QuantumScape Corp

Previous wording

We are a development-stage company with no revenue to date, have incurred a net loss from operations of approximately 131.9 million for the three months ended March 31, 2024, and an accumulated deficit of approximately $3.0 billion from our inception through March 31, 2024. We expect to incur significant expenses and continuing losses for the foreseeable future.

Current wording

We are a development-stage company with no revenue to date, have incurred a net loss from operations of approximately $134.5 million and $266.4 million for the three and six months ended June 30, 2024, respectively, and an accumulated deficit of approximately $3.1 billion from our inception through June 30, 2024. We expect to incur significant expenses and continuing losses for the foreseeable future.

Previous wording

We have demonstrated capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer cell cycling data, and in 2022, shipped our first 24-layer A0 prototype battery cells to multiple automotive OEMs for testing. Following that shipment, we continued focusing our research and development on subsequent generations of prototype samples incorporating advances in cell functionality, process and reliability, as well as bringing online the manufacturing capability of our consolidated QS-0 pre-pilot line. In 2023, we introduced our first targeted commercial product, QSE-5, a cell with a capacity of approximately 5 amp-hours.

Current wording

We have demonstrated capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer cell cycling data, and in 2022, shipped our first 24-layer A0 prototype battery cells to multiple automotive OEMs for testing. Following that shipment, we continued focusing our research and development on subsequent generations of prototype samples incorporating advances in cell functionality, process and reliability, as well as bringing online the manufacturing capability of our pre-pilot production facility (“QS-0”) in San Jose, California. In 2023, we announced our first targeted commercial product, the QSE-5, a cell with a capacity of approximately 5 amp-hours.

Previous wording

Continued improvement of the cathode. Our cathodes use a conventional cathode active material such as nickel-manganese-cobalt (NMC) mixed with a catholyte. We plan to benefit from industry cathode chemistry improvements and/or cost reduction, which in the future may include use of other cathode active materials, including cobalt-free compositions, including lithium-iron-phosphate (LFP), as well as cathode processing advances such as dry electrode processing. Over the years, we have developed catholytes made of differing mixtures of organic liquid electrolyte in an effort to optimize performance across multiple metrics such as voltage, temperature, power, and safety, among others. We continue to test solid, gel and liquid catholytes in our cells. The solid catholyte is part of our ongoing research and development investigation into inorganic catholytes. Our solid-state catholyte platform is being designed to enable high rates of charge and discharge for even thicker cathode electrodes, which when combined with a lithium-metal anode, may further increase cell energy densities.

Current wording

Continued improvement of the cathode. Our cathodes use a conventional cathode active material such as nickel-manganese-cobalt (NMC) mixed with a catholyte. We plan to benefit from industry cathode chemistry improvements and/or cost reduction, which in the future may include use of other cathode active materials, including cobalt-free compositions, including lithium-iron-phosphate (LFP), as well as cathode processing advances such as dry electrode processing. Over the years, we have developed catholytes made of differing mixtures of organic liquid electrolyte in an effort to optimize performance across multiple metrics such as voltage, temperature, power, and safety, among others. We have tested solid, gel and liquid catholytes in our cells. The solid catholyte is part of our ongoing research and development investigation into inorganic catholytes. Our solid-state cathode platform is being designed to enable high rates of charge and discharge for even thicker cathode electrodes, which, when combined with a lithium-metal anode, may further increase cell energy densities.

Previous wording

Continued improvement in quality, consistency and reliability. We are working to improve the quality and uniformity of our cells, including our solid-state electrolyte-separators, to further improve, among other things, the cycling behavior, power, operating conditions, and reliability of our cells. For certain of our processes, we use methods of continuous processing found at scale in both the battery and ceramic industries and are working on continuous improvement of this process, including better quality, consistency, and higher throughput through automation and process control (including specification tightening and adding or improving inspection points along the manufacturing process flow), quality of material inputs, and particle reduction across our process. We are also exploring new methods not typically used in ceramics that offer significant potential cost savings. Regarding consistency, we believe tightening the variability of electrolyte-separator quality will result in better yield. We plan to implement process improvements and controls necessary to manufacture higher quality, more consistent materials; we believe these activities will ultimately lead to higher reliability.

Current wording

Continued improvement in quality, consistency and reliability. We are working to improve the quality and uniformity of our cells, including our solid-state electrolyte-separators, to further improve, among other things, the cycling behavior, power, operating conditions, and reliability of our cells. For some of our first-generation processes, we use methods of continuous processing found at scale in both the battery and ceramic industries and are working on continuous improvement of these processes, including better quality, consistency, and higher throughput through automation and process control (including specification tightening and adding or improving inspection points along the manufacturing process flow), quality of material inputs, and particle reduction across our process. We are also developing subsequent methods not typically used in ceramics that offer significant potential cost savings. Regarding consistency, we believe tightening the variability of electrolyte-separator quality will result in better yield. We plan to implement process improvements and controls necessary to manufacture higher quality, more consistent materials; we believe these activities will ultimately lead to higher reliability.

Previous wording

Multilayering. We have demonstrated capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer solid-state cells in commercially relevant areas (ranging from approximately 60x75mm to 70x85mm), and in 2022, shipped 24-layer A0 prototype battery cells to multiple automotive OEMs for testing. In order to advance the maturity of our prototype cells and produce commercially viable solid-state battery cells, we must produce battery cells with dozens of layers to achieve target cell capacities set by our customers and may have to increase cell layer count; while we target our first commercial product, QSE-5, to have approximately 5 amp-hours of capacity, the exact number of layers and dimensions will vary and depend upon customer specifications, cell design considerations, and other factors. We will need to overcome production challenges to produce sufficient volumes of our solid-state electrolyte-separators and prototype battery cells to complete development of our first commercial product and for customer evaluation and product qualification purposes, as well as subsequent cell designs that may require increased layer counts.

Current wording

Cell layer count and dimensions. We have demonstrated capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer solid-state cells in commercially relevant areas (ranging from approximately 60x75mm to 70x85mm), and in 2022, shipped 24-layer A0 prototype battery cells to multiple automotive OEMs for testing. In order to advance the maturity of our prototype cells and produce commercially viable solid-state battery cells, we must produce battery cells with dozens of layers to achieve target cell capacities set by our customers and may have to vary cell layer count and dimensions; while we target our first commercial product, the QSE-5, to have approximately 5 amp-hours of capacity, the exact number of layers and dimensions will vary and depend upon customer specifications, cell design considerations, and other factors. We will need to overcome production challenges to produce sufficient volumes of our solid-state electrolyte-separators and prototype battery cells to complete development of our first commercial product and for customer evaluation and product qualification purposes, as well as subsequent cell designs that may require different layer counts and dimensions.

Previous wording

Our team of scientists, engineers, technicians, and other staff is highly motivated and committed to solving these challenges ahead. However, any delays in the completion of these tasks will require additional cash use and delay market entry. As we expand the capabilities of our consolidated pre-pilot line (“QS-0”) that we are currently building out and bringing up in San Jose, California, we expect our rate of cash utilization to also increase significantly.

Current wording

Our team of scientists, engineers, technicians, and other staff is highly motivated and committed to solving these challenges ahead. However, any delays in the completion of these tasks will require additional cash use and delay market entry.

Previous wording

Our architecture depends on our proprietary solid-state ceramic electrolyte-separator which we plan to manufacture ourselves. Though our electrolyte-separator’s design is unique, our first-generation process relies on established or similar high-volume production processes already deployed in other industries. We are developing a subsequent, proprietary higher-volume separator manufacturing process that seeks to further reduce cost, increase throughput, and improve quality.

Current wording

Our architecture depends on our proprietary solid-state ceramic electrolyte-separator. Though our electrolyte-separator’s design is unique, our first-generation process relies on established or similar high-volume production processes already deployed in other industries. We are developing subsequent, proprietary higher-volume separator manufacturing processes that seek to further reduce cost, increase throughput, and improve quality.

Previous wording

We are focused on the throughput and capability of QS-0. As part of the continued expansion of our throughput we are automating our manufacturing process and purchasing larger-scale battery-cell manufacturing equipment. We will need to substantially improve our battery cell manufacturing processes to increase throughput required for higher numbers of battery cells and to achieve the cost, performance and volume levels required for commercial shipments.

Current wording

We are focused on the throughput and capability of QS-0, our pre-pilot production facility in San Jose, California. As part of the continued expansion of our throughput we are automating our manufacturing process and purchasing larger-scale battery-cell manufacturing equipment. We will need to substantially improve our battery cell manufacturing processes to increase throughput required for higher numbers of battery cells and to achieve the cost, performance and volume levels required for commercial shipments.

Previous wording

QS-0 is intended to serve three purposes. First, QS-0 is intended to provide a sufficient quantity of solid-state electrolyte-separator and cells for internal development and customer sampling. Second, QS-0 is intended to provide the basis for continued manufacturing process development and to help inform equipment selection and specifications for future manufacturing activities. Delays in the successful buildout of QS-0 may impact both our development and future scale-up timelines. And third, as we continue to build out our manufacturing capabilities, we target the initial production of QSE-5 cells made available for sale to a third party.

Current wording

QS-0 is intended to serve four purposes. First, QS-0 is intended to provide a sufficient quantity of solid-state electrolyte-separator and cells for internal development and customer sampling. Second, QS-0 is intended to provide the basis for continued manufacturing process development and to help inform equipment selection and specifications for future manufacturing activities by us or our partners. Third, we target the initial production of QSE-5 cells at QS-0. Fourth, QS-0 is intended to support collaboration and future technology transfer activities as part of the collaboration and licensing arrangements with PowerCo as well as potential future commercial arrangements. Delays in the successful buildout of QS-0 may impact both our development and future scale-up timelines.

Previous wording

We have demonstrated the performance capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer solid-state cells in commercially relevant areas (ranging approximately from 60x75mm to 70x85mm), and in 2022, shipped our first 24-layer A0 prototype battery cells to multiple automotive original equipment manufacturers (“OEM”). We will work to continue improving quality, consistency, reliability, throughput and safety and optimize all components of the cell. We will continue to work to further develop and validate the volume manufacturing processes to enable higher volume manufacturing and minimize manufacturing costs. Finally, we intend for the building out of QS-0 to serve as the basis for continued manufacturing process development for the subsequent scale up of our manufacturing capabilities.

Current wording

We have demonstrated the performance capabilities of our solid-state electrolyte-separator and battery technology in single-layer and multilayer solid-state cells in commercially relevant areas (ranging approximately from 60x75mm to 70x85mm), and in 2022, shipped our first 24-layer A0 prototype battery cells to multiple automotive original equipment manufacturers (“OEM”). We will work to continue improving quality, consistency, reliability, throughput, and safety and optimize all components of the cell. We will continue to work to further develop and validate the volume manufacturing processes to enable higher volume manufacturing and minimize manufacturing costs. Finally, we intend for the building out of QS-0 to serve as the basis for continued manufacturing process development for the subsequent scale up of the manufacturing capabilities of our battery cells.

Previous wording

Our joint venture agreement with Volkswagen provides for the commercialization of our solid-state battery cells to occur in two phases. The first phase is the construction of a 1GWh pilot-production line (“QS-1”) upon the delivery and validation of certain milestones for our solid-state battery cells. The second phase is a subsequent expansion to 21GWh target line (“QS-1 Expansion”). While Volkswagen is the first automotive OEM that we signed an agreement with the goal of commercializing vehicles using our battery technology, we intend to continue working closely with other OEMs to make our solid-state battery cells widely available over time. In addition to Volkswagen, we have signed customer sampling agreements with a number of other OEMs, ranging from leading manufacturers by global revenue to premium performance and luxury carmakers, to collaborate with us in the testing and validation of our solid-state battery cells with the goal of providing such cells to the OEM for inclusion into pre-production prototype vehicles and ultimately into serial production vehicles. We are currently focused on automotive EV applications, which have among the most stringent sets of requirements for batteries. However, we recognize that our solid-state battery technology has applicability in other large and growing markets including stationary storage and consumer electronics such as smartphones and wearables and intend to explore opportunities in those areas as appropriate.

Current wording

While Volkswagen is the first automotive OEM that we signed an agreement with the goal of commercializing vehicles using our battery technology, we intend to continue working closely with other OEMs to make our solid-state battery cells widely available over time. In addition to Volkswagen, we have signed customer sampling agreements with a number of other OEMs, ranging from leading manufacturers by global revenue to premium performance and luxury carmakers, to collaborate with us in the testing and validation of our solid-state battery cells with the goal of providing such cells to the OEM for inclusion into pre-production prototype vehicles and ultimately into serial production vehicles. We are currently focused on automotive EV applications, which have among the most stringent sets of requirements for batteries. Meanwhile, our solid-state battery technology has applicability in other large and growing markets including stationary storage and consumer electronics such as smartphones and wearables and we intend to explore opportunities in those areas as appropriate.

Previous wording

We believe that our technology enables a variety of business models. In addition to joint ventures, such as the one with Volkswagen, we may operate solely-owned manufacturing facilities or license technology to other manufacturers. We intend to continue to invest in research and development to improve battery cell performance, improve manufacturing processes, and reduce cost.

Current wording

We believe that our technology enables a variety of business models. In addition to the collaboration with PowerCo, which contemplates a licensing arrangement, we may operate solely-owned manufacturing facilities, license technology to other manufacturers, or enter into joint venture arrangements. We intend to continue to invest in research and development to improve battery cell performance, improve manufacturing processes, and reduce cost.

Previous wording

Based on our current business plan, we believe that our cash resources will last into the second half of 2026. In July 2022, we filed a shelf registration statement on Form S-3 with the SEC (File No. 333-266419) (the “Form S-3”), which the SEC declared effective in August 2022, for the offer and sale of Class A Common Stock, preferred stock, depositary shares, debt securities, warrants, subscription rights, purchase contracts and units in one or more offerings and in any combination for an aggregate offering price of up to $1 billion. In February 2023, we filed a prospectus supplement to the Form S-3 for the issuance and sale of our Class A Common Stock from time to time for an aggregate offering price of up to $400 million (the “ATM offering”). No shares of our Class A Common Stock were sold pursuant to the ATM offering during the three months ended March 31, 2024. In August 2023, we completed an underwritten public offering of 37.5 million shares of our Class A Common Stock for an aggregate purchase price of $288.2 million, net of issuance costs of $11.8 million (the “August 2023 Public Offering”).

Current wording

Based on our current business plan, we believe that our cash resources will last into 2028. In July 2022, we filed a shelf registration statement on Form S-3 with the SEC (File No. 333-266419) (the “Form S-3”), which the SEC declared effective in August 2022, for the offer and sale of Class A Common Stock, preferred stock, depositary shares, debt securities, warrants, subscription rights, purchase contracts and units in one or more offerings and in any combination for an aggregate offering price of up to $1 billion. In February 2023, we filed a prospectus supplement to the Form S-3 for the issuance and sale of our Class A Common Stock from time to time for an aggregate offering price of up to $400 million (the “ATM offering”). No shares of our Class A Common Stock were sold pursuant to the ATM offering during the three and six months ended June 30, 2024. In August 2023, we completed an underwritten public offering of 37.5 million shares of our Class A Common Stock for an aggregate purchase price of $288.2 million, net of issuance costs of $11.8 million (the “August 2023 Public Offering”).

Previous wording

To date, our research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering and facilities supporting QS-0 in San Jose, including the material and supplies to support the product development and process engineering efforts. As we ramp up our engineering operations to complete the development of our solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets, we anticipate that research and development expenses will increase significantly for the foreseeable future as we continue to invest in additional plant and equipment for product development (e.g., multilayer cell stacking, packaging engineering), building prototypes, and testing of battery cells as our team works to meet the full set of automotive product requirements. We also recognize significant non-cash stock-based compensation to employees directly involved in research and development activities. For stock-based compensation awards with performance and market conditions, such as the awards granted under our Extraordinary Performance Award Program (the “EPA Program”) in December 2022 and 2021, and for stock-based compensation awards with performance conditions, such as the restricted stock units with performance conditions (“PSU”) granted in 2023 and 2024, the non-cash expense recognized is based on a probability assessment of the performance conditions, and as such, research and development expenses may fluctuate in the future as the performance conditions are re-assessed at each reporting period. Further, should the stated market conditions of the EPA Program grants be achieved prior to the expected achievement period, we may accelerate the stock-based compensation expense recognized, which could result in significant fluctuations in research and development expense recognized in the future. For more information on the EPA Program grants and PSUs, see Note 8, Stockholders’ Equity, to our unaudited condensed consolidated financial statements elsewhere in this Report.

Current wording

To date, our research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering and facilities supporting QS-0 in San Jose, including the material and supplies to support the product development and process engineering efforts. As we ramp up our engineering operations to complete the development of our solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets, we anticipate that research and development expenses will increase significantly for the foreseeable future as we continue to invest in additional plant and equipment for product development (e.g., multilayer cell stacking, packaging engineering), building prototypes, and testing of battery cells as our team works to meet the full set of automotive product requirements. We also recognize significant non-cash stock-based compensation to employees directly involved in research and development activities. For stock-based compensation awards with performance and market conditions, such as the awards granted under our Extraordinary Performance Award Program (the “EPA Program”) in December 2022 and 2021, and for stock-based compensation awards with performance conditions, such as the restricted stock units with performance conditions (“PSUs”) granted in 2023 and 2024, the non-cash expense recognized is based on a probability assessment of the performance conditions, and as such, research and development expenses may fluctuate in the future as the performance conditions are re-assessed at each reporting period. Further, should the stated market conditions of the EPA Program grants be achieved prior to the expected achievement period, we may accelerate the stock-based compensation expense recognized, which could result in significant fluctuations in research and development expense recognized in the future. For more information on the EPA Program grants and PSUs, see Note 8, Stockholders’ Equity, to our unaudited condensed consolidated financial statements elsewhere in this Report.

Previous wording

Interest expense consists primarily of interest expense associated with our finance lease for the initial QS-0 campus.

Current wording

Interest expense consists primarily of interest expense associated with our finance lease for one of our facilities.

Previous wording

Comparison of the Three Months Ended March 31, 2024 to the Three Months Ended March 31, 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 to the Three and Six Months Ended June 30, 2023

Previous wording

The increase in research and development expense in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily resulted from an increase of $2.7 million related to depreciation and amortization, an increase of $2.6 million in personnel cost to support our battery technology development, and a non-cash stock-based compensation expense increase of $1.4 million primarily due to the net effect of restricted stock units granted subsequent to March 31, 2023, primarily offset by full amortization of awards.

Current wording

The increase in research and development expense in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily resulted from an increase of $7.6 million in personnel cost to support our battery technology development, an increase of $5.9 million related to depreciation and amortization, an increase of $1.5 million in material supplies, and a non-cash stock-based compensation expense increase of $1.4 million primarily due to the net effect of new restricted stock units granted offset by full amortization of awards subsequent to June 30, 2023.

Previous wording

The increase in general and administrative expenses in the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily resulted from the $24.5 million litigation settlement accrual for the Securities Class Action Litigation described in Note 7, Commitments and Contingencies, to the condensed consolidated financial statements elsewhere in this Report, and an increase of $10.6 million in charges related to other legal matters, professional fees, outside services and office administration, offset by a non-cash stock-based compensation expense decrease of $20.1 million primarily due to the reversal of the previously recognized expense of $16.0 million for the options for Mr. Jagdeep Singh where the requisite service period had not been completed at the time of forfeiture upon the termination of his employment.

Current wording

The increase in general and administrative expenses in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily resulted from the net $24.5 million litigation settlement accrual for the Securities Class Action Litigation described in Note 7, Commitments and Contingencies, to the condensed consolidated financial statements elsewhere in this Report, and an increase of $11.5 million in charges related to other legal matters, professional fees, outside services and office administration, offset by a decrease in non-cash stock-based compensation expense of $22.3 million primarily due to the net effect of forfeiture of EPA awards offset by new restricted stock units granted subsequent to June 30, 2023.

Previous wording

The increase in interest income during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was mainly due to an increase in investment and interest rates.

Current wording

The increase in interest income during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was mainly due to an increase in investment and interest rates.

Previous wording

Other income (expense) for the three months ended March 31, 2024 consisted of foreign currency exchange gain. Other expense for the three months ended March 31, 2023 primarily consisted of foreign currency exchange loss and other miscellaneous expenses.

Current wording

Other income (expense) for the three and six months ended June 30, 2024 consisted of foreign currency exchange gain and other miscellaneous income. Other income (expense) for the three and six months ended June 30, 2023 consisted of foreign currency exchange loss and other miscellaneous income.

Previous wording

As of March 31, 2024 and December 31, 2023, our principal sources of liquidity were our cash and cash equivalents and marketable securities in the amount of approximately $1.0 billion and $1.1 billion, respectively. Our cash equivalents are invested in U.S. money market funds, U.S. Treasury bonds and commercial paper. Our marketable securities are invested in U.S. Treasury notes and bonds, commercial paper, and corporate notes and bonds.

Current wording

As of June 30, 2024 and December 31, 2023, our principal sources of liquidity were our cash and cash equivalents and marketable securities in the amount of approximately $937.9 million and $1.1 billion, respectively. Our cash equivalents are invested in U.S. money market funds, U.S. Treasury bonds and commercial paper. Our marketable securities are invested in U.S. Treasury notes and bonds, commercial paper, and corporate notes and bonds.

Previous wording

We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of this Report. Based on our current business plan, we believe that our cash resources will last into the second half of 2026. However, any changes to our technology development, operating costs and scale-up could materially impact us and the availability of our capital resources. We may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with automotive OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, inflation, and regulatory developments, among others. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If such financing is not available, or if the financing terms are onerous given the high-interest rate environment or less desirable than we expect, we may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial prospects.

Current wording

We believe that our cash on hand will be sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of this Report. Based on our current business plan, we believe that our cash resources will last into 2028. However, any changes to our technology development, operating costs and scale-up, including our ability to meet the milestones to enable the entry into the IP License Agreement and related receipt of the initial royalty fee from PowerCo, could materially impact us and the availability of our capital resources. We may need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with automotive OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, inflation, and regulatory developments, among others. To the extent that our current resources are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. If such financing is not available, or if the financing terms are onerous given the high-interest rate environment or less desirable than we expect, we may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial prospects.

Previous wording

In February 2023, we filed a prospectus supplement to the Form S-3 for the issuance and sale of our Class A Common Stock from time to time for an aggregate offering price of up to $400 million through J.P. Morgan Securities LLC, Cowen and Company, LLC, Deutsche Bank Securities Inc. and UBS Securities LLC, as the sales agents. We entered into Distribution Agreements with each of these sales agents in February 2023, in connection with the offering. We have up to three years from the date of the Distribution Agreements to sell the shares, however we are not obligated to sell any such shares. Any proceeds from the sale of shares will be used for working capital and other general corporate purposes and would further extend our forecasted cash runway. No shares of our Class A Common Stock were sold pursuant to the ATM offering during the three months ended March 31, 2024.

Current wording

In February 2023, we filed a prospectus supplement to the Form S-3 for the issuance and sale of our Class A Common Stock from time to time for an aggregate offering price of up to $400 million through J.P. Morgan Securities LLC, Cowen and Company, LLC, Deutsche Bank Securities Inc. and UBS Securities LLC, as the sales agents. We entered into Distribution Agreements with each of these sales agents in February 2023, in connection with the offering. We have up to three years from the date of the Distribution Agreements to sell the shares, however we are not obligated to sell any such shares. Any proceeds from the sale of shares will be used for working capital and other general corporate purposes and would further extend our forecasted cash runway. No shares of our Class A Common Stock were sold pursuant to the ATM offering during the three and six months ended June 30, 2024.

Previous wording

Our cash flows used in operating activities to date have been primarily driven by the growth in our underlying business to support the research and development of next-generation battery technology. Ahead of starting the pre-pilot and pilot production line operations, we expect our cash used in operating activities to increase significantly before we start to generate any material cash flows from our business. To support our research and development activities and our plan to expand our pre-pilot manufacturing capability, we are expecting cash payments of approximately $8.9 million during the next twelve months and approximately $71.3 million thereafter for the operating lease commitments as of March 31, 2024. From time to time, we also enter into non-cancellable service and purchase commitments. We are expecting cash used in operating activities to include payments of approximately $4.0 million in the next twelve months and approximately $6.7 million thereafter through 2027 for our non-cancellable commitments as of March 31, 2024. As we complete the development of our solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets, we anticipate that research and development operating expenses will increase significantly for the foreseeable future.

Current wording

Our cash flows used in operating activities to date have been primarily driven by the growth in our underlying business to support the research and development of next-generation battery technology. To support our research and development activities and our plan to expand our QS-0 capability, we are expecting cash payments of approximately $8.9 million during the next twelve months and approximately $69.9 million thereafter for the operating lease commitments as of June 30, 2024. From time to time, we also enter into non-cancellable service and purchase commitments. We are expecting cash used in operating activities to include payments of approximately $4.1 million in the next twelve months and approximately $5.8 million thereafter through 2027 for our non-cancellable commitments as of June 30, 2024.

Previous wording

Cash used in operating activities for the three months ended March 31, 2024 was primarily driven by a net loss of $120.6 million, offset by non-cash expense of $19.3 million related to stock-based compensation, non-cash expense of $12.0 million related to depreciation and amortization, non-cash lease expense and amortization of right-of-use assets of $2.0 million. Cash used in the operating activities was further driven by an increase of $22.7 million in prepaid expenses, other current assets and other assets, and $8.2 million in amortization of premiums and accretion of discounts on marketable securities, and offset by an increase of $61.6 million in accounts payable, accrued liabilities, and accrued compensation and benefits.

Current wording

Cash used in operating activities for the six months ended June 30, 2024 was primarily driven by a net loss of $243.6 million, offset by non-cash expense of $67.1 million related to stock-based compensation, non-cash expense of $24.9 million related to depreciation and amortization, non-cash lease expense and amortization of right-of-use assets of $4.0 million. Cash used in the operating activities was further driven by an increase of $22.7 million in prepaid expenses, other current assets and other assets, and $15.7 million in amortization of premiums and accretion of discounts on marketable securities, and offset by an increase of $63.3 million in accounts payable, accrued liabilities and accrued compensation and benefits.

Previous wording

Cash used in operating activities for the three months ended March 31, 2023 was primarily driven by a net loss of $104.6 million, offset by non-cash expense of $38.0 million related to stock-based compensation, non-cash expense of $9.5 million related to depreciation and amortization, non-cash lease expense and amortization of right-of-use assets of $1.9 million. Cash used in the operating activities was partially driven by a net decrease of $4.1 million in accounts payable, accrued liabilities, and accrued compensation and benefits.

Current wording

Cash used in operating activities for the six months ended June 30, 2023 was primarily driven by a net loss of $221.1 million, and a decrease of $4.0 million in accounts payable, accrued liabilities and accrued compensation and benefits, offset by non-cash expense of $88.0 million related to stock-based compensation, non-cash expense of $19.5 million related to depreciation and amortization, non-cash lease expense and amortization of right-of-use assets of $3.9 million.

Previous wording

Our cash flows from investing activities to date have been comprised of purchases of property and equipment and purchases, maturities and sales of our marketable securities. We expect the level of capital investment to increase substantially in the near future as we acquire the property and equipment for and build out our consolidated QS-0 pre-pilot line.

Current wording

Our cash flows from investing activities to date have been comprised of purchases of property and equipment and purchases, maturities and sales of our marketable securities. We expect the level of capital investment to increase substantially in the near future as we acquire the property and equipment for and build out our QS-0 facility.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2024 primarily consists of proceeds from the maturity and sale of marketable securities of $384.6 million and $1.2 million, respectively. These were offset by $265.3 million used for the purchase of marketable securities and $14.1 million used for the purchase of various property and equipment, primarily to support our research and development activities.

Current wording

Cash provided by investing activities for the six months ended June 30, 2024 primarily consists of proceeds from the maturity and sale of marketable securities of $893.8 million and $1.2 million, respectively. These were offset by $690.2 million used for the purchase of marketable securities and $33.0 million used for the purchase of various property and equipment, primarily to support our research and development activities.

Previous wording

Cash provided by investing activities for the three months ended March 31, 2023 primarily consists of the proceeds from the maturity and sale of marketable securities of $191.0 million and $1.5 million, respectively, offset by $100.4 million used for the purchase of marketable securities. Cash provided by investing activities also includes $28.0 million of cash used for the purchase of various property and equipment, primarily to support our research and development activities.

Current wording

Cash provided by investing activities for the six months ended June 30, 2023 primarily consists of the proceeds from the maturity and sale of marketable securities of $452.5 million and $1.5 million, respectively, offset by $290.8 million used for the purchase of marketable securities. Cash provided by investing activities also includes $52.7 million of cash used for the purchase of various property and equipment, primarily to support our research and development activities.

Previous wording

Our cash flows from financing activities primarily consist of proceeds from the issuance of common stock and exercise of stock options. Finance lease commitment for QS-0 will result in net cash payments of $5.2 million in the next twelve months and payments of $43.0 million thereafter.

Current wording

Our cash flows from financing activities primarily consist of proceeds from the issuance of common stock and exercise of stock options. Finance lease commitment for QS-0 will result in net cash payments of $5.2 million in the next twelve months and payments of $41.7 million thereafter.

Previous wording

Cash provided by financing activities during the three months ended March 31, 2024 is primarily due to $1.9 million received from the exercise of stock options.

Current wording

Cash provided by financing activities during the six months ended June 30, 2024 is primarily due to $6.6 million received from the exercise of stock options and our employee stock purchase plan.

Previous wording

Cash provided by financing activities during the three months ended March 31, 2023 is primarily due to $4.1 million received from the exercise of stock options.

Current wording

Cash provided by financing activities during the six months ended June 30, 2023 is primarily due to $7.6 million received from the exercise of stock options and our employee stock purchase plan.