QuantumScape Corp

Previous wording

We are a development-stage company with no revenue to date, have incurred a net loss from operations of approximately $123.6 million for the three months ended March 31, 2025, and an accumulated deficit of approximately $3.5 billion from our inception through March 31, 2025. 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 $123.6 million and $247.2 million, for the three and six months ended June 30, 2025, respectively, and an accumulated deficit of approximately $3.6 billion from our inception through June 30, 2025. We expect to incur significant expenses and continuing losses for the foreseeable future.

Previous wording

Continued improvement in throughput. Increasing the volume of separator production results in the increased quantities to support internal development, prototype sampling to prospective customers, and supply chain development. We continue to invest and deploy resources to automate our manufacturing process, including purchasing higher throughput manufacturing equipment, that we expect will substantially improve our manufacturing processes and, as a result, increase throughput required for product qualification and to achieve the cost, performance and volume levels required for commercial shipments to support our prospective launch program and technology transfer activities.

Current wording

Continued improvement in throughput. Increasing the volume of separator production results in the increased quantities to support internal development, prototype sampling to prospective customers, our prospective launch program, supply chain development, and technology transfer activities. We continue to invest and deploy resources to automate our manufacturing process, including purchasing higher throughput manufacturing equipment, to improve the efficiency and efficacy of our manufacturing processes and to achieve higher battery cell output.

Previous wording

We are focused on the throughput and capability of our pilot line in San Jose, California. As part of the continued expansion of our throughput we are automating our manufacturing process and purchasing higher throughput 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 our pilot line in San Jose, California. As part of the continued expansion of our throughput we are automating our manufacturing process and purchasing higher throughput battery-cell manufacturing equipment.

Previous wording

Our pilot line is intended to serve four purposes. First, to provide a sufficient quantity of separators and cells for internal development and customer sampling. Second, 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 the pilot line. Fourth, 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 our pilot line may impact both our development and future scale-up timelines.

Current wording

Our pilot line is intended to serve four purposes. First, to provide a sufficient quantity of separators and cells for internal development and customer sampling. Second, 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 from the pilot line. Fourth, 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 our pilot line may impact both our development and future scale-up timelines.

Previous wording

We will need to achieve significant cost savings in battery design and manufacturing, in addition to the cost savings associated with the elimination of an anode from our solid-state battery cells as manufactured, while controlling costs associated with the manufacture of our separator, including achieving substantial improvements in quality, consistency, reliability, throughput and safety required to hit commercial targets. Further, we will need to capture industry cost savings in the materials, components, equipment, facilities design, and processes that we share, notably in the cathode and cell design.

Current wording

We will need to achieve significant cost savings in battery design and manufacturing, in addition to the cost savings associated with the elimination of an anode from our solid-state battery cells as manufactured, while controlling costs associated with the manufacture of our separator, including achieving substantial improvements in quality, consistency, reliability, throughput and safety required to hit commercial targets. Further, we will need to capture industry cost savings in the materials, components, equipment, facilities design, and processes for products we develop, notably in the cathode and cell design. As we advance our licensing business model, we anticipate our partners will need to achieve similar cost savings in battery design and manufacturing, and capture industry cost savings.

Previous wording

In July 2024, we entered into the PowerCo Collaboration Agreement with the goal of industrializing the solid-state lithium-metal battery technology we intend to use in our first planned product—the QSE-5 Technology. PowerCo was formed by Volkswagen in 2022 as a company intended to consolidate Volkswagen’s activities in the development and production of battery cells. In connection with the PowerCo Collaboration Agreement and subject to the completion of certain milestones, we and PowerCo intend to enter into the PowerCo IP License Agreement under which we will grant PowerCo a non-exclusive, limited, royalty-bearing license to use the QSE-5 Technology for the purpose of manufacturing and selling batteries primarily for automotive applications, and PowerCo will pre-pay an initial royalty fee of $130 million, against which any future royalties due will be credited. The initial royalty is subject to a time-based diminishing clawback if the PowerCo IP License Agreement is terminated early by PowerCo under certain conditions. The PowerCo Collaboration Agreement supersedes the JVA, which was terminated concurrently. As compared to a joint venture arrangement of similar output volumes, we expect the licensing arrangement to result in less revenue, as well as lower costs and capital requirements.

Current wording

In July 2024, we entered into the PowerCo Collaboration Agreement with the goal of industrializing the solid-state lithium-metal battery technology we intend to use in our first planned product—the QSE-5. PowerCo was formed by Volkswagen in 2022 as a company intended to consolidate Volkswagen’s activities in the development and production of battery cells. In connection with the PowerCo Collaboration Agreement and subject to the completion of certain milestones, we and PowerCo intend to enter into the PowerCo IP License Agreement under which we will grant PowerCo a non-exclusive, limited, royalty-bearing license to use the QSE-5 Technology for the purpose of manufacturing and selling batteries primarily for automotive applications, and PowerCo will pre-pay an initial royalty fee of $130 million, against which any future royalties due will be credited. The initial royalty is subject to a time-based diminishing clawback if the PowerCo IP License Agreement is terminated early by PowerCo under certain conditions. The PowerCo Collaboration Agreement supersedes the JVA, which was terminated concurrently. As compared to a joint venture arrangement of similar output volumes, we expect the licensing arrangement to result in less revenue, as well as lower costs and capital requirements.

Previous wording

In addition to the signed agreement with PowerCo with the goal of commercializing our battery technology, we intend to continue working closely with automotive OEMs to make our solid-state battery cells widely available over time. We have also signed customer sampling agreements with a number of OEMs, ranging from leading manufacturers by global revenue to premium performance and luxury carmakers, to collaborate with us in the testing and validating of our solid-state battery cells with the goal to include such cells 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.

Current wording

In addition to the signed agreement with PowerCo with the goal of commercializing our battery technology, we intend to continue working closely with automotive OEMs to make our solid-state battery cells widely available over time. We have also signed customer sampling agreements with a number of OEMs, ranging from leading manufacturers by global revenue to premium performance and luxury carmakers, to collaborate with us in the testing and validating of our solid-state battery cells with the goal to include such cells 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, consumer electronics, data centers, robotics, defense, and aviation and we intend to explore opportunities in those areas as appropriate.

Previous wording

Based on our current business plan, we believe that our cash resources will last into the second half of 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”). During the year ended December 31, 2024, 24.9 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $128.5 million, net of issuance costs paid. During the three months ended March 31, 2025, 0.2 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $1.0 million, net of issuance costs paid including immaterial commission fees to the sales agents.

Current wording

Based on our current business plan, we believe that our cash resources will last into 2029. 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”). During the year ended December 31, 2024, 24.9 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $128.5 million, net of issuance costs paid. No shares of the Company’s Class A Common Stock were sold pursuant to the ATM offering during the three months ended June 30, 2025. During the six months ended June 30, 2025, 0.2 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $0.9 million, net of issuance costs including immaterial commission fees to the sales agents. If immediately prior to the expiration of the Form S-3 the aggregate gross sales price of shares sold in the ATM offering is less than the maximum amount permissible thereunder, we would be required to file a new registration statement with the SEC.

Previous wording

Comparison of the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Current wording

Comparison of the Three and Six Months Ended June 30, 2025 to the Three and Six Months Ended June 30, 2024

Previous wording

The decrease in general and administrative expenses in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily resulted from a decrease of $24.5 million due to the net settlement of the accrual in the three months ended March 31, 2024 for the Securities Class Action Litigation, a decrease of $12.5 million in charges related to other legal matters, professional fees, outside services and office administration, primarily offset by a non-cash stock-based compensation expense increase of $16.3 million primarily due to the reversal of previously recognized expense of $16.0 million for the EPA awards forfeited in the three months ended March 31, 2024 where the requisite service period had not been completed at the time of forfeiture, the net effect of new restricted stock units granted offset by full amortization of awards subsequent to March 31, 2024, and the recognition of all unamortized expense for EPA awards cancelled in February 2025.

Current wording

The decrease in general and administrative expenses in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily resulted from a decrease of $24.5 million due to the net expense in the six months ended June 30, 2024 associated with the settlement of the class action lawsuits that were filed beginning January 2021, a decrease of $16.3 million in charges related to other legal matters, professional fees, outside services and office administration, primarily offset by a non-cash stock-based compensation expense increase of $5.7 million primarily due to the net impact of reversal of previously recognized expense of $16.0 million for the EPA awards forfeited in the six months ended June 30, 2024 where the requisite service period had not been completed at the time of forfeiture, offset by the decrease resulted from full amortization of awards, forfeitures and lower headcount.

Previous wording

The decrease in interest income during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 was mainly due to the decrease in interest rates.

Current wording

The decrease in interest income during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 was mainly due to the decrease in interest rates.

Previous wording

Other expense for the three months ended March 31, 2025 and the three months ended March 31, 2024, respectively, are not material individually or in aggregate.

Current wording

Other income (expense) for the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024, respectively, are not material individually or in aggregate.

Previous wording

As of March 31, 2025 and December 31, 2024, our principal sources of liquidity were our cash and cash equivalents and marketable securities in the amount of approximately $860.3 million and $910.8 million, 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, 2025 and December 31, 2024, our principal sources of liquidity were our cash and cash equivalents and marketable securities in the amount of approximately $797.5 million and $910.8 million, 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 2028, in part due to our transition from the JVA arrangement to the licensing arrangement with PowerCo, which, if entered into, is expected to have significantly lower costs and capital requirements. 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 PowerCo 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.

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 2029, in part due to our transition from the JVA arrangement to the licensing arrangement with PowerCo, which, if entered into, is expected to have significantly lower costs and capital requirements. 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 PowerCo 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 ATM 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 net 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. During the three months ended March 31, 2025, 0.2 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $1.0 million, net of issuance costs paid including immaterial commission fees to the sales agents.

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 ATM 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 net 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 the Company’s Class A Common Stock were sold pursuant to the ATM offering during the three months ended June 30, 2025. During the six months ended June 30, 2025, 0.2 million shares of our Class A Common Stock were sold pursuant to the ATM offering for aggregate proceeds of approximately $0.9 million, net of issuance costs including immaterial commission fees to the sales agents. If immediately prior to the expiration of the Form S-3 the aggregate gross sales price of shares sold in the ATM offering is less than the maximum amount permissible thereunder, we would be required to file a new registration statement with the SEC.

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. To support our research and development activities and our plan to build out and scale up our pilot line, we are expecting cash payments of approximately $9.2 million during the next twelve months and approximately $63.1 million thereafter for the operating lease commitments as of March 31, 2025. 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 $3.9 million in the next twelve months and approximately $2.8 million thereafter through 2027 for our non-cancellable commitments as of March 31, 2025.

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. As of June 30, 2025, our operating lease commitments are approximately $9.2 million during the next twelve months and approximately $60.8 million thereafter. As a result of the Termination Agreement entered into in July 2025, we are expecting payments for the operating lease commitments to be approximately $9.2 million in the next twelve months and approximately $44.5 million thereafter. 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 $3.7 million in the next twelve months and approximately $3.0 million thereafter through 2027 for our non-cancellable commitments as of June 30, 2025.

Previous wording

Cash used in operating activities for the three months ended March 31, 2025 was primarily driven by a net loss of $114.4 million, offset by non-cash expense of $40.6 million related to stock-based compensation, non-cash expense of $18.3 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 $5.0 million in amortization of premiums and accretion of discounts on marketable securities, a decrease of $1.5 million in accounts payable, accrued liabilities and accrued compensation and benefits, and a decrease of $1.3 million in operating lease liability.

Current wording

Cash used in operating activities for the six months ended June 30, 2025 was primarily driven by a net loss of $229.1 million, offset by non-cash expense of $66.9 million related to stock-based compensation, non-cash expense of $37.8 million related to depreciation and amortization, write-off of fixed assets of $14.9 million, non-cash lease expense and amortization of right-of-use assets of $4.1 million. Cash used in the operating activities was further driven by $9.1 million in amortization of premiums and accretion of discounts on marketable securities, a decrease of $6.9 million in accounts payable, accrued liabilities and accrued compensation and benefits, and a decrease of $2.6 million in operating lease liability.

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 provided by investing activities for the three months ended March 31, 2025 primarily consists of proceeds from the maturity of marketable securities of $281.2 million. These were offset by $213.4 million used for the purchase of marketable securities and $5.8 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, 2025 primarily consists of proceeds from the maturity of marketable securities of $537.6 million. These were offset by $384.1 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.

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

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 one of our buildings will result in net cash payments of $5.3 million in the next twelve months and payments of $37.7 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. A finance lease commitment for one of our buildings will result in net cash payments of $5.3 million in the next twelve months and payments of $36.4 million thereafter.

Previous wording

Cash provided by financing activities during the three months ended March 31, 2025 is primarily due to $11.2 million received from the exercise of stock options.

Current wording

Cash provided by financing activities during the six months ended June 30, 2025 is primarily due to $15.7 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, 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.