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| PART I · |
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| Item 1. | Business | 5 |
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| Item 1A. | Risk Factors | 11 |
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| Item 1B. | Unresolved Staff Comments | 32 |
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| Item 1C. | Cybersecurity | 32 |
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| Item 2. | Properties | 33 |
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| Item 3. | Legal Proceedings | 34 |
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| Item 4. | Mine Safety Disclosures | 34 |
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| PART II | | |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 34 |
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| Item 6. | [Reserved] | 35 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 43 |
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| Item 8. | Financial Statements and Supplementary Data | 44 |
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| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 80 |
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| Item 9A. | Controls and Procedures | 80 |
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| Item 9B. | Other Information | 82 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 82 |
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| PART III | | |
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| Item 10. | Directors, Executive Officers and Corporate Governance | 83 |
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| Item 11. | Executive Compensation | 83 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 83 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 83 |
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| Item 14. | Principal Accounting Fees and Services | 83 |
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| PART IV | | |
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| Item 15. | Exhibits, Financial Statement Schedules | 83 |
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| SIGNATURES | 88 | |
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EXPLANATORY NOTE
Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” “SES,” and the “Company” refer to SES AI Corporation, a Delaware corporation (f/k/a Ivanhoe Capital Acquisition Corp., a Cayman Islands exempted company (“Ivanhoe”)) and its consolidated subsidiaries, after giving effect to the Business Combination (as defined below).
We were originally formed as a Cayman Islands exempted company in July of 2020 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses. On January 11, 2021, we consummated our initial public offering (the “IPO”), following which our securities began trading on the New York Stock Exchange (the “NYSE”).
On February 3, 2022 (the “Closing Date”), Ivanhoe consummated its previously announced business combination (the “Business Combination”) with SES Holdings Pte. Ltd., a Singapore private company limited by shares (“Old SES”), pursuant to the terms of that certain Business Combination Agreement (as amended, the “Business Combination Agreement”) by and among Ivanhoe, Old SES, and Wormhole Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares, and a direct, wholly-owned subsidiary of Ivanhoe (“Amalgamation Sub”).
Pursuant to the terms of the Business Combination Agreement and in connection with the closing of the Business Combination (the “Closing”), (i) Ivanhoe migrated out of the Cayman Islands and domesticated as a Delaware corporation (the “Domestication”) by way of continuation and deregistration under Part XII of the Cayman Islands Companies Act and domestication under Section 388 of the Delaware General Corporation Law (“DGCL”), (ii) Ivanhoe changed its name to “SES AI Corporation” (“SES,” or the “Company”), and (iii) Amalgamation Sub merged with and into Old SES, with Old SES as the surviving company (the “Amalgamation”) (the time that the Amalgamation became effective is referred to as the “Effective Time”). As a result of the Amalgamation, Old SES became our wholly-owned subsidiary.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS AND RISK FACTORS SUMMARY
This Annual Report on Form 10-K (this Annual Report”) contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot provide assurance that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Annual Report, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to the risks below, which also serves as a summary of the principal risks of an investment in our securities:
| ● | We face significant challenges in developing a Lithium-Metal (“Li-Metal”) battery that can be commercialized for use in electric vehicles (“EVs”), urban air mobility (“UAM”), and other applications, and the pace of development is often unpredictable and subject to delays. |
| ● | We have a history of no revenues and of net losses and expect to continue to incur losses for the foreseeable future. While we expect to become profitable eventually, our internal assumptions may prove incorrect, and we may never achieve or maintain profitability. |
| ● | We will need substantial additional capital in the future to fund our business and may be unable to meet our future capital requirements, impairing our financial position and results of operations. |
| ● | Our Li-Metal technology is untested in actual EVs and may ultimately prove unworkable. |
| ● | If our batteries fail to perform as expected our ability to develop, market and sell our batteries could be harmed. |
| ● | Delays in the pre-manufacturing development of our battery cells could adversely affect our business and prospects. |
| ● | We may not be able to engage target original equipment manufacturers (“OEMs”) customers successfully and to convert such contacts into meaningful orders in the future. |
| ● | If we are unable to integrate our products into EVs manufactured by OEM customers, our results of operations could be impaired. |
| ● | We may not be able to establish new, or maintain existing, supply relationships for necessary raw materials, components or equipment or may be required to pay costs for raw materials, components or equipment that are more expensive than anticipated, which could delay the introduction of our product and negatively impact our business. |
| ● | Our ability to manufacture our Li-Metal batteries at scale depends on our ability to build, operate and staff our facilities successfully. |
| ● | We have pursued and may continue to pursue joint development agreements (“JDAs”) and other strategic alliances, which could have an adverse impact on our business if they are unsuccessful or if we are unable to enter into new JDAs. |
| ● | Certain components of our batteries pose safety risks that may cause accidents. We may be subject to financial and reputational risks due to product recalls and product liability claims, and we could face substantial liabilities that exceed our resources. |
| ● | Our business depends substantially on the continuing efforts of our senior executives and other key personnel as well as the ability to attract, train and retain highly skilled employees and key personnel. |
| ● | Developments in alternative technology or other fossil fuel alternatives may adversely affect the demand for our battery products. |
| ● | Our patent applications may not result in issued patents or our patent rights may be challenged, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from competing or interfering with the commercialization of our products. |
| ● | We rely heavily on our intellectual property portfolio, including unpatented proprietary technology. If we are unable to protect our intellectual property rights from unauthorized use, our business and competitive position would be harmed. |
| ● | The international scope of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States. |
| ● | We have incurred and will continue to incur increased costs related to operating as a public company, and our management will be required to devote substantial additional time to compliance and corporate governance practices. |
| ● | The price of our common stock has been and may continue to be volatile. |
| ● | Our public warrants may never be in the money, and they may expire worthless. |
| ● | We are controlled or substantially influenced by Dr. Qichao Hu and certain entities affiliated with Dr. Hu, whose interests may conflict with other stockholders. The concentrated ownership of our dual class common stock could prevent stockholders from influencing significant decisions. |
