What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-28 compared with 2024-02-27 · 225 added, 333 removed, 763 unchanged (42% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (Grant Thornton LLP, PCAOB ID Number 248 )

Report of Independent Registered Public Accounting Firm (KPMG LLP, PCAOB ID Number 185 )

Consolidated Balance Sheets as of December 31, 2024 and 2023

Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity for the Years ended December 31, 2023, 2022 and 2021

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

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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.

We have audited the accompanying consolidated balance sheets of SES AI Corporation, (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as 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, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s 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 audit in accordance with the standards of 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 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.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits 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.

Our audits 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 audits provide a reasonable basis for our opinion.

Critical audit matter

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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.

● 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.

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 Liability”) 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 are estimated using a Monte Carlo simulation model.

The fair value of the Sponsor Earn-Out Liability was determined to be $9,472,000 at December 31, 2024.

The loss on change in fair value of Sponsor Earn-Out Liability was $5,306,000 for the year ended December 31, 2024.

We identified the assessment of the fair value of the Sponsor Earn-Out Liability as a critical audit matter .

The principal considerations for our determination that the valuation of the Sponsor Earn-Out Liability is a critical audit matter were (1) the high degree of subjective auditor judgment required due to the complex valuation model and expected term assumption 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 Liability.

Our audit procedures related to the Sponsor Earn-Out Liability included the following, among others.

● We evaluated 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.

o Performed an independent calculation of the fair value using management’s assumptions and comparing to the fair value of the Sponsor Earn-Out Liability determined by the Company.

/s/ GRANT THORNTON LLP

2 unchanged sentences

February 28, 2025

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.

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

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.

We served as the Company’s auditor from 2021 to 2023.

Boston, Massachusetts

March 16, 2023

SES AI Corporation

Consolidated Balance Sheet s

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Short-term investments

Accounts receivable

Receivable from related party

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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:

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(in thousands, except share and per share amounts)

Revenue from contracts with customers:

Cost of revenues

Operating expenses:

5 unchanged sentences

Interest income

Gain on change in fair value of Sponsor Earn-Out liabilities

Miscellaneous income (expense), net

Gain on forgiveness of PPP note

(Loss) Gain on change in fair value of Sponsor Earn-Out liabilities

Miscellaneous (expense) income, net

Total other income, net

Loss before income taxes

Benefit (provision) from income taxes

(Provision) benefit from income taxes

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

Unrealized gain (loss) on short-term investments

Total other comprehensive (loss) income, net of tax

Foreign currency translation loss

Unrealized (loss) gain on short-term investments

Total other comprehensive (loss), net of tax

Total comprehensive loss

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SES AI Corporation

Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

Redeemable Convertible

Consolidated Statements of Stockholders’ Equity

Class A and Class B

Preferred Stock

Other Comprehensive

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Balance – December 31, 2022

Issuance of Series D and Series D plus redeemable convertible preferred stock, net of issuance costs of $ 608

Issuance of common stock upon exercise of stock options

Stock-based compensation

Foreign currency translation adjustments

Balance – December 31, 2021

Conversion of redeemable convertible preferred stock to common stock in connection with reverse recapitalization upon Business Combination

( 213,960,286 )

Business Combination and PIPE Financing, net of redemptions and transaction costs (1)

Post close adjustment of transaction costs related to Business Combination and PIPE Financing

Issuance of common stock upon exercise of stock options

Restricted stock units vested

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Stock-based compensation

Foreign currency translation adjustments

Unrealized loss on short-term investments

Foreign currency translation loss

Unrealized gain on short-term investments

Balance — December 31, 2023

Issuance of common stock upon exercise of stock options

Restricted stock units vested

Net restricted stock units vested

Forfeitures of Restricted Stock Awards

1 unchanged sentence

Stock-based compensation

Foreign currency translation adjustments

Unrealized gain on short-term investments

Foreign currency translation loss

Unrealized loss on short-term investments

Balance — December 31, 2024

(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.

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Adjustments to reconcile net loss to net cash used in operating activities:

Gain on change of fair value of Sponsor Earn-Out liabilities

Loss (gain) on change of fair value of Sponsor Earn-Out liabilities

Stock-based compensation

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Accretion income from available-for-sale short-term investments

Gain on forgiveness of PPP note

Loss on sale of fixed assets

Changes in operating assets and liabilities:

Receivable from related party

Accounts receivable

Prepaid expenses and other assets

Right of use assets

Deferred tax assets

Accounts payable

Lease liabilities

Accrued expenses and other liabilities

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Proceeds from the maturities of short-term investments

Purchases of intangible assets

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Cash Flows From Financing Activities

Proceeds from Business Combination and PIPE Financing, net of issuance costs

Proceeds from government grant

Proceeds from stock option exercises

Proceeds from issuance of Series D and Series D plus redeemable convertible preferred stock, net of issuance costs

Payment of deferred offering costs

Net cash provided by financing activities

Effect of exchange rates on cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period (Note 5)

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Supplemental Cash and Non-Cash Information:

Incomes taxes paid

Conversion of Redeemable Convertible Preferred Stock to shares of Class A common stock

Release of accrued transaction costs related to Business Combination and PIPE Financing

Accounts payable and accrued expenses related to purchases of property and equipment

Incomes taxes paid

Lease liabilities arising from obtaining right-of-use assets

Liabilities of Ivanhoe acquired in the Business Combination

Deferred offering costs included in accounts payable and accrued expenses and other liabilities

The accompanying notes are an integral part of these consolidated financial statements.

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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 is engaged in the development of AI-enhanced high-performance, Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”) and other applications.

The Company’s mission is to accelerate the world’s energy transition through material discovery and battery management.

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.

Principal operations have commenced, and the Company has derived revenue from its principal business activities starting in October 2024.

Summary of Significant Accounting Policies

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All intercompany balances and transactions have been eliminated upon consolidation.

Reclassification of Prior Period Amounts

Certain amounts have been reclassified to conform to the current year financial statement presentation.

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

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.

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) revenue from customers, (iii) deferred tax assets and uncertain income tax positions, (iv) the measurement of operating lease liabilities, and (v) the evaluation of the recoverability of long-lived assets, including intangible assets.

On an ongoing basis, the Company evaluates these judgments and estimates for reasonableness.

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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.

Net realized and unrealized gains (losses) from foreign currency transactions are included in miscellaneous income (expense), net in the consolidated statements of operations and comprehensive loss and were $ 0.2 million and $ 0.3 million for the years ended December 31 2024 and 2023, respectively.

Cash and Cash Equivalents

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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.

Restricted cash includes cash held in checking and money market funds as collateral to secure certain insurance policies.

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.

The Company has investments in short-term marketable debt and marketable equity securities.

As of December 31, 2024 and 2023, the Company had restricted cash balances of $ 0.6 million and $ 1.3 million, respectively.

Revenue from Contracts with Customers

In October 2024, the Company began to generate revenue from its planned principal business activities.

The Company recognizes revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”).

ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

To achieve this core principle, the Company applies the following five-steps:

identify the contract(s) with the customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to the performance obligations in the contract;

recognize revenue as performance obligations are satisfied.

The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer.

The Company’s contracts do not contain significant financing components.

Product Revenue

The Company manufactures and sells Li-Metal battery cells and battery materials, such as electrolytes, to automotive original equipment manufacturers (“OEMs”) and other manufactures.

Product revenue is recognized at a point in time upon transfer of control of the product.

Transfer of control generally occurs upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created.

The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for the promised goods.

Service Revenue

The Company provides services for the design and development of Li-ion and Li-Metal battery materials in accordance with the customer’s specifications.

Customers of the Company’s design and development services include OEM’s and other companies who use our battery technology and battery materials in their products, not limited to EV, UAM, and drones.

Service revenue contracts generally have a term that extends from one to two years beginning at the effective date of the contract.

Consideration for service revenue contracts generally include up-front payments as well as further payments that become payable when the Company meets specific contractual milestones.

The Company has an enforceable right to payment for performance completed to date and

the deliverable has no alternative use to the Company.

Judgment is required in the assessment of progress toward completion of the performance obligations.

Service revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward the satisfaction of its performance obligations.

Some of the Company’s service revenue contracts contain multiple performance obligations that are to be satisfied in sequential order and require customer acceptance to progress to the next performance obligation.

This creates variable consideration in the context of the contract, which is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur;

otherwise, the Company reduces transaction price by the amount of the variable consideration.

Deferred Revenue

Deferred revenue represents situations where the cash is collected, but the related revenue has not yet been recognized.

Revenue is subsequently recognized when the revenue recognition criteria are met.

Service revenue is generally invoiced based on contractual milestones and recognized based the Company’s estimated progress toward the satisfaction of the performance obligations.

Costs to Fulfill a Customer Contract

Certain costs, such as employee compensation for design, discovery and development services, are recognized as an asset if they relate directly to a customer contract, generate or enhance resources of the entity that will be used in satisfying future performance obligations, and are expected to be recovered.

If these three criteria are not met, the costs are expensed in the period incurred.

Deferred costs are recognized as cost of revenue in the period when the related revenue is recognized.

As of December 31, 2024, total deferred contract costs were $ 0.1 million.

Cost of Revenue

Cost of revenue includes materials, labor, inventory, freight costs, overhead and other costs related to manufacturing our products and completing service contracts.

Labor consists of personnel-related expenses such as salaries and benefits, and stock-based compensation.

Overhead and other costs consist primarily of expenses incurred for outside services, utilities, rent, depreciation expense and other facilities-related costs.

Costs related to battery materials and design services are recognized in the same period as the associated revenue is recognized.

The Company has investments in marketable debt and 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.

treasury securities and are classified as available-for-sale at the time of purchase.

The Company reevaluates the available-for-sale classification at each balance sheet date.

These available-for-sale marketable debt 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.

Such amortization and accretion are reported within interest income in the consolidated statements of operations and comprehensive loss.

Investments in marketable equity securities are classified as short-term investments when the Company’s intention is to sell within a year, 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 consist of raw materials and are stated at the lower of average cost or net realizable value.

Concentrations of Credit Risk

Concentrations

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

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.

The Company seeks to mitigate its credit risk with respect to such concentrations by holding its deposits with 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, 2024 and 2023, the amount of cash, cash equivalents and restricted cash held by our subsidiaries in foreign bank accounts was $ 4.4 million and $ 11.1 million, respectively.

The Company had one customer during the year ended December 31, 2024 that accounted for approximately 90 % of the Company’s revenue and outstanding accounts receivable, respectively, for the year ended December 31, 2024 .

Fair Value Measurements

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Total current assets at fair value

Non-current assets

Restricted cash in money market funds

Total non-current assets at fair value

Total assets at fair value

Non-current liabilities

4 unchanged sentences

Cash equivalents in money market funds (Note 5)

treasury securities

treasury securities (Note 6)

Equity securities (1)

Total current assets at fair value

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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

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

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Intellectual property

Amortization expense is included in general and administrative expenses in the consolidated statement of operations and comprehensive loss.

Amortization expense is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Impairment of Long-Lived Assets

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There were no impairments of long-lived assets during the years ended December 31, 2024 and 2023.

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.

The Company determines if an arrangement includes a lease at inception.

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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.

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 statements of operations and comprehensive loss or as a reduction of the cost of the related asset in the consolidated balance sheets.

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 a government grant awarded to the Company.

Sponsor Earn-Out Liabilities

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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.

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 February 3, 2022 (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 statements 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, 2024, the earn-out triggering events were not achieved for any of Tranche 2 through Tranche 5.

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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.

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.

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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.

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 statements 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.

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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.”

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 .

Research and Development Costs

Research and Development

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.

Additionally, payments received by the Company under its JDAs are recognized as a reduction to research and development expense in the consolidated statements of operations and comprehensive loss.

General and Administrative

General and administrative expenses consist primarily of costs incurred for salaries and personnel-related expenses, including stock-based compensation expense , for our finance, legal and human resource functions, expenses for director and officer insurance, outside contractor and professional service fees, audit and compliance expenses, legal, accounting and other advisory services, as well as allocated facilities and information technology costs including depreciation and amortization.

Stock-Based Compensation

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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.

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 15 – Stock-Based Compensation” for additional information about stock-based awards.

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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.

The changes in accumulated other comprehensive income (loss) are included in the Company’s consolidated statements 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.

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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.

The Company adopted the new guidance beginning for fiscal year 2024 .

See Note 18 for the Company’s disclosures in accordance with this new guidance.

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.

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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.

In November 2024, The FASB issued ASU No.

2024-03, Disaggregation of Income Statement Expenses , which requires more detailed information about the types of expenses included in certain expense captions presented on the consolidated statements of operations.

Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses.

The new standard is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

We are currently evaluating the impact of adoption on our consolidated financial statements.

The Company has reviewed all other accounting pronouncements issued during the year ended December 31, 2024 and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

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;

● 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;

● 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:

We disaggregate our revenue from customers by the type of arrangement, primarily from the sale of battery products and from providing research and development services, as this depicts how the nature, amount, timing, and cash flows are affected by economic factors.

The following table summarizes the Company’s disaggregated revenue:

Year Ended December 31,

(in thousands)

Cash - Ivanhoe's trust and cash, net of redemptions

Cash - PIPE Financing

Non-Transaction costs relating to Ivanhoe in conjunction with Closing

Transaction costs and advisory fees paid

Net proceeds from Business Combination and PIPE Financing at Closing

Transaction costs paid post Closing

Financing cash inflow from Business Combination and PIPE Financing

Transaction costs expensed relating to liabilities assumed upon the Business Combination

Transactions costs paid on or before December 31, 2021

Sponsor Earn-Out liability

Liabilities assumed from Ivanhoe

Accrued transaction costs

Net contributions from Business Combination and PIPE Financing

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

Redemption of Ivanhoe Class A common stock

( 22,455,850 )

Ivanhoe Class A common stock, net of redemptions

Ivanhoe Class B ordinary shares, converted to Class A common stock upon Closing

Total Ivanhoe Class A Common Stock

PIPE Investors — Class A common stock

Old SES common and redeemable convertible preferred shares (other than SES Founder Group) converted to Class A common stock

SES Founder Group shares of common stock converted to shares of Class B common stock

Old SES Restricted Shares converted to restricted shares of Class A common stock

Founder Earn-Out Shares (Class B common stock)

Earn-Out Shares (Class A common stock)

Earn-Out Restricted Shares (Class A common stock)

Shares of Old SES outstanding prior to Business Combination and PIPE Financing

( 276,103,221 )

Business Combination and PIPE Financing Shares

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 .

Revenue from customers:

Service revenue

Product revenue

Total revenue from customers

Remaining Performance Obligations

We have performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue.

As of December 31, 2024, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied, was approximately $ 3.4 million, which is expected to be recognized as revenue within one year .

This amount does not include contracts to which the customer is not committed.

The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications.

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 Li-Metal battery technology, which concluded in November 2023.

Further, in May 2021, the Company executed another JDA with Hyundai to jointly develop the A-Sample Li-Metal batteries effective August 31, 2021.

In March 2024, the Company extended this JDA until December 2025 to develop the B-sample Li-Metal batteries.

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 research and develop the A-Sample Li-Metal batteries and build-out a prototype manufacturing line for GM Technology .

The JDA concluded in September 2024.

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:

(“Honda”) when it entered into a JDA to jointly research and develop the A-Sample Li-Metal batteries, which concluded in June 2023.

The Company entered into a B-sample services agreement with Honda to replace the JDA in January 2025, with a term through the end of 2025.

In November 2023, the Company entered into a B-Sample JDA with one of our OEM partners for delivery of the B-Sample batteries.

The JDA has a term of two and half years .

R&D activities.

The following table summarizes credits to research and development recorded in accordance with the terms of the JDA agreements:

Year Ended December 31,

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Total credits to research and development

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 .

As of December 31, 2024, there were no receivables from related party outstanding compared to $ 3.9 million outstanding as a receivable from related party as of December 31, 2023, as disclosed in the consolidated balance sheets.

As of December 31, 2024, there was no non-related party receivable outstanding compared to $ 5.1 million outstanding as of December 31, 2023.

Amounts for non-related party receivables are recorded within prepaid expenses and other current assets in the consolidated balance sheets .

Cash and Cash Equivalents

The following table presents information about the Company’s cash, cash equivalents, and restricted cash:

The following table presents information about the Company’s cash, cash equivalents, and restricted cash, as shown in the consolidated statements of cash flows:

(in thousands)

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Restricted cash included in other assets

Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows

Total cash, cash equivalents, and restricted cash

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.

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, 2024 and December 31, 2023, which had maturity dates that range from 0 month s to 10 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, 2024 and 2023.

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treasury securities

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.

The Company has $ 1.0 million and $ 0.6 million marketable equity securities as of December 31, 2024 and 2023, respectively, with an initial cost of $ 0.5 million.

Total unrealized gain of $ 0.5 million and $ 0.1 million is recorded under miscellaneous (expense) income, net in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023, respectively.

Property and Equipment, Net

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Property and equipment, net

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.

Depreciation expense was $ 8.2 million and $ 5.4 million for the years ended December 31, 2024 and 2023, respectively.

Intangible Assets, Net

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Amortization expense was $ 0.1 million for each of the years ended December 31, 2024 and 2023, 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:

Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheets as of December 31, 2024 is expected to be as follows:

Years Ending December 31,

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The components of accrued expenses and other current liabilities consisted of the following:

As of December 31,

(in thousands)

December 31, 2023

December 31, 2022

Vendor project charges

Employee compensation and related costs

Professional and consulting services

Construction in process

Income taxes payable

Professional and consulting services

Deferred income received under joint development agreements

Accrued expenses and other current liabilities

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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.

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 repay the Grant in its entirety with interest.

The Company has yet to fulfill the required minimum investment and minimum employment conditions hence interest payable was recorded.

The compliance with these conditions will continue to be monitored over the remaining grant period.

As of December 31, 2024 and 2023, respectively, the Company had received, but not yet earned 12 billion Korean won.

These balances are equivalent to $ 8.1 million and $ 9.3 million, after translation, as of December 31, 2024 and December 31, 2023, respectively, which is disclosed as a noncurrent liability in the consolidated balance sheets.

Sponsor Earn-Out Liabilities

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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).

Expected volatility is based on the weighted average historical volatilities of the Company’s Class A common stock and public warrants as well as the common stock of select peer companies’ that matches the expected term of the awards (range of the weighted average of volatility is 87.3 % - 122.5 % and 83.8 % - 96.2 % for the years ended December 31, 2024 and 2023, respectively).

The expected term is derived from the probability weighted model, considering the number of inputs, including the probability of a change in control.

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Balance as of December 31, 2022

Additions during the period

Change in fair value

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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.

The Company’s total operating lease cost was $ 3.5 million and $ 2.9 million for the years ended December 31, 2024 and 2023, respectively.

Cash paid for amounts included in the measurement of lease liabilities was $ 3.5 million and $ 2.9 million for the years ended December 31, 2024 and 2023.

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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.

The lease agreement was renewed in September 2024 for an additional two-year term that can be terminated with 90 -day notice and provides for annual cost of living increases in rent.

Total future minimum lease payments under this lease are $ 1.0 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.

Total future minimum lease payments under this lease are $ 0.7 million.

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.

In June 2024, the Company terminated this lease agreement resulting in no future lease payments and the removal of the corresponding lease asset and liability.

Commitments and Contingencies

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To date, there have been no claims under these indemnification provisions.

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

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)

Shares Issued

and Outstanding

Series C plus

Series D plus

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.

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.

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

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(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;

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.

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( 1,619,998 )

( 1,931,044 )

( 1,270,726 )

Total shares issued and outstanding

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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 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.

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General and administrative

Cost of revenue

The following table summarizes share-based compensation expense by award type:

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Outstanding at December 31, 2022

( 1,063,863 )

Forfeited and canceled

Outstanding at December 31, 2023

Gross vested units

( 2,413,455 )

Forfeited and canceled

( 2,392,385 )

Outstanding at December 31, 2024

The total fair value of RSUs vested was $ 10.0 million and $ 8.9 million for the years ended December 31, 2024 and 2023, respectively.

No RSUs were granted or vested in the year ended December 31, 2021.

As of December 31, 2024, there was $ 14.3 million of unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.0 years.

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Outstanding at December 31, 2024

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.

The total fair value of RSAs vested was $ 2.0 million and $ 3.1 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, there was $ 1.2 million of unrecognized compensation cost related to RSAs, which is expected to be recognized over a weighted-average period of 0.3 years.

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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.

Expected volatility is based on the weighted average historical volatilities of the Company’s Class A common stock and select peer companies’ common stock that matches the expected term of the awards.

The expected term is derived from the vesting period.

9 unchanged sentences

Forfeited and canceled

( 1,029,316 )

Outstanding at December 31, 2024

There were no PSUs granted or vested in the year ended December 31, 2021.

As of December 31, 2024, there was $ 1.8 million of unrecognized compensation cost related to PSUs, which is expected to be recognized over a weighted-average period of 1.5 years.

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Outstanding at December 31, 2022

Granted/vested

Forfeited and canceled

19 unchanged sentences

Forfeited and canceled

( 1,049,208 )

Outstanding at December 31, 2024

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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

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,

Expected term of options (in years)

Risk-free interest rate

0.6 % to 1.1 %

Expected volatility

68.0 % to 69.9 %

Expected dividends

Weighted-average grant date fair value per option

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.

There were no options granted during the years ended December 31, 2024 and 2023.

As of December 31, 2024, there was less than $ 0.1 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.1 years.

As discussed in “Note 1 – Nature of Business,” SES Holdings Pte.

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Change in valuation allowance

Deferred adjustments

Change in Sponsor Earn-Out liabilities

Transaction costs

Effective tax rate

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Net operating losses

Lease liabilities

Research and development tax credits

Lease liabilities

Stock-based compensation

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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 2024, 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.

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, 2024 and 2023, the total amount of unrecognized tax benefits was $ 7.6 million and $ 5.5 million respectively, of which $ 7.3 million would affect 2024 income tax expense, if recognized, without considering any valuation allowance.

6 unchanged sentences

Beginning of the year

Increase – current year positions

Increase – prior year positions

Increase – current year positions

Decrease – prior year positions

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Unvested RSAs

Redeemable convertible preferred stock

Segment and Geographic Information

The Company operates as one reportable segment as described in Note 2 to the consolidated financial statements.

Operating Segments

The Company’s CODM is its Chief Executive Officer .

The CODM uses operating income (loss) as the measure of financial performance and for resource allocation decisions.

Significant Expenses

The Company concluded it operates as one operating and reportable segment based on the information regularly reviewed by the CODM for decision making, resource allocation, and evaluating financial performance.

The information included is categorized into different significant expense lines such as compensation and benefits, lab and equipment, professional services, general and administrative, facility, and sales and marketing.

For the year ended December 31, 2024, the Company reported to its CODM $ 33.5 million in compensation and benefits excluding stock compensation and net of reimbursements, $ 18.3 million in lab and equipment net of reimbursements, $ 16.0 million in general and administrative, $ 12.7 million in professional services, $ 8.6 million in facility, and $ 1.6 million in sales and marketing.

For the year ended December 31, 2023, the Company reported to its CODM $ 16.9 million in compensation and benefits excluding stock compensation and net of reimbursements, $ 5.7 million in lab and equipment net of reimbursements, $ 13.7 million in general and administrative, $ 12.6 million in professional services, $ 7.4 million in facility, and $ 1.2 million in sales and marketing.

Geographic Information

For the year ended December 31, 2024, revenue outside of the United States, based on customer billing address in the Asia Pacific region, was 100% of total revenue.

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.

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Total property and equipment, net

Intangible assets, net:

Total long-lived assets

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

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.

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 annual compensation on a pre-tax basis.

The Company contributed $ 0.7 million and $ 0.5 million to the defined contribution retirement savings plan for the years ended December 31, 2024 and 2023, respectively.

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.

Pursuant to the director nomination agreement, dated as of July 12, 2021, with the Company (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.

On October 29, 2024, GM and the Company mutually agreed to terminate the Director Nomination Agreement and GM terminated its board representation.

Hence, GM is no longer considered a related party.

See “Note 4 – Partnerships” for more details about our prior partnership with GM.

Changes in and Disagreements With Accountants On Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data