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Item 1. Business

2026-03-04 compared with 2025-02-28 · 48 added, 145 removed, 50 unchanged (79% of the section changed)

We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”), drones, robotics, Battery Energy Storage Systems (“BESS”) and other applications.

Our differentiated battery technology has been designed to combine the high energy density of Li-Metal and Li-ion with the large-scale manufacturability of conventional Li-ion batteries in order to help promote the transition from the global dependence on fossil fuel-based vehicles to clean and efficient EVs, with the goal of enabling a new era of electric transportation on land and in the air.

We are seeking to accelerate our pace of innovation by currently utilizing artificial intelligence (“AI”) across the spectrum of our business, from engineering and manufacturing to battery health and safety monitoring and AI-accelerated battery materials discovery.

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

Our team has dedicated the past decade to developing a comprehensive and proprietary Li-Metal and Li-ion battery technology platform, including high concentration solvent-in-salt electrolyte, ultra-thin wide format lithium anode, protective anode coating, and novel cell engineering processes that are based on scalable Li-ion manufacturing but address unique lithium metal plating challenges.

As we build more AI-enhanced Li-Metal and Li-ion cells and generate more data, AI has become an increasingly integral part of our business in material development, battery health monitoring and incident prediction, with our AI initiatives consisting of AI for Science, AI for Manufacturing and AI for Safety.

We believe that our AI for Science has the potential to accelerate our pipeline material discovery by mapping the vast universe of small molecules, with the goal to improve battery performance and safety.

Our AI for Manufacturing uses machine learning to help define and fine-tune quality specifications based on manufacturing process data.

Our AI for Safety is designed to monitor battery state-of-health and predict incidents more accurately than conventional battery management system.

Four Pillars of our Business

There are four pillars to our mission.

Electric Vehicles (EV)

In 2012, we transitioned away from solid state Li-Metal so our Li-Metal batteries could operate at room temperature and be manufactured at large scale.

In 2024, we began producing large 50 Amp-hour (“Ah”) and 100Ah B-sample Li-Metal battery cells for EVs.

We made significant progress in automotive Li-Metal cell manufacturing by addressing key manufacturing challenges in ultra-thin wide format lithium anode, issues related to powder and metal bur in lithium anode punching, high concentration electrolyte scale-up, and other issues related to quality and safety in automotive large Li-Metal cell manufacturing.

We have performed in-house testing on these 50Ah and 100Ah Li-Metal B-sample cells and shared testing data with our OEM partners, as well as shipped these B-sample cells to other third parties and OEMs for their further performance and safety testing.

We believe that our AI-enhanced Li-Metal battery technology demonstrates industry-leading energy density and performance and have the ability to:

● deliver a lightweight and compact battery, and substantially reduce range anxiety of EV consumers;

● provide fast-charge capability to charge the battery to 80% in less than 15 minutes, significantly reducing charging times;

● incorporate AI software and battery management systems (“BMS”), which will accurately monitor the state of health of the battery and apply appropriate self-healing protocols;

● achieve rapid market adoption due to our strategic partnerships, including with leading global OEMs, such as Hyundai Motor Company (“Hyundai”) and Honda Motor Company, Ltd.

● capitalize on the innovation occurring in Li-ion, including improvements in energy density, manufacturing efficiency and cost reduction, as our manufacturing processes are very similar to Li-ion.

In 2024, we transitioned from developing and producing A-Sample batteries to B-Samples to meet carmakers' requirements for their electric vehicles.

A-Sample batteries are functional prototypes developed for OEMs based on their technical specifications.

These are in contrast with B-Sample batteries, which are A-sample batteries manufactured under much higher throughput and tested in actual vehicles.

We expect to develop and produce C-Samples batteries beginning in 2026, which would be fully functional, mature samples for mass production and tested for full drivability in actual EVs.

As we remain focused on B-Sample battery development, we do not yet have any arrangements with OEMs to manufacture consumer-ready batteries for their EVs.

We expect this progress will pave the way for commercial production of our technology in 2027.

For more information on collaborations with these OEMs, see “ Our Partnerships” below.

Urban Air Mobility (UAM)

We believe that UAM is a perfect fit for Li-Metal.

In our view, B-sample battery cell technology requires less additional development to reach commercial production for use in UAM than in EVs, and that our B-sample technology for EVs can be adapted for UAMs.

UAM frequently operates on a fleet business model where the key business metrics are cost per passenger per mile, with weight being a paramount factor to costs.

We believe that the step-change gravimetric energy density that Li-Metal can potentially offer means that an aircraft has the potential to carry twice the number of passengers, or twice the payload for cargo applications, or fly twice the distance, which has the potential to significantly improve the profitability of UAM operators.

We have converted two of our EV A-sample lines to be dedicated to UAM cell production.

We also believe that our high-energy density and high-power density cells, such as the AI-enhanced 2170 cylindrical cell that we unveiled in January 2025, are well designed for use in humanoid robots, drones and other applications.

Artificial Intelligence (AI)

We started our AI programs to address the need to provide a high level of safety in, and to further accelerate our future roadmap for, material Li-Metal battery development.

Our AI programs fall under three major categories:

AI for Science - We are developing new AI models designed to screen a vast universe of small molecules for potential electrolyte solvent candidates.

We have also built an electrolyte foundry designed to provide high throughput synthesis and testing of these materials.

AI for Manufacturing – The traditional approach to optimizing cell design and process and improving manufacturing quality is through human experience, where the human engineers define and optimize quality specifications, which typically is a very lengthy process.

We believe our AI for Manufacturing can accelerate this timeline.

AI for Manufacturing uses machine learning to help define and fine-turn quality specifications based on manufacturing process data.

AI for Safety - We seek to provide a high level of safety in the field, and we are leveraging our automotive 50Ah and 100Ah cell production volume and quality data to train our AI for Safety.

Our AI for Safety prediction accuracy increased to 95% in 2024, meeting the target we set at the start of the year.

Our ultimate goal is to be able to reach near 100% safety in the field, which we believe will be paramount to both EV and UAM OEMs.

We are currently using and intend to continue using and developing AI for our own product innovations.

Additionally, in the future we plan to work toward generating additional service revenue from the use of our AI programs by third parties.

For more information, see “Our AI-Related Initiatives.”

Battery Energy Storage System (BESS)

We believe the intersection of digital infrastructure and the need for power is one of the most critical themes of our time.

As AI continues to evolve, the demand for power will grow significantly.

BESS is an essential enabler of renewable energy generation, helping alternative sources of power make a steady contribution to the world’s energy needs despite the inherently intermittent character of the renewable energy sources.

The flexibility BESS provides will make it integral to applications such as peak shaving, self-consumption, and back power in the event of outages.

We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies and battery materials for Energy Storage Systems (“ESS”), Urban Air Mobility (“UAM”), drones, robotics, electric vehicles (“EVs”), and other applications.

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

SES accelerates its pace of innovation by utilizing superintelligent AI across the spectrum of our business, from research and development, materials sourcing, cell design, engineering and manufacturing, to battery health and safety monitoring .

Molecular Universe

Through our AI-based platform, Molecular Universe, we believe we have access to multi-pronged business opportunities in fast growing markets, such as ESS, drones and materials.

For ESS, we supply fully integrated hardware and software solutions with battery health and safety management software powered by Molecular Universe, which we believe differentiates our products in a competitive market.

For materials, we believe that we can manufacture and supply enhanced materials discovered through Molecular Universe to gain market share in the large addressable market for advanced battery materials.

We also manufacture and supply high energy and power density Li-Metal and Li-ion cells which can be used for drones, UAM, robotics and EV applications, which are regularly improved through research powered by Molecular Universe.

Finally, we also offer access to Molecular Universe as a software product.

Energy Storage System (ESS)

We believe the intersection of digital infrastructure and the need for power is one of the more critical themes of our time.

As AI continues to evolve, the demand for power is expected to grow significantly.

ESS is an essential enabler of renewable energy generation, helping alternative sources of power make a steady contribution to the world’s energy needs despite the inherently intermittent character of renewable energy sources.

The flexibility ESS provides will make it integral to applications such as peak shaving, self-consumption, and back power in the event of outages.

All of this has created a significant opportunity for us.

We have been actively exploring this area as a natural fit to exploit our unique capabilities in materials discovery and superintelligent battery management through AI.

We believe that our AI-enhanced batteries can extend the life of BESS, and our AI for Safety can improve BESS battery health and safety.

We have only begun to tap into this market and look forward to growing our presence in energy storage.

Our Li-Metal Battery Technology

Limitations of Current Battery Technology

Conventional Li-ion technology is currently being used in most commercially available EVs.

Li-ion typically uses a metal oxide-based or phosphate-based cathode and graphite or graphite/silicon-based anodes.

The anode and cathode are separated by a polymer-based separator.

Finally, the whole cell is filled with a liquid electrolyte that conducts lithium ions from the anode to the cathode as the vehicle is being driven (or battery is being discharged), and from the cathode to the anode as the vehicle (or the battery) is being charged.

Conventional Li-ion cells have been instrumental in kick-starting the current EV market and are being manufactured at scale at capacities of hundreds of GWh today.

However, the automotive industry desires a battery with higher energy density to improve the electric driving range (the distance that a vehicle can be driven on a single charge) while reducing battery cost to enable mass-adoption.

Li-Metal Batteries

Li-Metal is widely considered and accepted as the EV battery technology capable of achieving the highest energy density.

In fact, switching the current Li-ion graphite/silicon anode with Li-Metal will currently result in the highest possible energy density for any given cathode in lithium chemistry.

Li-Metal is the lightest un-engineered pure metal on earth and since the lithium ions do not have to diffuse in and out of the anode host material (like in the case of graphite or silicon in conventional Li-ion), the battery cells made with Li-Metal anode can be very compact and light.

This combination of a lightweight and compact anode results in the highest possible gravimetric (Watt-hour (“Wh”)/kg) and volumetric (Wh/liter) energy density, respectively, for any given cathode in lithium chemistry.

SES’s Approach to Li-Metal Cell

SES’s approach to Li-Metal cell utilizes the high energy density benefits of lithium metal anode while utilizing a cell design that primarily uses a liquid electrolyte in the cathode and separator to transport the lithium ions.

There is also a protective anode coating between the anode and the separator.

This approach results not only in improved energy density due to using a lithium metal anode, but also superior performance at room and lower than room temperatures and enables manufacturing at scale just like Li-ion, which is manufactured at scale today.

In fact, we have been successfully making multi-Amp-hour, multi-layer cells using our Li-Metal approach for many years.

The key breakthrough in SES’s Li-Metal cells is its proprietary and patented liquid electrolyte.

This electrolyte was developed internally at SES with many years of scientific research and development.

We use a high-concentration, solvent-in-salt electrolyte.

While liquid electrolytes used in conventional Li-ion cells are volatile and flammable, SES’s liquid electrolyte has low volatility and is self-extinguishing.

Conventional liquid electrolytes are primarily made up of organic solvents with low concentrations of salt to aid lithium-ion conduction.

SES’s liquid electrolyte primarily consists of salt with a low concentration of proprietary solvent molecules.

This new type of high-concentration solvent-in-salt liquid electrolyte is fundamentally different from conventional liquid electrolyte.

It maintains the manufacturability advantage of liquid electrolytes in conventional Li-ion manufacturing but can enable Li-Metal due to its stability on lithium metal.

SES’s Li-Metal technology also helps resolve an issue that has plagued Li-Metal adoption and progress for decades.

With repeated charge and discharge cycles, lithium metal anodes are known to develop needle-like mossy structures known as dendrites, which can penetrate the separator and short-circuit the battery cell.

The use of our liquid electrolyte changes the morphology of dendrite formation in our Li-Metal battery cells from needle-like mossy structures to a smooth lithium metal surface or dense deposition.

Our proprietary anode coating provides an added layer of protection against separator penetration by making lithium plating denser during charging.

Additionally, our AI-powered safety software and BMS monitors the state-of-health of the battery cells and can accurately detect any safety issues much earlier.

The combination of these elements significantly increases cell cycle life and safety.

The rest of the cell is assembled using our proprietary ultra-thin wide-width Li-Metal anode, a conventional separator and a cathode.

With the exception of the Li-Metal anode, all materials and components utilized in our battery cells are either already being manufactured at scale or have the capability to be easily manufactured at scale without the need for intensive research and development, or development of new equipment.

To our knowledge, SES Li-Metal battery cells are the only Li-Metal cells demonstrated to meet or exceed the preliminary OEM target requirements for energy density, low temperature discharge, room temperature fast charge and discharge, cycle life and safety.

Our unique high-energy density Li-Metal battery is expected to be:

● light and compact, with high energy density of at least 400 Wh/kg and 1,000 Wh/liter in our large 100 AH cells, compared to approximately 265 Wh/kg / 535 Wh/L in Li-ion battery cells using a high nickel content cathode, and with one version of our 100 Ah

multi-layer battery cells demonstrating energy density of 380 Wh/kg / 850 Wh/L in third-party testing.

This higher energy density is expected to translate into significantly more range, which we believe will help to enable the expansion of an electrified world;

● durable and safe, with the ability to meet stringent cycle life, overall lifetime and safety targets for EVs and UAM aircrafts;

● capable of fast charge, charging up to 80% in less than 15 minutes;

● capable of high power discharge, at room and low temperatures;

● low-cost, taking advantage of existing Li-ion manufacturing scale and best-practices to enable cost-reduction;

● capitalizing on the innovation occurring in Li-ion, in terms of incremental improvement in energy density, supply chain development, cost reduction and manufacturing efficiency, since the cathode and cell manufacturing process are the same as in Li-ion;

● smarter, with AI-powered safety software and BMS that can predict safety incidents in real time and make appropriate diagnostic recommendations

Our AI-Based Initiatives

Through our AI-based initiatives discussed above targeted at material discovery, we believe that we can rapidly introduce enhancements to Li-Metal and Li-ion batteries for use in a multitude of applications, including EVs, UAM, storage, drones and robotics, among others.

We believe that our AI-discovered electrolyte materials provide a pathway to generate service revenue earlier than previously anticipated through targeting the large addressable market in each of the aforementioned applications.

Since AI-enhanced electrolytes can simply be dropped into existing Li-ion manufacturing infrastructure, they also require significantly less capital expenditure than traditional battery manufacturing.

Our Partnerships

We have entered into strategic alliances and may in the future enter into additional strategic alliances.

For example, we previously had a JDA with General Motors (“GM”), have entered into JDAs with Hyundai Motor Company (“Hyundai”) and another OEM partner, and have a service contract with Honda Motor Company, Ltd.

(“Honda”), which expire at different points in time.

For more information, see Note 4 to our consolidated financial statements.

We expect to continue to strengthen these partnerships in the use of our battery technology.

Also, we intend to work closely with other OEMs and other strategic partners to develop and produce our Li-Metal battery cells, as well as support our supply chain and the build out of manufacturing facilities, with the aim of making our Li-Metal battery cells widely available in EVs, UAM aircrafts and other applications over time

Our Research and Development

We conduct research and development at our facilities in Woburn, Massachusetts in the United States, Shanghai, China, and Chungju, South Korea.

Research and development activities concentrate on making further improvements to our battery technology, including improvements to battery performance, quality and cost.

Major development efforts include, but are not limited to, programs in the following areas.

Our design is further being customized with and validated by several OEMs.

Based on our collaborations with OEMs, we believe that a roughly 100 Ah cell-size manufactured at GWh scale (five to seven cells-per-minute) is needed to achieve commercialization in EVs and UAMs at a large, global scale.

We are developing processes and upgrading equipment to scale up the manufacturing of our current cell design from three to nine Ah capacity to 50 Ah and 100 Ah capacity.

● Module and Pack Design :

Li-Metal cells must be integrated into modules and packs as part of their integration into vehicles.

Our active development efforts are focused on the integration of our Li-Metal cells into modules to enable our Li-Metal cells to perform as intended once they are integrated into vehicles.

● AI Software and BMS :

Software is critical to the ongoing monitoring of battery health and safety.

We continue to develop AI algorithms to diagnose battery cell-related health issues, develop advanced control algorithms and charging methods to enhance cycle life and safety, and port such software on to a BMS that can integrated into a battery pack.

● Advanced Materials and Coatings :

We continue to research and develop advanced electrolyte and anodes to further improve cycle life and safety.

In addition, we continue to develop novel methods of laminating or depositing lithium metal onto current collector that can be deployed at commercial GWh scale.

● Cathode Materials and Design :

We develop our Li-Metal cells for a variety of different cathode materials, cathode design and cathode processing methods that can provide ultra-high energy density and/or significant cost-reduction.

● Li-Metal Recycling :

Along with other battery components that are already being recycled today, Li-Metal foil will also need to be recycled in the future.

We continue to explore methods of recycling that are productive and cost-effective.

We believe that our AI-enhanced batteries can extend the life of ESS, and our AI for Safety can improve ESS battery health and safety.

In September 2025, we completed the acquisition of UZ Energy, an ESS systems manufacturer, which has allowed us to accelerate our entry into the ESS market.

We believe that by integrating our hardware and software solutions with battery health and safety management software powered by Molecular Universe into UZ Energy’s existing products, we can further differentiate our ESS products to compete in a fast growing but competitive ESS marketplace.

We believe that drones are a perfect fit for high energy density and high-power density Li-Metal and Li-ion batteries.

UAM and drones frequently operate on a fleet business model where the key business metrics are cost per passenger per mile, with weight being a paramount factor to costs.

We believe that the step-change gravimetric energy density that Li-Metal and Li-ion can potentially offer means that an aircraft has the potential to carry twice the number of passengers, or twice the payload for cargo applications, or fly twice the distance, which has the potential to significantly improve the profitability of UAM operators.

We have converted two of our EV A-sample lines to be dedicated to drones and UAM cell production.

We are also planning to develop NDAA-compliant manufacturing capacity to develop drone cells with high energy and high-power density in our facility in Korea to meet the growing demand for NDAA-compliant cells.

Molecular Universe should accelerate material discovery for both Li-Metal and Li-ion across multiple applications ranging from ESS, drones, EV, consumer electronics and many others.

We partner with contract manufacturers to supply materials discovered through the Molecular Universe at scale.

To date, we have discovered six novel electrolyte materials across multiple applications through our Molecular Universe platform which are being tested with over 40 potential customers.

In November 2025, we announced a joint venture

with Hisun New Energy Materials Ltd.

(“Hisun”), an electrolyte manufacturer, to allow us to manufacture our newly discovered materials at commercial scale for customers.

We expect to begin supplying materials manufactured through the Hisun joint venture in the second half of 2026.

Molecular Universe

We also provide access to our Molecular Universe AI4Science platform, either through access to a cloud version of Molecular Universe, or through on-premises deployment, on a subscription basis.

Molecular Universe allows battery professionals to accelerate their own research to discover breakthroughs in battery materials for consumer electronics, drones, ESS and EV applications, among others.

Molecular Universe offers high precision and high-speed simulation models, high quality experimental data and domain expertise, allowing battery professionals to significantly accelerate research while reducing research and development costs.

Our Intellectual Property

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We have registered various trademarks associated with our business with the United States Patent and Trademark Office on the Principal Register and in other appropriate jurisdictions.

As of December 31, 2024, we have 93 registered or allowed trademarks, with 14 trademark applications pending.

As of December 31, 2025, we have 106 registered or allowed trademarks, with 1 trademark application pending.

Depending upon the jurisdiction, trademarks are valid if they are in use and/or their registrations are properly maintained.

Geographic & Concentration Information

Revenue outside of the United States, based on customer billing address, was 99% and 100% of total revenue for the years ending December 31 2025 and 2024, respectively.

For the year ending December 31, 2025, there were three customers that accounted for 48%, 15%, and 12% of revenue, respectively, compared with one customer that accounted for 93% in the year ending December 31, 2024.

Our Suppliers

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For our current product development needs, we source from third-party suppliers for raw materials, components and equipment necessary to develop and manufacture our Li-Metal battery cells.

As discussed above, we have announced a joint venture with Hisun to allow us to manufacture our newly discovered materials at commercial scale for customers.

We expect to begin supplying materials manufactured through the Hisun joint venture in the second half of 2026.

Our Employees

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The workforce in our China and South Korea locations primarily consists of operators for our manufacturing lines.

Currently, approximately

83% of our employees worldwide are engaged in research and development and related functions, with expertise in all aspects of the development process, including materials science, chemistry, engineering, machine-learning, and software.

Currently, approximately 68% of our employees worldwide are engaged in research and development and related functions, with expertise in all aspects of the development process, including materials science, chemistry, engineering, machine-learning, and software.

Many of these employees have extensive experience from large Li-ion companies and hold advanced engineering and scientific degrees, including many from the world’s top universities.

Our Facilities

We have leased facilities located in Woburn, Massachusetts in the United States, Shanghai, China, and Chungju and Seoul, South Korea.

We have leased facilities located in Woburn, Massachusetts in the United States, Shanghai and Shenzhen, China, and Chungju and Seoul, South Korea.

Our primary Woburn facility, which also serves as the Company’s headquarters, focuses on chemistry, material and algorithm research and development, as well as engaging with our OEM and strategic partners.

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Our Shanghai facility focuses on supply chain development, manufacturing process development, battery cell development and production.

Our Shenzhen facility focuses on ESS supply chain and sales to our customers, including logistics and manufacturing processes.

Our Chungju facility focuses on manufacturing process development.

We have also set up an office in Seoul focused on supply chain, customer relations and our collaboration with partners in the region.

The battery market, like the EV market it services, is fast-growing, extremely competitive and driven by the innovation of both large incumbents and emerging entrants like SES.

The battery market is fast-growing, extremely competitive and driven by the innovation of both large incumbents and emerging entrants .

With the introduction of new technologies and the potential entry of new competitors into the market, we expect competition to increase in the future, which could harm our business, results of operations, or financial condition.

Our prospective competitors include major manufacturers supplying the industry, automotive OEMs and potential new entrants to the industry.

Existing suppliers of batteries to the EV industry include Contemporary Amperex Technology Co.

Limited, SK Innovation, LG Energy Solutions, Panasonic Corporation and Samsung SDI.

Additionally, many automotive OEMs, including Tesla, Nio, Rivian and Toyota, are researching and investing in efforts to develop their own EV battery production capabilities.

Newer entrants, including Sila Nanotechnologies, Solid Power, Enovix, QuantumScape, and Amprius, are also seeking to improve conventional lithium-ion batteries or to develop new technologies, including lithium-metal and solid-state batteries, or to develop new technologies for cathodes, anodes, electrolytes and additives.

Some of these companies have established relationships with automotive OEMs and are in varying stages of development.

Our prospective competitors include major manufacturers supplying the battery market, automotive and drone OEMs and potential new entrants to the battery market.

Existing suppliers of ESS products include FREYR Battery, Microvast Holdings, Electrovaya, Stem Inc., and Fluence Energy.

Existing manufacturers of battery materials that we compete with include Enovix, Solid Power, FREYR Battery, Sion Power, and Natrion.

Existing manufacturers of drone and robotics cells that we compete with include Amprius, QuantumScape, Solid Power, Enovix, and Cuberg.

Existing competitors for our Molecular Universe software service include C3.ai, Natrion, Intecells, Zeta Energy, and Innoviz Technologies.

We acknowledge that incumbents and emerging entrants may have greater resources to invest in advancing their technologies, access to more potential customers, or strategic relationships with OEMs (or other third parties) that may give them a competitive edge.

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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 1. Business