Amprius Technologies Inc

Previous wording

Amprius Technologies, Inc. (hereafter referred to as the “Company,” “we,” “us,” or “our”) develops, manufactures and markets lithium-ion batteries for mobility applications, including the aviation and electric vehicle (“EV”) industries. We have been in commercial battery production since 2018 and our disruptive silicon anode technology is intended to enable batteries with higher energy density, higher power density and fast charging capabilities over a wide range of operating temperatures. This results in our batteries providing superior performance compared to conventional graphite lithium-ion batteries. Our silicon anode is a direct drop-in replacement of the graphite anode in traditional lithium-ion batteries, and our manufacturing processes leverage the manufacturing processes for conventional lithium-ion batteries and the related supply chain.

Current wording

Amprius Technologies, Inc. (hereafter referred to as the “Company,” “we,” “us,” or “our”) develops, manufactures and markets lithium-ion batteries for mobility applications, including the aviation, electric vehicle (“EV”) and light electric vehicle (“LEV”) industries. We have been in commercial battery production since 2018 and our disruptive silicon anode technology is intended to enable batteries with higher energy density, higher power density and fast charging capabilities over a wide range of operating temperatures. This results in our batteries providing superior performance compared to conventional graphite lithium-ion batteries. Our silicon anodes are a direct drop-in replacement of the graphite anode in traditional lithium-ion batteries, and our manufacturing processes leverage the manufacturing processes for conventional lithium-ion batteries and the related supply chain.

Previous wording

Currently, our batteries are primarily used for existing and emerging aviation applications, including unmanned aerial systems, such as drones and high-altitude pseudo satellites. We believe our proprietary technology has the potential for broad application in electric transportation. Our batteries and their performance specifications have been tested and validated for application by over 100 customers, including AALTO Airbus, AeroVironment, BAE Systems, the Korean Aerospace Research Institute, Kraus Hamdani Aerospace and Teledyne FLIR, and from inception through June 30, 2024, we have shipped over 150,000 batteries, which have enabled mission critical applications. Our proprietary silicon anode structures, battery cell designs and manufacturing processes are defended by our portfolio of patents, trade secrets and know-how developed over 10 years of research and development.

Current wording

Currently, our batteries are primarily used for existing and emerging aviation applications, including unmanned aerial systems, such as drones and high-altitude pseudo satellites. We believe our proprietary technology has the potential for broad application in electric transportation. Our batteries and their performance specifications have been tested and validated for application by over 175 customers, including AALTO Airbus, AeroVironment, BAE Systems, the Korean Aerospace Research Institute, Kraus Hamdani Aerospace and Teledyne FLIR, and from inception through September 30, 2024, we have shipped over 400,000 batteries, which have enabled mission critical applications. Our proprietary silicon anode structures, battery cell designs and manufacturing processes are defended by our portfolio of patents, trade secrets and know-how developed over 10 years of research and development.

Previous wording

Our SiMaxx batteries are currently manufactured at our headquarters in Fremont, California, where we believe demand for our SiMaxx batteries exceeds our manufacturing capacity. We have made significant progress in expanding our kWh-scale manufacturing line into a MWh-scale manufacturing facility. Once our expansion is in full operation, which we expect to achieve exiting 2024, we anticipate that we will manufacture SiMaxx batteries up to 2 MWh capacity, which is about 10 times our production capacity in 2023.

Current wording

Our SiMaxx batteries are currently manufactured at our headquarters in Fremont, California, where we believe demand for our SiMaxx batteries exceeds our manufacturing capacity. We have made significant progress in expanding our kWh-scale manufacturing line into a MWh-scale manufacturing facility. Once our expansion is in full operation, which we expect to achieve entering 2025, we anticipate that we will manufacture SiMaxx batteries up to 2 MWh capacity, which is about 10 times our production capacity in 2023.

Previous wording

Our SiCore batteries are developed in collaboration with Berzelius (Nanjing) Co. Ltd. (“Berzelius”), a former subsidiary of Amprius, Inc. (“Amprius Holdings”), our former parent company and current majority stockholder. In order to support our customers’ current roadmaps and supply forecasts, we entered into a supply agreement with Berzelius (the “Exclusive Supply Agreement”), which gives us exclusive rights to purchase its proprietary silicon anode materials in the United States, Canada and Mexico. Currently, we have access through supply agreements with three toll manufacturers to over 500 MWhs of SiCore batteries that are commercially available today in a wide range of form factors encompassing pouch, large form factor (up to 100 Ah) and cylindrical cells. The existing toll manufacturing SiCore production capacity allows us to service our customers and grow our business as we continue our pre-construction plans related to our GWh-scale manufacturing facility in Brighton, Colorado. The construction scope and schedule for the facility will be determined based on the final design and the availability and timing of funding. We are paying close attention to the larger industry dynamics. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations would also influence our decision.

Current wording

Our SiCore batteries are developed in collaboration with Berzelius (Nanjing) Co. Ltd. (“Berzelius”), a former subsidiary of Amprius, Inc. (“Amprius Holdings”), our former parent company and former majority stockholder at September 30, 2024. In order to support our customers’ current roadmaps and supply forecasts, we entered into a supply agreement with Berzelius (the “Exclusive Supply Agreement”), which gives us exclusive rights to purchase its proprietary silicon anode materials in the United States, Canada and Mexico. In addition, we have access through supply agreements with three toll manufacturers to over 500 MWhs of SiCore batteries that are commercially available in a wide range of form factors encompassing pouch, large form factor (up to 100 Ah) and cylindrical cells. The existing toll manufacturing production capacity for our SiCore batteries allows us to service our customers and grow our business as we continue our pre-construction plans related to our GWh-scale manufacturing facility in Brighton, Colorado. The construction scope and schedule for the facility will be determined based on the final design and the availability and timing of funding. We are paying close attention to the larger industry dynamics. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations would also influence our decision.

Previous wording

During the six months ended June 30, 2024 and from the date of the Sales Agreement through June 30, 2024, the aggregate net proceeds from the sale of shares of common stock under the Sales Agreement were approximately $10.9 million and $11.2 million, respectively.

Current wording

During the nine months ended September 30, 2024 and from the date of the Sales Agreement through September 30, 2024, we sold shares of our common stock under the Sales Agreement resulting in aggregate net proceeds of approximately $10.9 million and $11.2 million, respectively.

Previous wording

In order to meet the increased demand for our products, we are expanding our manufacturing capacity in Fremont, California and planning to build a GWh-capacity manufacturing facility in Brighton, Colorado. Currently, our expansion of the Fremont, California facility from a kWh-scale manufacturing line into a MWh-scale manufacturing line is in progress. Once our expansion in Fremont, California is in full operation, which we expect to achieve exiting 2024, we anticipate that we will manufacture SiMaxx batteries up to 2 MWh capacity, which is about 10 times our production capacity in 2023. In addition, we have commenced pre-construction work to build the initial phase of our GWh-scale manufacturing facility in Brighton, Colorado. The construction scope and schedule for the facility will be determined based on the final design and the availability and timing of funding. Once the initial phase is in operation, we plan to produce SiCore batteries first and then produce SiMaxx batteries as we continue to expand our manufacturing capacity. Currently, we produce SiCore batteries by leveraging Berzelius’ existing production line and manufacturing partners.

Current wording

In order to meet the increased demand for our products, we are expanding our manufacturing capacity in Fremont, California and have substantially completed the design and specifications for a GWh-scale manufacturing facility in Brighton, Colorado. Currently, our expansion of the Fremont facility from a kWh-scale manufacturing line into a MWh-scale manufacturing line is in progress. Once our expansion in Fremont, California is in full operation, which we expect to achieve entering 2025, we anticipate that we will manufacture SiMaxx batteries up to 2 MWh capacity, which is about 10 times our production capacity in 2023. In Brighton, the construction scope and schedule for the facility will be determined based on the final design and the availability and timing of funding. During this process, we will continue to monitor broader industry dynamics. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations may influence our decisions with respect to the design and build out of the GWh-scale manufacturing facility, including whether to proceed with the project at all. Currently, we produce SiCore batteries by leveraging Berzelius’ existing production line and through our supply agreements with three toll manufacturers.

Previous wording

To achieve capacity at commercial scale, we need to establish supply relationships for necessary materials, components and equipment to mass produce our silicon technology for our prospective markets, which will allow us to develop an automated, high-volume manufacturing line to increase production volume. We plan to procure manufacturing equipment that allows for anode and cathode fabrication, battery assembly, and battery testing. The capacity and timing of our future manufacturing requirements, and related capital expenditures, remain uncertain and will depend on a variety of factors, including our ability to design and construct new manufacturing sites and develop an automated, high-volume manufacturing line for our silicon anode, to mitigate supply chain constraints and manage a new labor force, to utilize planned capacity in our existing facilities, to obtain the required regulatory and zoning permits and approvals, to realize the benefits of any government incentives, and to operate in new geographic areas apart from our current headquarters. Our potential suppliers and other equipment vendors may also encounter delays, including to our expected initial production capacity of up to 500 MWh in our Brighton, Colorado facility, along with additional costs, and other obstacles in building our manufacturing line, which are currently unknown. To the extent we are unable to develop an automated, high-volume manufacturing line for our silicon anode, our ability to grow will be adversely affected. Additionally, although we already received and are currently testing the large-scale anode production equipment from centrotherm for our manufacturing line expansion in Fremont, California, the equipment required certain modifications for our needs and there is uncertainty as to whether our planned manufacturing line will be successful. We expect our operating requirements and capital expenditures to increase as we ramp up our manufacturing capacity and expand operations.

Current wording

To achieve capacity at commercial scale, we need to establish supply relationships for necessary materials, components and equipment to mass produce our silicon technology for our prospective markets, which will allow us to develop an automated, high-volume manufacturing line to increase production volume. We plan to procure manufacturing equipment that allows for anode and cathode fabrication, battery assembly, and battery testing. The capacity and timing of our future manufacturing requirements, and related capital expenditures, remain uncertain and will depend on a variety of factors, including our ability to design and construct new manufacturing sites and develop an automated, high-volume manufacturing line for our silicon anode, to mitigate supply chain constraints and manage a new labor force, to utilize planned capacity in our existing facilities, to obtain the required regulatory and zoning permits and approvals, to realize the benefits of any government incentives, and to operate in new geographic areas apart from our current headquarters. Our potential suppliers and other equipment vendors may also encounter delays, including to our expected initial production capacity of up to 500 MWh in our Brighton, Colorado facility, along with additional costs, and other obstacles in building our manufacturing line, which are currently unknown. To the extent we are unable to develop an automated, high-volume manufacturing line for our silicon anode, our ability to grow will be adversely affected. Additionally, although we already received and are currently testing the large-scale anode production equipment from centrotherm for our manufacturing line expansion in Fremont, California, the equipment required certain modifications for our needs and there is uncertainty as to whether our planned manufacturing line will be successful.

Previous wording

Achieving capacity at commercial scale of our high energy density lithium-ion batteries will require us to make significant and increasing capital expenditures to scale our manufacturing capacity and improve our supply chain processes. Based on our current expectations, we estimate that our capital equipment expenditures will range between $75.0 million and $100.0 million to achieve up to 500 MWh per year of manufacturing capacity in our Brighton, Colorado facility, but such estimate does not include costs related to the construction and build-out of the new manufacturing facility. Our first manufacturing line is planned to be for SiCore, which allows us to use conventional, off-the-shelf processes. As we plan additional lines, our SiMaxx anode process requires different equipment than traditional anode manufacturing, therefore our capital equipment costs are likely to be higher than equipment used for production of graphite anodes. Our ability in the future to generate revenue sufficient to achieve profitability will depend largely on our ability to scale production to meet the expected market demand for our products. 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

Achieving capacity at commercial scale of our high energy density lithium-ion batteries may require us to make significant and increasing capital expenditures to scale our manufacturing capacity and improve our supply chain processes. Based on our current expectations, we estimate that our capital equipment expenditures will range between $75.0 million and $100.0 million to achieve up to 500 MWh per year of manufacturing capacity in our Brighton, Colorado facility, but such estimate does not include costs related to the construction and build-out of the new manufacturing facility. Our first manufacturing line is planned to be for SiCore, which allows us to use conventional, off-the-shelf processes. As we plan additional lines, our SiMaxx anode process requires different equipment than traditional anode manufacturing, therefore our capital equipment costs are likely to be higher than equipment used for production of graphite anodes. Our ability in the future to generate revenue sufficient to achieve profitability will depend largely on our ability to scale production to meet the expected market demand for our products. 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

We believe focusing on reducing the manufacturing costs of our batteries on a $/kWh basis is an important factor to accelerate the demand for our batteries and the expansion of our customer base. As a result, we will continue to work to develop further and validate our manufacturing processes to enable high-volume manufacturing and reduce manufacturing costs. As the production of our silicon anode requires different equipment than traditional graphite anode manufacturing, our capital equipment costs are likely to be initially higher than equipment used for the production of graphite anodes. As we scale, we believe we will benefit from reduced per-unit fixed costs, such as overhead, labor and capital expenditures, tool utilization improvements and volume pricing for equipment and materials. We will also seek to reduce costs by optimizing material utilization, throughput and yield. This is complemented by our plans to continue to invest in research and development to improve both battery performance and manufacturing processes. However, until we are able to successfully design and implement an automated, high-volume manufacturing line for our silicon anode and manufacture our batteries at scale, we cannot accurately forecast our manufacturing costs, which may adversely affect our ability to achieve reduced costs in our manufacturing processes. In addition, high inflation may affect our manufacturing costs. If our costs become subjected to significant inflationary pressures, we may not be able to fully offset such higher costs through the increase in prices of the products we sell.

Current wording

We believe focusing on reducing the manufacturing costs of our SiMaxx batteries on a $/kWh basis is an important factor to accelerate the demand for our batteries and the expansion of our customer base. As a result, we will continue to work to develop further and validate our manufacturing processes to enable high-volume manufacturing and reduce manufacturing costs. As the production of our silicon anode requires different equipment than traditional graphite anode manufacturing, our capital equipment costs are likely to be initially higher than equipment used for the production of graphite anodes. As we scale, we believe we will benefit from reduced per-unit fixed costs, such as overhead, labor and capital expenditures, tool utilization improvements and volume pricing for equipment and materials. We will also seek to reduce costs by optimizing material utilization, throughput and yield. This is complemented by our plans to continue to invest in research and development to improve both battery performance and manufacturing processes. However, until we are able to successfully design and implement an automated, high-volume manufacturing line for our silicon anode and manufacture our batteries at scale, we cannot accurately forecast our manufacturing costs, which may adversely affect our ability to achieve reduced costs in our manufacturing processes. In addition, high inflation may affect our manufacturing costs. If our costs become subjected to significant inflationary pressures, we may not be able to fully offset such higher costs through the increase in prices of the products we sell.

Previous wording

Our competition includes both established manufacturers and new entrants that are developing new battery technologies and chemistries to address the growing market for electrified transportation solutions. We believe the manufacturers of these batteries will continue to invest funds, time and effort to improve the capabilities of their batteries with the recent developments of silicon anode batteries as a potential alternative to conventional graphite batteries. Currently, we are the only known manufacturer using a 100% silicon anode that is free of any inactive additives. We believe we are the leading company in the market that has a high-performance battery that can meet the requirements of aviation applications. We are not currently producing batteries for EVs. The EV battery industry has a limited number of commercially available batteries that meet the minimum performance specifications. This creates a fast-growing and highly competitive industry for many battery manufacturers to claim market share for commercially acceptable batteries. We believe that there is significant room for improvement in the EV industry in driving range and fast charging capabilities that our silicon technology may address. To compete in the EV industry, we expect that we will need to significantly reduce our manufacturing costs, increase form factors and increase production quantity. One or more of our competitors and potential future entrants may be better capitalized to expand production capacities, have greater resources to commercialize and have greater access to customers in either or both the aviation and EV markets. As such, we may be at a competitive disadvantage and be unable to retain or grow our market share.

Current wording

Our competition includes both established manufacturers and new entrants that are developing new battery technologies and chemistries to address the growing market for electrified transportation solutions. We believe the manufacturers of these batteries will continue to invest funds, time and effort to improve the capabilities of their batteries with the recent developments of silicon anode batteries as a potential alternative to conventional graphite batteries. Currently, we believe that we are the only known manufacturer using a 100% silicon anode that is free of any inactive additives. In addition, we believe that we are the leading company in the market that has a high-performance battery that can meet the requirements of aviation applications. We are not currently producing batteries for EVs. The EV battery industry has a limited number of commercially available batteries that meet the minimum performance specifications. This creates a fast-growing and highly competitive industry for many battery manufacturers to claim market share for commercially acceptable batteries. We believe that there is significant room for improvement in the EV industry in driving range and fast charging capabilities that our silicon technology may address. To compete in the EV industry, we expect that we will need to significantly reduce our manufacturing costs, increase form factors and increase production quantity. One or more of our competitors and potential future entrants may be better capitalized to expand production capacities, have greater resources to commercialize and have greater access to customers in either or both the aviation and EV markets. As such, we may be at a competitive disadvantage and be unable to retain or grow our market share.

Previous wording

We expect to continue investing in the development of battery technology with the goal of enabling commercial production. We continue to develop customized battery solutions and deliver standardized samples (i.e., prototypes) of batteries to industry leading manufacturers as well as the federal government. We plan to focus our research and development on the following key areas:

Current wording

We expect to continue investing in the development of battery technology with the goal of enabling commercial production. We continue to develop customized battery solutions and deliver standardized samples (i.e., prototypes) of batteries to industry leading manufacturers as well as to certain federal government agencies. We plan to focus our research and development on the following key areas:

Previous wording

We operate in an industry that is subject to many established environmental regulations, which have generally become more stringent over time. As we process, store, dispose of, transport, and use hazardous materials, we are subject to laws and regulations surrounding battery safety and transportation, as well as health and production safety laws and regulations governing hazardous materials. We expect that environmental regulations under the current administration could, if adopted, facilitate market demand and revenue growth, while other potential regulations, if adopted, could result in additional operating costs. If we fail to comply with existing and future laws and regulations, our business and results of operations could be adversely affected, such as the imposition of fines, litigation, criminal charges, sanctions by regulators, or other liabilities. As future regulatory changes are uncertain, we are unable to measure the impact of such changes on our business and our results of operations.

Current wording

We operate in an industry that is subject to many established environmental regulations, which have generally become more stringent over time. As we process, store, dispose of, transport, and use hazardous materials, we are subject to laws and regulations surrounding battery safety and transportation, as well as health and production safety laws and regulations governing hazardous materials. If we fail to comply with existing and future laws and regulations, our business and results of operations could be adversely affected, such as the imposition of fines, litigation, criminal charges, sanctions by regulators, or other liabilities. As future regulatory changes are uncertain, we are unable to measure the impact of such changes on our business and our results of operations.

Previous wording

The COVID-19 pandemic has been unpredictable and unprecedented and resulted in significant national and global economic disruption. The extent to which public health emergencies such as the COVID-19 pandemic may impact our business, financial condition, prospects and results of operations is highly uncertain and cannot be predicted.

Current wording

The COVID-19 pandemic was unprecedented and resulted in significant national and global economic disruption. The extent to which public health emergencies such as the COVID-19 pandemic may impact our business, financial condition, prospects and results of operations is highly uncertain and cannot be predicted.

Previous wording

We generate revenue from the (i) sale of finished battery products and (ii) arrangements for customization design services. The customization design services generally include designing and developing custom batteries by applying our existing technology into a customer’s required specifications and delivery of prototype batteries. We recognize revenue at the point in time when control is transferred to the customers, which is generally (i) upon shipment, in the case of sale of finished battery products, and (ii) upon completion and/or delivery of prototype batteries, in the case of customization design services. We also generate revenue from a U.S. federal government expense reimbursement grant that is recognized in the period when we have the right to bill and collect the payment, which is the period in which the qualifying costs have been incurred.

Current wording

We generate revenue from the (i) sale of finished battery products and (ii) arrangements for customization design services. The customization design services generally include designing and developing custom batteries by applying our existing technology into a customer’s required specifications and delivery of prototype batteries. We recognize revenue at the point in time when control is transferred to the customers, which is generally (i) upon shipment, in the case of sale of finished battery products, and (ii) upon completion and/or delivery of prototype batteries, in the case of customization design services. We also receive government grants from time to time, which we present as a component of revenue. We recognize government grants in the period when we comply with the conditions associated with the grants, if there are any, and other conditions such as when we incur costs associated with the grants, and when we have the right to receive the payment.

Previous wording

Cost of revenue, which includes the cost of finished goods sold and the cost of customization design services, are comprised primarily of costs of raw materials, labor costs, and the allocation of overhead costs incurred in producing batteries or performing the customization development work and the costs of SiCore batteries purchased from Berzelius. Labor costs consist of personnel-related expenses such as salaries, employee benefits and stock-based compensation expense. Overhead and other costs consist primarily of outside services, utilities, rent, depreciation expense and other facilities-related costs. Costs related to batteries and design services are recognized in the same period as the associated revenue is recognized. In addition, we include under cost of revenue certain non-capitalizable expenses incurred during the preliminary stage of our plan to construct a GWh-scale manufacturing facility in Brighton, Colorado, such as re-zoning costs and engineering studies. We expect that our cost of revenue will increase as we ramp up manufacturing in our existing facility and when we start building a GWh-scale manufacturing facility.

Current wording

Cost of revenue, which includes the cost of finished goods sold and the cost of customization design services, are comprised primarily of costs of raw materials, labor costs, allocation of overhead costs incurred in producing batteries or performing the customization development work, and purchase costs of SiCore batteries from Berzelius and our toll manufacturing partners. Labor costs consist of personnel-related expenses such as salaries, employee benefits and stock-based compensation expense. Overhead and other costs consist primarily of outside services, utilities, rent, depreciation expense and other facilities-related costs. Costs related to batteries and design services are recognized in the same period as the associated revenue is recognized. In addition, we include under cost of revenue certain non-capitalizable expenses incurred during the preliminary stage of our plan to construct a GWh-scale manufacturing facility in Brighton, Colorado, such as re-zoning costs and engineering studies. We expect that our cost of revenue will increase for the foreseeable future as we ramp up manufacturing in our existing facility and increase our volume of orders for SiCore batteries.

Previous wording

Selling, general and administrative expenses consist mainly of personnel-related expenses such as salaries, employee benefits and stock-based compensation expense of our executive and administrative employees, as well as fees for professional and advisory services such as legal, accounting and audit. Selling, general and administrative expenses also include corporate insurance expense, including directors’ and officers’ insurance costs, and allocation of overhead costs, which include utilities, rent, depreciation expense and other facilities-related costs. We expect that our selling, general and administrative expenses will increase for the foreseeable future due to the additional costs for compliance-related requirements resulting from being a public company and investment in additional sales, general and administrative personnel to support the growth of our business.

Current wording

Selling, general and administrative expenses consist mainly of personnel-related expenses such as salaries, employee benefits and stock-based compensation expense of our executive and administrative employees, as well as fees for professional and advisory services such as legal, accounting and audit. Selling, general and administrative expenses also include corporate insurance expense, including directors’ and officers’ insurance costs, and allocation of overhead costs, which include utilities, rent, depreciation expense and other facilities-related costs. We expect that our selling, general and administrative expenses will increase for the foreseeable future primarily due to costs for compliance-related requirements resulting from being a public company and investment in additional sales, general and administrative personnel to support the growth of our business.

Previous wording

Other income consists mainly of interest income.

Current wording

Other income, net consists mainly of interest income.

Previous wording

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

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 to the Three and Nine Months Ended September 30, 2023

Previous wording

The following table summarizes our results of operations during the three and six months ended June 30, 2024 and 2023 (in thousands, except percentage data):

Current wording

The following table summarizes our results of operations during the three and nine months ended September 30, 2024 and 2023 (in thousands, except percentage data):

Previous wording

Revenue increased by $1.7 million, or 105%, to $3.3 million during the three months ended June 30, 2024 from $1.6 million during the same period last year due primarily to the $2.0 million increase in sales of batteries, including a $1.8 million increase in sales of SiCore batteries, resulting from an increase in the volume of orders from existing and new customers. The increase in revenue was offset by a $0.3 million decrease in non-recurring customized design service revenue.

Current wording

Revenue increased by $5.1 million, or 181%, to $7.9 million during the three months ended September 30, 2024 from $2.8 million during the same period last year due primarily to the $3.9 million increase in sales of batteries, including the $3.2 million increase in sales of SiCore batteries, resulting from an increase in the volume of orders from new and existing customers, as well as the $0.9 million increase in non-recurring customization design service revenue and a $0.3 million increase in revenue from government grants.

Previous wording

Revenue increased by $3.4 million, or 146%, to $5.7 million during the six months ended June 30, 2024 from $2.3 million during the same period last year due primarily to the $3.9 million increase in sales of batteries, including a $3.0 million increase in sales of SiCore batteries, resulting from an increase in the volume of orders from existing and new customers. The increase in revenue was offset by a $0.5 million decrease in non-recurring customized design service revenue and grant revenue.

Current wording

Revenue increased by $8.4 million, or 165%, to $13.5 million during the nine months ended September 30, 2024 from $5.1 million during the same period last year primarily due to the $7.8 million increase in sales of batteries, including the $6.2 million increase in sales of SiCore batteries, resulting from an increase in the volume of orders from existing and new customers, and the $0.6 million increase in non-recurring customization design service revenue.

Previous wording

Cost of revenue increased by $5.2 million, or 112%, to $9.9 million, and by $7.8 million, or 88%, to $16.7 million during the three and six months ended June 30, 2024, respectively, compared to the same periods last year. The increase was primarily due to the increase in outside services and consulting fees, which include nonrecurring fees incurred in connection with our plan to construct a GWh manufacturing facility in Brighton, Colorado, as well as increases in cost of materials to produce our products, personnel-related costs, and allocation of overhead costs, primarily shared-facility costs, equipment and utility costs.

Current wording

Cost of revenue increased by $5.9 million, or 84%, to $13.0 million, and by $13.7 million, or 86%, to $29.6 million during the three and nine months ended September 30, 2024, respectively, compared to the same periods last year. The increase was primarily due to increases in the volume of purchases of finished SiCore batteries for resale, increases in the cost of materials and personnel-related costs to produce SiMaxx products, and costs from the allocation of overhead, primarily shared-facility costs, equipment and utility costs.

Previous wording

Research and development expense increased by $0.9 million, or 115%, to $1.7 million, and by $1.7 million, or 106%, to $3.2 million, during the three and six months ended June 30, 2024, respectively, compared to the same periods last year primarily due to the increase in personnel-related costs, including stock-based compensation expense, due to the hiring of additional personnel involved in research and development activities.

Current wording

Research and development expense increased by $1.0 million, or 123%, to $1.8 million, and by $2.7 million, or 112%, to $5.1 million, during the three and nine months ended September 30, 2024, respectively, compared to the same periods last year primarily due to the increase in personnel-related costs, including stock-based compensation expense, and materials used in ongoing research and development activities.

Previous wording

Selling, general and administrative expense decreased by $1.5 million, or 25%, to $4.7 million during the three months ended June 30, 2024 compared to the same period last year primarily due to a $2.5 million decrease in non-recurring professional fees and corporate insurance costs, including adecrease in directors’ and officers’ insurance costs, offset by a $1.0 million increase in personnel-related and other administrative costs, including an increase in stock-based compensation expense, due to the hiring of additional personnel.

Current wording

Selling, general and administrative expense increased by $0.3 million, or 7%, to $4.3 million during the three months ended September 30, 2024 compared to the same period last year primarily due to a $0.6 million increase in personnel-related costs, including an increase in stock-based compensation expense, due to the hiring of additional personnel, offset by a $0.3 million decrease in non-recurring professional fees and corporate insurance costs, including a decrease in directors’ and officers’ insurance costs.

Previous wording

Selling, general and administrative expense decreased by $2.7 million, or 23%, to $9.0 million during the six months ended June 30, 2024 compared to the same period last year primarily due to a $4.3 million decrease in non-recurring professional fees and corporate insurance costs, including a decrease in directors’ and officers’ insurance costs, offset by a $1.6 million increase in personnel-related and other administrative costs, including an increase in stock-based compensation expense, due to the hiring of additional personnel.

Current wording

Selling, general and administrative expense decreased by $2.4 million, or 15%, to $13.4 million during the nine months ended September 30, 2024 compared to the same period last year primarily due to a $4.7 million decrease in non-recurring professional fees and corporate insurance costs, including a decrease in directors’ and officers’ insurance costs, offset by a $2.3 million increase in personnel-related and other administrative costs, including an increase in stock-based compensation expense, due to the hiring of additional personnel.

Previous wording

Other income, which consisted primarily of interest income, decreased by $0.2 million and by $0.4 million during the three and six months ended June 30, 2024, respectively, compared to the same periods last year primarily due to the utilization of our interest-bearing funds for operations.

Current wording

Other income, net, which consisted primarily of interest income, decreased by $0.2 million and by $0.7 million during the three and nine months ended September 30, 2024, respectively, compared to the same periods last year primarily due to the utilization of our interest-bearing funds for operations.

Previous wording

During the three and six months ended June 30, 2024 and 2023, we have financed our operations primarily though revenue generated from operations and proceeds from the issuance of shares of our common stock. We expect to rely on our cash and cash equivalents, which was$46.4 million as of June 30, 2024, and cash flows from operations to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date our financial statements included in this Quarterly Report on Form 10-Q are issued. Also, as described further below, we may receive additional funds when we issue shares of our common stock under the At Market Financing and if the stock warrants are exercised for cash.

Current wording

During the three and nine months ended September 30, 2024 and 2023, we have financed our operations primarily though revenue generated from operations and proceeds from the issuance of shares of our common stock. We expect to rely on our cash and cash equivalents, which was$35.0 million as of September 30, 2024, and cash flows from operations to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date our financial statements included in this Quarterly Report on Form 10-Q are issued.

Previous wording

Under the At Market Financing, we may receive additional funds from the offering and sale of our shares of our common stock with an aggregate offering price of not more than $100.0 million. During the six months ended June 30, 2024 and from the date of the Sales Agreement through June 30, 2024, the aggregate net proceeds were $10.9 million and $11.2 million, respectively. Actual sales, if any, of shares of common stock in the At Market Financing will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock and determinations by us as to appropriate sources of funding for our business and operations. We cannot guarantee the extent to which we may be able to raise funds through the At Market Financing.

Current wording

Under the At Market Financing, we may receive additional funds from the offering and sale of our shares of our common stock with an aggregate offering price of not more than $100.0 million. During the nine months ended September 30, 2024 and from the date of the Sales Agreement through September 30, 2024, we sold shares of our common stock under the At Market Financing resulting in aggregate net proceeds of approximately $10.9 million and $11.2 million, respectively. Future sales, if any, of shares of common stock under the At Market Financing will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock and determinations by us as to appropriate sources of funding for our business and operations. We cannot guarantee the extent to which we may be able to raise funds through the At Market Financing.

Previous wording

We may also receive additional funds if our stock warrants are exercised for cash. The exercise price of our public warrants and private warrants is $11.50 per warrant, and the exercise price of the PIPE warrants is $12.50 per warrant, although we and, in certain cases, the warrant agent have the ability to amend the applicable warrant agreement to reduce the exercise price, including to a price that is below the trading price of our common stock at that time. On May 13, 2024, we offered the holders of the public and private warrants the opportunity to exercise, for cash, their warrants at a temporarily reduced exercise price of$1.10 per warrant. Such cash tender offer expired on June 11, 2024. A total of 12,575,664 public warrants and 500,000 private warrants were exercised. Net proceeds from such cash tender offer, after deducting stock issuance costs, totaled $13.6 million. Subsequent to our second fiscal quarter of 2024, and pursuant to another tender offer that expired on July 23, 2024, a total of 15,600,000 private warrants were exercised, on a cashless basis, in exchange for a total of 3,073,200 shares of our common stock. As of July 25, 2024, we had 16,692,572 public warrants, 300,000 private warrants and 2,052,500 PIPE warrants outstanding. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon market conditions.

Current wording

We may also receive additional funds from our outstanding stock warrants if those stock warrants are exercised for cash. On May 13, 2024, we offered the holders of the public and private warrants the opportunity to exercise, for cash, their warrants at a temporarily reduced exercise price of$1.10 per warrant. Net proceeds from such cash tender offer, which expired on June 11, 2024, totaled $13.6 million. In addition, we made a separate tender offer to the holders of private warrants to exchange their warrants, on a cashless basis, for shares of our common stock. A total of 15.6 million private warrants were exercised in exchange for a total of 3.1 million shares of our common stock under such cashless tender offer, which expired on July 23, 2024. As of September 30, 2024, we had a total of 16.7 million public warrants, 0.3 million private warrants and 2.1 million PIPE warrants outstanding. The exercise price of our public warrants and private warrants is $11.50 per warrant, and the exercise price of the PIPE warrants is $12.50 per warrant, although we have, and, in certain cases, together with the warrant agent have, the ability to amend the applicable warrant agreement to reduce the exercise price, including to a price that is below the trading price of our common stock at that time. The likelihood that warrant holders will exercise the warrants and any cash proceeds that we would receive is dependent upon market conditions.

Previous wording

Our ability to become profitable is dependent upon future events, including obtaining adequate financing to fund our business plan, completing the design and build out of our GWh-scale manufacturing facility, obtaining adequate supplier relationships, building our customer base, successfully executing our business and marketing strategy and hiring appropriate personnel.

Current wording

Our ability to become profitable is dependent upon future events, including obtaining adequate financing to fund our business plan, optimizing our manufacturing capacity, obtaining adequate supplier relationships, building our customer base, successfully executing our business and marketing strategy and hiring appropriate personnel.

Previous wording

We expect our capital expenditures and working capital requirements to increase materially in the near future. At our headquarters in Fremont, California, our expansion from a kWh-scale manufacturing line into a MWh-scale manufacturing line is in progress. In addition, in order to meet the demand for our batteries, we are in the process of designing and then building a new GWh-scale manufacturing facility in Brighton, Colorado. Based on our current expectations, we estimate that our capital equipment expenditures will range between $75.0 million and $100.0 million to achieve up to 500 MWh per year of manufacturing capacity, but such estimate does not include costs related to the construction and the build-out of the new manufacturing facility. We are continuing the design and pre-construction work of the initial phase of up to 500 MWh, and we expect to build out additional manufacturing in phases thereafter. Though, the construction schedule for the facility will be determined based on the final design and the timing of funding.

Current wording

We expect our capital expenditures and working capital requirements may increase materially in the near future. At our headquarters in Fremont, California, our expansion from a kWh-scale manufacturing line into a MWh-scale manufacturing line is in progress. In addition, in order to meet the demand for our batteries, we are planning the construction of a new GWh-scale manufacturing facility in Brighton, Colorado. Based on our current expectations, we estimate that our capital equipment expenditures will range between $75.0 million and $100.0 million to achieve up to 500 MWh per year of manufacturing capacity, but such estimate does not include costs related to the construction and the build-out of the new manufacturing facility. We are continuing the pre-construction work of the initial phase of up to 500 MWh, and we expect to build out additional manufacturing in phases thereafter. However, the construction schedule for the facility will be determined based on the final design and the timing of funding. During this process, we will continue to monitor broader industry dynamics. Changes in demand, supply, battery cost structure, government incentives, trade tariffs, and other considerations may influence our decisions with respect to the design and build out of the GWh-scale manufacturing facility, including whether to proceed with the project at all.

Previous wording

We have incurred net losses to date. During the three and six months ended June 30, 2024, we incurred a net loss of $12.5 million and $22.4 million, respectively. We expect to incur additional losses and increased expenses in future periods, including those associated with the design and build out of our GWh-scale manufacturing facility, continued research and development, and increased employee headcount to support those efforts.

Current wording

We have incurred net losses to date. During the three and nine months ended September 30, 2024, we incurred a net loss of $10.9 million and $33.3 million, respectively. We expect to incur additional losses and increased expenses in future periods, including those associated with any build out of our GWh-scale manufacturing facility, continued research and development, and increased employee headcount to support those efforts.

Previous wording

As of June 30, 2024, our contractual obligations consisted primarily of our noncancellable operating lease agreements for our corporate headquarters and manufacturing facilities in Fremont, California and in Brighton, Colorado. As of June 30, 2024, the total future minimum lease payable, net of tenant improvement allowance, over the remaining weighted-average lease term of 13.9 years was approximately $70.7 million, of which approximately $2.5 million is payable over the next twelve months. For additional information about our leases, please refer to Note 9 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

As of September 30, 2024, our contractual obligations consisted primarily of our noncancellable operating lease agreements for our corporate headquarters and manufacturing facilities in Fremont, California and in Brighton, Colorado. As of September 30, 2024, the total future minimum lease payable, net of tenant improvement allowance, over the remaining weighted-average lease term of 13.7 years was approximately $70.4 million. Approximately $3.0 million is payable over the next twelve months before adjusting such amount for the tenant improvement allowance. For additional information about our leases, please refer to Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Our primary source of cash provided by operations is revenue from the sale of batteries and from non-recurring customized design services. Our uses of cash in our operating activities primarily include payments for personnel-related costs, procurement of materials used to produce batteries and to conduct research, professional fees and other general corporate expenses.

Current wording

Our primary source of cash provided by operations is revenue from the sale of batteries and from non-recurring customization design services. Our uses of cash in our operating activities primarily include payments for personnel-related costs, procurement of SiCore batteries, procurement of materials used to produce SiMaxx batteries and to conduct research, as well as professional fees, and other general corporate expenses.

Previous wording

Net cash used in operating activities increased to $17.7 million during the six months ended June 30, 2024 from $12.1 million during the same period last year primarily due to the increase in personnel-related costs as we hired additional employees.

Current wording

Net cash used in operating activities increased to $27.3 million during the nine months ended September 30, 2024 from $20.8 million during the same period last year primarily due to the increase in personnel-related costs as we hired additional employees.

Previous wording

Net cash used in investing activities increased to $5.5 million during the six months ended June 30, 2024 from $2.9 million during the same period last year primarily due to the construction of leasehold improvements in our manufacturing facilities and purchases of production equipment as we continue to expand our manufacturing capacity.

Current wording

Net cash used in investing activities decreased to $6.8 million during the nine months ended September 30, 2024 from $11.8 million during the same period last year primarily due to the construction of leasehold improvements in our manufacturing facilities in the prior year period and the timing of purchases of production equipment as we continue to expand our manufacturing capacity.

Previous wording

Net cash provided by financing activities increased to $25.1 million during the six months ended June 30, 2024 from $10.3 million during the same period last year. Net cash provided by financing activities during the six months ended June 30, 2024 consisted primarily of the net proceeds from the issuance of common stock in connection with the Sales Agreement and the cash received upon exercise of our public and private warrants. Net cash provided by financing activities during the same period last year consisted primarily of the net proceeds from the issuance of common stock in connection with the Common Stock Purchase Agreement (the “Stock Purchase Agreement”) with B. Riley Principal Capital II, LLC (“BRPC II”).

Current wording

Net cash provided by financing activities increased to $24.6 million during the nine months ended September 30, 2024 from $16.3 million during the same period last year. Net cash provided by financing activities during the nine months ended September 30, 2024 consisted primarily of the net proceeds from the issuance of common stock in connection with the Sales Agreement and the cash received upon the exercise of our public and private warrants. Net cash provided by financing activities during the same period last year consisted primarily of the net proceeds from the issuance of common stock in connection with the Common Stock Purchase Agreement (the “Stock Purchase Agreement”) with B. Riley Principal Capital II, LLC (“BRPC II”).

Previous wording

There have been no changes to our critical accounting estimates during the six months ended June 30, 2024.

Current wording

There have been no changes to our critical accounting estimates during the nine months ended September 30, 2024.