 2022 ​ 2021 Tax provision (benefit) at U.S. statutory rate ​ 21.0 % ​ ​ 21.0 % ​ ​ 21.0 % State income taxes, net of federal benefit ​ ​ ( 0.2 )% ​ ​ — ​ ​ — Foreign tax ​ 0.9 % ​ ​ ( 0.8 )% ​ ​ ( 0.1 )% Foreign income taxed at non US rates ​ ​ ( 0.1 )% ​ ​ — ​ ​ — Other permanent items ​ ( 0.1 )% ​ ​ ( 0.1 )% ​ ​ 0.5 % Section 162(m) ​ ​ ( 4.4 )% ​ ​ ( 3.8 )% ​ ​ — 76 Table of Contents Stock-based compensation ​ ​ ( 0.8 )% ​ ​ 4.1 % ​ ​ ( 1.1 )% Research and development tax credits ​ 2.7 % ​ ​ 2.4 % ​ ​ 2.0 % Unrecognized tax benefits ​ ( 0.8 )% ​ ​ ( 0.6 )% ​ ​ ( 0.6 )% GILTI ​ ​ ( 0.3 )% ​ ​ — ​ ​ — Change in valuation allowance ​ ( 18.3 )% ​ ​ ( 33.3 )% ​ ​ ( 22.0 )% Change in Sponsor Earn-Out liabilities ​ ​ 2.6 % ​ ​ 10.7 % ​ ​ — Transaction costs ​ ​ 0.0 % ​ ​ ( 1.5 )% ​ ​ — Others ​ ( 0.6 )% ​ ​ ( 0.6 )% ​ ​ 0.2 % Effective tax rate ​ 1.6 % ​ ​ ( 2.5 )% ​ ​ ( 0.1 )% The Company files federal, state and foreign tax returns, which are subject to examination by the relevant tax authorities. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment. The statute of limitations for assessment by the Internal Revenue Service (“IRS”), and state tax authorities remains open for all tax years ended after 2012. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS or state tax authorities to the extent utilized in a future period. The components of the net deferred tax asset at the end of each year are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (in thousands) 2023 2022 Deferred tax assets: ​ ​ ​ Net operating losses ​ $ 30,453 ​ $ 25,338 Section 174 ​ ​ 12,146 ​ ​ 6,389 Lease liabilities ​ ​ 3,980 ​ ​ 3,803 Research and development tax credits ​ 3,720 ​ 2,358 Stock-based compensation ​ 3,349 ​ 2,869 Accruals and reserves ​ 1,499 ​ 1,251 Fixed assets ​ ​ 321 ​ ​ 131 Other ​ 120 ​ 241 Total deferred tax assets ​ 55,588 ​ 42,380 Deferred tax liabilities: ​ ​ ROU assets ​ ( 3,801 ) ​ ( 3,572 ) Total deferred tax liabilities ​ ( 3,801 ) ​ ( 3,572 ) Net deferred tax asset before valuation allowance ​ ​ 51,787 ​ ​ 38,808 Valuation allowance ​ ( 50,730 ) ​ ( 38,808 ) Net deferred tax asset ​ $ 1,057 ​ $ — The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21 % was due primarily to the research and development credit and change in valuation allowance. The Company maintains full valuation allowance against its U.S. and Viking Power System Pte. Ltd., net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2023. The Company's valuation allowance balance increased by $ 11.9 million and $ 17.3 million for the years ended December 31, 2023 and 2022, respectively. A full valuation allowance was established for SES AI Korea Co., Ltd since the fiscal year 2021. However, SES Korea operates under a cost-plus model in adherence to transfer pricing (TP) regulations, ensuring its profitability in accordance with U.S. GAAP. Upon reevaluation of the subsidiary's consistent profitability and other favorable indicators, it is determined that a valuation allowance was no longer warranted. In the fiscal year 2023, the Company released the Korean valuation allowance. As of December 31, 2023, the Company has Federal net operating loss (“NOLs”) carryforward of approximately $ 124.7 million, of which $ 9.3 million is for pre-2018 and $ 115.4 million is post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also has Massachusetts NOLs carryforwards of approximately $ 74.9 million, which begins to expire in 2033. 77 Table of Contents As of December 31, 2022, the Company had Federal NOLs carryforward of approximately $ 104.4 million, of which $ 9.3 million was for pre-2018 and $ 95.1 million was post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also had Massachusetts NOLs carryforwards of approximately $ 61.2 million, which begins to expire in 2033. As of December 31, 2023 and 2022, the Company had federal research credit carryforwards of approximately $ 3.8 million and $ 2.4 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $ 1.9 million and $ 1.2 million, respectively, which begins to expire in 2030. The utilization of the Company’s NOLs and R&D credits and carryforwards may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code. An “ownership change” is generally defined as a greater than 50 percent change (by value) in its equity ownership over a three-year period. The annual limitation may result in the expiration of the NOL carryforwards before their utilization. Through December 31, 2018, the Company had completed several financings since its inception and performed the related analysis which concluded that changes in ownership had occurred, as defined by Sections 382 and 383 of the Internal Revenue Code. The annual limitation to apply to the pre-2018 net operating losses and research credits is $ 0.5 million. To the extent that the Company raises additional equity financing or other changes in the ownership interest of significant stockholders occurs, additional tax attributes may become subject to an annual limitation. This could further limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. Based on analysis performed, the Company would not lose any material tax attribute due to Section 382 since 2018. During 2023, management does not believe there were significant ownership changes that would trigger a Section 382 limitation. The Company records unrecognized tax benefits in accordance with ASC 740-10, Income Taxes . ASC 740-10 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As of December 31, 2023 and 2022, the total amount of unrecognized tax benefits was $ 5.5 million and $ 4.6 million respectively, of which $ 5.2 million would affect 2023 income tax expense, if recognized, without considering any valuation allowance. The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months. The Company includes interest and penalties related to unrecognized tax benefits within the benefit from (provision for) income taxes. As of the years ended December 31, 2023 and 2022 the total amount of gross interest accrued in each year was less than $ 0.1 million, respectively. A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (in thousands) 2023 2022 Beginning of the year $ 4,573 ​ $ 4,179 Increase – current year positions ​ 618 ​ 511 Increase – prior year positions ​ 311 ​ — Decrease – prior year positions ​ ​ — ​ ​ ( 117 ) End of the year ​ $ 5,502 ​ $ 4,573 ​ The Company is subject to income taxes in the U.S. federal, state, and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination within the U.S. and foreign authorities for all years, until such time as the NOLs are initially utilized. The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018. ​ Beginning in 2022, the 2017 Tax Cuts and Jobs Act amended Section 174 to eliminate current-year deductibility of research and experimentation (R&E) expenditures and software development costs (collectively, R&E expenditures) and instead require taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable R&E activity performed outside the United States). The Company generated a deferred tax asset for capitalized R&E expenditures for the year ended December 31, 2023 which was fully offset with a valuation allowance. ​ 78 Table of Contents Note 19. Net Income (Loss) Per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing net loss, as adjusted for changes in fair value recognized in earnings from equity contracts classified as liabilities, by the weighted average number of common shares outstanding and, when dilutive, common share equivalents from outstanding stock options and restricted stock units (using the treasury-stock method). The weighted-average number of common shares used in the computation of basic and diluted net income per share were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, (in thousands, except share and per share amounts) 2023 ​ 2022 2021 Numerator: ​ ​ ​ ​ Net loss attributable to common stockholders - basic and diluted $ ( 53,400 ) ​ $ ( 50,993 ) ​ $ ( 31,255 ) Denominator: ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares of common stock outstanding - basic and diluted ​ 315,051,508 ​ ​ 288,304,750 ​ ​ 61,089,065 Net loss per share attributable to common stockholders - basic and diluted $ ( 0.17 ) ​ $ ( 0.18 ) ​ $ ( 0.51 ) ​ The number of common stock equivalents excluded from the computation of diluted net loss per share because either the effect would have been anti-dilutive, or the performance criteria related to such shares and awards had not been met, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2023 ​ 2022 ​ 2021 Escrowed Earn-Out Shares ​ 27,690,978 ​ ​ 27,690,978 ​ ​ — Options to purchase common stock ​ 13,619,793 ​ ​ 18,308,233 ​ ​ 20,750,755 Public Warrants ​ 9,199,947 ​ ​ 9,199,947 ​ ​ — Sponsor Earn-Out Shares ​ 5,520,000 ​ ​ 5,520,000 ​ ​ — Private Warrants ​ 5,013,333 ​ ​ 5,013,333 ​ ​ — Unvested RSUs ​ 6,359,474 ​ ​ 2,807,660 ​ ​ — Unvested PSUs ​ 3,364,810 ​ ​ 2,116,942 ​ ​ — Earn-Out Restricted Shares ​ 1,619,998 ​ ​ 1,931,044 ​ ​ — Unvested RSAs ​ 649,567 ​ ​ 1,270,726 ​ ​ 2,261,862 Redeemable convertible preferred stock ​ — ​ ​ — ​ ​ 213,960,286 Total ​ 73,037,900 ​ ​ 73,858,863 ​ ​ 236,972,903 ​ Note 20. Segment and Geographic Information The Company operates as one reportable segment as described in Note 2 to the consolidated financial statements. The Company’s long-lived assets consist primarily of property and equipment and intangible assets and are attributed to the geographic location in which they are located. Long-lived assets by geographical area were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, (in thousands) 2023 2022 Property and equipment, net: ​ ​ China ​ $ 19,167 ​ $ 16,956 United States ​ ​ 13,927 ​ ​ 3,414 South Korea ​ ​ 4,865 ​ ​ 7,386 Total property and equipment, net ​ 37,959 ​ 27,756 Intangible assets, net: ​ ​ Singapore ​ 1,345 ​ 1,473 Total long-lived assets ​ $ 39,304 ​ $ 29,229 ​ Note 21. Defined Contribution Plan Beginning January 1, 2023, the Company offers a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan covers employees who meet minimum age and service requirements and allows participants to defer a portion of their 79 Table of Contents annual compensation on a pre-tax basis. The Company contributed $ 0.5 million to the defined contribution retirement savings plan for the year ended December 31, 2023. ​ ​ Note 22. Related-Party Transactions As of December 31, 2023 and 2022, pursuant to the Director Nomination Agreement, General Motors Company and its affiliates (“GM”) were considered related parties due to their board representation and the board member’s employment position at GM, which remained in effect as long as GM continues to hold more than 5 % of the fully diluted outstanding equity securities of SES as per the agreement. See “Note 4 – Partnerships” for more details about our partnership with GM. ​ ​ Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure None. ​