SES AI Corp
For the period ended Dec 31, 2025. Filed Mar 4, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 4, 2026
SES$0.83+22.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-28.
0001819142-25-000017
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-04.
0001819142-26-000010
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 61 previous paragraphs and 73 current paragraphs.
31 unchanged; 14 reworded; 26 added; 16 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 14 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”), drones, robotics, Energy Storage Systems (“ESS”) and other applications. The Company’s mission is to accelerate the world’s energy transition through material discovery and battery management. SES accelerates its pace of innovation by utilizing superintelligent AI across the spectrum of our business, from research and development, materials sourcing, cell design, engineering and manufacturing, to battery health and safety monitoring.
Current report
Key Trends, Opportunities and Uncertainties
Current report
Historical Performance
Current report
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose significant risks and challenges, including those discussed below and in “Part I, Item 1A. Risk Factors.”
Current report
Acquisition of UZ Energy
Current report
On July 25, 2025, our wholly owned subsidiary, SES AI International I Pte Ltd, entered into an agreement with UZ Energy and its shareholders to acquire 100% of the share capital of UZ Energy, a China-based battery energy storage system manufacturer. The aggregate consideration for the acquisition of UZ Energy is approximately* *RMB 183.5 million ($25.8 million), consisting of the purchase consideration of approximately RMB 93.5 million ($13.1 million) and a capital contribution of RMB 90.0 million ($12.6 million) made by the Company. The transaction closed on September 15, 2025. We believe that the acquisition of UZ Energy strengthens our capabilities in the ESS market and will provide opportunities for revenue generation.
Current report
Commercialization of Molecular Universe
Current report
We believe that the commercialization of the Molecular Universe platform represents a significant opportunity to drive future revenue growth and margin expansion, as it should enable us to offer differentiated AI-driven solutions to customers. We expect that successful adoption of Molecular Universe, both as a software product and as an integrated component of our hardware and software offerings, could increase revenues and improve gross margins over time. However, we also recognize that the market for AI-based scientific discovery tools is nascent and rapidly evolving, and that the pace of adoption and competitive dynamics are uncertain. If adoption is slower than anticipated or if competing platforms gain traction, our ability to achieve revenue growth and profitability could be adversely affected.
Current report
Shift to Joint Venture Manufacturing with Hisun
Current report
Our strategic shift away from in-house manufacturing of certain battery materials, and the announcement of a joint venture with Hisun to produce novel materials at commercial scale, is expected to reduce capital intensity and accelerate time-to-market for new products. We anticipate that this approach will allow us to scale more efficiently and address a broader customer base, which could positively impact future revenues. However, the transition introduces new uncertainties, including the risk of production delays, quality control challenges, and dependence on third-party manufacturing partners. These factors could result in variability in cost of goods sold, potential supply chain disruptions, and fluctuations in cash flows.
Current report
NDAA-Compliant Drone Cell Manufacturing
Current report
Our plan to develop NDAA-compliant manufacturing capacity for drone cells is intended to position us to capture new business from [U.S. government and defense-related customers], which we believe could be a driver of future revenue growth. Achieving NDAA compliance may also enhance our competitive positioning and open additional market opportunities. However, this initiative will require substantial capital investment and ongoing compliance costs, and there is uncertainty regarding the timing and magnitude of customer demand. If we are unable to achieve commercial-scale production or if demand for NDAA-compliant drone cells does not materialize as expected, we could experience underutilization of assets and negative impacts on cash flows.
Current report
See*“Note 2 – Summary of Significant Accounting Policies” *to the consolidated financial statements for further discussion on our revenue streams and revenue recognition policies.
Current report
Revenue from customers for the year ended December 31, 2025 increased $19.0 million to $21.0 million compared to $2.0 million for the year ended December 31, 2024.
Current report
Service revenues increased $11.6 million to $13.6 million for the year ended December 31, 2025 compared to $2.0 million for the year ended December 31, 2024. This increase was primarily attributable to a full year of revenue from service-related contracts with OEMs and other manufacturers compared with only one quarter of activities in the prior year. Product revenue increased $7.3 million to $7.4 million for the year ended December 31, 2025 compared to $0.1 million in the year ended December 31, 2024. This increase was primarily attributable to ESS systems sales from UZ Energy, which was acquired during the third quarter of 2025.
Current report
Costs of revenue for the years ended December 31, 2025 increased $8.9 million to $9.7 million compared to $0.8 million for the year ended December 31, 2024. Costs related to service revenues increased $2.4 million to $3.1 million for the year ended December 31, 2025 compared to $0.8 million for the year ended December 31, 2024. This increase was primarily attributable to full year of activities for service-related contracts in 2025 compared to one quarter of activities in the prior year. Costs related to product revenue increased $6.6 million primarily attributable to ESS systems sales from UZ Energy, which was acquired during the third quarter of 2025.
Current report
Gross Profit
Current report
Gross profit has been and will continue to fluctuate over time affected by a variety of factors, including the average sales price of our product and service offerings and changes in our mix of revenue between ESS systems, drone batteries, battery materials andservice offerings to automotive OEMs and other manufacturers.
Current report
Gross margin for the years ended December 31, 2025 and December 31, 2024 were 53.8% and 63.1%, respectively. The fluctuation was primarily due to the effect of changing revenue mix between product and service offerings as explained above.
Current report
Research and development expenses for the year ended December 31, 2025 decreased $5.1 million, or 7.1%, to $67.0 million, compared to $72.1 million for the year ended December 31, 2024. The decrease was driven by $13.0 million decrease in personnel costs mainly attributable to salaries, benefits and stock-based compensation attributable toreduced headcount resulting from the company’s strategic shift to an AI-based focus, a $4.9 million decrease in lab expenses due to lower research and development activities, a $4.0 million decrease in automotive OEM JDA related lab equipment expenses, and a $0.6 million decrease in professional service fees. These decreases were
Current report
offset by a $9.1 million increase in AI infrastructure costs incurred from renting Graphic Processing Unit (“GPU”) computing resources and from the development of the Company’s Molecular Universe platform, a$8.3 million decrease in reimbursements compared to the prior period from billings from our automotive OEM JDA partners due to the culmination of certain JDA activities in 2024, and a $1.0 million increase in rent, depreciation, and utilities costs.
Current report
General and administrative expense for the year ended December 31, 2025 decreased $11.5 million, or 30.0%, to $26.9 million, compared to $38.4 million for the year ended December 31, 2024. This decrease was driven by a $8.1 million decrease in personnel costs primarily attributable to salaries, benefits and stock-based compensationdue toreduced headcount, a $3.1 million decrease in professional services including marketing andpublic relations, a $0.6 decrease in insurance costs, and a $0.3 million decrease in audit and legal fees partially offset by a $0.6 million increase in other operating costs including franchise tax fees and regulatory costs.
Current report
Interest income for the year ended December 31, 2025 decreased $5.7 million, or 37.9%, to $9.3 million compared to $15.0 million for the year ended December 31, 2024. This $5.7 million decrease was primarily attributable to lower average short-term investment balances and a decline in market interest rates during the current year.
Current report
Net cash used in investing activities was $39.2 million for the year ended December 31, 2025, compared with net cash provided by investing activities of $108.2 million for the year ended December 31, 2024. This increase in cash used was primarily attributable to a $158.7 million reduction in cash provided by the maturities of short-term investments, net of purchases, and $3.0 million in the payment of deferred consideration related to the acquisition of UZ Energy, partially offset by $9.3 million of lower capital expenditures and $5.0 million from the sale of short-term investments in the current year period.
Current report
Net cash used in financing activities of $2.0 million for the year ended December 31, 2025 was primarily attributable to $1.6 million in cash payments for Class A common share repurchases and $0.4 million in cash withheld for tax payments on restricted stock units (“RSU”) vesting.
Current report
For additional information regarding our operating lease obligations, see “Note 13 – Leases” of our accompanying consolidated financial statements.
Removed paragraphs (16)
Previous report
We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal and Li-ion rechargeable batteries for EVs, UAM, drones, robotics, BESS and other applications. Our differentiated battery technology has been designed to combine the high energy density of Li-Metal with the large-scale manufacturability of conventional Lithium-ion (“Li-ion”) batteries and will help to promote the transition from the global dependence on fossil fuel-based automotive vehicles to clean and efficient EVs and help enable an era of electric transportation in the air.
Previous report
SES’s mission is to accelerate the world’s energy transition through material discovery and battery management. To assist in achieving this mission, we have partnered with leading global OEMs, including GM, Hyundai, and Honda, among other strategic partners, under JDAs and service contracts to develop and produce our Li-Metal battery cells and technology. We have transitioned from the development and production of A-Sample batteries to B-Sample batteries with specifications required by OEMs for their EVs. This transition began when we signed a B-Sample agreement for Li-Metal development of EVs. A-Sample batteries are functional prototypes developed for OEMs based on their technical specifications. These are in contrast with B-Sample batteries, which are A-sample batteries manufactured under much higher throughput and tested in actual vehicles, and C-Sample batteries, which would be fully functional, mature samples for mass production and tested for full drivability in actual vehicles.
Previous report
We are also conducting research and development activities to further improve the performance, quality and cost of our battery technology by focusing on the following key areas, all of which we expect to help us achieve our commercialization goal, at our facilities in Woburn, Massachusetts in the United States, Shanghai, China, and Chungju, South Korea. These activities include:
Previous report
Factors Affecting Operating Results
Previous report
Revenue for the year ended December 31, 2024 was $2.0 million and was primarily attributable to service-related contracts from OEM and other manufacturers.
Previous report
Cost of revenue for the year ended December 31, 2024 was $0.8 million primarily attributable to personnel costs.
Previous report
We are an early-stage growth company that has just begun the commercialization stage of development and conduct our business through one operating segment. We have spent $81.5 million and $44.9 million on research and development activities, which is prior to credits received by our OEM partners under the JDAs during the years ended December 31, 2024 and 2023, respectively.
Previous report
Research and development expenses for the year ended December 31, 2024 increased $41.5 million, or 135.2%, to $72.1 million, compared with $30.7 million for the year ended December 31, 2023. The increase primarily resulted from a $14.6 million decrease in reimbursements from our JDA partners due to culmination of a couple of JDA activities. In addition, there was a $10.5 million increase in lab consumables and material supplies and JDA equipment expenses, a $9.2 million increase in personnel costs mainly attributable to salaries, benefits and stock-based compensation expense associated with higher headcount to support new materials discoveries and all in on AI initiatives, and a $4.4 million increase in computer and software development costsdue to AI infrastructure spend. Further, there was a $2.7 million increase in facility costs due to newly commissioned electrolyte foundry. We expect research and development expenses to remain consistent in 2025 compared with 2024.
Previous report
Out-of-Period Adjustment
Previous report
During the year ended December 31, 2023, an expense of $2.0 million related to Earn-Out Restricted Shares was erroneously reversed upon a former employee’s departure. This misstatement resulted in an understatement of research and development expense by $2.0 million for the year ended December 31, 2023, as well as an understatement of additional paid-in capital as of December 31, 2023, by the same amount.
Previous report
The Company corrected this misstatement during the year ended December 31, 2024, which resulted in a $2.0 million overstatement of research and development expense for the year ended December 31, 2024, with a corresponding impact on APIC. The correction of $2.0 million is included in the increase of $9.2 million noted in the above paragraph. In accordance with ASC 250 – Accounting Changes and Error Corrections, the Company evaluated the materiality of the misstatement from both quantitative and qualitative perspectives for the prior period errors and concluded that it was immaterial to both the prior period and the current period.
Previous report
General and administrative expenses for the year ended December 31, 2024 decreased $9.1 million, or 19.1%, to $38.4 million, compared with $47.5 million for the year ended December 31, 2023. This decrease primarily resulted from a $5.2 million decrease in personnel-related expenses, including stock-based compensation expense, that relates to lower stock-based compensation due to forfeitures from headcount reductions. In addition, a $1.7 million decrease in general liability insurance costs due to lower rates, and a $3.3 million decrease in audit fees, legal expenses and professional and consulting fees due to change in auditors and nonrecurring prior period expenses. These decreases were partly offset by a $1.0 million increase in rent and facility costs due to expansion of facility in our headquarters office and a $0.3 million increase inexpenses related to investor relations, repairs and maintenance, and information technology services.
Previous report
During the year ended December 31, 2024, we had interest income of $15.0 million compared with $16.7 million for the year ended December 31, 2023. This $1.7 million decrease was primarily due to a decrease ininvestment balances resulting from cash used in operations.
Previous report
Net cash provided by investing activities was $108.2 million for the year ended December 31, 2024, compared with net cash used in investing activities of $32.7 million for the year ended December 31, 2023. Investing activities include purchases of investments, maturities of investments, and purchases of property, plant, and equipment.
Previous report
Purchases and Maturities of Investments– Net proceeds of short-term investments were $120.4 million for the year ended December 31, 2024, compared with net proceeds from maturities of short-term investments of $48.5 million for the year ended December 31, 2023. The $71.9 million increase in net proceeds was driven by the nature and time to maturity for the treasury securities included in our portfolio in the current year and cash needs for operations.
Previous report
Net cash provided by financing activities of $3.3 million for the year ended December 31, 2023 related to proceeds received from a government grant and proceeds from the exercise of stock options
Reworded paragraphs (14)
Previous wording
Further, we have incurred net losses of $100.2 million and $53.4 million for the years ended December 31, 2024 and 2023, respectively, and have an accumulated deficit of $298.9 million and $198.7 million from our inception through December 31, 2024 and 2023, respectively. Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate and our ability to generate revenue in the future that is sufficient enough to achieve profitability will depend largely on the successful development of our products and services. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations.
Current wording
We are an early-stage growth company. We incurred net losses of $74.9 million and $100.2 million for the years ended December 31, 2025 and 2024, respectively, and had an accumulated deficit of $373.7 million and $298.9 million from our inception through December 31, 2025 and 2024, respectively. We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a few more years. Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate and our ability to generate revenue in the future that is sufficient enough to achieve profitability will depend largely on the successful development of our products and services. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations.
Previous wording
In October 2024, we began to generate revenue from our principal business activities. We generate revenue from two primary sources:
Current wording
For the years ended December 31, 2025 and 2024, we generated revenue from two primary sources:
Previous wording
Cost of revenue includes materials, labor, depreciation and amortization expense, inventory, freight costs, and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries, benefits, and stock-based compensation. We anticipate that cost of revenue will continue to increase as we enter into new revenue contracts.
Current wording
Cost of revenue includes materials, labor, depreciation and amortization expense, inventory, freight costs, warranty, and other direct costs related to manufacturing our products and service contracts. Labor consists of personnel-related expenses such as salaries, benefits, and stock-based compensation.
Previous wording
Research and development expenses consist primarily of costs incurred for personnel-related expenses, including salaries, benefits, and stock-based compensation expenses, for scientists, experienced engineers and technicians, expenses for materials and supplies used in product research and development, process engineering efforts and testing, as well as payments to consultants, patent related legal costs, depreciation, and allocated facilities and information technology costs.
Current wording
We are an early-stage growth company conducting business activities through one operating segment. Research and development expenses include personnel-related expenses, such as salaries, benefits, and stock-based compensation, for scientists, experienced engineers and technicians. These expenses also cover materials and supplies used in product research and development, process engineering efforts and testing, payments made to consultants, and patent related legal costs. Furthermore, they encompass depreciation, allocated facilities expenses, and information technology costs, including costs incurred for renting graphic processing units (“GPUs”) to train AI models.
Previous wording
General and administrative expenses consist primarily of costs incurred for salaries and personnel-related expenses, including stock-based compensation expense, for our finance, legal and human resource functions, expenses for director and officer insurance, outside contractor and professional service fees, audit and compliance expenses, legal, accounting and other advisory services, as well as allocated facilities and information technology costs including depreciation and amortization. Upon commencement of commercial operations, we also expect to incur customer and sales support and advertising costs.
Current wording
General and administrative expenses include personnel-related expenses, such as salaries, benefits, and stock-based compensation for our finance, legal and human resource functions. These expenses also cover director and officer insurance, outside contractor fees, and professional services, including audit, compliance, legal, accounting, investor relations, and other advisory services. Additionally, the expenses encompass allocated facilities and information technology costs, such as depreciation and amortization.
Previous wording
Interest income primarily consists of interest earned on our cash and cash equivalents, which are primarily invested in money market funds, and short-term investments in marketable securities, which are invested in U.S. treasury securities, and accretion income from the marketable securities.
Current wording
Interest income primarily consists of interest earned on our cash and cash equivalents, short-term investments in marketable securities, and accretion income from the marketable securities.
Previous wording
During the year ended December 31, 2024, we incurred a $5.3 million loss compared with a $6.8 million gain for the year ended December 31, 2023 associated with the change in fair value of the Sponsor Earn-Out liabilities. This $12.1 million decrease in gain on the change in fair value of the Sponsor Earn-Out liabilities is tied to SES’s stock price, continued volatility in the stock price or changes in the expected term. See “Note 11 – Sponsor Earn-Out Liabilities” to the consolidated financial statements for additional information.
Current wording
During the year ended December 31, 2025, we incurred a $1.7 million gain compared with a $5.3 million loss for the year ended December 31, 2024 associated with the change in fair value of the Sponsor Earn-Out liabilities. This $7.0 million increase in gain on the change in fair value of the Sponsor Earn-Out liabilities is tied to SES’s stock price, continued volatility in the stock price or changes in the expected term. See “Note 12 – Sponsor Earn-Out Liabilities” to the consolidated financial statements for additional information.
Previous wording
During the year ended December 31, 2024, we had miscellaneous expense of $0.5 million, compared with miscellaneous income of $0.4 million for the year ended December 31, 2023. This $0.9 million increase in miscellaneous expense was primarily due to $0.7 million loss on sale of assets and $0.6 million of interest expense related to our unearned government grant liability that was not incurred in prior year. These increases were partly offset by receipts of government subsidy, and unrealized and realized foreign currency gains due to the weakening of the Chinese renminbi and South Korean won compared with the U.S. dollar.
Current wording
During the year ended December 31, 2025, we had miscellaneous expense of $1.2 million, compared with miscellaneous expense of $0.5 million for the year ended December 31, 2024. This $0.7 million increase in miscellaneous expense was primarily due to a $1.3 million loss on the disposal of property and equipment, partly offset by foreign currency gains recognized in the current year period.
Previous wording
Income tax expense was $0.2 million on pre-tax loss of $100.0 million for the year ended December 31, 2024 compared with an income tax benefit of $0.9 million on pre-tax loss of $54.3 million for the year ended December 31, 2023. Our effective tax rate was (0.2)% and 1.6% for the years ended December 31, 2024 and 2023, respectively. The difference between our effective tax rate and the U.S. federal statutory rate of 21% was primarily driven by deferred tax benefits and release of valuation allowances from foreign jurisdictions. See “Note 16 – Income Taxes” to the consolidated financial statements for additional information on our income tax expense.
Current wording
Income tax expense was $0.2 million on pre-tax loss of $74.6 million for the year ended December 31, 2025 compared with an income tax expense of $0.2 million on pre-tax loss of $100.0 million for the year ended December 31, 2024. Our effective tax rate was (0.3)% and (0.2)% for the years ended December 31, 2025 and 2024, respectively. The difference between our effective tax rate and the U.S. federal statutory rate of 21% was primarily driven by deferred tax benefits and release of valuation allowances from foreign jurisdictions. See “Note 17 – Income Taxes” to the consolidated financial statements for additional information on our income tax expense.
Previous wording
As of December 31, 2024, we had total cash and cash equivalents of $128.8 million, short-term investments in marketable securities of $133.7 million, and an accumulated deficit of $298.9 million. As an early-stage growth company that has just begun the commercialization stage of development, the net operating losses we have incurred since inception are consistent with our strategy and budget.
Current wording
As of December 31, 2025, we had total cash and cash equivalents of $29.5 million and short-term investments in marketable securities of $170.1 million. As an early-stage growth company, the net operating losses we have incurred since inception are consistent with our strategy and budget.
Previous wording
We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a number of years. Our ability to successfully develop our products and services, scale up our commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity and/or debt financing and, over time, our ability to generate positive cash flows from operations. To date, we have funded our operations through a combination of proceeds from the Business Combination and subsequent equity private placement in 2022 and funding received through the sales of our redeemable convertible preferred stock. We believe that our cash on hand and marketable securities resulting from these proceeds will be sufficient to meet our principal working capital and capital expenditure requirements and ongoing costs, such as research and development relating to our Li-Metal batteries and the construction of additional manufacturing facilities, for a period of at least 12 months from the date of this Annual Report on Form 10-K, as well as to full commercialization. However, additional funding may be required during or after this period for a variety of reasons, including additional opportunities to purchase data and equipment to develop and train our AI models, develop commercial operations in the United States, business combinations or acquisitions, and delays in expected development of our Li-Metal battery cells. If we need such additional funding beyond these existing short- to medium-term sources of liquidity, or if following commercialization, we are not able to fund our operations from cash flows generated from anticipated product sales, we expect that we will need to raise additional funds. This may be through a variety of possible methods, including, but not limited to, entry into joint ventures or other strategic arrangements, issuance of equity, equity-related or debt securities or through obtaining credit from financial institutions, as well as anticipated future revenue from product sales. For more information about our at-the-market equity offering program with certain investment banks, through which we may offer and sell, from time to time, shares of Class A Common Stock having an aggregate offering price of up to $150.0 million, see “Part II, Item 9.B. Other Information.”
Current wording
We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a few more years. Our ability to successfully develop our products and services, scale up our commercial operations and expand our business will depend on many factors, including our working capital needs, the availability of equity and/or debt financing and, over time, our ability to generate positive cash flows from operations. We believe that our cash on hand and marketable securities will be sufficient to meet our principal working capital and capital expenditure requirements and ongoing research and development costs, operational and commercial activities, including expenditures fordeferred cash payments of an estimated approximately RMB 59.9 million ($8.4 million) related to the acquisition of UZ Energy as well asactivities related to the recently acquired ESS business, our plans for NDAA-compliant manufacturing capacity to develop drone cells and development and commercialization of Molecular Universe material discoveries, for a period of at least 12 months from the date of this Annual Report. However, additional funding may be required during or after this period to finance certain needs beyond our principal working capital and capital expenditure requirements and ongoing costs, including additional opportunities to purchase data and equipment, develop and train our AI models, and/or develop commercial operations in the United States and abroad, acquisitions or other strategic transactions, and unexpected delays in the development of our battery cells. See “Note 3 – Acquisition” of our accompanying consolidated financial statements for further discussion of the estimated deferred cash payments related to the acquisition of UZ Energy.
Previous wording
Our cash flows used in operating activities to date have been comprised of payroll, revenue from customers, consumables and supplies related to research and development, expenditures and reimbursements related to our JDAs, and facilities expense and professional services for general and administrative activities. As we continue to grow as an early commercialization company, we expect our cash used in operating activities to increase before we start to generate any material cash inflows from our operations.
Current wording
Our cash flows used in operating activities to date have been attributable to payroll, revenue from customers, consumables and supplies related to research and development, expenditures and reimbursements related to our JDAs, and facilities expense and professional services for general and administrative activities. As we continue to grow, we expect cash outflows from operating activities before we start to generate any material cash inflows from our operations.
Previous wording
Net cash used in operating activities of $56.4 million for the year ended December 31, 2023 was primarily attributable to net loss of $53.4 million, as adjusted for non-cash operating items such as stock-based compensation expense of $20.6 million, accretion income from available-for-sale short-term investments of $11.1 million, a gain on change in fair value of Sponsor Earn-Out liabilities of $6.8 million, and depreciation and amortization expense of $5.5 million. These non-cash operating items were combined with a $11.1 million working capital outflow. The working capital outflow was driven primarily by a $8.2 million increase in prepaids and other assets, a $1.5 million increase in receivable from related party, a $1.1 million increase in deferred tax assets, a $0.1 million decrease in accrued expenses and a $0.2 million increase in inventories, partially offset by a $0.1 million increase in accounts payable. The increase in prepaids and other assets was primarily due to insurance costs to cover potential liabilities under our indemnification obligations to our directors and certain officers, license fees for software, advance payments for research agreements, and VAT taxes. The increase in receivable from related party was driven by activity from a JDA. The decrease in accrued expenses and other liabilities was primarily due to adjustments for fixed assets in accruals at period end, accrued income taxes payable, payroll related accruals and the accounting of certain postemployment benefits. The increase in inventories was driven by current purchases with limited consumption of materials. The increase in accounts payable was primarily due to an increase in accounts payable related to the purchase of property and equipment for the South Korea and Shanghai facilities offset by a decrease in vendor payables.
Current wording
Net cash used in operating activities of $58.4 million for the year ended December 31, 2025 was primarily attributable to net loss of $73.0 million, as adjusted for non-cash operating items such as stock-based compensation expense of $11.0 million, depreciation and amortization expense of $10.3 million, accretion income from available-for-sale short-term investments of $3.1 million, a gain on change in fair value of Sponsor Earn-Out liabilities of $1.7 million, a loss on disposal of fixed assets of $1.3 million, other adjustments, and a $3.5 million working capital outflow. The working capital outflow was primarily attributable to a $10.4 million decrease in accrued expenses and other liabilities, a $2.6 million increase in accounts receivable, and a $1.0 million increase in inventories, partially offset by a $10.0 million decrease in prepaids and other assets and a $1.0 million increase in accounts payable. The increase in accounts payable was primarily due to timing of vendor payments. The decrease in accrued expenses and other liabilities was primarily due to reductions in accruals for lab equipment
Previous wording
Capital Spending – Capital expenditures were $12.2 million and $15.8 million for the years ended December 31, 2024 and 2023, respectively. These expenditures primarily related to purchases of lab machinery and equipment, lab tools and instruments and leasehold improvements to our facilities in the United States. We expect capital expenditures to decrease in 2025 compared with 2024 as we continue to spend on AI related infrastructure rather than invest in manufacturing equipment.
Current wording
The decrease in capital expenditures was primarily attributable to reductions in purchases of manufacturing equipment, lab machinery and equipment, and leasehold improvements to manufacture battery cells due to the current year strategic shift to AI focused spending which consisted of purchases of software and computer equipment, lab tools and instruments and AI related infrastructure. We expect capital expenditures to remain consistent in 2026 compared with 2025 as we continue to spend on AI related infrastructure rather than invest in manufacturing equipment.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
If we need additional funding beyond these existing short- to medium-term sources of liquidity, or if we are not able to fund our operations from cash flows generated from anticipated product sales and service offerings, we expect that we will need to raise additional funds. This may be through a variety of possible methods, including, but not limited to, entry into joint ventures or other strategic arrangements, issuance of equity, equity-related or debt securities, and obtaining credit from financial institutions. We currently maintain an at-the-market equity offering program with certain investment banks (the “Agents”), pursuant to which we may offer and sell into the open market from time to time, at our option, shares of our Class A common stock with an aggregate offering price of up to $150.0 million. Subject to the terms and conditions of our agreement with them, the Agents will use their commercially reasonable efforts to sell shares of our Class A common stock from time to time, based on instructions from us (including any price, time or size limits or other parameters or conditions we may impose), in exchange for a commission of up to 3.0% of the aggregate gross sale proceeds. We have also provided the banks with customary indemnification and contribution rights. We are not obligated to sell any Class A common stock and may at any time suspend solicitation and offers thereunder. We sold no shares under the at-the-market equity offering program during the year ended December 31, 2025, and to date have sold no shares under the program.
Current report — wording carried from elsewhere
related to JDA, professional fees, and payroll related accruals. The increase in accounts receivable was primarily driven by increases in product shipments. The increase in inventories is primarily due to purchases for product sales. The decrease in prepaids and other assets was primarily due to AI infrastructure license and GPU rental advance payments, license fees for software, and advance payments for research agreements.