What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-04 compared with 2025-02-28 · 312 added, 180 removed, 808 unchanged (38% of the section changed)

32 unchanged sentences

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 Liability”) measured at fair value, with changes in fair value recorded in the consolidated statement of operations and comprehensive loss each reporting period.

As described further in Notes 2 and 12 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 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.

The fair value of the Sponsor Earn-Out Liabilities was determined to be $7,795,000 at December 31, 2025.

The gain on change in fair value of Sponsor Earn-Out Liabilities was $1,677,000 for the year ended December 31, 2025.

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 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 Liabilities.

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

● We evaluated the judgments and assumptions made by management in the determination of the expected term.

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o Evaluated the appropriateness of the Monte Carlo simulation model.

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.

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.

● We evaluated the design and implementation of controls related to the Sponsor Earn-Out Liabilities .

/s/ GRANT THORNTON LLP

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Boston, Massachusetts

February 28, 2025

March 4, 2026

SES AI Corporation

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Accounts receivable

Receivable from related party

Prepaid expenses and other assets

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Operating lease liabilities

Deferred consideration, current

Accrued expenses and other liabilities

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Unearned government grant

Deferred consideration, non-current

Other liabilities, non-current

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Interest income

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

Miscellaneous (expense) income, net

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

Miscellaneous expense, net

Total other income, net

Loss before income taxes

(Provision) benefit from income taxes

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

Provision for income taxes

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss)

Unrealized gain (loss) on short-term investments

Total other comprehensive income (loss), net of tax

Total comprehensive loss

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Foreign currency translation loss

Unrealized gain on short-term investments

Unrealized loss on short-term investments

Balance — December 31, 2024

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Forfeitures of Earn-Out restricted shares

Repurchase and retirement of Class A common stock

( 1,340,656 )

Stock issuance costs

Stock-based compensation

Foreign currency translation loss

Unrealized loss on short-term investments

Foreign currency translation gain

Unrealized gain on short-term investments

Balance — December 31, 2025

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

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

(Gain) loss 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

Loss on sale of fixed assets

Loss on sale or disposal of fixed assets

Changes in operating assets and liabilities:

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Accounts payable

Lease liabilities

Operating lease liabilities

Accrued expenses and other liabilities

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Purchases of property and equipment

Acquisition of business, net of cash acquired

Proceeds from the sale of short-term investments

Purchase of short-term investments

Proceeds from the maturities of short-term investments

Net cash provided by investing activities

Net cash (used in) provided by investing activities

Cash Flows From Financing Activities

Proceeds from government grant

Repurchase and retirement of Class A common stock

Payments for taxes withheld on vesting of restricted stock

Proceeds from stock option exercises

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Effect of exchange rates on cash

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

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

Cash, cash equivalents and restricted cash at beginning of period (Note 6)

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

Incomes taxes paid

Income taxes paid

Deferred consideration payable for acquisition

Lease liabilities arising from obtaining right-of-use assets

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Nature of Business

SES AI Corporation, and consolidated subsidiaries (together the “Company”) consists of SES AI Corporation (“SES”) and its wholly-owned subsidiary SES Holdings Pte.

SES AI Corporation and its consolidated subsidiaries (together the “Company”) consists of SES AI Corporation (“SES”) and its wholly-owned subsidiary SES Holdings Pte.

(“SES Holdings” or “Old SES”), along with its wholly owned subsidiaries SolidEnergy Systems, LLC (“SES LLC”), SES (Shanghai) Co., Ltd.

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(“SES Viking”), SES AI Korea Co., Ltd.

(“SES Korea”) and SES Energy Pte.

(“SES Energy”).

(“SES Korea”), Molecular Universe Pte.

(“Molecular Universe Ltd.”), SES Energy Storage (Shanghai) Co., Ltd.

(“SES Energy Storage”), and Shenzhen UZ Energy Co., Ltd.

(“UZ Energy”).

SES Holdings is a Singapore private company limited by shares formed in November 2018.

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SES Korea, formerly known as Massachusetts Solid Energy Co., Ltd., was registered in South Korea in November 2021.

SES Energy is a Singapore private company and was incorporated in September 2022.

The Company is engaged in the development of 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.

Molecular Universe Ltd.

is a Singapore private company and was incorporated in September 2022.

SES Energy Storage is a China private company and was incorporated in August 2025.

UZ Energy is a China private company that was acquired in September 2025.

The Company is engaged in the development of AI-enhanced high-performance, 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 AI-enhanced 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 large-scale manufacturability of conventional Li-ion batteries in order to help promote the transition to new cleaner technologies.

The Company is seeking to accelerate the pace of innovation by currently utilizing AI across the spectrum of our business, from engineering and manufacturing to battery health and safety monitoring and AI-accelerated battery materials discovery.

The Company’s headquarter is located in Woburn, Massachusetts with research and development facilities located there, in Shanghai, China, and in Chungju, South Korea.

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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

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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) 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.

Significant estimates and assumptions include those related to the valuation of (i) certain equity awards including, the Sponsor Earn-Out Shares (as defined below), and performance stock units, (ii) revenue from customers, (iii) deferred tax assets and uncertain income tax positions, (iv) the measurement of operating lease liabilities, (v) the evaluation of the recoverability of long-lived assets and goodwill,

including intangible assets, (vi) fair value measurement of acquired intangible assets and deferred consideration, and (vii) warranty reserve .

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

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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 $ 0.7 million and $ 0.2 million for the years ended December 31 2025 and 2024, respectively.

Business Combinations

In accordance with the provisions of ASC Topic 805, Business Combinations, the Company recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date.

Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.

During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill, or bargain purchase if applicable.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the condensed consolidated statements of operations and comprehensive loss.

The results of operations of an acquired business are included in the Company’s consolidated financial statements from the date of acquisition.

Acquisition-related costs, including advisory, legal, accounting, valuation and other costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of operations.

Contingent consideration liabilities are recognized at the estimated fair value on the acquisition date.

Subsequent changes to the fair value of contingent consideration liabilities are recognized in miscellaneous expense, net in the consolidated statements of operations and comprehensive loss.

Cash and Cash Equivalents

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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”).

The Company recognizes revenue within the scope of 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.

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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.

The Company sells ESS products to its global customer base that were contract manufactured and enhanced through the installation of the Company’s battery management system.

The Company also manufactures and sells battery cells and battery materials, such as electrolytes, to automotive and drone original equipment manufacturers (OEMs”) and other manufacturers.

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

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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.

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.

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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.

As of December 31, 2025 and 2024, total deferred contract costs were $ 0.3 million and $ 0.1 million, respectively.

Cost of Revenue

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

Accounts Receivable

Accounts receivable and notes receivable are recorded at invoiced amounts less allowance for any credit losses.

We recognize credit losses based on a forward-looking current expected credit losses (“CECL”) model.

We make estimates of expected credit losses based upon the assessment of various factors, including the age of receivable balances, credit quality of our customers, current economic conditions,

reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers.

The allowance for credit losses is recognized in the Consolidated Statement of Operations and Comprehensive Loss.

The uncollectible receivables are written off in the period in which a determination is made that all commercially reasonable means of recovering them have been exhausted.

We did no t recognize an amount for the allowance for expected credit loss as of December 31, 2025 and 2024, respectively, and there were no write-offs of accounts receivable for the periods.

As of December 31, 2025 and December 31, 2024, our accounts receivable was $ 4.8 million and $ 1.0 million, respectively.

As of December 31, 2025, we have an immaterial amount of notes receivable and no notes receivable as of December 31, 2024.

Warranty Reserve

The Company’s ESS products are sold with a warranty that covers the products for manufacturing defects for up to a ten-year period after the sale of our products.

The Company establishes a warranty reserve based on anticipated warranty claims using historical data at the time product revenue is recognized.

This reserve requires us to make estimates regarding the amount and costs of warranty repairs we expect to make over a period of time.

Factors affecting warranty reserve levels include the historical rates of warranty claims and cost to replace equipment.

Warranty expense is recorded in cost of revenues and the related liabilities are record in accrued expenses and other current liabilities and other liabilities based on expected warranty term.

We evaluate the adequacy of this reserve each reporting period.

The Company has investments in marketable debt and equity securities.

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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.

Inventory is stated at the lower of average cost or net realizable value on a first-in, first-out basis.

Inventory costs include purchase of materials, freight, storage, hauling, and certification costs.

The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions.

Once established, write-downs of inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts.

As of December 31, 2025 and 2024, the Company did no t have excess or obsolete inventory reserves.

Inventories consisted of the following:

Year Ended December 31,

(in thousands)

Raw materials

Work-in-process

Finished goods

Total inventories

Concentrations

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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 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, 2025 and 2024, the amount of cash, cash equivalents and restricted cash held by our subsidiaries in foreign bank accounts was $ 27.9 million and $ 4.4 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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Cash equivalents in money market funds (Note 6)

treasury securities

treasury securities (Note 7)

Equity securities (1)

Total current assets at fair value

Non-current liabilities

Current Liabilities

Deferred consideration, current (2)

Total current liabilities at fair value

Long-term Liabilities

Sponsor Earn-Out liabilities

Total non-current liabilities at fair value

Deferred consideration, non-current (2)

Total long-term liabilities at fair value

December 31, 2024

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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

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(1) Fair value was determined using publicly quoted market prices obtained from third-party sources in their respective markets.

(2) Fair value was determined using the Black Scholes option pricing formula capped call and capped put methodology using risk adjusted discount rate for the revenue and adjusted revenue forecasts.

There were no transfers in or out of Level 3 measurements during the years ended December 31, 2025 and 2024.

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Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including amortizable intangible assets and ROU assets, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company evaluates long-lived assets, including amortizable intangible assets and right-of-use assets, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If such events or circumstances arise, the Company will compare the carrying amount of the asset group comprising the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the asset group.

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There were no impairments of long-lived assets during the years ended December 31, 2025 and 2024.

Goodwill, long-lived assets, and other intangible assets

Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 805, Business Combinations and ASC Topic 350, Intangibles—Goodwill and Other.

In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met:

(1) the intangible asset acquired arises from contractual or other legal rights;

or (2) the intangible asset is separable.

Intangibles are typically trade names and intellectual property.

Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

The Company recorded goodwill for the first time in connection with its acquisition of UZ Energy in September 2025.

As the Company determined there to be a single reporting unit subsequent to the acquisition, management identified the historical losses of the legacy business to be an indicator of a triggering event, in accordance with ASC Topic 350.

The Company performed a quantitative test for impairment, noting that the fair value of the Company using the market cap under the market approach exceeded its book value and concluded there was no impairment of goodwill.

Notes Payable

During 2025, the Company acquired notes payable liabilities, including accrued interest, as part of the UZ Energy acquisition detailed in “Note 3 – Acquisitions.” The Company recorded notes payable at their carrying amount, including accrued interest, based on the rates and terms detailed in the original agreements for the notes payable.

As of December 31, 2025, the outstanding notes payable and accrued interest balance was $ 0.8 million.

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

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The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheets.

See “Note 12 – Leases” for additional information about the Company’s leases.

Government Grants

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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.

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 11 – Government Grant” for additional information about a government grant awarded to the Company.

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These Sponsor Earn-Out Shares are subject to certain transfer restrictions and forfeiture terms following the Closing, which will be released as follows:

● 20 % are subject to transfer restrictions until the date that is 180 days after the Closing (“Tranche 1”);

● 20 % were subject to transfer restrictions until the date that is 180 days after the Closing (“Tranche 1”);

● 20 % are subject to transfer restrictions until SES’s closing stock price equals or exceeds $ 12.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 2”);

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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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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.

Research and development expenses include personnel-related expenses, such as salaries, benefits, and stock-based compensation, for scientists, experienced engineers and technicians.

These expenses also cover materials and supplies used in product research and development, process engineering efforts and testing,

payments made to consultants, and patent related legal costs.

Furthermore, they encompass depreciation, allocated facilities expenses, and information technology costs, including costs incurred for renting GPUs to train AI models .

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.

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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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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-7, Improvements to Reportable Segment Disclosures , which requires disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The 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.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance.

We are currently evaluating the impact this ASU will have when adopted and anticipate this ASU will likely result in the required additional disclosures being included in our consolidated financial statements.

On December 4, 2023, the FASB issued ASU No.

2023-09, Improvements to Income Tax Disclosures ("ASU 2023-09").

ASU 2023-09 amends ASC 740, Income Taxes to expand income tax disclosures and requires that the Company disclose (i) the income tax rate reconciliation using both percentages and reporting currency amounts;

(ii) specific categories within the income tax rate reconciliation;

(iii) additional information for reconciling items that meet a quantitative threshold;

(iv) the composition of state and local income taxes by jurisdiction;

and (v) the amounts of income taxes paid disaggregated by jurisdiction.

The Company adopted ASU 2023-09 for the year ended December 31, 2025 on a prospective basis.

In November 2024, The FASB issued ASU No.

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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 financial disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which allows for a practical expedient election to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses.

The new standard is effective for annual periods beginning after December 15, 2025, with early adoption permitted.

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

In September 2025, the FASB issued ASU No.

2025-06, Targeted Improvements to the Accounting for Internal-Use Software , which removes references to project stages and clarifies the timing of capitalizing costs based on certain thresholds.

Additionally, this amendment requires certain disclosures in the notes to the financial statements regardless of financial statement presentation of software costs.

The new standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods with early adoption permitted.

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

The Company has reviewed all other accounting pronouncements issued during the year ended December 31, 2025 and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

Acquisition of Shenzhen UZ Energy Co.

“(UZ Energy”)

On July 25, 2025 , our wholly owned subsidiary, SES AI International I Pte Ltd, entered into a Share Transfer and Share Purchase Agreement (the “Agreement”) with UZ Energy and its shareholders to acquire 100 % of the share capital of UZ Energy, a China-based battery energy storage system manufacturer.

The acquisition closed on September 15, 2025 (the “Closing”) .

The acquisition of UZ Energy was accounted for as a business combination and the results of UZ Energy’s operations from the date of closing have been included in our consolidated financial statements.

The aggregate consideration for the acquisition of UZ Energy is approximately RMB 183.5 million ($ 25.8 million), consisting of the purchase consideration of approximately RMB 93.5 million ($ 13.1 million) and a capital contribution of RMB 90.0 million ($ 12.6 million) made by the Company in exchange for newly issued shares of UZ Energy.

Purchase consideration consists of cash payments of approximately RMB 23.5 million ($ 3.3 million), which was paid during the fourth quarter of 2025, and deferred consideration of approximately RMB 70.0 million ($ 9.8 million) tied to performance targets, assuming such targets are met but not exceeded.

At the Closing, total purchase consideration was valued at RMB 83.3 million ($ 11.7 million), reflecting the acquisition date fair value of the deferred cash payments.

The capital contribution was excluded from purchase consideration as the proceeds will remain with UZ Energy and will be used for working capital requirements.

The deferred consideration is contingent on UZ Energy meeting specified thresholds relating to revenue and cash balances for fiscal years 2025 and 2026.

As of the Closing, the fair value of the deferred consideration was estimated using a Black-Scholes option-pricing model.

As of December 31, 2025, the possible outcomes for the range of deferred cash payments, on an undiscounted basis, are from $ 1.1 million

to $ 11.8 million.

The analysis considered, among other items, contractual terms of the Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue and cash balance thresholds required for payment of the deferred consideration will be achieved.

The Company recorded the acquisition date fair value of the short-term portion of the deferred payment liability within accrued expenses and other current liabilities and the long-term portion of the deferred payment liability within other liabilities, non-current on the consolidated balance sheets, respectively.

The purchase price was allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition.

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill.

Goodwill is primarily attributed to the expected synergies from future expected economic benefits, including enhanced revenue growth from expanded products and capabilities related to ESS, as well as substantial cost savings from duplicative overheads, streamlined operations and enhanced efficiency.

Goodwill is no t deductible for tax purposes.

The following table summarizes the preliminary allocation of the purchase price (in thousands):

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Property, plant and equipment

Intangible assets, net

Accounts payable

Accrued expenses and other liabilities

Deferred revenue

Operating lease liability

Note payable, current

The above fair values of assets acquired and liabilities assumed are based on the information that was available as of the reporting date.

During the fourth quarter, the Company recorded measurement period adjustments to the preliminary purchase price allocation for the acquisition of UZ Energy.

These adjustments, which reflect new information obtained about facts and circumstances that existed as of the acquisition date, resulted in an increase in warranty reserve liability and a corresponding increase in goodwill.

The fair values include Level 3 unobservable inputs and were determined using generally accepted valuation techniques.

The Company’s allocation of the purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present as of the closing becomes available and final valuation and analysis are completed.

The Company will finalize the purchase price allocation no later than one year from the acquisition date.

The following table presents a reconciliation of the deferred consideration liability:

(in thousands)

Balance as of December 31, 2024

Additions during the year

Payments during the year

Change in fair value

Foreign exchange impact

Balance as of December 31, 2025

The deferred consideration liability, which was measured at fair value on Acquisition Date and was remeasured to fair value for actual 2025 results and expected 2026 results.

The change in fair value was recorded within miscellaneous expense, net of the Company’s Consolidated Statements of Operations.

The following table sets forth the components of the identifiable intangible assets acquired and their estimated fair values and useful lives as of the date of the acquisition:

(in thousands)

Weighted Average

Total acquired intangible assets

The amount of revenue and pre-tax loss the Company recognized since the acquisition, which is included in the consolidated statements of operations and comprehensive loss for the years ending December 31, 2025, was approximately $ 7.4 million and $ 0.4 million, respectively.

The Company has not included pro-forma financial information for the acquisition of UZ Energy in these consolidated financial statements.

It was determined that the preparation of such information is impracticable as UZ Energy was a foreign, privately held entity that did not historically maintain financial statements in accordance with the U.S.

The Company has, however, included the results of UZ Energy's operations in its consolidated financial statements from the Closing date forward.

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.

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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.

Contract Assets

The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time.

Contract assets primarily relate to unbilled service revenue.

The Company does not have the right to bill and collect revenue for certain performance obligations until the milestone is complete.

Estimated revenue related to milestone achievement cannot be billed or collected until customer acceptance of milestone is completed.

Contract assets are included in prepaid and other current assets in the Company's consolidated balance sheets.

The following table reflects the change in contract assets between December 31, 2024 and December 31, 2025:

Year Ended December 31,

(in thousands)

Contract assets:

Balance at December 31

Billings to customer

Balance at December 31

Contract Liabilities

Contract liabilities primarily relate to the advance consideration received from customers.

Contract liabilities are included in accrued expenses and other current liabilities in the Company's consolidated balance sheets.

The following table reflects the change in contract liabilities between December 31, 2024 and December 31, 2025:

Year Ended December 31,

(in thousands)

Contract liabilities:

Balance at December 31

Revenue recognized

Foreign exchange adjustments

Balance at December 31

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.

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

The JDA concluded in December 2025.

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 .

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(“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.

The Company entered into a B-sample services agreement with Honda to replace the JDA in January 2025, with a term through June 2026.

The JDA concluded in December 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 .

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 JDA had a term of two and half years .

The JDA concluded in December 2025.

Under the terms of certain JDAs, the Company funded research and development activities and capital expenditures related to the buildout of pilot manufacturing lines and the JDA partner was 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 with the terms of the JDA agreements:

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Total credits to research and development

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

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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, 2024 and December 31, 2023, which had maturity dates that range from 0 month s to 10 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, 2025 and December 31, 2024, which had maturity dates that range from 0 months to 10 months , respectively.

Fair value was determined using market prices obtained from third-party sources.

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treasury securities

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.

The Company had $ 0.9 million and $ 1.0 million marketable equity securities as of December 31, 2025 and 2024, respectively, with an initial cost of $ 0.5 million.

Total unrealized gain of $ 0.4 million and $ 0.5 million is recorded under miscellaneous (expense) income, net in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024, respectively.

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Depreciation expense was $ 10.1 million and $ 8.2 million for the years ended December 31, 2025 and 2024, respectively.

Intangible Assets, Net

Goodwill and Intangible Assets, Net

Changes in the carrying amount of goodwill were as follows:

(in thousands)

Balance as of December 31, 2024

Balance as of December 31, 2025

Intangible assets, net consisted of the following:

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Intangible assets, net

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

Amortization expense was $ 0.2 million and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively.

Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheets as of December 31, 2025 is expected to be as follows:

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(in thousands)

Vendor project charges

Employee compensation and related costs

Vendor project charges

Contract liabilities

Professional and consulting services

Construction in process

Short-term notes payables

Software services

Income taxes payable

Construction in process

Accrued expenses and other current liabilities

Government Grant

In December 2022, the Company was awarded a grant (the “Grant”) from certain government agencies.

In December 2022, the Company was awarded a grant (the “Grant”) from certain Korean government agencies.

The incentives received under the Grant, which is in the form of cash, can be used for facilities related expenses and the purchase of property and equipment.

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.

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 repay the Grant in its entirety with interest.

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As of December 31, 2025 and 2024, the weighted average remaining lease term for operating leases was 4.4 years and 4.9 years, respectively, and the weighted average discount rate used to determine the operating lease liability was 7.2 % and 7.4 % , respectively.

In August 2016, the Company entered into an operating lease agreement to lease an office space in Woburn, Massachusetts with the original lease term expiring in August 2021.

The lease agreement has one five-year renewal option and has variable lease payment that depends on the CPI index and is measured annually.

In May 2020, the Company extended the term of the lease by 5 years through August 2026.

In February and March 2021, the Company amended the lease agreement increasing the leased space.

In December 2021, the Company further amended the lease agreement reducing the leased space.

The amendment includes an obligation to pay monthly relinquishment charges (equal to the total rental obligation for the duration of the lease term), only if the new tenant does not pay monthly rental amount and lessor has provided a notice to collect the relinquishment charges from the Company.

As of December 31, 2024, the Company assessed the probability of any liability to be incurred for relinquishment charges as remote.

Total future minimum lease payments under this lease are $ 6.0 million.

In October 2022, the Company entered into an amendment to the operating lease agreement for its Woburn facility to add additional space and is accounted for as a separate lease (“Addition Lease”).

Pursuant to the amendment, the landlord has agreed to construct an addition to the existing facility for such additional space, which commenced in June 2023 and expires at the same time as the original lease.

The Addition Lease also contains a variable lease payment that depends on the CPI Index and is measured annually.

The additional space consists of approximately 5,000 square feet and the total undiscounted future minimum lease payments for the addition through the expected 8 -year term will be approximately $ 1.3 million.

Electrolyte Foundry Lease

In June 2023, the Company entered into an operating lease agreement to lease a lab space in Woburn, Massachusetts with the original lease term expiring five years after the delivery date upon completion of the build-out.

The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least six months before the expiry and has variable lease payment that depends on the CPI index and is measured annually.

In January 2024, the Company started using the lab space.

Total future minimum lease payments under this lease are $ 2.3 million.

Shanghai Lease

In September 2018, the Company entered into an operating lease agreement to lease a manufacturing space in Shanghai, China with the original lease term expiring in August 2023.

In September 2021, the Company amended the lease agreement.

The amendment increased the amount of leased space and extended the term of the lease by three years through August 2026.

Total future minimum lease payments under this lease are $ 2.4 million.

The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least 90 days before the expiry and provides for annual cost of living increases of up to 3 %.

South Korea Leases

In November 2022, the Company entered into an operating lease agreement with a lease commencement date of July 2022 to lease a manufacturing building in the Chungju, South Korea industrial complex with the original lease term expiring in September 2024.

The lease agreement 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.

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

Under the terms of one of the JDAs entered into in 2021, the Company is committed to undertake certain research and development activities to the benefit of both itself and its OEM Partners which involves expenditures related to engineering efforts and purchases of related equipment.

The JDA has an agreed-upon value of up to $ 35 million, of which the Company has spent $ 16.1 million as of December 31, 2024.

The JDA had an agreed-upon commitment value of up to $ 35 million.

As of December 31, 2025, the Company has a remaining commitment to spend up to $ 7.3 million.

Legal Contingencies

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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;

or (iii) all outstanding shares of Class B c ommon stock will convert into shares of Class A common stock upon the date specified by the affirmative vote of the holders of at least two-thirds of the then-outstanding shares of Class B c ommon stock , voting as a separate class.

Each outstanding share of Class B c ommon stock is entitled to ten votes per share and each outstanding share of Class A common stock is entitled to one vote per share.

As of December 31, 2024, the Company had 317,676,034 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively and as of December 31, 2023 had 310,266,922 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively.

For accounting purposes, only shares that are fully vested or that are not subject to repurchase are considered issued and outstanding.

Below is a reconciliation of shares of common stock issued and outstanding:

For accounting purposes, only shares that are fully vested or that are not subject to repurchase are considered issued and outstanding, as reconciled in the table below:

December 31, 2025

December 31, 2024

Class A Shares Outstanding

Class B Shares Outstanding

Total shares of common stock legally issued and outstanding

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Earn-Out Restricted Shares

( 1,619,998 )

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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(in thousands)

Earn-Out Restricted Shares

Stock options

Earn-Out Restricted Shares

Restricted Stock Units

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Forfeited and canceled

( 2,392,385 )

Outstanding at December 31, 2024

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The total fair value of RSAs vested was $ 1.3 million and $ 2.0 million for the years ended December 31, 2025 and 2024, 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.

As of December 31, 2025, the compensation cost related to RSAs was fully recognized.

Performance Stock Units

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The fair value of PSU awards is amortized to expense on a straight-line basis over the requisite service period, irrespective of whether the market vesting condition is satisfied, which is generally two to three years .

The key inputs used in the Monte Carlo simulation model for PSUs granted during the years ended December 31, 2024 and 2023 at their measurement date were as follows:

There were no awards granted in 2025 that required meeting market conditions for vesting that would require a valuation.

The key inputs used in the Monte Carlo simulation model for PSUs granted during the year ended December 31, 2024 at their measurement date were as follows:

Expected term (in years)

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Forfeited and canceled

( 1,029,316 )

Outstanding at December 31, 2024

Forfeited and canceled

( 1,029,316 )

Outstanding at December 31, 2025

2 unchanged sentences

The Earn-Out Restricted Shares granted in connection with the Business Combination have a contractual term of five years and have both service and market vesting conditions.

The Earn-Out Restricted Shares have been measured at their estimated fair value using a Monte Carlo simulation valuation model with t he effect of the market condition reflected in the grant date fair value of the award.

The aggregate grant date fair value of the Earn-Out Restricted Shares is $ 15.0 million and is amortized to expense on a straight-line basis over the requisite service period, irrespective of whether the market vesting condition is satisfied, which is 1.45 years.

The key inputs used in the Monte Carlo simulation model for the Earn-Out Restricted Shares at their measurement dates were as follows:

February 3, 2022

(Closing Date)

Contractual term (in years)

Risk-free rate

Expected volatility

Expected dividends

The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion.

The Company estimates the volatility of its common stock by using select peer companies’ common stock that matches the contractual term of the awards.

The risk-free interest rate is based on the yield curve for zero-coupon U.S.

Treasury notes with maturities corresponding to the contractual term of the restricted shares.

The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

During the year ended December 31, 2023, the Earn-Out Restricted Shares met the requisite service period and the related expense was fully amortized.

Earn-Out Restricted Shares activity is as follows:

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Outstanding at December 31, 2025

During the year ended December 31, 2023, the Earn-Out Restricted Shares met the requisite service period and the related expense was fully amortized.

Stock Options

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Forfeited and canceled

Outstanding at December 31, 2023

( 1,049,208 )

Outstanding at December 31, 2024

Forfeited and canceled

( 1,049,208 )

Outstanding at December 31, 2025

3 unchanged sentences

The fair value of stock options vested for the years ended December 31, 2025 and 2024 were $ 8.8 million and $ 11.8 million, respectively.

The Company uses the Black-Scholes pricing model to determine the fair value of options granted.

The calculation of the fair value of stock options is affected by the stock price on the grant date, the expected volatility of the Company’s stock over the expected term of the award, the expected life of the award, the risk-free interest rate and the dividend yield.

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 of December 31, 2025, there was less than $ 0.1 million of unrecognized compensation cost related to stock options, which is expected to be recognized during 2026.

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

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Federal consolidated income tax group.

The Company adopted ASU No.

2023-09, Improvements to Income Tax Disclosures, effective for the fiscal year ended December 31, 2025.

In accordance with the transition guidance, the Company applied the amendments prospectively.

As a result, the disclosures required by ASU 2023-09 are presented for fiscal year 2025 only and prior periods have not been restated.

and foreign components of loss before income taxes were as follows:

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Income tax (benefit) expense

The following table provides a reconciliation of the U.S.

statutory income tax rate to the Company’s provision for income taxes and respective effective tax rate disaggregated by required category for the year ended December 31, 2025 in accordance with ASU 2023-09:

Year Ended December 31,

(in thousands, except percentages)

Federal Statutory Tax Rate

State and Local Income Taxes, Net of Federal Income Tax Effect

Foreign Tax Effects

Singapore Local NOL

DTA not recognized due to DCL election

Other foreign jurisdictions

Research and development tax credits

Energy-related tax credits

Changes in Valuation Allowances

Nontaxable or Nondeductible Items

Share-based payment awards

Changes in Unrecognized Tax Benefits

Other Adjustments

Statutory tax rate difference between Elimination and United States

Effective Tax Rate

Reconciliations of the federal statutory income tax rate to the Company’s effective income tax rate are as follows:

Years Ended December 31,

Year Ended December 31,

Tax provision (benefit) at U.S.

statutory rate

State income taxes, net of federal benefit

Foreign income taxed at non US rates

Other permanent items

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Effective tax rate

The Company files federal, state and foreign tax returns, which are subject to examination by the relevant tax authorities.

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment.

The statute of limitations for assessment by the Internal Revenue Service (“IRS”), and state tax authorities remains open for all tax years ended after 2012.

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the IRS or state tax authorities to the extent utilized in a future period.

The Company is subject to income taxes in the U.S.

federal, state, and various foreign jurisdictions.

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply.

The Company’s tax years remain open for examination within the U.S.

and foreign authorities for all years, until such time as the net operating losses are initially utilized.

The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018.

The components of the net deferred tax asset at the end of each year are as follows:

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Accruals and reserves

Deferred revenue

Total deferred tax assets

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The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21 % was due primarily to the research and development credit and change in valuation allowance.

The Company maintains full valuation allowance against its U.S.

and Viking Power System Pte.

Ltd., net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2024.

The Company's valuation allowance balance increased by $ 17.1 million and $ 18.1 million for the years ended December 31, 2025 and 2024, respectively.

A full valuation allowance was established for SES AI Korea Co., Ltd since the fiscal year 2021.

However, SES Korea operates under a cost-plus model in adherence to transfer pricing (TP) regulations, ensuring its profitability in accordance with U.S.

Upon reevaluation of the subsidiary's consistent profitability and other favorable indicators, it is determined that a valuation allowance was no longer warranted.

In the fiscal year 2023, the Company released the Korean valuation allowance.

As of December 31, 2025, the Company has Federal net operating loss (“NOLs”) carryforward of approximately $ 169.0 million, of which $ 9.2 million is for pre-2018 and $ 159.7 million is post 2017.

The pre-2018 Federal NOLs carryforwards will begin to expire in 2033.

The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income.

post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income.

The Company also has Massachusetts NOLs carryforwards of approximately $ 85.2 million, which begins to expire in 2033.

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The Company also had Massachusetts NOLs carryforwards of approximately $ 81.2 million, which begins to expire in 2033.

As of December 31, 2024 and 2023, the Company had federal research credit carryforwards of approximately $ 4.5 million and $ 3.8 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $ 2.1 million and $ 1.9 million, respectively, which begins to expire in 2030.

The utilization of the Company’s NOLs and R&D credits and carryforwards may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code.

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During 2025, management does not believe there were significant ownership changes that would trigger a Section 382 limitation.

As of December 31, 2025 and 2024, the Company had federal research credit carryforwards of approximately $ 7.2 million and $ 4.5 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $ 3.5 million and $ 2.1 million, respectively, which begins to expire in 2030.

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, 2025 and 2024, the total amount of unrecognized tax benefits was $ 10.5 million and $ 7.6 million respectively, of which $ 10.1 million would affect 2025 income tax expense, if recognized, without considering any valuation allowance.

The Company does not expect the unrecognized tax benefits to change significantly over the next 12 months.

The Company includes interest and penalties related to unrecognized tax benefits within the benefit from (provision for) income taxes.

As of the years ended December 31, 2024 and 2023 the total amount of gross interest accrued in each year was less than $ 0.1 million, respectively.

As of the years ended December 31, 2025 and 2024 the total amount of gross interest accrued in each year was $ 0.1 million and less than $ 0.1 million, respectively.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

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Increase – current year positions

Decrease – prior year positions

End of the year

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The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018.

Beginning in 2022, the 2017 Tax Cuts and Jobs Act amended Section 174 to eliminate current-year deductibility of research and experimentation (R&E) expenditures and software development costs (collectively, R&E expenditures) and instead require taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable R&E activity performed outside the United States).

The Company generated a deferred tax asset for capitalized R&E expenditures for the year ended December 31, 2024 which was fully offset with a valuation allowance.

Net Income (Loss) Per Share

The Company maintains full valuation allowance against its US and Viking Power System Pte.

Ltd and UZ Energy, net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2025.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period.

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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.

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

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

When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews revenue and significant expenses included in the net income (loss).

In addition, the CODM reviews and monitors operating expenses and cash forecasts to ensure that enough capital is available for operations.

Significant Expenses

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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 reported the following significant expenses to the CODM :

Years Ended December 31,

(in thousands)

Compensation and benefits

Stock compensation

Lab and equipment

General and administrative

Professional services

Marketing and sales

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.

As of December 31, 2025, there were three customers that accounted for 31 % , 12 % , and 10 % of accounts receivable compared to one customer that accounted for 94 % of accounts receivable as of December 31, 2024.

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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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