Solid Power, Inc.

Previous wording

We made progress on our 2025 development objectives as the solid-state battery landscape continues to evolve. Below is a summary of our progress towards our goals.

Current wording

We made progress on our 2025 development objectives as the solid-state battery landscape continues to evolve. Below is a summary of our progress towards our goals during the second quarter of 2025.

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

During the three months ended March 31, 2025, our capital and operational investments supported our key 2025 development objectives.

Current wording

During the three and six months ended June 30, 2025, our capital and operational investments supported our key 2025 development objectives.

Previous wording

We recognized $4.5 million of collaborative revenue for the three months ended March 31, 2025. The majority of our collaborative revenue consisted of revenue driven by our performance on ourresearch and development technology license agreement, line installation agreement, and electrolyte supply agreement with SK On (collectively, the“SK On Agreements”). During the three months ended March 31, 2025, we neared completion of factory acceptance testing under the line installation agreement, which we completed in April 2025. We intend to continue executing on the SK On Agreements and anticipate recognizing additional revenue from the SK On Agreements through the remainder of the year.

Current wording

We recognized $5.9 million and $10.5 million of collaborative revenue for the three and six months ended June 30, 2025, respectively. The collaborative revenue primarily consists of performance on ourresearch and development technology license agreement, line installation agreement, and electrolyte supply agreement with SK On (collectively, the“SK On Agreements”). During the three and six months ended June 30, 2025, we completed factory acceptance testing under the line installation agreement and began working towards site acceptance testing. We intend to continue executing on the SK On Agreements and anticipate recognizing additional revenue from the SK On Agreements through the remainder of the year.

Previous wording

We recognized $1.5 million of government revenue for the three months ended March 31, 2025. The majority of our government revenue consisted of revenue from our assistance agreement (the “Assistance Agreement”) with the U.S. Department of Energy (“DOE”). The Assistance Agreement provides that the DOE will provide us with funding of up to $50 million for our installation of equipment necessary for the continuous production of sulfide-based solid electrolyte material. During the three months ended March 31, 2025, we conducted detailed design of equipment and finished ordering long-lead time equipment for the installation of a continuous electrolyte production pilot line. Revenue is recognized on the non-capital costs of the project. As we continue to execute on the construction of the project milestones, we expect to recognize additional grant revenue.

Current wording

We recognized $1.6 million and $3.1 million of government revenue and government grant income for the three and six months ended June 30, 2025, respectively. Government revenue and government grant income consisted primarily of grant income from the Assistance Agreement. The Assistance Agreement provides that the DOE will provide us with funding of up to $50 million for our installation of equipment necessary for the continuous production of sulfide-based solid electrolyte material. During the three and six months ended June 30, 2025, we initiated detailed design of the continuous electrolyte production pilot line and finished ordering long-lead time equipment. Grant income is recognized on the non-capital costs of the project. As we continue to execute on the project milestones, we expect to recognize additional grant income.

Previous wording

Research and development-related operating expenses largely consisted of employee compensation and employee benefit costs incurred to maintain our skilled workforce, including engineers, scientists, operators, chemists, and technicians. Total research and development costs remained consistent with a $0.1 million increase in the three months ended March 31, 2025 compared to the same period in 2024. Factors contributing to the change in research and development costs included both an increase from depreciation expense and a decrease due to stock-based compensation. The increase in depreciation expense was a result of EIC being place into service in 2024. This accounted for an increase in depreciation expense of $0.5 million for the period ending March 31, 2025 compared to the same period in 2024. We expect depreciation expense to continue to increase as we place the remainder of the EIC and other construction in progress into service within the year. This increase in depreciation expense was partially offset by a decrease in stock-based compensation expense as a result of forfeiture of unvested stock options.

Current wording

Research and development-related operating expenses largely consisted of employee compensation and employee benefit costs incurred to maintain our skilled workforce, including engineers, scientists, operators, chemists, and technicians. Total research and development costs did not change materially for the three and six months ended June 30, 2025 compared to the same period in 2024.

Previous wording

Selling, general and administrative expenses largely consisted of employee compensation and personnel related costs for our administrative functions as well as costs driven by insurance and regulatory requirements. Selling, general and administrative expenses decreased $0.2 million in the three months ended March 31, 2025 compared to the same period in 2024. This was primarily due to the strategic decision to reduce outside contractor and external consultant support in an effort to reduce costs.

Current wording

Selling, general and administrative expenses are largely comprised of employee compensation and personnel related costs for our administrative functions as well as costs driven by insurance and regulatory requirements. Selling, general and administrative expenses decreased by $1.4 million and $1.7 million in the three and six months ended June 30, 2025, respectively, compared to the same periods ended June 30, 2024 primarily due to a decrease in stock-based compensation expense as a result of forfeitures of unvested stock options and restricted stock units. The decrease of selling, general and administrative expenses was also driven by the strategic decision to reduce contractor and consultant support.

Previous wording

Overall, we expect operating expenses for the remainder of the year to slightly increase on a quarterly basis compared to the expenses incurred in the current quarter as we continue to execute on our objectives.* *

Current wording

Overall, we expect operating expenses for the remainder of the year to remain consistent with the expenses incurred in the first two quarters of 2025 as we continue to execute on our objectives and focus on cost reduction efforts to offset overall rising costs.

Previous wording

The sale of equity has historically been our primary source of cash, with a smaller portion of cash coming from achievement of performance milestones under agreements with our partners, government contracts, and interest earned on available-for-sale securities.

Current wording

The sale of equity has historically been our primary source of cash, with a smaller portion of cash coming from achievement of performance milestones under agreements with our partners and government contracts. We also receive cash from the interest earned on our available-for-sale securities.

Previous wording

As of March 31, 2025 total liquidity, which includes all cash and cash equivalents as well as our available-for-sale securities,

Current wording

As of June 30, 2025 total liquidity, which includes all cash and cash equivalents as well as our available-for-sale securities, was $279.8 million, a decrease of $47.7 million compared to December 31, 2024. Additionally, we had contract receivables of $4.6 million and total current liabilities of $12.4 million as of June 30, 2025.

Previous wording

Longer term, we may require additional liquidity prior to being able to generate adequate cash flows from electrolyte sales and/or licensing activities. We also may require funding if there are material changes to our business conditions or other developments, including changes to our operating plan; development progress or delays; negotiations with OEMs, cell manufacturers, or other customers; market adoption of EVs; supply chain challenges; competitive pressures; government regulations, including tariffs; and inflation. To the extent that our resources are insufficient to satisfy our cash requirements, we may need to seek equity or debt financing. We also may opportunistically seek to enhance our liquidity through equity or debt financing, if such financing becomes available to us on terms that we consider favorable. If financing is not available, or if the terms of financing are less desirable

Current wording

Longer term, we may require additional liquidity prior to being able to generate adequate cash flows from electrolyte sales and/or licensing activities. We also may require funding if there are material changes to our business conditions or other developments, including changes to our operating plan; development progress or delays; negotiations with OEMs, cell manufacturers, or other customers; market adoption of EVs; supply chain challenges; competitive pressures; government regulations, including tariffs; and inflation. To the extent that our resources are insufficient to satisfy our cash requirements, we may need to seek equity or debt financing. We also may opportunistically seek to enhance our liquidity through equity or debt financing, if such financing becomes available to us on terms that we consider favorable. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, which may adversely affect our development, business, operating results, financial condition and prospects.

Previous wording

Cash used in operating activities decreased $2.8 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily driven by lower payments to Dahae, a strategic partner serving as installer of the SK On line, partially offset by an annualized increase in employee compensation costs. Payments to Dahae were $5.8 million in the three months ended March 31, 2024 compared to $1.1 million in the three months ended March 31, 2025. The largest use of operating cash in the three months ended March 31, 2025 was employee compensation, including the payout of annual performance-based incentive compensation, which together were $14.2 million. The remaining cash used in operating activities for the three months ended March 31, 2025 were costs to operate our facilities, purchases of materials and supplies, and hazardous waste removal. Additionally, we received $3.0 million of cash from our partners in the three months ended March 31, 2025, compared to $2.7 million of cash received from our partners in the three months ended March 31, 2024. We anticipate cash used in operations to slightly increase on a quarterly basis for the remainder of the year, but expect additional cash receipts from partners which will partially offset that increase.

Current wording

Cash used in operating activities for the six months ended June 30, 2025 increased $0.5 million compared to the six months ended June 30, 2024. This cash flow stabilization was driven by offsetting cash uses. Cash used for payments to Dahae were $3.9 million in the six months ended June 30, 2025 compared to $7.7 million in the six months ended June 30, 2024. This change is due to the timing of milestone payments under our agreement with Dahae in connection with the SK On arrangement. Cash used for employee compensation and other employee benefit related costs, including the payout of annual performance-based incentive compensation, totaled $19.4 million in the six months ended June 30, 2025 compared to $16.9 million for the same period in prior year. The remaining cash used in operating activities for the six months ended June 30, 2025 were costs to operate our facilities, purchases of materials and supplies, and hazardous waste removal. Additionally, we received $9.9 million of cash from our partners in the six months ended June 30, 2025, compared to $10.1 million of cash received from our partners in the six months ended June 30, 2024. The cash received from partners for the period ended June 30, 2025 included the payment of the factory acceptance testing milestone under our line installation agreement with SK On. We anticipate cash used in operations for the remainder of the year to remain consistent with the first half of 2025, but expect additional cash receipts from partners which will partially offset the cash used for expenses.

Previous wording

Cash provided by investing activities increased $16.9 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to increased proceeds from purchases and sales of available-for-sale securities, which provided $33.3 million of proceeds in the three months ended March 31, 2025 compared to $17.9 million of proceeds in the three months ended in March 31, 2024. This increase was due to the timing of the individual security maturity date and the sale of more securities in the three months ended March 31, 2025 compared to the same period in 2024.

Current wording

Proceeds from our available-for-sale security activity provided $5.8 million less in cash in the six months ending June 30, 2025 compared to the same period in prior year. This change was due to the timing of the individual security maturity date and the sale of fewer securities in the six months ended June 30, 2025 compared to the same period in 2024.

Previous wording

Cash spent on capital expenditures was $2.4 million in the three months ended March 31, 2025, compared to $4.0 million in the three months ended March 31, 2024. Capital expenditures were primarily for the construction of our continuous electrolyte production pilot line which was partially offset by cash received from the DOE under the Assistance Agreement. We anticipate cash used in investing for capital expenditures to increase as we continue to make progress toward installation of the continuous electrolyte production pilot line.

Current wording

Cash used for capital expenditures was $3.4 million less in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Capital expenditures in 2025 were primarily for the construction of our continuous electrolyte production pilot line. Cash used for capital expenditures for the same period in 2024 were for construction of the EIC. Capital expenditures for the six months ended June 30, 2025 totaled $7.0 million partially offset by cash received of $2.0 million from the DOE under the Assistance Agreement. We anticipate cash used in investing for capital expenditures for the remainder of the year to increase as we continue to make progress toward installation of the continuous electrolyte production pilot line. Cash paid for a loan receivable from our equity method investee, Dahae, was $0 in the six months ended June 30, 2025 and $3.0 million in the six months ended June 30, 2024.

Previous wording

Cash used in financing activities decreased $4.9 million in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This decrease was primarily related to the repurchase of $4.9 million of our common stock under our stock repurchase program in the three months ended March 31, 2024 and no repurchases in the three months ended March 31, 2025. Cash used in financing activities for the three months ended March 31, 2025 was predominantly cash paid for withholding of employee taxes related to stock-based compensation and payments on finance lease liabilities, partially offset by proceeds from the exercise of stock options.

Current wording

Cash used in financing activities decreased $5.0 million in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily due to the repurchase of $3.6 million of our stock under the stock repurchase program in the six months ended June 30, 2025 compared to the repurchase of $8.3 million of our common stock in the six months ended June 30, 2024. The remaining cash used in financing activities for the six months ended June 30, 2025 was cash paid for withholding of employee taxes related to stock-based compensation and payments on finance lease liabilities, partially offset by proceeds from the exercise of stock options.

Previous wording

Except as set forth below, there have been no significant and material changes in our critical accounting policies and use of estimates during the three months ended March 31, 2025 as compared to those disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the 2024 Form 10-K.

Current wording

Except as set forth below, there have been no significant and material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2025 as compared to those disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in the 2024 Form 10-K.