UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission File Number: 001-39845

SES AI Corporation

(Exact name of registrant as specified in its Charter)


Delaware	88-0641865
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

35 Cabot Road Woburn, MA	01801
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (339) 298-8750

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Exchange on which registered
Class A common stock, par value $0.0001 per share	SES	The New York Stock Exchange
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50	SES WS	The New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 2830, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $~~392~~278.05 million, calculated by using the closing price of the registrant’s Class A common stock on such date on the New York Stock Exchange of $10.2588.

As of ~~February~~March 252, ~~2025~~2026, there were ~~320~~322,~~778~~742,~~608~~539 shares of the registrant’s Class A common stock and 43,881,251 shares of the registrant’s Class B common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant intends to file a proxy statement pursuant to Regulation 14A within 120 days of the end of the fiscal year ended December 31, ~~2024~~2025. Portions of such proxy statement are incorporated by reference into Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS


PART I
Item 1.	Business	56
Item 1A.	Risk Factors	119
Item 1B.	Unresolved Staff Comments	3230
Item 1C.	Cybersecurity	3230
Item 2.	Properties	3331
Item 3.	Legal Proceedings	3431
Item 4.	Mine Safety Disclosures	3431

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3431
Item 6.	[Reserved]	3432
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3432
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	4241
Item 8.	Financial Statements and Supplementary Data	4342
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	7577
Item 9A.	Controls and Procedures	7577
Item 9B.	Other Information	7779
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	7879

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	7879
Item 11.	Executive Compensation	7879
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7879
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7879
Item 14.	Principal ~~Accounting~~Accountant Fees and Services	7879

PART IV
Item 15.	Exhibits, Financial Statement Schedules	7879
Item 16.	Form 10-K Summary	8283
SIGNATURES		8384

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EXPLANATORY NOTE

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” “SES,” and the “Company” refer to SES AI Corporation, a Delaware corporation (f/k/a Ivanhoe Capital Acquisition Corp., a Cayman Islands exempted company (“Ivanhoe”)) and its consolidated subsidiaries, after giving effect to the Business Combination (as defined below).

We were originally formed as a Cayman Islands exempted company in July of 2020 for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization, recapitalization or other similar business combination with one or more businesses. On January 11, 2021, we consummated our initial public offering (the “IPO”), following which our securities began trading on the New York Stock Exchange (the “NYSE”).

On February 3, 2022 (the “Closing Date”), Ivanhoe consummated its previously announced business combination (the “Business Combination”) with SES Holdings Pte. Ltd., a Singapore private company limited by shares (“Old SES”), pursuant to the terms of that certain Business Combination Agreement (as amended, the “Business Combination Agreement”) by and among Ivanhoe, Old SES, and Wormhole Amalgamation Sub Pte. Ltd., a Singapore private company limited by shares, and a direct, wholly-owned subsidiary of Ivanhoe (“Amalgamation Sub”).

Pursuant to the terms of the Business Combination Agreement and in connection with the closing of the Business Combination (the “Closing”), (i) Ivanhoe migrated out of the Cayman Islands and domesticated as a Delaware corporation (the “Domestication”) by way of continuation and deregistration under Part XII of the Cayman Islands Companies Act and domestication under Section 388 of the Delaware General Corporation Law (“DGCL”), (ii) Ivanhoe changed its name to “SES AI Corporation” (“SES,” or the “Company”), and (iii) Amalgamation Sub merged with and into Old SES, with Old SES as the surviving company (the “Amalgamation”) (the time that the Amalgamation became effective is referred to as the “Effective Time”). As a result of the Amalgamation, Old SES became our wholly-owned subsidiary.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS AND RISK FACTORS SUMMARY

This Annual Report on Form 10-K (this Annual Report”) contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot provide assurance that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Annual Report, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to the risks below, which also serves as a summary of the principal risks of an investment in our securities:

● We face significant challenges in developing a Lithium-Metal (“Li-Metal”) battery that can be commercialized for use in electric vehicles (“EVs”) and other applications, and the pace of development is often unpredictable and subject to delays.

●

We expect to continue to incur losses for the foreseeable future. While we expect to become profitable eventually, our projects are based on internal assumptions that may prove incorrect, and we may never achieve or maintain profitability.

●

We will need substantial additional capital in the future to fund our business and may be unable to meet our future capital requirements, impairing our financial position and results of operations.

● ~~Our~~We ~~Li-Metal~~may ~~technology~~not isbe ~~untested~~able into ~~actual~~successfully ~~EVs~~integrate ~~and~~UZ ~~may~~Energy’s ~~ultimately~~operations ~~prove~~with ~~unworkable~~our business.

●

The market for UAM, and for use of Li-Metal technology in UAM applications, is still emerging and may not achieve the growth potential we expect.

●

We may face challenges in developing National Defense Authorization Act (“NDAA”)-compliant manufacturing capacity for drone cells, and even if we develop the manufacturing capacity, demand for NDAA-compliant drone cells may not develop.

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●

If our batteries fail to perform as expected our ability to develop, market and sell our batteries could be harmed.

● We are unable to predict user behavior when driving EVs with Li-Metal technology.

● Delays in the pre-manufacturing development of our battery cells could adversely affect our business and prospects.

●

We may not be able to engage target original equipment manufacturers (“OEMs”) customers successfully and to convert such contacts into meaningful orders in the future.

● If we are unable to integrate our products into EVs manufactured by OEM customers, our results of operations could be impaired.

●

We may not be able to establish new, or maintain existing, supply relationships for necessary raw materials, components or equipment or may be required to pay costs for raw materials, components or equipment that are more expensive than anticipated, which could delay the introduction of our product and negatively impact our business.

● Our ability to manufacture our ~~Li-Metal~~ batteries at scale depends on our ability to build, operate and staff our facilities successfully, as well as to obtain sufficient contract manufacturing specificity.

●

We have pursued and may continue to pursue joint development agreements (“JDAs”), service contracts and other strategic alliances, which could have an adverse impact on our business if they are unsuccessful or if we are unable to enter into new strategic alliances.

● The EV battery market continues to evolve and is highly competitive, and certain other battery manufacturers have significantly greater resources than we do.

●

We may not be able to estimate accurately the future supply and demand for our batteries, which could result in a variety of inefficiencies in our business and hinder our ability to generate revenue. If we fail to predict accurately our manufacturing requirements, we could incur additional costs or experience delays.

●

Certain components of our batteries pose safety risks that may cause accidents. We may be subject to financial and reputational risks due to product recalls and product liability claims, and we could face substantial liabilities that exceed our resources.

●

We may not be able to develop and commercialize newly discovered materials.

●

The use of artificial intelligence in our products and services may result in reputational harm and competitive harm.

●

Our use of artificial intelligence and machine learning may result in legal and regulatory risks.

● The market for our AI-based services such as Molecular Universe is still emerging and our AI programs may not achieve the growth potential we expect.

●

The economic benefit of our ESS products to our customers depends on the cost of electricity available from alternative sources, including local electric utility companies, which cost structure is subject to change.

●

Our ESS products performance may not meet customers’ expectations or needs.

●

We depend upon component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the U.S.

●

Our patent applications may not result in issued patents or our patent rights may be challenged, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from competing or interfering with the commercialization of our products.

●

We rely heavily on our intellectual property portfolio, including unpatented proprietary technology. If we are unable to protect our intellectual property rights from unauthorized use, our business and competitive position would be harmed.

●

The international nature of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.

●

The price of our Class A common stock has been and may continue to be volatile.

●

Our public warrants may never be in the money, and they may expire worthless.

●

We are controlled or substantially influenced by Dr. Qichao Hu and certain entities affiliated with Dr. Hu, whose interests may conflict with other stockholders. The concentrated ownership of our dual class common stock could prevent stockholders from influencing significant decisions.

● Our failure to satisfy certain New York Stock Exchange (“NYSE”) listing requirements may result in our Class A common stock being delisted from the NYSE, which could eliminate or adversely affect the trading market for our Class A common stock.

●

We have a history of material weaknesses in our internal control over financial reporting, and a failure to remediate any such weakness and/or our identification of new ones could have an adverse impact on the value of our Class A common stock.

●

The other factors described in “Part I, Item 1A” in this Annual Report.

The forward-looking statements contained in this Annual Report on Form 10-K are based on information available as of the date of this Annual Report on Form 10-K and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements speak only as of the date of this Annual Report on Form 10-K and should not be relied upon as representing the Company’s views as of any subsequent date. The Company expressly disclaims any obligation or undertaking

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to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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PART I

Item 1. Business

Overview

We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable battery technologies and battery materials for ~~electric~~Energy ~~vehicles~~Storage Systems (“~~EVs~~ESS”), Urban Air Mobility (“UAM”), drones, robotics, ~~Battery~~electric ~~Energy~~vehicles ~~Storage Systems~~ (“~~BESS~~EVs”), and other applications. ~~Our~~The ~~differentiated~~Company’s ~~battery~~mission ~~technology~~is ~~has been designed~~ to ~~combine~~accelerate the ~~high~~world’s energy ~~density of Li-Metal and Li-ion with the large-scale manufacturability of conventional Li-ion batteries in order to help promote the~~ transition ~~from~~through ~~the~~material ~~global~~discovery ~~dependence on fossil fuel-based vehicles to clean~~ and ~~efficient~~battery ~~EVs, with the goal of enabling a new era of electric transportation on land and in the air~~management. WeSES ~~are~~accelerates ~~seeking~~its ~~to accelerate our~~ pace of innovation by ~~currently~~ utilizing ~~artificial~~superintelligent ~~intelligence (“~~AI”) across the spectrum of our business, from research and development, materials sourcing, cell design, engineering and manufacturing, to battery health and safety monitoring ~~and AI-accelerated battery materials discovery~~.

~~SES’s~~Molecular mission is to accelerate the world’s energy transition through material discovery and battery management. Our team has dedicated the past decade to developing a comprehensive and proprietary Li-Metal and Li-ion battery technology platform, including high concentration solvent-in-salt electrolyte, ultra-thin wide format lithium anode, protective anode coating, and novel cell engineering processes that are based on scalable Li-ion manufacturing but address unique lithium metal plating challenges. As we build more AI-enhanced Li-Metal and Li-ion cells and generate more data, AI has become an increasingly integral part of our business in material development, battery health monitoring and incident prediction, with our AI initiatives consisting of AI for Science, AI for Manufacturing and AI for Safety. We believe that our AI for Science has the potential to accelerate our pipeline material discovery by mapping the vast universe of small molecules, with the goal to improve battery performance and safety. Our AI for Manufacturing uses machine learning to help define and fine-tune quality specifications based on manufacturing process data. Our AI for Safety is designed to monitor battery state-of-health and predict incidents more accurately than conventional battery management system.Universe

~~Four~~Through ~~Pillars~~our ofAI-based platform, Molecular Universe, we believe we have access to multi-pronged business opportunities in fast growing markets, such as ESS, drones and materials. For ESS, we supply fully integrated hardware and software solutions with battery health and safety management software powered by Molecular Universe, which we believe differentiates our ~~Business~~products in a competitive market. For materials, we believe that we can manufacture and supply enhanced materials discovered through Molecular Universe to gain market share in the large addressable market for advanced battery materials. We also manufacture and supply high energy and power density Li-Metal and Li-ion cells which can be used for drones, UAM, robotics and EV applications, which are regularly improved through research powered by Molecular Universe. Finally, we also offer access to Molecular Universe as a software product.

~~There~~Our ~~are four pillars to our mission.~~Products

1. ~~Electric~~Energy ~~Vehicles~~Storage System (EVESS)

InWe ~~2012,~~believe wethe ~~transitioned~~intersection ~~away~~of ~~from~~digital ~~solid~~infrastructure ~~state~~and ~~Li-Metal~~the soneed for power is one of the more critical themes of our ~~Li-Metal~~time. ~~batteries~~As ~~could~~AI ~~operate~~continues atto ~~room~~evolve, ~~temperature~~the ~~and~~demand befor ~~manufactured~~power atis ~~large~~expected ~~scale~~to grow significantly. InESS ~~2024,~~is wean ~~began~~essential ~~producing~~enabler ~~large~~of 50renewable ~~Amp-hour~~energy ~~(“Ah”)~~generation, ~~and~~helping ~~100Ah~~alternative ~~B-sample~~sources ~~Li-Metal~~of ~~battery~~power ~~cells~~make ~~for~~a ~~EVs.~~steady Wecontribution ~~made~~to ~~significant~~the ~~progress~~world’s inenergy ~~automotive~~needs ~~Li-Metal~~despite ~~cell~~the ~~manufacturing~~inherently byintermittent ~~addressing~~character ~~key~~of ~~manufacturing~~renewable ~~challenges~~energy insources. ~~ultra-thin~~The ~~wide~~flexibility ~~format~~ESS ~~lithium~~provides ~~anode,~~will ~~issues~~make ~~related~~it integral to ~~powder~~applications such as peak shaving, self-consumption, and ~~metal~~back ~~bur~~power in ~~lithium~~the ~~anode~~event ~~punching,~~of ~~high~~outages. ~~concentration~~All ~~electrolyte~~of ~~scale-up,~~this ~~and~~has ~~other~~created ~~issues~~a ~~related~~significant opportunity for us. We have been actively exploring this area as a natural fit to ~~quality~~exploit ~~and~~our ~~safety~~unique capabilities in ~~automotive~~materials ~~large~~discovery ~~Li-Metal~~and ~~cell~~superintelligent ~~manufacturing~~battery management through AI. We ~~have~~believe ~~performed~~that inour AI-~~house~~enhanced ~~testing~~batteries oncan ~~these~~extend ~~50Ah~~the life of ESS, and ~~100Ah~~our ~~Li-Metal~~AI ~~B-sample~~for ~~cells~~Safety can improve ESS battery health and ~~shared~~safety. In ~~testing~~September ~~data~~2025, ~~with~~we ~~our~~completed ~~OEM~~the ~~partners~~acquisition of UZ Energy, asan ~~well~~ESS assystems ~~shipped~~manufacturer, ~~these~~which ~~B-sample~~has ~~cells~~allowed us to ~~other~~accelerate ~~third~~our ~~parties~~entry into the ESS market. We believe that by integrating our hardware and ~~OEMs~~software ~~for~~solutions ~~their~~with ~~further~~battery ~~performance~~health and safety ~~testing~~management software powered by Molecular Universe into UZ Energy’s existing products, we can further differentiate our ESS products to compete in a fast growing but competitive ESS marketplace.

We2. ~~believe~~Drones ~~that our AI-enhanced Li-Metal battery technology demonstrates industry-leading energy density and performance and have the ability to:~~

●We ~~deliver~~believe that drones are a ~~lightweight~~perfect fit for high energy density and ~~compact~~high-power ~~battery~~density Li-Metal and Li-ion batteries. UAM and drones frequently operate on a fleet business model where the key business metrics are cost per passenger per mile, with weight being a paramount factor to costs. We believe that the step-change gravimetric energy density that Li-Metal and ~~substantially~~Li-ion ~~reduce~~can ~~range~~potentially ~~anxiety~~offer means that an aircraft has the potential to carry twice the number of passengers, or twice the payload for cargo applications, or fly twice the distance, which has the potential to significantly improve the profitability of UAM operators. We have converted two of our EV ~~consumers;~~A-sample lines to be dedicated to drones and UAM cell production. We are also planning to develop NDAA-compliant manufacturing capacity to develop drone cells with high energy and high-power density in our facility in Korea to meet the growing demand for NDAA-compliant cells.

●3. ~~provide~~Materials ~~fast-charge capability to charge the battery to 80% in less than 15 minutes, significantly reducing charging times;~~

●Molecular ~~incorporate~~Universe AIshould ~~software~~accelerate material discovery for both Li-Metal and ~~battery~~Li-ion ~~management~~across ~~systems~~multiple ~~(“BMS”)~~applications ranging from ESS, ~~which~~drones, ~~will~~EV, ~~accurately~~consumer ~~monitor~~electronics ~~the~~and ~~state~~many ofothers. ~~health~~We ofpartner with contract manufacturers to supply materials discovered through the ~~battery~~Molecular ~~and~~Universe ~~apply~~at ~~appropriate~~scale. ~~self-healing~~To ~~protocols;~~date, we have discovered six novel electrolyte materials across multiple applications through our Molecular Universe platform which are being tested with over 40 potential customers. In November 2025, we announced a joint venture

● achieve rapid market adoption due to our strategic partnerships, including with leading global OEMs, such as Hyundai Motor Company (“Hyundai”) and Honda Motor Company, Ltd. (“Honda”); and

● capitalize on the innovation occurring in Li-ion, including improvements in energy density, manufacturing efficiency and cost reduction, as our manufacturing processes are very similar to Li-ion.

In 2024, we transitioned from developing and producing A-Sample batteries to B-Samples to meet carmakers' requirements for their electric vehicles. 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.

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We expect to develop and produce C-Samples batteries beginning in 2026, which would be fully functional, mature samples for mass production and tested for full drivability in actual EVs. As we remain focused on B-Sample battery development, we do not yet have any arrangements with OEMs to manufacture consumer-ready batteries for their EVs. We expect this progress will pave the way for commercial production of our technology in 2027. For more information on collaborations with these OEMs, see “Our Partnerships” below.

2. Urban Air Mobility (UAM)

We believe that UAM is a perfect fit for Li-Metal. In our view, B-sample battery cell technology requires less additional development to reach commercial production for use in UAM than in EVs, and that our B-sample technology for EVs can be adapted for UAMs. UAM frequently operates on a fleet business model where the key business metrics are cost per passenger per mile, with weight being a paramount factor to costs. We believe that the step-change gravimetric energy density that Li-Metal can potentially offer means that an aircraft has the potential to carry twice the number of passengers, or twice the payload for cargo applications, or fly twice the distance, which has the potential to significantly improve the profitability of UAM operators. We have converted two of our EV A-sample lines to be dedicated to UAM cell production.

We also believe that our high-energy density and high-power density cells, such as the AI-enhanced 2170 cylindrical cell that we unveiled in January 2025, are well designed for use in humanoid robots, drones and other applications.

3. Artificial Intelligence (AI)

We started our AI programs to address the need to provide a high level of safety in, and to further accelerate our future roadmap for, material Li-Metal battery development. Our AI programs fall under three major categories:

AI for Science - We are developing new AI models designed to screen a vast universe of small molecules for potential electrolyte solvent candidates. We have also built an electrolyte foundry designed to provide high throughput synthesis and testing of these materials.

AI for Manufacturing – The traditional approach to optimizing cell design and process and improving manufacturing quality is through human experience, where the human engineers define and optimize quality specifications, which typically is a very lengthy process. We believe our AI for Manufacturing can accelerate this timeline. AI for Manufacturing uses machine learning to help define and fine-turn quality specifications based on manufacturing process data.

AI for Safety - We seek to provide a high level of safety in the field, and we are leveraging our automotive 50Ah and 100Ah cell production volume and quality data to train our AI for Safety. Our AI for Safety prediction accuracy increased to 95% in 2024, meeting the target we set at the start of the year. Our ultimate goal is to be able to reach near 100% safety in the field, which we believe will be paramount to both EV and UAM OEMs.

We are currently using and intend to continue using and developing AI for our own product innovations. Additionally, in the future we plan to work toward generating additional service revenue from the use of our AI programs by third parties. For more information, see “Our AI-Related Initiatives.”

4. Battery Energy Storage System (BESS)

We believe the intersection of digital infrastructure and the need for power is one of the most critical themes of our time. As AI continues to evolve, the demand for power will grow significantly. BESS is an essential enabler of renewable energy generation, helping alternative sources of power make a steady contribution to the world’s energy needs despite the inherently intermittent character of the renewable energy sources. The flexibility BESS provides will make it integral to applications such as peak shaving, self-consumption, and back power in the event of outages. All of this has created a significant opportunity for us. We have been actively exploring this area as a natural fit to exploit our unique capabilities in materials discovery and superintelligent battery management through AI. We believe that our AI-enhanced batteries can extend the life of BESS, and our AI for Safety can improve BESS battery health and safety. We have only begun to tap into this market and look forward to growing our presence in energy storage.

Our Li-Metal Battery Technology

Limitations of Current Battery Technology

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~~Conventional~~with ~~Li-ion~~Hisun ~~technology~~New isEnergy ~~currently~~Materials ~~being used in most commercially available EVs~~Ltd. ~~Li-ion typically uses a metal oxide-based or phosphate-based cathode and graphite or graphite/silicon-based anodes~~Co. ~~The anode and cathode are separated by a polymer-based separator. Finally~~(“Hisun”), ~~the~~an ~~whole cell is filled with a liquid~~ electrolyte ~~that~~manufacturer, ~~conducts~~to ~~lithium~~allow ~~ions~~us ~~from the anode~~ to ~~the~~manufacture ~~cathode~~our asnewly ~~the~~discovered ~~vehicle~~materials isat ~~being~~commercial ~~driven~~scale ~~(or~~for ~~battery~~customers. isWe ~~being~~expect ~~discharged), and from the cathode~~ to ~~the~~begin ~~anode~~supplying asmaterials ~~the~~manufactured ~~vehicle~~through ~~(or~~ the ~~battery)~~Hisun isjoint ~~being~~venture ~~charged. Conventional Li-ion cells have been instrumental~~ in ~~kick-starting~~ the ~~current~~second EVhalf ~~market and are being manufactured at scale at capacities~~ of ~~hundreds of GWh today~~2026. However, the automotive industry desires a battery with higher energy density to improve the electric driving range (the distance that a vehicle can be driven on a single charge) while reducing battery cost to enable mass-adoption.

~~Li-Metal~~4. ~~Batteries~~Molecular Universe

~~Li-Metal~~We isalso ~~widely~~provide ~~considered~~access ~~and~~to ~~accepted~~our asMolecular ~~the~~Universe EVAI4Science ~~battery~~platform, ~~technology~~either ~~capable~~through ofaccess ~~achieving~~to ~~the~~a ~~highest~~cloud ~~energy~~version ~~density.~~of InMolecular ~~fact~~Universe, ~~switching~~or ~~the~~through ~~current Li~~on-~~ion~~premises ~~graphite/silicon~~deployment, ~~anode~~on ~~with~~a ~~Li-Metal~~subscription ~~will currently result in the highest possible energy density for any given cathode in lithium chemistry~~basis. ~~Li-Metal~~Molecular isUniverse ~~the~~allows ~~lightest~~battery ~~un-engineered~~professionals ~~pure~~to ~~metal~~accelerate ontheir ~~earth~~own ~~and~~research ~~since the lithium ions do not have~~ to ~~diffuse~~discover inbreakthroughs ~~and out of the anode host material (like~~ in ~~the~~battery ~~case~~materials offor ~~graphite~~consumer orelectronics, ~~silicon in conventional Li-ion)~~drones, ~~the~~ESS ~~battery~~and ~~cells~~EV ~~made~~applications, ~~with~~among ~~Li-Metal anode can be very compact and light~~others. ~~This~~Molecular ~~combination~~Universe ofoffers ahigh ~~lightweight~~precision and ~~compact~~high-speed ~~anode~~simulation ~~results~~models, inhigh ~~the~~quality ~~highest~~experimental ~~possible~~data ~~gravimetric~~and ~~(Watt-hour~~domain ~~(“Wh”)/kg)~~expertise, ~~and~~allowing ~~volumetric~~battery ~~(Wh/liter)~~professionals ~~energy~~to ~~density,~~significantly ~~respectively,~~accelerate ~~for~~research ~~any~~while ~~given~~reducing ~~cathode~~research inand ~~lithium~~development ~~chemistry~~costs.

SES’s Approach to Li-Metal Cell

SES’s approach to Li-Metal cell utilizes the high energy density benefits of lithium metal anode while utilizing a cell design that primarily uses a liquid electrolyte in the cathode and separator to transport the lithium ions. There is also a protective anode coating between the anode and the separator. This approach results not only in improved energy density due to using a lithium metal anode, but also superior performance at room and lower than room temperatures and enables manufacturing at scale just like Li-ion, which is manufactured at scale today. In fact, we have been successfully making multi-Amp-hour, multi-layer cells using our Li-Metal approach for many years.

The key breakthrough in SES’s Li-Metal cells is its proprietary and patented liquid electrolyte. This electrolyte was developed internally at SES with many years of scientific research and development. We use a high-concentration, solvent-in-salt electrolyte. While liquid electrolytes used in conventional Li-ion cells are volatile and flammable, SES’s liquid electrolyte has low volatility and is self-extinguishing. Conventional liquid electrolytes are primarily made up of organic solvents with low concentrations of salt to aid lithium-ion conduction. SES’s liquid electrolyte primarily consists of salt with a low concentration of proprietary solvent molecules. This new type of high-concentration solvent-in-salt liquid electrolyte is fundamentally different from conventional liquid electrolyte. It maintains the manufacturability advantage of liquid electrolytes in conventional Li-ion manufacturing but can enable Li-Metal due to its stability on lithium metal.

SES’s Li-Metal technology also helps resolve an issue that has plagued Li-Metal adoption and progress for decades. With repeated charge and discharge cycles, lithium metal anodes are known to develop needle-like mossy structures known as dendrites, which can penetrate the separator and short-circuit the battery cell. The use of our liquid electrolyte changes the morphology of dendrite formation in our Li-Metal battery cells from needle-like mossy structures to a smooth lithium metal surface or dense deposition. Our proprietary anode coating provides an added layer of protection against separator penetration by making lithium plating denser during charging. Additionally, our AI-powered safety software and BMS monitors the state-of-health of the battery cells and can accurately detect any safety issues much earlier. The combination of these elements significantly increases cell cycle life and safety.

The rest of the cell is assembled using our proprietary ultra-thin wide-width Li-Metal anode, a conventional separator and a cathode. With the exception of the Li-Metal anode, all materials and components utilized in our battery cells are either already being manufactured at scale or have the capability to be easily manufactured at scale without the need for intensive research and development, or development of new equipment.

To our knowledge, SES Li-Metal battery cells are the only Li-Metal cells demonstrated to meet or exceed the preliminary OEM target requirements for energy density, low temperature discharge, room temperature fast charge and discharge, cycle life and safety.

Our unique high-energy density Li-Metal battery is expected to be:

● light and compact, with high energy density of at least 400 Wh/kg and 1,000 Wh/liter in our large 100 AH cells, compared to approximately 265 Wh/kg / 535 Wh/L in Li-ion battery cells using a high nickel content cathode, and with one version of our 100 Ah

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multi-layer battery cells demonstrating energy density of 380 Wh/kg / 850 Wh/L in third-party testing. This higher energy density is expected to translate into significantly more range, which we believe will help to enable the expansion of an electrified world;

● durable and safe, with the ability to meet stringent cycle life, overall lifetime and safety targets for EVs and UAM aircrafts;

● capable of fast charge, charging up to 80% in less than 15 minutes;

● capable of high power discharge, at room and low temperatures;

● low-cost, taking advantage of existing Li-ion manufacturing scale and best-practices to enable cost-reduction;

● capitalizing on the innovation occurring in Li-ion, in terms of incremental improvement in energy density, supply chain development, cost reduction and manufacturing efficiency, since the cathode and cell manufacturing process are the same as in Li-ion; and

● smarter, with AI-powered safety software and BMS that can predict safety incidents in real time and make appropriate diagnostic recommendations

Our AI-Based Initiatives

Through our AI-based initiatives discussed above targeted at material discovery, we believe that we can rapidly introduce enhancements to Li-Metal and Li-ion batteries for use in a multitude of applications, including EVs, UAM, storage, drones and robotics, among others. We believe that our AI-discovered electrolyte materials provide a pathway to generate service revenue earlier than previously anticipated through targeting the large addressable market in each of the aforementioned applications. Since AI-enhanced electrolytes can simply be dropped into existing Li-ion manufacturing infrastructure, they also require significantly less capital expenditure than traditional battery manufacturing.

Our Partnerships

We have entered into strategic alliances and may in the future enter into additional strategic alliances. For example, we previously had a JDA with General Motors (“GM”), have entered into JDAs with Hyundai Motor Company (“Hyundai”) and another OEM partner, and have a service contract with Honda Motor Company, Ltd. (“Honda”), which expire at different points in time. For more information, see Note 4 to our consolidated financial statements. We expect to continue to strengthen these partnerships in the use of our battery technology. Also, we intend to work closely with other OEMs and other strategic partners to develop and produce our Li-Metal battery cells, as well as support our supply chain and the build out of manufacturing facilities, with the aim of making our Li-Metal battery cells widely available in EVs, UAM aircrafts and other applications over time

Our Research and Development

We conduct research and development at our facilities in Woburn, Massachusetts in the United States, Shanghai, China, and Chungju, South Korea. Research and development activities concentrate on making further improvements to our battery technology, including improvements to battery performance, quality and cost.

Major development efforts include, but are not limited to, programs in the following areas.

● Scale-up: Our design is further being customized with and validated by several OEMs. Based on our collaborations with OEMs, we believe that a roughly 100 Ah cell-size manufactured at GWh scale (five to seven cells-per-minute) is needed to achieve commercialization in EVs and UAMs at a large, global scale. We are developing processes and upgrading equipment to scale up the manufacturing of our current cell design from three to nine Ah capacity to 50 Ah and 100 Ah capacity.

● Module and Pack Design: Li-Metal cells must be integrated into modules and packs as part of their integration into vehicles. Our active development efforts are focused on the integration of our Li-Metal cells into modules to enable our Li-Metal cells to perform as intended once they are integrated into vehicles.

● AI Software and BMS: Software is critical to the ongoing monitoring of battery health and safety. We continue to develop AI algorithms to diagnose battery cell-related health issues, develop advanced control algorithms and charging methods to enhance cycle life and safety, and port such software on to a BMS that can integrated into a battery pack.

● Advanced Materials and Coatings: We continue to research and develop advanced electrolyte and anodes to further improve cycle life and safety. In addition, we continue to develop novel methods of laminating or depositing lithium metal onto current collector that can be deployed at commercial GWh scale.

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● Cathode Materials and Design: We develop our Li-Metal cells for a variety of different cathode materials, cathode design and cathode processing methods that can provide ultra-high energy density and/or significant cost-reduction.

● Li-Metal Recycling: Along with other battery components that are already being recycled today, Li-Metal foil will also need to be recycled in the future. We continue to explore methods of recycling that are productive and cost-effective.

Our Intellectual Property

To maintain a competitive advantage, we believe we must develop and preserve the proprietary aspect of our technologies. We rely on a combination of copyright, patent, trademark, trade secret, license and other intellectual property laws in the United States and other jurisdictions, as well as license agreements and other contractual protections, including non-disclosure agreements and other measures to establish, maintain, enforce and protect our proprietary rights. Our policy is to require our employees, consultants, and advisers to execute non-disclosure agreements in connection with their employment, consulting, or advisory relationships with us, where appropriate. We also have a policy that requires employees, consultants, and advisers who work on our products to agree to disclose and assign to us all inventions conceived during their work with us that are developed using our property or relate to our business. In addition, we seek to protect our proprietary and intellectual property position by, in addition to filing patent applications in various jurisdictions related to our proprietary technology, relying on trade secrets, know-how and continuing technological innovation. Despite measures taken to protect our intellectual property, unauthorized parties may attempt to copy aspects of our proprietary technology or obtain and use information that we regard as proprietary, which could harm our business and competitive position. For a more comprehensive discussion of the risks related to our intellectual property, please see “Part I, Item 1A. Risk Factors—Risks Relating to Our Business and Technology” and “Risk Factors—Risks Relating to Our Intellectual Property.”

Patents

As of December 31, ~~2024~~2025, we have been granted 87103 patents, with expiration dates ranging from ~~2032~~2030 through ~~2043~~2042, and have over ~~154~~80 patent applications pending in the United States and in other jurisdictions. We also rely substantially on unpatented proprietary technology, including know-how and 3040 trade secrets as of December 31, ~~2024~~2025. The issued and pending patents, licenses, know-how and trade secrets cover the following:

●

Cell design, including physical format, component layout, application tuning, cell formation and support structures.

●

Materials, including salt preparation and purification, design of synthetic solvents, state-of-the art electrolyte formulations, lithium foil production, separator composition and anodes.

●

Battery management, including charge/discharge profiles, rapid charging, safety systems and algorithms, telemetry harvesting and big data analysis.

●

Environmental, including low-impact production of cell materials and recyclability of spent materials.

Trademarks

We have registered various trademarks associated with our business with the United States Patent and Trademark Office on the Principal Register and in other appropriate jurisdictions. As of December 31, ~~2024~~2025, we have 93106 registered or allowed trademarks, with 141 trademark ~~applications~~application pending. Depending upon the jurisdiction, trademarks are valid if they are in use and/or their registrations are properly maintained.

Geographic & Concentration Information

Revenue outside of the United States, based on customer billing address, was 99% and 100% of total revenue for the years ending December 31 2025 and 2024, respectively. For the year ending December 31, 2025, there were three customers that accounted for 48%, 15%, and 12% of revenue, respectively, compared with one customer that accounted for 93% in the year ending December 31, 2024.

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Our Suppliers

Currently, we are in product development and our product design has yet to be finalized, so our volume demand is limited, and we do not have long-term supply arrangements. As volume demand grows, we expect to negotiate long-term supply contracts. For our current product development needs, we source from third-party suppliers for raw materials, components and equipment necessary to develop and manufacture our Li-Metal battery cells. As discussed above, we have announced a joint venture with Hisun to allow us to manufacture our newly discovered materials at commercial scale for customers. We expect to begin supplying materials manufactured through the Hisun joint venture in the second half of 2026.

Our Employees

As of December 31, ~~2024~~2025, we had approximately ~~250~~215 full-time employees. Approximately 3735% of our employees, including all of our executive management team, are located in the United States, with the remaining located in China, South Korea and Singapore. The workforce in our China and South Korea locations primarily consists of operators for our manufacturing lines. Currently, approximately 68% of our employees worldwide are engaged in research and development and related functions, with expertise in all aspects of the development process, including materials science, chemistry, engineering, machine-learning, and software. Many of these employees have extensive experience from large Li-ion companies and hold advanced engineering and scientific degrees, including many from the world’s top universities.

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83% of our employees worldwide are engaged in research and development and related functions, with expertise in all aspects of the development process, including materials science, chemistry, engineering, machine-learning, and software. Many of these employees have extensive experience from large Li-ion companies and hold advanced engineering and scientific degrees, including many from the world’s top universities.

Our Facilities

We have leased facilities located in Woburn, Massachusetts in the United States, Shanghai and Shenzhen, China, and Chungju and Seoul, South Korea. Our primary Woburn facility, which also serves as the Company’s headquarters, focuses on chemistry, material and algorithm research and development, as well as engaging with our OEM and strategic partners. We also have another facility near our Woburn facility, which focuses on novel electrolyte molecule discovery and synthetic pathway development. Our Shanghai facility focuses on supply chain development, manufacturing process development, battery cell development and production. Our Shenzhen facility focuses on ESS supply chain and sales to our customers, including logistics and manufacturing processes. Our Chungju facility focuses on manufacturing process development. We have also set up an office in Seoul focused on supply chain, customer relations and our collaboration with partners in the region.

Competition

The battery market, ~~like the EV market it services,~~ is fast-growing, extremely competitive and driven by the innovation of both large incumbents and emerging entrants ~~like SES~~. With the introduction of new technologies and the potential entry of new competitors into the market, we expect competition to increase in the future, which could harm our business, results of operations, or financial condition.

Our prospective competitors include major manufacturers supplying the ~~industry~~battery market, automotive and drone OEMs and potential new entrants to the ~~industry~~battery market. Existing suppliers of ~~batteries~~ESS toproducts ~~the~~include EVFREYR ~~industry~~Battery, ~~include~~Microvast ~~Contemporary~~Holdings, ~~Amperex~~Electrovaya, ~~Technology~~Stem CoInc., ~~Limited~~and Fluence Energy. Existing manufacturers of battery materials that we compete with include Enovix, SKSolid ~~Innovation~~Power, LGFREYR ~~Energy~~Battery, ~~Solutions~~Sion Power, ~~Panasonic~~and ~~Corporation~~Natrion. Existing manufacturers of drone and ~~Samsung~~robotics ~~SDI.~~cells ~~Additionally,~~that ~~many~~we ~~automotive~~compete ~~OEMs,~~with ~~including~~include ~~Tesla~~Amprius, ~~Nio~~QuantumScape, ~~Rivian~~Solid ~~and~~Power, ~~Toyota~~Enovix, ~~are~~and ~~researching~~Cuberg. ~~and~~Existing ~~investing~~competitors infor ~~efforts~~our toMolecular ~~develop~~Universe ~~their~~software ~~own~~service EVinclude ~~battery~~C3.ai, ~~production~~Natrion, ~~capabilities~~Intecells, Zeta Energy, and Innoviz Technologies.

Newer entrants, including Sila Nanotechnologies, Solid Power, Enovix, QuantumScape, and Amprius, are also seeking to improve conventional lithium-ion batteries or to develop new technologies, including lithium-metal and solid-state batteries, or to develop new technologies for cathodes, anodes, electrolytes and additives. Some of these companies have established relationships with automotive OEMs and are in varying stages of development.

We acknowledge that incumbents and emerging entrants may have greater resources to invest in advancing their technologies, access to more potential customers, or strategic relationships with OEMs (or other third parties) that may give them a competitive edge. We further acknowledge that these disparities, where they exist, have the potential to harm our business, results of operations or financial condition.

Government Regulation and Compliance

There are government regulations pertaining to battery safety, transportation of batteries, use of batteries in vehicles, factory safety and disposal of hazardous materials. We will ultimately have to comply with these regulations to sell our batteries into the market. For more information, see “Part I, Item 1A. Risk Factors—Risks Relating to Regulations and Our Compliance With Such Regulations” discussing regulations and regulatory risks related to export controls (including our export controls compliance program), environmental, health and safety, anti-corruption, anti-bribery, data collection, trade and tax law compliance.

Company Information

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Information that we furnish to or file with the SEC, including the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to, or exhibits included in, these reports are made available for download, free of charge, through the Company’s website at www.ses.ai as soon as reasonably practicable. The Company’s SEC filings, including exhibits filed therewith, are also available directly on the SEC’s website at www.sec.gov.

The Company may use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website. Accordingly, investors should monitor this channel, in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts. Information contained on the Company’s website is not part of this report.

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Item 1A. Risk Factors

We have identified the following risks and uncertainties that may have a material adverse effect on our business, financial condition, results of operations or reputation. The risks described below are not the only risks we face. Additional risks not presently known to us or that we currently believe are not material may also significantly affect our business, financial condition, results of operations or reputation. Our business could be harmed by any of these risks. The risk factors described below should be read together with the other information set forth in this Annual Report, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC.

Risks Relating to Our Business and Technology

We face significant challenges in developing a Li-Metal battery that can be commercialized for use in EVs and other applications, and the pace of development is often unpredictable and subject to delays.

To our knowledge, Li-Metal batteries have never been successfully used in automobiles. Li-Metal batteries have been successfully used for other applications, but their use in other vehicles, including UAM, has been limited thus far. We are still in the development stages for our Li-Metal batteries and face significant scientific challenges that will need to be solved prior to commercializing our Li-Metal batteries for use in EVs and other applications such as UAM. If we are not able to overcome these challenges, our Li-Metal batteries may not be able to be commercialized and our business may fail.

In particular, we need to build Li-Metal battery cells which meet OEM requirements for use in EVs and UAM. While we have been making progress toward these requirements, significant engineering and mechanical barriers remain which must be solved before our Li-Metal batteries will meet OEM requirements. It is difficult to predict with certainty the pace of scientific development which will allow us to solve these challenges, and delays in meeting these challenges, or the introduction of new, unforeseen challenges, could impact the timing of the commercialization of our Li-Metal batteries, or our ability to reach commercialization at all.

We expect to continue to incur losses for the foreseeable future. While we expect to become profitable eventually, our projections are based on internal assumptions that may prove incorrect, and we may never achieve or maintain profitability.

We incurred net losses of $~~100~~73.20 million and $53100.42 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, and had an accumulated deficit of $~~298~~371.9 million and $~~198~~298.79 million from our inception through December 31, ~~2024~~2025 and ~~2023~~2024, respectively. AsSince discussed in “Business - Our Technology,” to date, we have only validated the capabilities of our Li-Metal battery cell technology and have not produced Li-Metal batteries for sale. As a result, since inception, we have not achieved profitable operations or positive cash flows from our operations.

We believe that we will continue to incur operating and net losses as we continue to incur significant expenses in connection with our research and development efforts. As discussed in other risk factors in this section, factors that could impact the timing and levels of our profitability include, but are not limited to: our ability to solve the scientific engineering and mechanical challenges to commercialize our products; the level of demand for our products; the performance of our products; the projected supply materials for our products; the cost of our investment in artificial intelligence and machine learning infrastructure; a reduction in the cost of Li-ion; average selling prices of EVs and our products; the safety of UAM use; projected production capacities of our facilities; our collaboration with OEMs; the projected gross margin achievable upon sale of our products; and the extent to which growth of EV, UAM, ESS drones, robotics and ~~UAM~~Molecular Universe markets and continued shift in consumer preference will conform with projections.

We will need substantial additional capital in the future to fund our business and may be unable to meet our future capital requirements, impairing our financial position and results of operations.

The development, design, manufacture and sale of batteries is a capital-intensive business. We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a number of years. 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. These funds are expected to finance our principal sources of liquidity and ongoing costs, such as research and development relating to our Li-ion and Li-Metal batteries and the ~~construction~~continued development of ~~additional~~Molecular ~~manufacturing facilities~~Universe. In the future, if 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 through a variety of possible methods, including, but not limited to, entry into joint ventures or other strategic arrangements, issuance of equity (including through at-the-market sales), equity-related or debt securities or through obtaining credit from financial institutions, as well as anticipated future revenue from product sales.

11We believe that our cash on hand and marketable securities will be sufficient to meet our working capital and capital expenditure requirements for a period of at least 12 months from the date of this Annual Report on Form 10-K. However, additional funding may be required for a variety of reasons, including merger and acquisition opportunities, development costs for our batteries and development costs for Molecular Universe. Our ability to successfully develop our products 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.

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We believe that our cash on hand and marketable securities will be sufficient to meet our working capital and capital expenditure requirements for a period of at least 12 months from the date of this Annual Report on Form 10-K, and also sufficient to fund us to commercialization. However, additional funding may be required for a variety of reasons, including opportunities to build an integrated supply chain in the United States and delays in expected development of our Li-Metal battery cells. Our ability to successfully develop our products, commence 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 cannot be certain that additional capital will be available on attractive terms, if at all, when needed, which could be dilutive to stockholders. We may be forced to decrease our level of investment in product development or scale back our operations, which could have an adverse impact on our business and financial prospects. Furthermore, the cost of debt could be higher than anticipated, which could negatively affect our earnings.

~~Our~~We ~~Li-Metal~~may ~~technology~~not isbe ~~untested~~able into ~~actual~~successfully ~~EVs~~integrate ~~and~~UZ ~~may~~Energy’s ~~ultimately~~operations ~~prove~~with ~~unworkable~~our business.

~~The~~We ~~results~~completed the acquisition of ~~third-party~~UZ ~~tests~~Energy ~~show~~on ~~that~~September 15, 2025. Integrating UZ Energy into our ~~multi~~business may require significant attention from our senior management, which may divert their attention from our day-~~layer~~to-day ~~cells~~business. ~~meet~~The ordifficulties ~~exceed~~of ~~the~~integration ~~preliminary~~may ~~OEM~~be ~~target~~increased ~~requirements~~by ~~for~~cultural ~~energy~~differences ~~density,~~between ~~low~~our ~~temperature~~two ~~discharge,~~organizations ~~room~~and ~~temperature~~the ~~fast~~necessity ~~charge~~of retaining and ~~discharge~~integrating personnel, ~~cycle~~including ~~life~~UZ ~~and~~Energy’s ~~safety~~key employees. ~~Additionally,~~The ~~Li-Metal~~services isof ~~widely~~some ~~considered~~of ~~and~~these ~~accepted~~individuals aswill be important to the EVcontinued ~~battery~~growth ~~technology~~and ~~capable~~success of ~~achieving~~UZ ~~the~~Energy’s ~~highest~~business ~~energy~~and ~~density~~to our ability to integrate its business with ours. ~~However,~~If we ~~have~~were ~~not~~to ~~produced~~lose ~~Li-Metal~~the ~~batteries~~services ~~for~~of ~~use~~these bykey anemployees ~~actual~~or EVfail to sufficiently integrate them, ~~and~~our noability ~~one~~to ~~has~~operate these businesses successfully ~~demonstrated~~would ~~use~~likely ofbe ~~high~~materially ~~energy~~and ~~density~~adversely ~~Li-Metal~~impacted. ~~batteries~~There may also be challenges in ~~EVs.~~the ~~Our~~integration ~~Li-Metal~~of ~~battery~~operations ~~cell~~and ~~technology~~systems, ~~may~~products ~~prove~~and ~~unworkable~~services, ~~when~~and ~~used~~management of facilities, conforming standards, controls, procedures and accounting and other policies, business cultures, engineering, design and development processes, and compensation structures between the two companies, managing the expanded operations of a large and complex company and in ~~actual~~keeping ~~EVs~~existing customers and obtaining new customers. As such, ~~which~~if ~~would~~we ~~substantially~~are ~~undercut~~unable to successfully integrate UZ Energy’s operations into our business we could be required to record material impairments, ~~operating~~and ~~results~~as a result, our financial condition, ~~and~~results ~~prospects~~of operations, cash flows and ~~could~~stock ~~effectively~~price ~~eliminate~~could ~~the~~be ~~value~~material ofand ~~your~~adversely ~~investment~~affected.

The market for UAM, and for use of ~~Li-Metal~~our battery technology in UAM and other applications, is still emerging, and may not achieve the growth potential we expect.

The UAM market is still emerging, and it is uncertain to what extent market acceptance of UAM will grow, if at all. The market is new and rapidly evolving, characterized by rapidly changing technologies and evolving government regulation and industry standards. To our knowledge, there is no market standard battery technology for use in UAM applications. There can be no assurance that, even if the UAM market grows significantly, ~~Li-Metal~~our technology will emerge as a preferred battery technology for use in UAM applications. The success of our ability to sell ~~Li-Metal~~our batteries for use in UAM applications will depend on the growth and acceptance of UAM generally and the results of testing and certifications for use of our batteries in UAM applications. If the UAM market does not develop as we expect, or if our ~~Li-Metal~~ batteries do not perform as expected during testing for use in UAM applications, it could materially adversely affect our business, operating results, financial condition and prospects.

Similarly, to the extent we seek to grow our business through the commercialization of our battery technology for use in EVs, our growth will be dependent upon the adoption of EVs by commercial vehicle and specialty vehicle operators and consumers. In that case, if the markets for EVs do not develop as we expect or develop more slowly than we expect, it could materially adversely affect our business, operating results, financial condition and prospects.

We may face challenges in developing NDAA-compliant manufacturing capacity for drone cells, and even if we develop the manufacturing capacity, demand for NDAA-compliant drone cells may not develop.

Our plans to develop NDAA-compliant manufacturing capacity for high energy and high-power density drone cells involve significant execution, regulatory and market risks. Achieving and maintaining NDAA compliance may require substantial capital expenditures, supply chain modifications and ongoing verification procedures, and we may be unable to source compliant components or certify our processes on commercially reasonable terms or within expected timelines. In addition, demand for NDAA-compliant drone cells may not develop as anticipated or may be adversely affected by changes in law or procurement policies. Any delays, cost overruns or failure to achieve commercial-scale production and distribution could materially and adversely affect our business and results of operations.

If our batteries fail to perform as expected, our ability to develop, market and sell our batteries could be harmed.

IfOur ~~and/or when commercial production of our Li-Metal battery technology commences, our~~ batteries may contain defects in design and manufacture that may cause them to not perform as expected or that may require repairs, recalls, and design changes. Our battery cells are inherently complex and incorporate technology and components that have not been used for other applications and that may contain defects and errors, particularly when first introduced. For more information, see “Part I, Item 1. Business—Our Technology.” Due to our limited operating history, we have a restricted frame of reference from which to evaluate the long-term performance of our Li-Metal batteries. There can be no assurance that we will be able to detect and fix any defects in our batteries prior to the sale to potential consumers. If our batteries fail to perform as expected, customers may delay deliveries, terminate further orders or initiate product recalls, each of which could adversely affect our sales and brand and could adversely affect our business, financial condition, operating results and prospects.

We are unable to predict user behavior when driving EVs with Li-Metal technology.

While conventional Li-ion battery technology has been tested in many applications for several decades, Li-Metal batteries have yet to be commercialized for use in EVs. Even if we work with OEMs to thoroughly test Li-Metal cells using pre-determined conditions, there is no guarantee that users in the field will not drive outside of recommended driving conditions and unintentionally abuse the batteries. In such events, performance and safety may be compromised, thus having a materially negative impact on our business, financial condition, operating results and prospects.

Delays in the pre-manufacturing development of our battery cells could adversely affect our business and prospects.

We have previously entered into and currently maintain JDAs and/or service contracts with major OEMs to develop (jointly in the case of JDAs or independently in the case of service contracts) Li-Metal batteries, with the expectation that such development will culminate in the widespread use of our technology in future EVs with these major OEMs and eventually with other large OEMs. For more information, see

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Note 4 to our consolidated financial statements. We have previously substituted, and may determine to substitute, our JDAs with other types of strategic alliances, such as service contracts. However, as we are still in the developmental stages with each of these OEMs, we do not currently have existing arrangements to produce our Li-Metal cells for use in OEM vehicles, and production-ready models of our batteries will not be available until sufficiently tested and approved for inclusion in future OEMs’ EVs. Each time we produce a battery with a higher output, the product must undergo extensive pre-manufacturing development and testing. Anything that delays the consistent development and testing of pre-manufacturing battery cells samples at increasingly higher outputs, such as technology or engineering issues, could alter our prospects and adversely affect our business.

We may not be able to engage target OEM customers successfully and to convert such contacts into meaningful orders in the future.

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Our success, and our ability to increase revenue and operate profitably, depends in part on our ability to identify OEM target customers and convert such contacts into meaningful orders or expand on current customer relationships. In some cases, our battery cells may be delivered to certain customers on a sampling basis, where they have the ability to evaluate whether our products meet their performance requirements before committing to joint development and meaningful orders. While our business does not substantially depend on any one customer, our ongoing success depends on whether our target customers are willing to begin and continue using our battery technology, as well as whether their product lines continue to incorporate our products. Thus, our efforts to expand our manufacturing and sales to OEMs may not be successful and may never result in products that achieve market acceptance, create additional revenue or become profitable, thus harming our financial results and prospects.

Our research and development efforts strive to create products that are on the cutting edge of technology and are meeting the evolving requirements of our customers, but competition in our industry is high. To secure acceptance of our products, we must also constantly develop and introduce cost-effective, increasingly more scalable ~~Li-Metal~~ batteries with enhanced functionality and performance to meet evolving industry standards. If we are unable to retain target customers, or convert early trial deployments into meaningful orders, our business, financial condition, operating results and prospects could be materially adversely affected. In addition, we may not receive adequate assistance from OEMs to commercialize our products successfully, which could impair our results of operations.

IfWe may not be able to establish new, or maintain sufficient existing, supply relationships for necessary raw materials, newly discovered materials, components or equipment, or we ~~are~~may ~~unable~~be required to ~~integrate~~pay ~~our~~costs ~~products~~for ~~into~~raw ~~EVs~~materials, ~~manufactured~~newly bydiscovered ~~OEM~~materials, ~~customers~~components or equipment that are more expensive than anticipated, ~~our~~which ~~results~~could delay the introduction of ~~operations~~our ~~could~~product beand ~~impaired~~negatively impact our business.

~~Our~~Currently, ~~batteries~~our ~~are~~volume ~~composed~~demand ofis ~~modules assembled from battery cells~~limited, ~~which~~and we ~~produce~~do ~~and~~not ~~intend~~have tolong-term ~~manufacture~~supply ~~at scale~~arrangements. ~~OEMs~~As ~~often~~volume ~~require~~demand ~~unique configurations or custom designs for batteries for their EVs. Once we enter into contracts with OEMs to produce batteries for their EVs~~grows, we expect to ~~tailor~~negotiate ~~the~~long-term ~~design~~supply ofcontracts. For our ~~batteries~~current ~~specifically~~product ~~to the EVs that these OEM customers manufacture. This~~ development ~~process~~needs, ~~requires~~we ~~not~~source ~~only~~from ~~substantial~~third-party ~~lead~~suppliers ~~time between the commencement of design efforts~~ for ~~customized~~raw ~~batteries and the commencement of volume shipments of the battery cells to the customer~~materials, ~~but~~components ~~also the cooperation~~ and ~~assistance~~equipment ofnecessary ~~the OEMs in order~~ to ~~determine~~develop ~~the~~and ~~requirements~~manufacture ~~for each specific application. Technical problems may arise that affect the acceptance of~~ our ~~product~~battery ~~by the OEMs~~cells. IfFor wemore ~~are unable to design and develop products that meet the OEMs’ requirements~~information, wesee ~~may~~“Part ~~lose opportunities to obtain purchase orders~~I, ~~and~~Item ~~our~~1. ~~reputation~~Business—Our ~~and prospects may be damaged~~Suppliers.”

WeAdditionally, ~~may~~we ~~not~~partner bewith ~~able~~contract manufacturers to ~~establish~~supply ~~new,~~materials ordiscovered ~~maintain~~through ~~existing,~~the ~~supply~~Molecular ~~relationships~~Universe ~~for~~at ~~necessary~~scale. ~~raw~~In ~~materials~~November 2025, ~~components~~we orannounced ~~equipment~~a orjoint ~~may~~venture bewith ~~required~~Hisun, an electrolyte manufacturer, to ~~pay~~allow ~~costs~~us ~~for~~to ~~raw~~manufacture our newly discovered materials, ~~components~~at orcommercial ~~equipment~~scale ~~that~~for ~~are~~customers. ~~more~~We ~~expensive~~expect ~~than~~to ~~anticipated,~~begin ~~which~~supplying ~~could~~materials ~~delay~~manufactured through the ~~introduction~~Hisun ofjoint ~~our~~venture ~~product~~in ~~and~~the ~~negatively~~second ~~impact~~half ~~our~~of ~~business~~2026.

~~Currently,~~To wethe ~~are~~extent ~~in product development and our product design has yet to be finalized~~that, sowhen our volume demand isso ~~limited~~requires, ~~and~~if we doare ~~not~~unable ~~have~~to enter into long-term ~~supply~~agreements ~~arrangements.~~with Asour ~~volume~~current ~~demand~~or ~~grows,~~future wesuppliers ~~expect~~on tobeneficial ~~negotiate~~terms, ~~long-term~~or ~~supply~~such ~~contracts.~~suppliers ~~For~~are unable to meet our ~~current~~long-term ~~product~~requirements ~~development~~at ~~needs~~reasonable cost, we ~~source~~may ~~from~~need ~~third-party~~to ~~suppliers~~seek alternative sources for necessary raw materials, components ~~and~~or equipment necessary to develop and manufacture our ~~Li-Metal~~ battery cells., ~~For~~produce ~~more~~the ~~information~~raw materials or additional components in-house, ~~see~~produce ~~“Part~~newly Idiscovered materials at commercial scale for customers, ~~Item~~or 1redesign our proposed products to accommodate available substitutes. ~~Business—Our~~To ~~Suppliers~~the extent that our suppliers experience any delays or inability in providing or developing their products, we could also experience delays or inability in delivering our products.”

ToMoreover, the ~~extent~~price ~~that,~~of ~~when~~raw ~~our~~materials, ~~volume~~components ~~demand~~and soequipment ~~requires,~~could iffluctuate wesignificantly ~~are~~due ~~unable~~ to ~~enter~~circumstances ~~into~~beyond ~~long-term agreements with~~ our ~~current~~control. orSubstantial ~~future~~increases ~~suppliers~~in onprices ~~beneficial~~would ~~terms,~~increase orour ~~such~~operating ~~suppliers~~costs ~~experience~~and ~~difficulties~~negatively ~~ramping~~impact ~~up their supply to meet~~ our ~~long-term~~prospects. ~~requirements~~Any atdisruption ~~reasonable~~in ~~cost,~~supply wecould ~~may~~also ~~need~~temporarily todisrupt ~~seek~~future ~~alternative~~research ~~sources~~and ~~for~~development ~~necessary~~activities ~~raw materials, components~~ or ~~equipment~~production ~~necessary~~of toour ~~develop~~batteries and ~~manufacture~~newly ~~our~~discovered ~~Li-Metal battery cells, produce the raw~~ materials oruntil ~~additional~~an ~~components~~alternative ~~in-house,~~supplier oris ~~redesign~~able ~~our proposed products~~ to ~~accommodate~~meet ~~available substitutes. To the extent that~~ our ~~suppliers experience any delays in providing or developing their products, we could also experience delays in delivering on our timelines~~requirements.

~~Moreover~~Changes in business conditions, ~~the~~unforeseen ~~price~~circumstances ofand governmental changes, as well as other factors beyond our control or which we do not presently anticipate, could affect our suppliers’ ability to deliver raw materials, components ~~and~~or equipment ~~could~~to ~~fluctuate~~us ~~significantly~~on ~~due~~a totimely ~~circumstances~~basis. ~~beyond~~For instance, we may be impacted by currency fluctuations, trade barriers, tariffs or shortages and other general economic or political conditions (such as the ongoing military conflict between Russia and Ukraine, throughout the Middle East, and wider regional conflict), which may limit our ~~control.~~ability ~~Substantial~~to ~~increases~~obtain inkey ~~prices~~raw ~~would~~materials ~~increase~~or components for our ~~operating~~batteries or significantly increase freight charges and other costs and ~~negatively~~expenses associated with our business. For more information, including the impact of current tariffs on us, see “—Risks Relating to our ~~prospects~~International Operations—The international nature of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.” Any ~~disruption~~of inthe ~~supply~~foregoing could ~~also~~materially and adversely affect our business, financial condition, operating results and prospects.

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~~temporarily~~Our ~~disrupt~~ability ~~future~~to ~~research~~manufacture ~~and~~our ~~development~~batteries ~~activities~~at orscale ~~production~~depends ofon our ~~batteries~~ability ~~until~~to anbuild, ~~alternative~~operate ~~supplier~~and isstaff ~~able~~our facilities successfully, as well as to ~~meet~~obtain ~~our~~sufficient ~~requirements~~contract manufacturing capacity.

Changes in business conditions, unforeseen circumstances and governmental changes, as well as other factors beyond our control or which we do not presently anticipate, could affect our suppliers’ ability to deliver raw materials, components or equipment to us on a timely basis. For instance, we may be impacted by currency fluctuations, trade barriers, tariffs or shortages and other general economic or political conditions (such as the ongoing military conflict between Russia and Ukraine, the Middle East, and wider regional conflict), which may limit our ability to obtain key raw materials or components for our Li-Metal batteries or significantly increase freight charges and other costs and expenses associated with our business. For more information, including the impact of current tariffs on us, see “—Risks Relating to our International Operations—The international nature of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.” Any of the foregoing could materially and adversely affect our business, financial condition, operating results and prospects.

Our ability to manufacture our Li-Metal batteries at scale depends on our ability to build, operate and staff our facilities successfully, as well as to obtain sufficient contract manufacturing capacity.

Because we expect to rely heavily on complex machinery, well-trained personnel and a well-managed supply chain for our operations, our internal and outsourced production will involve a significant degree of uncertainty and risk in terms of operational capacity performance and costs.

Our manufacturing facilities consist of large-scale machinery combining many components. ~~Such machinery will require us to make intensive capital expenditures prior to our ability to earn any product revenue.~~ The manufacturing facility machinery may suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which may not be available when needed. Additionally, unexpected malfunctions of the manufacturing facility machinery may significantly affect the intended operational efficiency, thus materially and adversely affecting our business, financial condition and operating results.

The production of our facilities also requires us to hire and train highly skilled personnel to operate such facilities, including engineers, workers, and indirect laborers. Recruiting and training such skilled staff takes significant cost and time, and an inability to do so timely or at all inhibits the successful operation of these facilities, thus negatively affecting our business. In addition, the manufacturing of our ~~Li-Metal~~ batteries at facilities requires us to obtain various production licenses and permits, receive the necessary internal approvals from our customers regarding specifications and enter into agreements for the supply of raw materials, components and manufacturing tools and supplies. If we do not complete such steps in a timely manner, our manufacturing timeline or output could be significantly delayed or inhibited.

We also ~~plan to~~ rely ~~in the future~~ on contract manufacturers to complete production of certain of our products, including newly discovered materials, in a timely manner that meets our quality, quantity and cost requirements. Contract manufacturers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet demand for our products.

Finally, the production of our Li-Metal batteries at scale and competitive cost, compared to conventional Li-ion cells, will require us to achieve rates of throughput, use of electricity and consumables, yield, and rate of automation demonstrated for mature batteries and battery material. As we have not produced Li-Metal batteries at scale, our ability to achieve such rates is untested and subject to significant constraints and uncertainties. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, environmental hazards and remediation, costs associated with commissioning of machines, damages or defects in electronic systems, industrial accidents, fire and seismic activity and natural disasters, and problems with equipment vendors. Should operational risks materialize, they may result in lower yield, which would negatively affect our revenue growth and profitability as projected. Additionally, they could cause personal injury to or death of workers, the loss of manufacturing equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all of which could have a material adverse effect on our business, financial condition, operating results and prospects.

We have pursued and may continue to pursue JDAs, service contracts, joint ventures and other strategic alliances, which could have an adverse impact on our business if they are unsuccessful or if we are unable to enter into new strategic alliances.

We have entered into strategic alliances and may in the future enter into additional strategic alliances. ~~For example, we previously had a JDA with GM, have entered into JDAs with Hyundai and another OEM partner, and have a service contract with Honda, which expire at~~

14While offering potential benefits, these current and future strategic alliances with battery manufacturers, OEMs, contract suppliers and others could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by our partners and costs of establishing and maintaining new strategic alliances, any of which may materially and adversely affect our business. We may have limited ability to monitor or control the actions of our partners and, to the extent any of them suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by virtue of our association with them. For example, if we rely on our partners’ manufacturing facilities, those operations would be outside of our control. We could experience delays if our partners do not meet agreed-upon timelines or experience capacity constraints, and in turn, we could lose customers and face reputational harm.

Further, there is risk of potential disputes with any partners with whom we collaborate, and we could be affected by adverse publicity related to our partners, whether or not such publicity is related to their collaboration with us. Our ability to build a premium brand successfully could also be adversely affected by perceptions about the quality of our partners’ products. In addition, because we rely on our partners and third parties to meet our quality standards, there can be no assurance that we will successfully maintain quality standards. Finally, we may not be successful in entering into new strategic alliances in the future, whether with new partners or with existing partners with whom we want to continue our relationships. Any of the foregoing could adversely affect our business, financial condition, operating results and prospects.

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~~different~~The ~~points~~battery inmarket ~~time.~~continues ~~For~~to ~~more~~evolve ~~information,~~and ~~including~~is ~~the~~highly ~~expiration dates of these agreements~~competitive, ~~see~~and ~~Note~~certain ~~4 to our consolidated financial statements. We expect to form~~ other ~~strategic~~battery ~~joint~~manufacturers ~~ventures~~have insignificantly ~~the~~greater ~~future~~resources tothan ~~support~~we our supply chain as well as the build out of manufacturing facilities aimed at the commercialization of our batteries, whether with these existing OEMs or new OEMs, which could take various forms, such as service contracts in substitution of JDAsdo.

~~While~~The ~~offering~~battery ~~potential benefits~~market, ~~these~~like ~~current~~the ~~and~~market ~~future~~for ~~strategic~~renewable ~~alliances~~energy ~~with~~that ~~battery~~it ~~manufacturers~~services, ~~OEMs~~is ~~and~~fast-growing, ~~others~~extremely ~~could~~competitive ~~subject~~and usdriven toby athe ~~number~~innovation of ~~risks,~~both ~~including~~large ~~risks~~incumbents ~~associated~~and ~~with~~emerging ~~sharing~~entrants ~~proprietary~~like SES. For more information, ~~non-performance~~see by“Part ~~our~~I, ~~partners~~Item ~~and~~1. ~~costs~~Business—Competition.” ofLi-ion ~~establishing~~battery technology has been widely adopted and ~~maintaining~~our ~~new~~current ~~strategic~~competitors ~~alliances~~have, ~~any~~and offuture ~~which~~competitors may ~~materially~~have, ~~and~~greater ~~adversely~~resources ~~affect~~than ~~our~~we ~~business.~~do Weand may ~~have~~also ~~limited~~be ~~ability~~able to ~~monitor~~devote orgreater ~~control~~resources to the ~~actions~~development of ~~our~~their ~~partners~~current and, tofuture ~~the~~technologies. ~~extent~~These ~~any~~competitors ofalso ~~them~~may ~~suffers~~have ~~negative~~greater ~~publicity~~access ~~or harm~~ to ~~their~~customers ~~reputation~~and ~~from~~may ~~events~~be ~~relating~~able to ~~their~~establish ~~business,~~cooperative weor ~~may~~strategic ~~also~~relationships ~~suffer~~amongst ~~negative~~themselves ~~publicity~~ or ~~harm~~with tothird ~~our~~parties ~~reputation~~that bymay ~~virtue~~further ofenhance ~~our~~their ~~association~~resources ~~with~~and ~~them~~competitive positioning. ~~For~~In ~~example~~addition, ifLi-ion webattery ~~rely~~manufacturers onmay ~~our~~continue ~~partners’~~to ~~manufacturing~~reduce ~~facilities,~~cost ~~those~~and ~~operations~~expand ~~would~~supply ~~be outside~~ of ~~our~~conventional ~~control.~~batteries Weand ~~could~~therefore ~~experience~~reduce ~~delays~~the ifprospects for our ~~partners~~business door ~~not~~negatively ~~meet~~impact ~~agreed-upon~~our ~~timelines~~ability orto ~~experience~~sell ~~capacity~~our ~~constraints,~~products ~~and~~at ina ~~turn,~~market-competitive weprice ~~could lose customers~~ and ~~face~~yet ~~reputational~~with ~~harm~~sufficient margins.

~~Further,~~A ~~there~~number isof ~~risk~~development-stage ofcompanies ~~potential~~are ~~disputes~~also ~~with~~seeking ~~any~~to ~~partners~~develop ~~with~~new ~~whom~~technologies wefor ~~collaborate,~~batteries. ~~and~~Potential wenew ~~could~~entrants beare ~~affected~~seeking byto ~~adverse~~develop ~~publicity~~new ~~related~~technologies tofor ~~our~~cathodes, ~~partners~~anodes, ~~whether~~electrolytes orand ~~not~~additives. ~~such~~Some ~~publicity~~of isthese ~~related~~companies tohave ~~their~~established ~~collaboration~~relationships with usOEMs and are in varying stages of development. ~~Our~~Additionally, ~~ability~~many toOEMs ~~build~~are aresearching ~~premium~~and ~~brand~~investing ~~successfully~~in ~~could~~conventional ~~also~~Li-ion bebatteries ~~adversely~~and/or ~~affected~~Li-Metal bybattery ~~perceptions~~efforts ~~about~~and, ~~the~~in ~~quality~~some ofcases, ~~our~~in ~~partners’~~battery ~~products.~~development Inand ~~addition~~production. Furthermore, ~~because~~other wecompanies ~~rely~~are ondeveloping ~~our~~alternative ~~partners~~technologies ~~and~~such ~~third~~as ~~parties~~advanced todiesel, ~~meet~~ethanol, ~~our~~fuel ~~quality~~cells ~~standards~~or compressed natural gas, ~~there~~as ~~can~~well beas nopotential ~~assurance~~improvements ~~that~~in wethe ~~will~~fuel ~~successfully~~economy ~~maintain~~of ~~quality~~the ~~standards~~internal combustion engine. ~~Finally,~~We weexpect ~~may~~competition ~~not~~in bebattery ~~successful~~technology into ~~signing~~intensify ~~into~~due ~~new~~to ~~JDAs,~~increased ~~service~~demand ~~contracts~~for orhigh ~~other~~energy ~~strategic~~density ~~alliances~~batteries. Developments in alternative technologies or improvements in battery technology made by competitors may materially adversely affect the ~~future~~sales, ~~whether~~pricing ~~with~~and ~~new~~gross ~~OEM~~margins ~~partners~~of our batteries. If a competing technology is developed that has superior operational or ~~with~~price ~~existing~~performance, ~~OEM~~our ~~partners~~business ~~with~~will ~~whom~~be harmed. Similarly, if we ~~want~~fail to ~~continue~~accurately predict and ensure that our ~~relationships.~~battery ~~Any~~technology ofcan ~~the~~address ~~foregoing~~customers’ ~~could~~changing ~~adversely~~needs ~~affect~~or ~~our~~emerging ~~business~~technological trends, ~~financial~~or ~~condition~~if our customers fail to achieve the benefits expected from our batteries, ~~operating~~our ~~results~~business ~~and~~will ~~prospects~~be harmed.

~~The~~We EVmay ~~battery~~not ~~market~~be ~~continues~~able to ~~evolve~~estimate accurately the future supply and isdemand ~~highly~~for ~~competitive~~our batteries, or battery materials, which could result in a variety of inefficiencies in our business and ~~certain~~hinder ~~other~~our ~~battery~~ability ~~manufacturers~~to ~~have~~generate ~~significantly~~revenue. ~~greater~~If ~~resources~~we ~~than~~fail to predict accurately our manufacturing requirements, we docould incur additional costs or experience delays.

~~The~~It EVis ~~battery~~difficult ~~market,~~to ~~like~~predict ~~the~~our EVfuture ~~market~~revenues itand ~~services,~~appropriately isbudget ~~fast-growing,~~for ~~extremely~~our ~~competitive~~expenses, and ~~driven~~we bymay ~~the~~have ~~innovation~~limited ofinsight ~~both~~into ~~large~~trends ~~incumbents~~that ~~and~~may ~~emerging~~emerge ~~entrants~~and ~~like~~affect ~~SES~~our business. ~~For~~We ~~more~~anticipate ~~information,~~being ~~see~~required ~~“Part~~to I,provide ~~Item~~forecasts 1.of ~~Business—Competition.”~~our ~~Li-ion~~demand ~~battery~~to ~~technology~~our ~~has~~current ~~been~~and ~~widely~~future ~~adopted~~suppliers ~~and~~prior ~~our~~to ~~current~~the ~~competitors~~scheduled ~~have,~~delivery ~~and~~of ~~future~~products ~~competitors~~to potential customers. If we overestimate our requirements, our suppliers may have excess inventory, ~~greater~~which ~~resources~~may ~~than~~increase our costs. If we dounderestimate ~~and~~our ~~may~~requirements, ~~also~~our besuppliers ~~able~~may tohave ~~devote~~inadequate ~~greater~~inventory, ~~resources~~which tocould ~~the~~interrupt ~~development~~manufacturing of ~~their~~our ~~current~~products and ~~future~~result ~~technologies.~~in ~~These~~delays ~~competitors~~in ~~also~~shipments ~~may~~and ~~have~~product ~~greater~~revenue ~~access~~or topotential ~~customers~~liability ~~and~~for ~~may~~late bedelivery. ~~able~~In toaddition, ~~establish~~lead ~~cooperative~~times orfor ~~strategic~~raw ~~relationships~~materials, ~~amongst~~components ~~themselves~~and ormanufacturing ~~with~~equipment ~~third~~may ~~parties~~vary ~~that~~significantly ~~may~~and ~~further~~depend ~~enhance~~on ~~their~~factors ~~resources~~such as the specific supplier, contract terms and ~~competitive~~demand ~~positioning.~~for Ineach ~~addition~~raw material, ~~Li-ion~~component ~~battery~~or ~~manufacturers~~manufacturing ~~may~~equipment ~~continue~~at toa ~~reduce~~given ~~cost~~time. ~~and~~Any ~~expand~~of ~~supply~~the offoregoing ~~conventional~~could ~~batteries~~result ~~and~~in ~~therefore~~delays ~~reduce~~in the ~~prospects~~delivery ~~for~~of ~~our~~batteries ~~business~~ or ~~negatively~~battery ~~impact~~materials to our ~~ability~~potential tocustomers, ~~sell~~which would harm our ~~products~~business, atfinancial acondition, ~~market-competitive~~operating ~~price~~results and ~~yet with sufficient margins~~prospects.

A number of development-stage companies are also seeking to develop new technologies for Li-Metal batteries. Potential new entrants are seeking to develop new technologies for cathodes, anodes, electrolytes and additives. Some of these companies have established relationships with OEMs and are in varying stages of development. Additionally, many OEMs are researching and investing in conventional Li-ion batteries and/or Li-Metal battery efforts and, in some cases, in battery development and production. Furthermore, other companies are developing alternative technologies such as advanced diesel, ethanol, fuel cells or compressed natural gas, as well as potential improvements in the fuel economy of the internal combustion engine. We expect competition in battery technology and EVs to intensify due to increased demand for these vehicles and a regulatory push for EVs, continuing globalization, and consolidation in the worldwide automotive industry. Developments in alternative technologies or improvements in battery technology made by competitors may materially adversely affect the sales, pricing and gross margins of our batteries. If a competing technology is developed that has superior operational or price performance, our business will be harmed. Similarly, if we fail to accurately predict and ensure that our battery technology can address customers’ changing needs or emerging technological trends, or if our customers fail to achieve the benefits expected from our Li-Metal batteries, our business will be harmed.

It is difficult to predict our future revenues and appropriately budget for our expenses, and we may have limited insight into trends that may emerge and affect our business. We anticipate being required to provide forecasts of our demand to our current and future suppliers prior to the scheduled delivery of products to potential customers. Currently, there is no historical basis for making judgments on the demand for our batteries or our ability to develop, manufacture, and deliver batteries, or our profitability in the future. If we overestimate our

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requirements, our suppliers may have excess inventory, which may increase our costs. If we underestimate our requirements, our suppliers may have inadequate inventory, which could interrupt manufacturing of our products and result in delays in shipments and product revenue or potential liability for late delivery. In addition, lead times for raw materials, components and manufacturing equipment may vary significantly and depend on factors such as the specific supplier, contract terms and demand for each raw material, component or manufacturing equipment at a given time. Any of the foregoing could result in delays in the delivery of batteries to our potential customers, which would harm our business, financial condition, operating results and prospects.

Due to the high energy density inherent in lithium-based batteries, our batteries can pose certain safety risks, including the risk of fire. Our state-of-the-art software is designed to accurately monitor and predict most safety incidents. Nevertheless, accidents causing death or personal injury, or property damage can occur, and no high energy density battery will ever be 100% safe. For example, with repeated charge and discharge cycles, Li-Metal anodes are known to develop needle-like mossy structures known as dendrites, which can penetrate the separator and short-circuit the battery cell. Although we incorporate safety procedures in the research, development, manufacture and transportation of batteries that are designed to minimize safety risks - for example, our Li-Metal battery technology is designed to change the morphology of dendrite formation - the manufacture or use of our products may still cause accidents. Any accident, whether occurring at the manufacturing facilities or from the use of our products, may result in significant production interruption, delays or claims for substantial damages caused by personal injuries or property damage.

Product liability claims, even those without merit or those that do not involve our products, could harm our business, financial condition, operating results and prospects. The automobile industry in particular experiences significant product liability claims, and we face inherent risk of exposure to claims in the event that our battery products do not perform or are claimed not to have performed as expected. As is true for other commercial vehicle suppliers, we expect in the future that our battery products will be installed on vehicles that will be involved ~~in crashes resulting in death or personal injury. Additionally, product liability claims that affect our competitors may cause indirect adverse publicity for us and our products.~~

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in crashes resulting in death or personal injury. Additionally, product liability claims that affect our competitors may cause indirect adverse publicity for us and our products.

A successful product liability claim against us could require us to pay a substantial monetary award. We may not be able to cover any substantial monetary judgment against us. Moreover, a product liability claim against us or our competitors could generate substantial negative publicity about our products and business and could have a material adverse effect on our brand, business, prospects, financial condition and operating results.

We may not be able to develop and commercialize newly discovered materials.

We believe that we can manufacture and supply enhanced materials discovered through Molecular Universe to gain market share in the large addressable market for advanced battery materials. To date, we have discovered six novel electrolyte materials across multiple applications through our Molecular Universe platform that are being tested with over 40 customers. Accordingly, our business depends, in part, on our ability to successfully discover, develop, manufacture and commercialize novel materials for use in the battery industry, and our efforts may not result in commercially viable products.

The discovery and development of novel materials is inherently uncertain, time-consuming and capital intensive. Materials that demonstrate promising performance in modeling or laboratory testing may fail to achieve required performance, safety, durability, cost or manufacturability standards under real-world conditions. Our novel materials currently undergoing customer validation and qualification testing may not meet customer specifications or may not be adopted at all.

In addition, scaling production from laboratory or pilot processes to commercial-scale manufacturing presents significant technical and operational risks, including yield, quality control and cost challenges. Commercial adoption of new materials typically involves lengthy qualification cycles, and competing technologies or materials may reduce demand for our products. If we are unable to successfully develop, scale and commercialize our materials on a timely and cost-effective basis, our business and results of operations could be materially adversely affected.

We may incur significant costs based on the warranties we may supply in our products and services.

Battery manufacturers are expected to give warranties that are reflective of the warranties given by manufacturers to users of the end product (e.g., from an OEM to a buyer of a vehicle). With respect to our battery products, we expect to offer warranties against any defects due to product malfunction or workmanship. We expect to provide a reserve for these potential warranty expenses, which is based on an analysis of historical warranty issues. There will be no assurance that future warranty claims will be consistent with past history, and in the event we experience a significant increase in warranty claims, there is no assurance that our reserves will be sufficient. This could have a material adverse effect on our business, financial condition and operating results.

Our business depends substantially on the continuing efforts of our senior executives and other key personnel as well as the ability to attract, train and retain highly skilled employees and key personnel.

Our success depends on our ability to attract and retain our executive officers, key employees and other qualified personnel, and our operations may be severely disrupted if we lost their services. As we build our brand and become better known, there is increased risk that competitors or other companies will seek to hire our personnel. All of our executives and engineering staff are subject to non-competition agreements, but we may face challenges in enforcing these non-competition agreements~~, and such agreements may become illegal if the Federal Trade Commission’s Non-Compete Clause Rule is found enforceable following the conclusion of pending litigation~~. The failure to attract, integrate, train, motivate and retain these personnel could seriously harm our business and prospects.

To execute our business plan, we must attract and retain highly qualified personnel in research and development, artificial intelligence and machine learning, sales and marketing, production and other leadership roles. Competition for these employees is intense, and we may not be successful in attracting and retaining qualified personnel. We have from time to time in the past experienced, and we expect to continue to experience, difficulty in hiring and retaining highly skilled employees with appropriate qualifications in relevant industries. Many of the companies with which we compete for experienced personnel have greater resources than we have. In addition, in making employment decisions, particularly in high-technology industries, job candidates often consider the value of the equity they are to receive in connection with their employment. Employees may be more likely to leave us if the shares they own or the shares underlying their equity incentive awards have significantly appreciated or significantly reduced in value. A significant talent pool consists of nationals from countries that may require a license from the United States Bureau of Industry and Security to work with our technology, which raises the cost of hiring

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companies with which we compete for experienced personnel have greater resources than we have. In addition, in making employment decisions, particularly in high-technology industries, job candidates often consider the value of the equity they are to receive in connection with their employment. Employees may be more likely to leave us if the shares they own or the shares underlying their equity incentive awards have significantly appreciated or significantly reduced in value. A significant talent pool consists of nationals from countries that may require a license from the United States Bureau of Industry and Security to work with our technology, which raises the cost of hiring due to the uncertainty that a license may not be granted and the candidate would be unemployable in the role envisioned. If we fail to attract new personnel, or fail to retain and motivate our current personnel, our business and growth prospects could be harmed.

In addition, we are highly dependent on the services of Dr. Qichao Hu, our Founder and Chief Executive Officer, and other senior technical and management personnel, including our executive officers, who may take significant amounts of time to replace. If Dr. Hu or other key personnel were to depart, we may not be able to successfully attract and retain senior leadership necessary to grow our business.

If we do not maintain and continue to develop our corporate culture as we grow and evolve, it could also harm our ability to foster the innovation, creativity and teamwork we believe that we need to support our growth. Additions of executive-level management, significant numbers of new employees, our workforce reduction and higher employee turnover could significantly and adversely impact our culture.

Our insurance coverage may not be adequate to protect us from all business risks.

We may be subject, in the ordinary course of business, to losses resulting from product liability, cyber-attacks, accidents, acts of God, and other claims against us, for which we may have no insurance coverage. As a general matter, the policies that we do have may include significant deductibles or self-insured retentions, and we cannot be certain that our insurance coverage will be sufficient to cover all future losses or claims against us. A loss that is uninsured or which exceeds policy limits may require us to pay substantial amounts, which could adversely affect our financial condition and operating results.

Risks Relating to the EV Industry

Our future growth and success depend on the willingness of vehicle operators and consumers to adopt EVs.

Our growth is highly dependent upon the adoption of EVs by commercial vehicle and specialty vehicle operators and consumers. If the markets for EVs do not develop as we expect or develop more slowly than we expect, our business, prospects, financial condition and operating results will be harmed, because demand for our products and services will not increase as expected or may even be reduced. The market for alternative fuel vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, price competition, numerous competitors, evolving government regulation and industry standards, frequent new vehicle announcements and changing consumer demands and behaviors.

Other factors may influence the adoption of EVs, including, but not limited to:

● perceptions about EV quality, design and performance, especially if adverse events or accidents occur that are linked to the quality or safety of EVs;

● volatility in sales of EVs;

● the costs of purchasing and maintaining EVs;

● perceptions about vehicle safety in general, namely, safety issues that may be attributed to the use of advanced technology, including vehicle electronics;

● negative perceptions of EVs, such as that they are more expensive than nonelectric vehicles and are only affordable with government subsidies or that they have failed to meet customer expectations;

● the limited range over which EVs may be driven on a single battery charge and the effects of weather on this range;

● the decline of an EV’s range resulting from deterioration over time in the battery’s ability to hold a charge;

● concerns about electric charging infrastructure availability and reliability, which could derail past and present efforts to promote EVs as a practical solution to vehicles which require gasoline;

● concerns about charging station standardizations, convenience and cost influencing consumers’ perceptions regarding the convenience of EV charging stations;

● concerns of potential customers about the susceptibility of battery packs to damage from improper charging, as well as the lifespan of battery packs and the cost of their replacement;

● concerns regarding comprehensive vehicular insurance coverage related to EVs;

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● developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, which could adversely affect sales of EVs;

● the environmental consciousness of consumers;

● the availability and volatility in the cost of natural gas, diesel, coal, oil, gasoline and other fuels relative to electricity;

● the availability of tax and other governmental incentives to purchase and operate EVs or future regulation requiring increased use of nonpolluting vehicles (for more information, see “—The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to us, end-users or OEMs could have a material adverse effect on our business, financial condition, operating results and prospects”);

● concerns regarding the value and costs for upkeep of EVs in the used car market;

● the availability of enough skilled labor in after-sale maintenance and repair services of EVs; and

● macroeconomic factors.

Any of these factors could impair the development of the EV market, lowering demand. In anticipation of an expected increase in the demand for EVs in the next few years, we plan to develop, test, manufacture and commercialize our Li-Metal battery technology. However, the markets we expect to target, primarily those in North America, Europe and Asia, may not achieve the level of growth we expect. If any market fails to achieve our expected level of growth, we may have excess manufacturing capacity and may not be able to generate enough revenue to achieve or sustain our profitability.

The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to us, end-users or OEMs could have a material adverse effect on our business, financial condition, operating results and prospects.

InWe ~~2019,~~rely in ~~connection~~part ~~with~~on ~~our~~governmental ~~establishment~~and ofeconomic ~~our~~incentives ~~Shanghai~~available ~~facility,~~to the ~~first~~EV ~~two~~battery ~~years of rent on the facility totaling approximately RMB7~~developers.1 ~~million~~Government ~~was~~incentives ~~borne~~and bysubsidies ~~the~~are ~~Jiading~~granted ~~district~~in ~~local~~connection with government’s ~~which~~efforts ~~also took on certain renovations~~ to ~~the~~promote ~~facility at~~ the ~~cost~~development of ~~approximately~~the ~~RMB~~local ~~4.3~~economy ~~million~~and ~~such~~other ~~that it is suitable for our use~~policies. InFor ~~2020~~instance, we ~~received~~have anhistorically ~~incentive~~received ~~award~~rent ofsubsidies ~~RMB10,000~~and ~~under~~incentive ~~the~~awards ~~Jiading Industrial Zone Development Potential Award~~ from ~~the Jiading district~~ local ~~government.~~governmental Inauthorities ~~2022,~~for weour ~~also~~operations ~~received~~in anShanghai ~~incentive~~and ~~award from certain South Korean government agencies~~Seoul. We intend to apply for further grants in the future in the jurisdictions in which we operate. ~~Government incentives and subsidies are granted in connection with government’s efforts to promote the development of the local economy and other policies.~~ Some local government incentives and subsidies may be challenged by higher-level government authorities. Therefore, government incentives and subsidies may be modified, terminated or subject to clawback at the sole discretion of the relevant governmental authorities. Additionally, because laws, regulations and policies with respect to incentives and subsidies may change, we cannot be sure that government incentives and subsidies will continue to be available. In the event that we cease to receive any government incentives or subsidies, any current or future incentive or subsidy is reduced, or any of our current or future incentives or subsidies are challenged, our business, financial condition and operating results may be adversely affected. ~~See Note 10 “Government Grant” of the Notes to the Financial Statements for discussion of our accounting for government incentives.~~

Additionally, we believe that, currently, the availability of government incentives and subsidies available to end-users and OEMs is an important factor considered by customers when purchasing EVs, and that growth in the battery market will depend in part on the availability and amounts of these subsidies and incentives for EVs. Currently, government programs, including in China and Europe, favor the purchase of EVs, including through disincentives that discourage the use of gasoline-powered vehicles. In the United States, the ~~Inflation Reduction Act of 2022 (the “IRA”) provides tax credits for the purchase of electric vehicles, and the~~ states of California, Connecticut, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington have recently banned the sale of new gas-powered vehicles by 2035, and other states may follow. ~~Given the current political climate in the United States~~However, ~~the~~changes ~~future~~to ofsuch ~~these~~government ~~incentives~~programs and ~~subsidies~~plans ~~for end-users and OEMs remains uncertain, including with respect~~ to ~~federal~~ban ~~programs. Since taking office, President Trump has taken actions to revoke~~ the ~~prior~~sale ~~presidential administration’s non-binding target that 50%~~ of new vehicles sold in the U.S. be battery powered by 2030 and to halt the disbursement of certain federal funds to the states for the building of EV charging infrastructure. The president and certain Republican members of Congress have also criticized the IRA and clean energy initiatives, and the president has stated that he supports revising current federal agency rules that incentivize the EV market and ending state emissions waivers that limit gas-powered ~~vehicle~~vehicles sales. Currently, the IRA and its tax credits remain in place and would require an act of Congress to be repealed, and any changes to federal agency rules would require administrative action. In addition, the enforceability of the federal government’s halt on the disbursement of funds to the states or any future actions to end or discourage state incentives or subsidies is extremely unclear. However, if such government laws or programs incentivizing the growth of the EV market are reduced or eliminated, or the available benefits thereunder are exhausted earlier than anticipated, demand for EVs may decrease and our anticipated sales of EV battery products could behave ~~adversely affected. In addition, OEM customers may delay taking delivery of our battery products if they believe that certain EV incentives will be available at~~ a ~~later~~material ~~date,~~adverse ~~which~~effect ~~may~~on ~~adversely affect~~ our business, financial condition, operating results and prospects. ~~Any further~~

18At the federal level in the United States, while the Inflation Reduction Act of 2022 (IRA) provided tax credits for the purchase of electric vehicles and electric vehicle charging infrastructure, the OBBBA (One Big Beautiful Bill Act), enacted in July 2025, has now terminated these credits, which were phased out on September 30, 2025 with respect to electric vehicle purchased after such date and will be on June 30, 2026 with respect to electric vehicle charging infrastructure placed in service after such date. These changes may reduce demand for EVs, adversely affecting our anticipated sales of EV battery products.

~~Table~~In addition, OEM customers may delay taking delivery of ~~Contents~~our battery products if they believe that certain EV incentives will be available at a later date, which may adversely affect our business, financial condition, operating results and prospects. Any further reduction or elimination of government and economic incentives or subsidies may result in the diminished competitiveness of the alternative fuel vehicle industry generally or EVs that use our batteries in particular.

reduction or elimination of government and economic incentives or subsidies may result in the diminished competitiveness of the alternative fuel vehicle industry generally or EVs that use our batteries in particular.

Developments in alternative technology or other fossil fuel alternatives may adversely affect the demand for our battery products.

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Significant developments in alternative technologies, such as fuel cell technology, advanced diesel, ethanol or natural gas, or breathing batteries, may materially and adversely affect our business, financial condition, operating results and prospects in ways that we may not currently anticipate. Existing and other battery technologies, fuels or sources of energy may emerge as customers’ preferred alternatives to our battery products. Any failure by us to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay our development and introduction of new and enhanced alternative products, which could result in decreased revenue and a loss of market share to our competitors.

Our research and development efforts may not be sufficient to adapt to changes in alternative fuel and EV technology. As technologies evolve, we plan to upgrade or adapt our energy solutions with the latest technology, in particular lighter weight modules and packs, advanced cooling methods, more sophisticated safety management software, more efficient manufacturing process, and advanced battery chemistry, which may also negatively impact the adoption of our other products. However, we may not compete effectively with alternative systems if we are not able to develop, source and integrate the latest technology into our battery products.

If ~~the EVs in which~~ our batteries are installed in EVs that do not meet certain motor vehicle standards, our business, operating results and prospects could be adversely affected.

Our products ~~are~~may ~~expected to~~ be used as components in EVs. All vehicles sold must comply with applicable international, federal, and state motor vehicle safety standards, which vary by national and other jurisdictions. In the United States, vehicles that meet or exceed all federally mandated safety standards are certified under the federal regulations. Rigorous testing and the use of approved materials and equipment are among the requirements for achieving federal certification. ~~Failure~~If byany ~~our eventual~~ EV manufacturing ~~customers~~customer that uses our products fails to satisfy motor vehicle standards, it could have a material adverse effect on our business and operating results.

Moreover, we may incur our own significant costs in complying with these regulations. ~~Laws~~Compliance ~~and regulations related to the EV industry and alternative energy are currently evolving and we face risks associated~~ with ~~changes~~changing ~~to these~~ laws and regulations. ~~For~~could ~~more~~be ~~information~~burdensome, ~~see~~time ~~“—The~~consuming ~~unavailability,~~and ~~reduction~~expensive. orTo ~~elimination~~the ~~of,~~extent orcompliance ~~uncertainty~~with ~~regarding,~~new ~~government~~laws and ~~economic~~regulations ~~incentives~~is orcost ~~subsidies available to us~~prohibitive, ~~end-users or OEMs could have a material adverse effect on~~ our business, financial condition, operating results and prospects would be adversely affected.”

To the extent laws and regulations become more stringent or otherwise change, our products or the vehicles into which they are incorporated may not comply with applicable international, federal, state or local laws, which would have an adverse effect on our business. Compliance with changing laws and regulations could be burdensome, time consuming and expensive. To the extent compliance with new laws and regulations is cost prohibitive, our business, financial condition, operating results and prospects would be adversely affected.

Internationally, there may be laws and regulations in jurisdictions we have not yet entered or laws of which we are unaware in jurisdictions we have entered that may restrict our sales or other business practices. Even for those jurisdictions we have analyzed, the laws and regulations in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with our or our eventual customers’ ability to sell products could have a negative and material impact on our business, financial condition, operating results and prospects.

Our ability to successfully market our products will depend on the establishment of charging station networks meeting the needs of EVs using our products. If any of the charging station networks are not compatible with such products and technologies, our sales could be adversely affected.

We design, develop, and manufacture electric power batteries for EVs. However, we do not manufacture chargers or charging poles that are necessary for using our products. In addition, we will rely on third parties, such as city governments, utility providers and private investors, to build charging stations for EVs using our products. If no charging station networks are built in markets in which OEMs using our products target their EVs, there would be little demand for electric battery products in those areas.

Further, existing charging station networks have not been established under a uniform standard and it could diminish our sales if any of the networks are not compatible with EVs using our products and technologies. In order for our fast-charging batteries to become widely adopted in electric passenger cars, a critical mass of compatible fast-charging stations must be installed and in operation in any given urban

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area where our OEM customers plan to enter. Establishing a network of fast-charging stations requires significant capital investment and government approvals. It also requires government regulators to believe that the merits of fast-charging stations support the costs of such construction. For more information regarding this government regulation, see “—The unavailability, reduction or elimination of, or uncertainty regarding, government and economic incentives or subsidies available to us, end-users or OEMs could have a material adverse effect on our business, financial condition, operating results and prospects.” If a sufficient number of charging stations that accommodate EVs using our products and technologies cannot be built up and be functional in a timely manner, it will be difficult for us to retain our existing customers and to attract new customers. As a result, our business, financial condition, operating results and prospects may be materially and adversely affected.

If emerging standards in charging station networks are not compatible with our current products or in development products and technologies, we may miss market opportunities and our financial performance will suffer. If other EV battery companies’ products and services, including industry-standard technologies or other new standards, emerge or become dominant in any of these areas, or differing standards emerge in global markets, demand for our technology and products could diminish. As standards emerge, such as those in China including specifications for hardware, connecting equipment and service networks, and standards for communication and inspection, compatibility of prior fast-charging stations could be made obsolete.

Risks Relating to Artificial Intelligence

The use of AI in our products and services may result in reputational harm and competitive harm.

We use artificial intelligence and machine learning in our business, including using artificial intelligence in our battery management systems to monitor the state of health of the battery and using machine learning to assist in developing new molecules and synthesis techniques to improve battery performance through our Molecular Universe platform. We also incorporate artificial intelligence solutions in our workflows and these applications may become increasingly important to our operations over time. As with many technological innovations, there are significant risks and challenges involved in maintaining and deploying these technologies. Artificial intelligence algorithms or training methodologies may be flawed. Datasets may be overbroad or insufficient and information generated by artificial intelligence may be illegal or harmful. There may also be insufficient back-testing. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be inaccurate, deficient, or biased, our business, financial condition and results of operations may be adversely affected. The rapid evolution and increased adoption of AI technologies may also intensify our cybersecurity risks. For more information, see “Risks Relating to Privacy and Security—If we experience a significant cybersecurity breach or disruption in our information systems or any of our partners’ information systems, our business could be adversely affected.” Overall, there can be no assurance that the usage of such technologies will enhance our products or services or be beneficial to our business, including our efficiency or profitability.

Our use of artificial intelligence and machine learning may result in legal and regulatory risks.

Artificial intelligence entails significant legal risks. The IP ownership and license rights of new technologies such as artificial intelligence and machine learning have not been fully addressed by U.S. courts, and there is uncertainty and ongoing litigation in different jurisdictions as to the degree and extent of protection warranted for artificial intelligence technologies and relevant system input and outputs. If we fail to obtain protection for the intellectual property rights concerning technologies developed using artificial intelligence or machine learning, or later have our intellectual property rights invalidated or otherwise diminished, our competitors may be able to take advantage of our research and development efforts to develop competing products, which could adversely affect our business, reputation, financial condition, or results of operations. Moreover, the use or adoption of artificial intelligence and machine learning in our technology may expose us to breach of a data or software license, website terms of service claims, claimed violations of privacy rights or other tort claims.

The regulatory landscape surrounding artificial intelligence is also evolving, and the use of machine learning technologies may become subject to regulation under new laws or new applications of existing laws. In the U.S., there is increasing uncertainty as to the federal government’s future approach to AI regulation, including as to the continued applicability of the 2023 executive order of the prior U.S. presidential administration to, among other things, establish extensive new standards for AI safety and security. In January 2025, President Trump signed an executive order revoking this 2023 executive order and directing the heads of various federal governmental bodies to review actions taken under that executive order and develop a new action plan with respect to AI-related matters. Additionally, other jurisdictions may decide to adopt similar or more restrictive legislation that may render the use of such technologies challenging. For example, the EU AI Act (which could become applicable to us depending on the global expansion of our business) came into force on August 1, 2024, and will generally become fully applicable after a two-year transitional period. The EU AI Act introduces various requirements for AI systems and models placed on the market or put into service in the EU, including specific transparency and other requirements for general purpose AI systems and the models on which those systems are based. Several U.S. states are considering enacting or have already enacted regulations concerning the use of AI technologies, including those focused on consumer protection, and depending on the scope of AI regulation at the federal level, some states may move to regulate AI model development and deployment. Further, at both the U.S. federal and state level, there have been various proposals (and in some cases laws enacted) addressing “deepfakes” and other AI-generated synthetic media. These current or future restrictions may make it harder for us to conduct our business using artificial 16

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The market for our AI~~-based~~ for Science services such as Molecular Universe is still emerging, and our AIMolecular Universe programs may not achieve the growth potential we expect.

We are seeking to accelerate our pace of innovation by utilizing AI across the spectrum of our business, from engineering and manufacturing; to battery health and safety monitoring. ~~Our~~through AIour ~~programs~~Molecular ~~fall~~Universe ~~under three major categories, namely, AI for Safety, AI for Manufacturing and AI for Science~~platform. AI and the application of AI to battery development is a new and emerging field, characterized by rapidly changing technology and evolving government regulations and industry standards and presents additional risks, costs, and challenges, including those discussed in these risk factors. Our ability to derive revenue from ~~providing~~Molecular ~~AI-based~~Universe ~~services~~ will depend on the growth and acceptance of these AI-based programs generally, and our ability to successfully develop and train AI models for use in these programs. In addition, developing AI-based models requires significant computing power, which can require significant capital expenditures and may be difficult to procure. The implementation of AI can be costly and there is no guarantee that our use of AI will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.

Risks Relating to the ESS Industry

The economic benefit of our ESS products to our customers includes, among other things, the benefit of reducing such customers’ payments to the local electric utility company or from sourcing electricity from other alternative sources. The rates at which electricity is available from a customer’s local electric utility company are subject to change and any changes in such rates may affect the relative benefits of our energy storage systems. Changes in the rates offered by local electric utilities and/or in the applicability or amounts of charges and other fees imposed by such utilities on customers acquiring our ESS products could adversely affect the demand for such products.

Additionally, the electricity stored and released by our ESS products may not currently be cost-competitive in some geographic markets, and we may be unable to reduce our costs to a level at which our ESS products would be competitive in such markets. As such, unless the cost of electricity in these markets rises or we are able to generate demand for our ESS products based on benefits other than electricity cost savings, our potential for growth in the ESS market may be limited. As a result, we may fail to realize all of the anticipated benefits of the UZ Energy acquisition and our ESS products business, or those benefits may take longer to realize than expected.

Our ESS products performance may not meet customers’ expectations or needs

Our ESS products, including those made by UZ Energy, are subject to various operating risks that may cause them not to perform as expected for our customers. These risks include a failure or wearing-out of our equipment or the equipment into which our equipment connects, an inability to find suitable replacement equipment or parts, or disruption in our distribution systems. Any extended interruption or failure to generate the expected amount of output could adversely affect our business, financial condition and results of operations. In

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addition, our ESS customers’ willingness to acquire additional systems or services from us may be impacted in the future if any of our systems incur operational issues that indicate expected future cash flows from the system are less than the carrying value. Any such outcome could adversely affect our operating results or ability to attract new customers.

We depend upon component and product manufacturing and logistical services provided by third parties, many of whom are located outside of the U.S.

A significant amount of our components in our ESS products are manufactured in whole or in part by a few third-party manufacturers. Many of these manufacturers are located outside of the U.S. If a catastrophic event occurs relative to these third-party manufacturers, or the political, social, or economic conditions shift within their respective geographies or between trade partners, we could experience business interruptions, delayed delivery of products, or other adverse impacts to our ongoing business. While these arrangements may lower operating costs, they also reduce our direct control over production and distribution. Such diminished control could have an adverse effect on the quality or quantity of our products as well as our flexibility to respond to changing conditions. In addition, we rely on third-party manufacturers to adhere to the terms and conditions of the agreements in place with each party. For example, although arrangements with such manufacturers may contain provisions for warranty expense reimbursement, we may remain responsible to the customer for warranty service in the event of product defects. Any unanticipated product or warranty liability, whether pursuant to arrangements with contract manufacturers or otherwise, could adversely affect our reputation, financial condition, and operating results. In addition, any adverse change in any of our manufacturers financial or business condition could disrupt our ability to supply quality products to our customers. If we are required to change our manufacturers, we may lose revenue, incur increased costs and damage our end-customer relationships. In addition, porting to and qualifying a new manufacturer and commencing production can be an expensive and lengthy process.

Risks Relating to Our Intellectual Property

Our key technological innovations, including innovations that are currently commercialized in our products and innovations that we plan to deploy in the future, are described in our issued patents and pending patent applications, as well as patent applications that we plan to file in the future. For more information, see “Part I, Item 1. Business—Intellectual Property.” The process of applying for and obtaining a patent is expensive, time consuming and does not always result in patent claims as expected or needed. We may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we financially may not be able to protect our proprietary rights at all. There is also no assurance that the pending applications will result in issued patents.

In addition, the issuance of a patent does not give us the right to practice the patented invention. Third parties may have blocking patents that could prevent us from marketing our products and practicing our technology. Alternatively, third parties may seek to market their products similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or agency with jurisdiction may find our patents invalid and/or unenforceable. Even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives. Under the terms of our JDAs, and as part of our sponsored research projects with universities, we may file patent applications with third parties and end up co-owning certain of our patents. Co-ownership of a patent may require us to enter into license agreements with third parties, which are less favorable than if we were the sole owner of the patent. Furthermore, if the other owners are unwilling to join us in an enforcement action, we may be unable to enforce our jointly owned patent rights against infringers. Such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. If one or more of our patents are held to be invalid or unenforceable, or if claims of those patents are interpreted narrowly, or if patents fail to issue from our pending applications, our competitiveness and value may also be undermined. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

We may not be able to prevent unauthorized use of our intellectual property, which could harm our business and competitive position. We rely upon a combination of the intellectual property protections afforded by patent, trademark and trade secret laws in the United States and ~~other jurisdictions, as well as license agreements and other contractual protections, to establish, maintain and enforce rights in our proprietary technologies.~~

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~~and through non-disclosure agreements with business partners and~~ other ~~third~~jurisdictions, ~~parties.~~as Wewell ~~cannot~~as ~~ensure~~license ~~that these~~ agreements ~~will~~and ~~provide meaningful protection for our trade secrets, know-how or~~ other ~~proprietary~~contractual ~~information in the event of any unauthorized use~~protections, ~~misappropriation,~~to ~~or disclosure of such trade secrets~~establish, ~~know-how~~maintain ~~or other proprietary information. There can be no assurance that employees, consultants, vendors~~ and ~~customers~~enforce ~~have~~rights ~~executed~~in ~~such agreements or have not breached or will not breach their agreements with us, that we will have adequate remedies for any breach, or that~~ our trade secrets will not otherwise become known or independently developed by competitors. The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our products and harm our business, the value of our investment in development or business acquisitions could be reduced and third parties might make claims against us related to losses of their confidential or proprietary ~~information~~technologies. ~~Any of the foregoing could materially and adversely affect our business.~~

We also rely substantially on unpatented proprietary technology, including know-how or trade secrets. We seek to protect our intellectual property rights in various ways, including through nondisclosure and invention assignment agreements with our employees and consultants and through non-disclosure agreements with business partners and other third parties. We cannot ensure that these agreements will provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how or other proprietary information. There can be no assurance that employees, consultants, vendors and customers have executed such agreements or have not breached or will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by competitors. The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our products and harm our business, the value of our investment in development or business acquisitions could be reduced and third parties might make claims against us related to losses of their confidential or proprietary information. Any of the foregoing could materially and adversely affect our business.

Additionally, despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property. Monitoring unauthorized use of our intellectual property is difficult and costly, and the steps we have taken or will take to prevent misappropriation may not be sufficient. Any enforcement efforts we undertake, including litigation, could be time-consuming and expensive and could divert management’s attention, which could harm our business, results of operations and financial condition. In addition, existing intellectual property laws and contractual remedies may afford less protection than needed to safeguard our intellectual property portfolio.

We may need to defend ourselves against intellectual property infringement claims, which may be time-consuming and could cause us to incur substantial costs.

Companies, organizations or individuals, including our current and future competitors, may hold or obtain patents, trademarks or other proprietary rights that would prevent, limit or interfere with our ability to make, use, develop or sell our products, which could make it more difficult for us to operate our business. From time to time, we have received, and we may in the future receive, claims or inquiries from holders of patents or trademarks claiming that and/or inquiring whether we are infringing their proprietary rights and/or seeking court declarations that they do not infringe upon our intellectual property rights. Companies holding patents or other intellectual property rights relating to batteries, electric motors or electronic power management systems may bring suits alleging infringement of such rights or otherwise asserting their rights and seeking licenses. In addition, if we are determined to have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:

●

cease selling, incorporating or using products that incorporate the challenged intellectual property;

●

pay damages;

●

obtain a license from the holder of the infringed intellectual property right, which license may not be available on reasonable terms or at all; or

●

redesign our batteries.

In the event of a successful claim of infringement against us and our failure or inability to obtain a license to the infringed technology, our business, prospects, operating results and financial condition could be materially adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs and diversion of resources and management’s attention.

We may face risks relating to protecting our intellectual property in various countries.

Patent, trademark and trade secret laws vary significantly throughout the world. Filing, prosecuting, and defending patents in all countries throughout the world would be prohibitively expensive, and the laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection or licenses, but enforcement is not as strong as that in the United States.

A number of foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Therefore, our intellectual property rights may not be as strong or as easily enforced outside of the United States, and efforts to protect against the unauthorized use of our intellectual property rights, technology, and other proprietary rights may be more expensive and difficult outside of the United States. Some courts inside and outside the United States may be less willing or unwilling to protect trade secrets and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases. Failure to adequately protect our intellectual property rights could result in our competitors using our intellectual property to offer products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which would adversely affect our business, financial condition, operating results and prospects.

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of the United States. Some courts inside and outside the United States may be less willing or unwilling to protect trade secrets and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases. Failure to adequately protect our intellectual property rights could result in our competitors using our intellectual property to offer products, potentially resulting in the loss of some of our competitive advantage and a decrease in our revenue, which would adversely affect our business, financial condition, operating results and prospects.

Risks Relating to our International Operations

The international nature of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States.

While we are incorporated as a Delaware corporation, we have significant operations outside the United States. Battery manufacturing is capital intensive, and to reduce dilution and financial burden, SES has been applying for appropriate government financial support. We currently have an operating facility in Shanghai, China, focused on supply chain development, manufacturing process development, battery cell development and production, AI software, BMS and module development, an operating facility in Shenzhen, China focused on ESS supply chain and sales to our customers, including logistics and manufacturing processes, and an operating facility in Chungju, South Korea, focused on manufacturing process development and battery cell product development. We have received financial support from the Government of South Korea to partially offset the expense of facility construction and plan to seek additional government financial support to the extent possible. Also, due to geopolitical considerations, we may be required to introduce certain commercial inefficiencies into our operations.

We are subject to, and could become further subject to, various legal, political, regulatory and social requirements and economic conditions both inside and outside the United States. Expansion into new markets requires significant resources and management’s attention, as well as significant expenditures, including for the establishment of local operating entities, hiring of local employees and establishment of facilities in advance of generating any revenue. Some of the risks associated with international operations in China, South Korea and/or other countries, such as in the development, manufacturing, marketing or sale of our products, include, but are not limited to:

● the United States has recently imposed tariffs ~~of 10%~~ on Chinese imports, which will increase costs of our product offerings across all lines of our business;

● ~~ongoing~~elevated trade tensions between the United States and China ~~have been escalating~~, and new legislation or regulations in either jurisdiction could impose additional restrictions and costs on our ability to operate in one or both jurisdictions, or even foreclose operations entirely;

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general political tension between South Korea and North Korea, including the ongoing risk of armed conflict between the two countries, which could disrupt our manufacturing operations in South Korea or foreclose our operations entirely;

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non-U.S. countries have enacted and could enact legislation or impose regulations or other restrictions, including unfavorable labor regulations or tax policies (such as Chinese regulations prohibiting our operating company from paying dividends out of accumulated distributable profits unless 10% of such profits (up to half of the company’s registered capital) are set aside annually, under Article 166 of China’s Company Law), which could have an adverse effect on our ability to conduct business in or expatriate profits from those countries;

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tax rates in certain non-U.S. countries may exceed those in the United States and non-U.S. earnings may be subject to withholding requirements or the imposition of tariffs, exchange controls, or other restrictions, including restrictions on repatriation;

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the regulatory or judicial authorities of non-U.S. countries may not enforce legal rights and recognize business procedures in a manner to which we are accustomed or would reasonably expect;

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we may have difficulty complying with a variety of laws and regulations in non-U.S. countries, some of which may conflict with laws in the United States;

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changes in political and economic conditions may lead to changes in the business environment in which we operate, as well as changes in currency exchange rates;

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in the case of China, the degree of significant government control over China’s economic growth through restrictions and limitations on foreign investment in certain industries, control over the allocation of resources, control over payment of foreign currency-denominated obligations, implementation of monetary policy, data localization and privacy requirements, technology transfer requirements, national security laws, influence over the courts and preferential treatment of particular industries or companies, could materially affect our liquidity, access to capital, intellectual property and ability to operate our business in China. If we are unable to operate our business in China, it would require us to redirect research and development efforts to facilities in other jurisdictions, which could result in additional expenditures which would negatively impact our business and results of operations;

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in the case of China, data localization requirements and restrictions on the use of foreign technology applications have already been enacted by the Chinese government, and restrictions on the use of Chinese technology and applications that have been or may be adopted in the future by the United States, may make it difficult to efficiently coordinate complex manufacturing supply chains in a global setting;

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in the case of China, new laws and regulations may require us to obtain additional permits or licenses, or complete or update registrations with regulatory authorities, and we may be unable to conduct our operations in China if we are unable to obtain required permits, licenses or registrations in a timely manner;

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restrictions or denials on visas for our personnel, may limit our ability to train and pass along proprietary information efficiently;

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differences in software usage and export controls, may make it difficult to share certain engineering documents and resources between global subsidiaries;

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changes to export controls and/or failure to obtain export licenses in the United States, China or other countries in which we do business could adversely affect our access to raw materials, ability to manufacture and ship our products or increase our costs to conduct research and development; and

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natural disasters or international conflict, including terrorist acts, could interrupt our research and development, manufacturing or commercialization or endanger our personnel.

Our ability to deal with these issues could be affected by existing or new U.S. laws and the need to protect our intellectual property and assets. The materialization of any such risks could have an adverse impact on our business, financial condition, operating results and prospects.

We could experience losses associated with our intellectual property in relation to our operations in China.

We rely upon the fair interpretation and enforcement of patent, copyright, trademark and trade secret laws in the U.S., similar laws in other countries, and agreements with employees, customers, suppliers, licensors and other parties. Such reliance serves to establish and maintain the intellectual property rights associated with the technology that we develop and ultimately sell. However, the laws and courts of certain countries at times do not protect intellectual property rights or respect contractual agreements to the same extent as the laws of the U.S. Therefore, in certain jurisdictions we may not be able to protect our intellectual property rights against counterfeiting or enforce our contractual agreements with other parties. Specifically, as discussed above, the Company conducts research and development operations in China. Article VII of the National Intelligence Law of China requires every commercial entity in China, by simple order of the Chinese government, to act as an agent of the government by committing espionage, technology theft, or whatever else the government deems to be in the national interest of China. If the Chinese government were to require the appropriation of certain of our intellectual property in the national interest, this could lead to material adverse effects on our operations and competitive positions.

Implementation of labor laws and regulations in China may adversely affect our business and results of operations.

Pursuant to the labor contract law of China that took effect in January 2008, its implementation rules that took effect in September 2008 and its amendment that took effect in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. Due to lack of detailed interpretative rules and uniform implementation practices and broad discretion of the local competent authorities, it is uncertain as to how the labor contract law and its implementation rules will affect our current employment policies and practices. Our employment policies and practices may violate the labor contract law or its implementation rules, and we may thus be subject to related penalties, fines or legal fees. Compliance with the labor contract law and its implementation rules may increase our operating expenses, in particular our personnel expenses. In the event that we decide to terminate some of our employees or otherwise change our employment or labor practices, the labor contract law and its implementation rules may also limit our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of operations.

As the interpretation and implementation of these laws and regulations are still evolving, we cannot assure you that our employment practice will at all times be deemed in full compliance with labor-related laws and regulations in China, which may subject us to labor disputes or government investigations. If we are deemed to have violated relevant labor laws and regulations, we could be required to provide additional compensation to our employees and our business, financial condition and results of operations could be adversely affected.

Further, labor disputes, work stoppages or slowdowns at our operations facilities or any of our third-party service providers could significantly disrupt daily operation or our battery development plans and have materially adverse effects on our business.

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Our incentives from various governments are conditional upon achieving or maintaining certain performance obligations and are subject to reduction, termination, or clawback.

We have received, and may in the future continue to receive, benefits and incentives from national, state, and local governments in various regions of the world designed to encourage us to establish, maintain, or increase investment, workforce, or production in those regions. These incentives may take various forms, including grants, loan subsidies, and tax arrangements, and typically require us to achieve or maintain certain levels of investment, capital spending, employment, technology deployment, or research and development activities to qualify for such incentives or could restrict us from undertaking certain activities. We may be unable to obtain significant future incentives to continue to fund a portion of our capital expenditures and operating costs, without which our cost structure would be adversely impacted. We also cannot guarantee that we will successfully achieve performance obligations required to qualify for these incentives or that the granting agencies will provide such funding. These incentive arrangements typically provide the granting agencies with rights to audit our compliance with their terms and obligations. Such audits could result in modifications to, or termination of, the applicable incentive program. The incentives we receive could be subject to reduction, termination, or clawback, and any decrease or clawback of government incentives could have a material adverse effect on our business, results of operations, or financial condition.

Risks Relating to Regulations and Our Compliance With Such Regulations

Changes in U.S. and foreign government policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on global economic conditions and our business, results of operations, prospects and financial condition.

As a result of changes to U.S. and foreign government policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, the imposition of or significant increases in tariffs on goods imported into the U.S., particularly those manufactured in China, and adverse responses by foreign governments to U.S. trade policies, among other possible changes. China is currently a leading global source of supplies for use in the battery, ESS, EV and UAM industries, including some products that we use. As the implementation of tariffs is ongoing, more tariffs may be added in the future. These tariffs could have an adverse impact on our business, results of operations, prospects and financial condition, and if we are unable to pass such price increases through to our customers, it would likely increase our cost of sales and, as a result, decrease our gross margins, operating income and net income. During fiscal 2025, new global trade tariffs were imposed on imports to the U.S., including from China, among other countries. In response, several countries imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and other measures. Various modifications and delays to the U.S. tariffs have been announced and further changes are expected to be made in the future, which may include additional sector-based tariffs or other measures. The U.S. Supreme Court also struck down certain of the U.S.-imposed tariffs in early 2026 on the basis that they were beyond the President’s authority. In addition, in October 2025, China announced new export controls over exports of certain high performance lithium-ion batteries, cathode active materials and anode active materials, which will apply to certain of our products. There can be no assurance that we will be able to obtain export licenses for affected products in a timely manner, or at all, which may affect our ability to export products subject to these export controls out of China, which could lead to a loss in sales opportunities.

In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties, and tariffs, and we can make no assurance regarding the eventual impact on our operating results and business. These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors could depress economic activity and restrict our access to suppliers or customers and, in turn, have a material adverse effect on the business and financial condition of such suppliers and customers or other counterparties we do business with, which in turn would negatively impact us.

Our operations expose us to litigation, environmental and other legal compliance risks. Compliance with laws and regulations can be expensive, and our failure to comply with these laws and regulations may result in monetary damages and fines, adverse publicity and a material adverse effect on our business.

We are subject to a variety of litigation, environmental, health and safety and other legal compliance risks. These risks include, among other things, possible liability relating to product liability matters, personal injuries, intellectual property rights, contract-related claims, health and safety liabilities, environmental matters and compliance with U.S. and foreign laws, competition laws and laws governing improper business practices.

Our operations in the United States, China, and South Korea may be subject to environmental laws and regulations, including laws and regulations relating to water, discharges, emissions, chemicals, hazardous materials, natural resources, remediation and contamination. Compliance with these laws can be difficult and costly. For example, battery life cycle management regulations and regulations governing the transport of batteries may impose substantial requirements on our operations in the United States. Our operations may be required to obtain and comply with environmental permits, many of which may be difficult and expensive to obtain and must be renewed on a periodic basis. A failure to comply with these laws, regulations or permits could result in substantial liabilities, including fines, penalties, the suspension or loss of permits, and possibly orders to cease the non-compliant operations.

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Compliance with these laws can be difficult and costly. For example, battery life cycle management regulations and regulations governing the transport of batteries may impose substantial requirements on our operations in the United States. Our operations may be required to obtain and comply with environmental permits, many of which may be difficult and expensive to obtain and must be renewed on a periodic basis. A failure to comply with these laws, regulations or permits could result in substantial liabilities, including fines, penalties, the suspension or loss of permits, and possibly orders to cease the non-compliant operations.

As a business with international reach, we are subject to complex laws and regulations in jurisdictions in which we operate. Those laws and regulations may be interpreted in different ways. They may also change from time to time, as may related interpretations and other guidance. Changes in laws or regulations could result in higher expenses and payments, and uncertainty relating to laws or regulations may also affect how we conduct our operations and structure our investments and could limit our ability to enforce our rights.

Changes in environmental and climate laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in manufacturing designs, subject us to additional costs and restrictions, including increased energy and raw materials costs, and could increase environmental compliance expenditures. We are subject to various environmental laws and regulations on air emission, waste water discharge, solid waste, noise and the disposal of hazardous materials. Cobalt and lithium are toxic materials that are important raw materials in our batteries. We also use, generate and discharge other toxic, volatile and hazardous chemicals and wastes in our research, development and manufacturing activities. Under Chinese, South Korean, and U.S. environmental regulations, we are required to maintain the pollutant emission levels at the facility within the levels prescribed by the relevant governmental authorities and obtain a pollution discharge permit for water and air emissions. In addition, certain laws and regulations require enterprises like us that generate hazardous wastes to engage companies which are licensed and qualified to process the hazardous wastes, and to collect, store, dispose of and transfer the hazardous waste.

If we fail to comply with national and local environmental protection laws and regulations, the relevant governmental authorities may impose fines or deadlines to cure instances of non-compliance and may even order us to cease operations if we fail to comply with their requirements. In particular, any breach by us in connection with requirements relating to the handling of hazardous wastes may subject us to monetary damages and fines. In addition, if any third party suffers any loss as a result of our pollutant emission practices, our improper handling of hazardous wastes or our noncompliance with environmental regulations, such third parties may seek damages from us.

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There can be no assurance that we will be able to comply with all environmental laws and regulations at all times as the environmental legal regime is evolving and becoming more stringent, especially in China, South Korea, and the United States. Therefore, if these or other governments where we do business impose more stringent regulations in the future, we will have to incur additional substantial costs and expenses in order to comply with new regulations, which may negatively affect our results of operations. If we fail to comply with any of the present or future environmental regulations in any material aspect or cause any loss to any third parties due to our pollutant emission practices, improper handling of hazardous wastes or other environmental noncompliance, we may suffer from negative publicity and may be required to pay substantial fines, pay damages to such third parties, or suspend or even cease operations Failure to comply with environmental laws and regulations may materially and adversely affect our business, financial condition, operating results and prospects.

Failure to comply with certain health and production safety laws and regulations governing hazardous materials could materially adversely affect our business and results of operations.

In the sourcing of our products throughout the world, we process, store, dispose of and otherwise use large amounts of hazardous materials. As a result, we are subject to extensive and evolving health and production safety laws and regulations governing, among other things: the health of our employees and safety production requirements regarding the generation, handling, storage, use and transportation of hazardous materials. Compliance with these laws and regulations results in ongoing costs. Failure to comply with these laws or regulations, or to obtain or comply with the relevant permits, could result in fines, criminal charges or other sanctions by regulators. Furthermore, we may be ordered to rectify a non-compliance within a stipulated deadline; and if we fail to do so, we may be ordered to cease operations. Our ongoing compliance with health and safety laws, regulations and permits could require us to incur significant expenses, limit our ability to modify or expand our facilities or continue manufacturing and make other capital improvements. In addition, private parties, including current or former employees, could bring personal injury or other claims against us due to the presence of, or exposure to, hazardous substances used, stored or disposed of by us or contained in our products.

We are subject to U.S. and foreign anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations. We can face criminal liability and other serious consequences for violations, which can harm our business.

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We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws and regulations in various jurisdictions in which we conduct or in the future may conduct activities, including the U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act 2010, and other anti-corruption laws and regulations in countries in which we conduct activities. Anti-corruption laws prohibit us and our officers, directors, employees, contractors and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing, directly or indirectly, anything of value to a “foreign official” for the purposes of influencing official decisions or obtaining or retaining business or otherwise obtaining favorable treatment. These laws also require companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. These laws also prohibit non-governmental “commercial” bribery and soliciting or accepting bribes. A violation of any of these laws or regulations could result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences and adversely affect our business, financial condition, operating results and reputation. Our policies and procedures designed to ensure compliance with these laws and regulations may not be sufficient and our directors, officers, employees, representatives, consultants, agents, and business partners could engage in improper conduct for which we may be held responsible.

As we increase our international cross-border business and expand our operations abroad, we may continue to engage with business partners, suppliers and third-party intermediaries to market our services and to obtain necessary permits, licenses and other regulatory approvals. In addition, we or our third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. We can be held liable for the corrupt or other illegal activities of these third-party intermediaries, our employees, representatives, contractors, partners and agents, even if we do not explicitly authorize such activities. There can be no assurance that our employees and agents will not take actions in violation of our policies and applicable law, for which we may be ultimately held responsible. As we increase our international business, our risks under these laws may increase.

Detecting, investigating and resolving actual or alleged violations of anti-corruption, anti-bribery, anti-money laundering or financial and economic sanctions laws can require a significant diversion of time, resources and attention from management. Non-compliance with these laws could subject us to whistleblower complaints, adverse media coverage, investigations, subpoenas received, enforcement actions, prosecution and severe fines, damages and administrative, civil and criminal sanctions, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect our business, financial condition, operating results and reputation. In addition, changes in these laws in the future could adversely impact our business and investments in our securities.

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Governmental trade controls, including export and import controls, sanctions, customs requirements and related regimes, could subject us to liability or loss of contracting privileges, limit our ability to transfer technology or compete in certain markets and affect our ability to hire qualified personnel.

Our technology and products, including components of our products, are subject to export control and import laws and regulations, including those by the U.S. Export Administration Regulations, U.S. Customs regulations, various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Control, and similar regulations by the South Korean government. These jurisdictions’ export control laws and regulations and economic sanctions prohibit the shipment of certain products, technologies and services to embargoed or sanctioned countries, governments and persons, as well as to various countries and persons due to national security and foreign policy concerns. In particular, U.S. and South Korean export control laws apply to cells with an energy density greater than 350 Wh/kg and require a license for the export of technology and cells exceeding that threshold to many locations outside of each respective jurisdiction, including China and Singapore. Some of our technology and products are thus presently subject to these license requirements under export controls.

Complying with export control and sanctions regulations for a particular sale may be time-consuming and result in the delay or loss of sales opportunities. We have set up an export controls compliance program internally. If we fail to comply with these laws and regulations, we and even some of our employees could be subject to substantial civil and/or criminal penalties, including the possible loss of export or import privileges, fines, which may be imposed on us and responsible employees or managers and, in extreme cases, the incarceration of responsible employees or managers.

A significant talent pool is comprised of nationals from countries that may require a license from the Bureau of Industry and Security to work with our technology (such as China, India, Russia, South Korea, Taiwan and Japan), which raises the cost of hiring due to the uncertainty that a license may not be granted and the candidate would be unemployable in the role envisioned. In addition, changes in our products or solutions or changes in applicable export or import laws and regulations may create delays or prohibitions in the introduction and sale of our products and solutions in international markets, increase costs due to changes in import and export duties and taxes, prevent our customers from deploying our products and solutions or, in some cases, prevent the export or import of our products and solutions to certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our products and solutions, decreased ability to export or sell our products and solutions to customers, and decreased ability to import components or parts critical to the manufacture of our products. Any decreased use of our technology and products, limitation on our ability to export or sell our technology and products, or limitation on our ability to import raw materials, components or equipment would likely adversely affect our business, financial condition, operating results and prospects.

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certain countries, governments or persons altogether. Any change in export or import laws and regulations, shift in the enforcement or scope of existing laws and regulations, or change in the countries, governments, persons or technologies targeted by such laws and regulations, could also result in decreased use of our products and solutions, decreased ability to export or sell our products and solutions to customers, and decreased ability to import components or parts critical to the manufacture of our products. Any decreased use of our technology and products, limitation on our ability to export or sell our technology and products, or limitation on our ability to import raw materials, components or equipment would likely adversely affect our business, financial condition, operating results and prospects.

Changes in U.S. and foreign tax laws could have a material adverse effect on our business, cash flow, results of operations or financial conditions.

We (as well as certain of our subsidiaries) are subject to federal, state and local taxes in the United States and are also subject to tax in certain foreign jurisdictions. Changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. federal income tax laws, such as the IRA, and others that may be enacted in the future (the uncertainty of all of which is heightened by recent changes in governmental administration in the United States), could impact the tax treatment of our foreign earnings. Due to our international business activities, any changes in the taxation of such activities may increase our worldwide effective tax rate and adversely affect our financial position and results of operations.

Significant judgment is required in evaluating our tax positions and our worldwide provision for taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain. In addition, our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, if our earnings are lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where it has higher statutory rates, by changes in foreign currency exchange rates, or by changes in the valuation of its deferred tax assets and liabilities. We may be audited in various jurisdictions, and such jurisdictions may assess additional taxes against us. Although we believe our tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different from our historical tax provisions and accruals, which could have a material adverse effect on our operating results or cash flows in the period or periods for which a determination is made.

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Additionally, changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years, and could increase our future tax expense, which could have a material adverse effect on our business, financial condition, operating results, and prospects.

Certain U.S. state tax authorities may assert that we have a state nexus and seek to impose state and local income taxes which could harm our results of operations.

There is a risk that certain state tax authorities where we do not currently file a state income tax return could assert that we are liable for state and local income taxes based upon income or gross receipts allocable to such states. States are becoming increasingly aggressive in asserting a nexus for state income tax purposes. If a state tax authority successfully asserts that our activities give rise to a nexus, we could be subject to state and local taxation, including penalties and interest attributable to prior periods. Such tax assessments, penalties and interest may adversely impact our results of operations.

Risks Relating to Privacy and Security

If we experience a significant cybersecurity breach or disruption in our information systems or any of our partners’ information systems, our business could be adversely affected.

Malicious actors may be able to penetrate our network and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Malicious actors also may be able to develop and deploy viruses, worms and other malicious software programs that attack our products or otherwise exploit any security vulnerabilities of our products. We manage and store various proprietary information and sensitive or confidential data relating to our business as well as information from our suppliers and customers. While we employ a number of protective measures, including firewalls, network infrastructure vulnerability scanning, anti-virus and endpoint detection and response technologies, these measures may fail to prevent or detect attacks on our systems due to the frequent evolving nature of cybersecurity attacks. Although these measures are designed to ensure the confidentiality, integrity and availability of our information and technology systems, there is no assurance that these measures will detect all threats or prevent a cybersecurity attack. If there are any breaches of our or any of our third party suppliers’ security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us or our employees, contractors, customers, suppliers, or other third parties, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, it could expose us or our employees, contractors, customers, suppliers, or other third parties to a risk of loss or misuse of this information, disruption of business operations, result in litigation, regulatory scrutiny, and potential liability for us, damage our brand and reputation or otherwise harm our business.

In addition, our hardware and software or third-party components and software that we utilize in our products may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the operation or security of the products. The costs to us to eliminate or mitigate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant and, if our efforts to address these problems are not successful, could result in interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.25

We have experienced, and will likely continue to experience, cybersecurity incidents in the normal course of our business; however, to our knowledge, we have not experienced a material cybersecurity incident during fiscal 2024. To the extent we experience cybersecurity incidents, our relationships with our partners, suppliers and eventual customers may be materially impacted, our brand and reputation may be harmed and we could incur substantial costs in investigating, responding to and remediating the incidents, and in resolving any regulatory investigations or disputes that may arise with respect to them, any of which would cause our business, operations, or products to be adversely affected. In addition, the cost and operational consequences of implementing and adding further data protection measures could be significant.

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unapproved dissemination of proprietary information or sensitive or confidential data about us or our employees, contractors, customers, suppliers, or other third parties, including the potential loss or disclosure of such information or data as a result of fraud, trickery or other forms of deception, it could expose us or our employees, contractors, customers, suppliers, or other third parties to a risk of loss or misuse of this information, disruption of business operations, result in litigation, regulatory scrutiny, and potential liability for us, damage our brand and reputation or otherwise harm our business.

We have experienced, and will likely continue to experience, cybersecurity incidents in the normal course of our business; however, to our knowledge, we have not experienced a material cybersecurity incident during fiscal 2025. To the extent we experience cybersecurity incidents, our relationships with our partners, suppliers and eventual customers may be materially impacted, our brand and reputation may be harmed and we could incur substantial costs in investigating, responding to and remediating the incidents, and in resolving any regulatory investigations or disputes that may arise with respect to them, any of which would cause our business, operations, or products to be adversely affected. In addition, the cost and operational consequences of implementing and adding further data protection measures could be significant.

Risks Relating to Our Common Stock and Warrants

Our failure to satisfy certain NYSE listing requirements may result in our Class A common stock being delisted from the NYSE, which could eliminate or adversely affect the trading market for our Class A common stock.

We previously received notice from the New York Stock Exchange (“NYSE”) indicating that we did not satisfy the continued listing standard set forth in Section 802.01C of the NYSE’s Listed Company Manual (“Section 802.01C”), as the average closing price of our common stock was less than $1.00 per share over a consecutive 30 trading-day period. We have since regained compliance. However, given the volatility in the stock market in general and in the market price of our securities in particular, and the resulting risk of our future non-compliance with Section 802.01C, we continue to actively monitor the market price of shares of our Class A common stock. The perception among investors that we are at heightened risk of delisting could negatively affect the market price and trading volume of our Class A common stock. Additionally, if we again fall out of compliance, we are not able to cure within the NYSE’s prescribed cure period and the NYSE ultimately delists our securities from trading on its exchange for failure to meet the listing standards and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences, which could severely diminish or eliminate the value of an investment in our Class A common stock, including a limited availability of market quotations for our securities, reduced liquidity for our securities, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future.

Our CEO and certain entities affiliated with the CEO (the “SES Founder Group”) is a large and significant stockholder and, as a result, we are a “controlled company,” which exempts us from certain obligations to comply with certain corporate governance requirements.

As of ~~February~~March 252, ~~2025~~2026, the SES Founder Group owned approximately 12.10% of our outstanding common stock and 57.96% of the total voting power. Accordingly, we are a “controlled company” for purposes of the NYSE listing requirements. As such, we are exempt from the obligation to comply with certain corporate governance requirements, including the requirements that a majority of our board of directors must consist of independent directors, and that we have nominating and compensation committees that are each composed entirely of independent directors. These exemptions do not modify the requirement for a fully independent audit committee. If we cease to be a “controlled company,” we must comply with the independent board committee requirements as they relate to the nominating and compensation committees, subject to certain “phase-in” periods.

We are controlled or substantially influenced by the SES Founder Group, whose interests may conflict with other stockholders. The concentrated ownership of our dual class common stock could prevent stockholders from influencing significant decisions.

The SES Founder Group has the ability to control the outcome of most matters requiring stockholder consent. AsFurther, our Chief Executive Officer, Dr. Hu has control over our day-to-day management and the implementation of major strategic investments, subject to authorization and oversight by our board of directors. As a board member and officer, Dr. Hu also owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. However, Dr. Hu is still entitled to vote his shares, and has the ability to control the outcome of most matters requiring stockholder consent. This was designed to shepherd our long-term growth amidst significant near-term fluctuations and uncertainty in the market.

Moreover, for so long as the SES Founder Group holds at least a majority of SES’s outstanding common stock, it has the ability, through the Board, to control decision-making with respect to SES’s business direction and policies. Matters over which the SES Founder Group can, directly or indirectly, exercise control include:26

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and oversight by our board of directors. As a board member and officer, Dr. Hu also owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. However, Dr. Hu is still entitled to vote his shares, and has the ability to control the outcome of most matters requiring stockholder consent. This was designed to shepherd our long-term growth amidst significant near-term fluctuations and uncertainty in the market.

Moreover, for so long as the SES Founder Group holds common stock representing at least a majority of the total voting power of SES’s outstanding common stock, it has the ability, through the Board, to control decision-making with respect to SES’s business direction and policies. Matters over which the SES Founder Group can, directly or indirectly, exercise control include:

●

the election of SES’s board of directors and the appointment and removal of our officers;

●

mergers and other business combination transactions requiring stockholder approval, including proposed transactions that would result in our stockholders receiving a premium price for their shares; and

●

amendments to SES’s certificate of incorporation or increases or decreases in the size of our board of directors.

Even if the SES Founder Group’s common stock ownership subsequently falls below 50% of the total voting power, the SES Founder Group may continue to be able to strongly influence or effectively control our decisions.

Provisions in our Certificate of Incorporation (the “Charter”) and Delaware law may inhibit a takeover attempt which could limit the price investors might be willing to pay in the future for our common stock and could entrench management.

Our Charter and Bylaws contain provisions to limit the ability of others to acquire control of us or cause us to engage in change-of-control transactions, including, among other things:

●

provisions that authorize our board of directors (the “Board”), without action by our stockholders, to authorize by resolution the issuance of shares of preferred stock and to establish the number of shares to be included in such series, along with the preferential rights determined by our Board; provided that, our Board may also, subject to the rights of the holders of preferred stock, authorize shares of preferred stock to be increased or decreased by the approval of the Board and the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the corporation;

●

provisions that permit only a majority of our Board, the Chairperson of the Board or the Chief Executive Officer to call special stockholder meetings; provided, that for so long as Dr. Qichao Hu and certain entities affiliated with Dr. Hu beneficially own at least 50% of the voting power of the then outstanding shares of our capital stock, special meetings of stockholders may also be called by or at the request of stockholders holding a majority of the voting power of the issued and outstanding shares of our capital stock;

●

provisions that impose advance notice requirements and other requirements and limitations on the ability of stockholders to propose matters for consideration at stockholder meetings; and

●

a staggered board whereby our directors are divided into three classes, with each class subject to retirement and reelection once every three years on a rotating basis.

These provisions could have the effect of depriving our stockholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of us in a tender offer or similar transaction. With our staggered Board, at least two annual meetings of stockholders will generally be required in order to effect a change in a majority of our directors. Our staggered Board can discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potential acquirer to gain control of our Board in a relatively short period of time.

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Board, at least two annual meetings of stockholders will generally be required in order to effect a change in a majority of our directors. Our staggered Board can discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares by making it more difficult for a potential acquirer to gain control of our Board in a relatively short period of time.

Our Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our Charter requires, to the fullest extent permitted by law, that derivative actions brought in our name, actions against directors, officers and employees for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware (the “Chancery Court”) and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to the personal jurisdiction of the Chancery Court and having service of process made upon such stockholder in any such action on such stockholder’s counsel. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to these forum provisions. Notwithstanding the foregoing, our Charter provides that the exclusive forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Additionally, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the “Securities Act”) against us or any of our directors, officers, other employees or agents. However, there is uncertainty as to whether a court would enforce the exclusive forum provisions relating to causes of actions arising under the Securities Act.

Although we believe this exclusive forum provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, it may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.

The price of our common stock has been and may continue to be volatile.

From the closing of our Business Combination until ~~February~~March 252, ~~2025~~2026, the market price of our Class A common stock has been volatile, fluctuating between a low of $70.6827 and a high of $010.8401. This market price is affected by a number of factors, including:

●

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

●

changes in the market’s expectations about our operating results;

●

success of competitors;

●

our operating results failing to meet market expectations in a particular period;

●

changes in financial estimates and recommendations by securities analysts concerning SES or the industry and market in general;

●

operating and stock price performance of other companies that investors deem comparable to SES;

●

our ability to market new and enhanced products on a timely basis;

●

changes in laws and regulations affecting our business;

●

commencement of, or involvement in, litigation;

●

changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

●

the volume of shares of our Class A common stock available for public sale;

●

any significant change in our Board or management;

● sales of substantial amounts of our ~~Class A~~ common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;

●

general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism including disruptions resulting from regional conflicts; and

●

disruptions resulting from public health crises or extreme weather events (including as a result of climate change).

Broad market and industry factors may depress the market price of our Class A common stock irrespective of our operating performance. The stock market in general and the NYSE have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for EV battery and related battery technology stocks or the stocks of other companies which investors perceive to be similar to SES could depress our stock price regardless of our business,

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disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for EV battery and related battery technology stocks or the stocks of other companies which investors perceive to be similar to SES could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our Class A common stock also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

Our public warrants may never be in the money, and they may expire worthless.

The exercise price for our warrants is $11.50 per-share, subject to adjustment, which exceeds the market price of our Class A common stock, which was $01.8466 per-share based on the closing price of our Class A common stock on the NYSE on ~~February~~March 252, ~~2025~~2026. There can be no assurance that the public warrants will ever be in the money prior to their expiration and, as such, the warrants may expire worthless.

We may redeem unexpired public warrants prior to their exercise at a time that is disadvantageous to the warrant holders, thereby making the warrants worthless.

We may redeem outstanding warrants (excluding any private placement warrants held by the Ivanhoe Capital Sponsor LLC (the “Sponsor”) or its permitted transferees) at any time after they become exercisable and prior to their expiration, at $0.01 per warrant, provided that the last reported sales price (or the closing bid price of our Class A common stock in the event our Class A common stock is not traded on any specific trading day) of our Class A common stock equals or exceeds $18.00 per-share for any 20 trading days within a 30 trading-day period ending on the third business day prior to the date we send proper notice of such redemption, provided that on the date we give notice of redemption and during the entire period thereafter until the time we redeem the warrants, there is an effective registration statement under the Securities Act covering the shares of our Class A common stock issuable upon exercise of the warrants and a current prospectus relating to them is available. If and when the warrants become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding warrants could force a warrant holder: (i) to exercise its warrants and pay the exercise price therefore at a time when it may be disadvantageous for it to do so, (ii) to sell its warrants at the then-current market price when it might otherwise wish to hold its warrants or (iii) to accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, will be substantially less than the market value of its warrants.

If the price of our Class A common stock increases, warrants to purchase SES common stock could increase the number of shares eligible for future resale in the public market and result in dilution to stockholders.

As of December 31, ~~2024~~2025, were 14,213,280 warrants outstanding. Each warrant entitles its holder to purchase one share of Class A common stock at an exercise price of $11.50 per-share and will expire at 5:00 p.m., New York time, ~~five~~February ~~years~~3, ~~after~~2027 ~~the closing of the Business Combination~~ or earlier upon redemption of our Class A common stock or our liquidation. While the warrants are currently out the money, to the extent they are exercised before expiration, additional shares of Class A common stock will be issued, which will result in dilution to our then existing stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could depress the market price of our Class A common stock.

We may be subject to securities litigation, which is expensive and could divert management’s attention.

The share price of our Class A common stock has been and may continue to be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. SES may be the target of this type of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on its business, financial condition, results of operations and prospects. Any adverse determination in litigation could also subject us to significant liabilities.

In September 2024, we received notice from the New York Stock Exchange (“NYSE”) indicating that we did not satisfy the continued listing standard set forth in Section 802.01C of the NYSE’s Listed Company Manual (“Section 802.01C”), as the average closing price of our common stock was less than $1.00 per share over a consecutive 30 trading-day period. We have since regained compliance, since at the end of January 2024 (within our six-month cure period under the NYSE’s rules), our Class A common stock reached a closing share price of at least $1.00 on the last trading day of January 2024 and had an average closing share price of at least $1.00 over the prior 30 trading-day period. However, given the volatility in the stock market in general and in the market price of our securities in particular, and the

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resulting risk of our future non-compliance with Section 802.01C, we continue to actively monitor the market price of shares of our Class A common stock. For more information, see “—The price of our common stock has been and may continue to be volatile.” The perception among investors that we are at heightened risk of delisting could negatively affect the market price and trading volume of our Class A common stock. Additionally, if we again fall out of compliance, we are not able to cure within the NYSE’s prescribed cure period and the NYSE ultimately delists our securities from trading on its exchange for failure to meet the listing standards and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences, which could severely diminish or eliminate the value of an investment in our Class A common stock, including a limited availability of market quotations for our securities, reduced liquidity for our securities, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future.

We are a “smaller reporting company” and the reduced reporting requirements applicable to such companies may make our securities less attractive to investors.

We are a “smaller reporting company” as defined by SEC rules, which allows us to take advantage of certain scaled disclosure requirements. For example, we may continue to use reduced compensation disclosure obligations, and, provided we also remain a “non-accelerated filer,” we will not be obligated to follow the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will remain a smaller reporting company until the last day of the fiscal year in which we have at least $100 million in revenue and at least $700 million in aggregate market value of Class A common stock held by non-affiliated persons and entities (known as “public float”), or, alternatively, if our revenue exceed $100 million, until the last day of the fiscal year in which our public float was at least $250.0 million (in each case, with respect to public float, as measured as of the last business day of the second quarter of such fiscal year). We cannot predict or otherwise determine if investors will find our securities less attractive as a result of our reliance on exemptions as a smaller reporting company and/or “non-accelerated filer.” If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile.

We have identified material weaknesses in our internal control over financial reporting, including one ongoing material weakness and others that have been remediated. If we fail to effectively remediate the ongoing material weakness or identify additional material weaknesses in the future, there could be an adverse impact on the value of your investment. 29

~~Effective~~Table internal controls are necessary for us to provide reliable financial reports, prevent fraud and errors in our financial statements and operate successfully as a public company. We have concluded we did not maintain effective internal control over financial reporting as of each of December 31, 2024, 2023 and 2022. We have since remediated the material weaknesses that made our internal control ineffective as of December 31, 2023 and 2022, but a new material weakness has led us to determine that our internal control over financial reporting as of December 31, 2024 was not effective. We are actively engaged in developing and implementing a remediation plan designed to address these material weaknesses and are committed to remediating it as promptly as possible. For more information, see “Part II, Item 9A. Controls and Procedures.” However, we cannot be certain that our internal control over financial reporting will be remediated and considered effective going forward. Because of its inherent limitations, our system of internal control over financial reporting may not prevent or detect every misstatement.Contents

If“non-accelerated we are unable to remediate the existing material weakness in our internal control over financial reporting or identify additional material weaknesses, we may be unable to accurately report our financial results, or report them within the timeframes required by the SECfiler.” If ~~this~~some ~~occurs,~~investors wefind ~~also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that~~ our ~~internal~~securities ~~control~~less ~~over~~attractive ~~financial reporting is effective, or, to the extent required by SEC rules, our independent registered public accounting firm is unable to express an opinion~~ as toa ~~the effectiveness of our internal control over financial reporting~~result, orthere ~~expresses an adverse opinion, investors~~ may ~~lose~~be ~~confidence~~a inless ~~the~~active ~~accuracy~~trading ~~and~~market ~~completeness~~for of our ~~financial~~securities ~~reports,~~and ~~we may face restricted access to~~ the ~~capital~~price ~~markets~~of ~~and~~ our ~~stock~~securities ~~price~~ may be ~~adversely~~more ~~affected~~volatile. We also face risks associated with the cost of establishing effective internal control over financial reporting, insofar as we have incurred, and expect to continue to incur, increased costs related to our internal control over financial reporting to remediate the above-described material weakness and improve further our internal control environment.

We have a history of material weaknesses in our internal control over financial reporting. Our identification of any new material weakness could have an adverse impact on the value of our Class A common stock.

Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and errors in our financial statements and operate successfully as a public company. While we have concluded that our disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2025, we have a history of material weaknesses in our internal control over financial reporting (which have since been remediated). For more information, see “Part II, Item 9A. Controls and Procedures. However, we cannot be certain that our internal control over financial reporting will be considered effective going forward. Because of its inherent limitations, our system of internal control over financial reporting may not prevent or detect every misstatement.

If we identify additional material weaknesses, we may be unable to accurately report our financial results, or report them within the timeframes required by the SEC. If this occurs, we also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are unable to assert that our internal control over financial reporting is effective, or, to the extent required by SEC rules, our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, or expresses an adverse opinion, investors may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and our stock price may be adversely affected. We also face risks associated with the cost of establishing effective internal control over financial reporting, and historically have incurred, and could in the future incur, increased costs related to improving further our internal control environment.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

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Cybersecurity is an important priority at SES, and we actively manage this critical risk through comprehensive measures. Our processes for assessing, identifying, and managing material risks from cybersecurity threats are still in development and have yet to be integrated into our overall risk management system and processes.

●

Proactive Defense: We utilize industry-standard mechanisms to assess, identify, and address potential threats from cybersecurity incidents. Our dedicated information technology (IT) team continuously monitors the evolving cybersecurity landscape and develops robust response processes to swiftly and effectively handle emerging threats.

●

Structured Framework: Our company-wide cybersecurity policy outlines our security posture and incident response protocol, ensuring clear escalation procedures to inform senior management, the Audit Committee, and the Board of Directors of cybersecurity events as needed.

● Independent Oversight: The Audit Committee, composed entirely of independent directors under SEC and NYSE rules, oversees our cyber risk exposure and evaluates our risk mitigation strategies. The committee ~~was briefed by our VP~~, ~~IT Services~~ in ~~depth~~turn, ~~and in turn~~ briefs the Board of Directors on any material cyber risks and events.

~~Additionally,~~There weis ~~use~~currently ~~processes~~no tomanagement ~~oversee~~position ~~and~~directly ~~identify~~responsible ~~material~~for ~~risks~~overseeing ~~from~~our cybersecurity ~~threats~~risk. ~~associated~~Rather, ~~with~~ our ~~use~~broader information technology department works closely with members of ~~third-party~~management ~~technology~~to continuously evaluate and ~~systems,~~address ~~including~~cybersecurity ~~third~~risks ~~party~~in ~~penetration~~alignment ~~tests,~~with ~~external~~our ~~security~~business ~~audits~~objectives ofand ~~our~~operational ~~data~~needs, ~~loss~~although ~~prevention~~we ~~mechanisms~~are ~~and~~currently ~~require~~seeking ~~that~~to ~~our~~hire ~~vendors~~a ~~comply~~director ~~with~~of ~~Service~~cybersecurity ~~Organization~~to ~~Control~~oversee ~~Type~~our IIinformation ~~requirements~~security program.

~~Previously,~~While ~~our~~cybersecurity ~~information~~threats ~~security~~remain ~~program~~a ~~was~~reality ~~led~~for byall ~~our Vice President of Compliance and Information Technology~~organizations, ~~who~~SES ~~has~~is ~~since~~committed ~~left~~to ~~the~~proactive ~~Company.~~risk Asmanagement ofand ~~February~~continuous ~~25,~~improvement ~~2025,~~in ~~the~~our ~~responsibilities~~security ofposture. ~~this~~At ~~role~~times ~~are~~we ~~being~~also ~~performed~~engage onassessors, anconsultants, ~~interim basis by our IT Manager~~auditors, ~~whose~~or ~~experience~~other ~~includes~~third ~~two~~parties ~~years~~to ~~supporting~~assist ~~the~~with ~~cybersecurity~~assessing, ~~function~~identifying, ~~under the Vice President of Compliance~~ and ~~Information~~managing ~~Technology.~~cybersecurity ~~We are currently seeking a replacement to oversee our information security program~~risks.

~~While~~We face risks from cybersecurity threats ~~remain~~that acould ~~reality~~have ~~for~~a ~~all~~material ~~organizations,~~adverse ~~SES~~effect ison ~~committed~~our torelationship ~~proactive~~with ~~risk~~our ~~management~~partners, suppliers and ~~continuous~~eventual ~~improvement~~customers, inor on our ~~security~~business, ~~posture~~operations or products. We ~~believe that the processes we~~ have ~~established for assessing~~experienced, ~~identifying,~~ and ~~managing~~will ~~material~~likely ~~risks~~continue ~~from cybersecurity allow us~~ to ~~effectively mitigate potential impacts and protect our business~~experience, ~~operations,~~cybersecurity ~~and products:~~

● In-sourced IT Services: By in-sourcing IT services in late 2023, we gained greater control over IT decisions, established a comprehensive knowledge base, and laid a framework allowing for unbiased assessments of future IT and cybersecurity investments. We have continued improvements using in-sourced IT services throughout 2024.30

● 24/7 Network Monitoring: Our continuous 24/7 second-level maintenance and monitoring contract provides constant vigilance against network disruptions and potential cyber threats, ensuring swift detection and mitigation of incidents.

● Data Backup: Deployment of our new data backup system was completed in June 2024 and offers robust protection against catastrophic failures, early detection of data loss prevention events, and near real-time mitigation of ransomware attacks.

● In addition, at times we also engage assessors, consultants, auditors, or other third parties to assist with assessing, identifying, and managing cybersecurity risks.

We face risks from cybersecurity threats that could have a material adverse effect on our relationship with our partners, suppliers and eventual customers, or on our business, operations or products. We have experienced, and will likely continue to experience, cybersecurity incidents in the normal course of our business; however, to our knowledge, we have not experienced a material cybersecurity incident during fiscal 2024. See “Part I, Item 1A. Risk Factors – Risks Related to Privacy and Security – If we experience a significant cybersecurity breach or disruption in our information systems or any of our partners’ information systems, our business could be adversely affected.”

Item 2. Properties

We have leased facilities located in Woburn, Massachusetts in the United States, in the vicinity of Woburn, Massachusetts, Shanghai, China, and Chungju and Seoul, South Korea. For more information, see “Part I, Item 1. Business—Our Facilities,” as well as “Leases” in Note 12 to the consolidated financial statements included in Item 8 of this Form 10-K.

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incidents in the normal course of our business; however, to our knowledge, we did not experience a material cybersecurity incident during fiscal 2025. See “Part I, Item 1A. Risk Factors – Risks Related to Privacy and Security – If we experience a significant cybersecurity breach or disruption in our information systems or any of our partners’ information systems, our business could be adversely affected.”

Item 2. Properties

We have leased facilities located in Woburn, Massachusetts in the United States, as well as in Shanghai and Shenzhen, China and Chungju and Seoul, South Korea. For more information, see “Part I, Item 1. Business—Our Facilities,” as well as “Leases” in Note 13 to the consolidated financial statements included in Item 8 of this Form 10-K.

Item 3. Legal Proceedings

The information required by this Item is provided under “Legal Contingencies” in Note 1314 to the consolidated financial statements included in Item 8 of this Form 10-K and is incorporated herein by reference.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Our Class A common stock is traded on The New York Stock Exchange (the “NYSE”) under the symbol “SES.” Our public warrants are traded on the NYSE under the symbol “SES WS.” There is no public market for our Class B common stock.

Holders of Record

As of ~~February~~March 252, ~~2025~~2026, there were ~~124~~129 holders of record of our Class A common stock and one holder of record of our public warrants. Such numbers do not include Depository Trust Company (“DTC”) participants or beneficial owners holding shares through nominee names.

There is ~~no public market for our Class B common stock and~~ one holder of record of our Class B common stock as of ~~February~~March 252, ~~2025~~2026.

Dividends

We have not paid any cash dividends on our shares of Class A common stock to date and do not anticipate paying any cash dividends for the foreseeable future. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition as well as general business conditions. The payment of any cash dividends will be within the discretion of the Board at such time.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

As reflected in the following table, there were no repurchases of our common stock during the three months ended December 31, 2025:


	Share Repurchase Activities
Period	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Program(1)	Approximate Dollar Value of Shares that May Yet Be Purchased under the Program(1)

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October 1 - October 31, 2025	—		—	—	28,394,719
November 1 - November 30, 2025	—		—	—	28,394,719
December 1 - December 31, 2025	—		—	—	28,394,719
Total	—	$	—	—

⁽¹⁾ On April 24, 2025, we announced that our Board approved a stock repurchase program authorizing us to purchase up to $30 million of our outstanding common stock. Under the authorization, the Company may repurchase shares from time to time at management’s discretion, through a variety of methods, including open market purchases in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), privately negotiated transactions or otherwise, in compliance with applicable federal securities laws and other applicable laws and regulations. The Company may also, from time to time, enter into plans that are compliant with Rule 10b5-1 of the Exchange Act to facilitate repurchases of its shares under this authorization. The timing and number of shares repurchased will depend on a variety of factors, including price, general business and market conditions, alternative investment opportunities, and funding considerations. The share repurchase authorization does not obligate the Company to repurchase any specific number of shares, may be suspended or discontinued at any time and does not have an expiration date.

Stock Performance Graph

Consistent with the rules applicable to “smaller reporting companies,” we have elected scaled disclosure reporting, and therefore have omitted information required by this item.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information which our management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. The following discussion and analysis should be read in conjunction with our audited consolidated financial statements as of and for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 and the accompanying notes included in this Annual Report on Form 10-K. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs, which are subject to risks, uncertainties and assumptions. These forward-looking statements within the meaning of the federal securities law are based on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are not statements of historical fact and may include statements regarding possible or assumed future results of operations. There can be no assurance that future developments affecting us will be those that we have anticipated. Our actual results and the timing of events may differ materially from those expressed or implied as a result of various factors, including those set forth in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” References in this section to our future plans that indicate the timing of when we expect such plans to be completed by a certain year mean at any point during that year.

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Overview

We are a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion”) rechargeable ~~batteries~~battery technologies for electric vehicles (“EVs”), Urban Air Mobility (“UAM”), drones, robotics, ~~BESS~~Energy Storage Systems (“ESS”) and other applications. ~~Our~~The ~~differentiated~~Company’s ~~battery~~mission ~~technology~~is ~~has been designed~~ to ~~combine~~accelerate the ~~high~~world’s energy ~~density~~transition ofthrough ~~Li-Metal~~material ~~with~~discovery ~~the~~and ~~large-scale~~battery ~~manufacturability~~management. ofSES ~~conventional~~accelerates ~~Lithium-ion~~its ~~(“Li-ion”)~~pace ~~batteries~~of ~~and~~innovation ~~will~~by ~~help~~utilizing tosuperintelligent ~~promote~~AI ~~the~~across ~~transition from~~ the ~~global~~spectrum ~~dependence~~of onour ~~fossil~~business, ~~fuel-based~~from ~~automotive~~research ~~vehicles to clean~~ and ~~efficient~~development, ~~EVs~~materials ~~and~~sourcing, ~~help~~cell ~~enable~~design, anengineering ~~era~~and ofmanufacturing, ~~electric~~to ~~transportation~~battery inhealth ~~the~~and ~~air~~safety monitoring.

~~SES’s~~Key ~~mission is to accelerate the world’s energy transition through material discovery and battery management. To assist in achieving this mission~~Trends, weOpportunities ~~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. Uncertainties

WeHistorical 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:Performance

●We ~~Scale~~are an early-~~up:~~stage growth ~~Our~~company. ~~design~~We isincurred ~~further~~net ~~being~~losses ~~customized~~of ~~with~~$74.9 million and ~~validated~~$100.2 bymillion ~~several~~for ~~OEMs~~the years ended December 31, 2025 and 2024, respectively, and had an accumulated deficit of $373.7 ~~Based~~million onand $298.9 million from our ~~collaborations~~inception ~~with~~through ~~OEMs~~December 31, 2025 weand ~~believe~~2024, ~~that~~respectively. We expect to sustain substantial operating expenses, without generating sufficient revenues to cover expenditures, for a ~~roughly~~few ~~100~~more Ahyears. Our ~~cell-size~~historical ~~manufactured~~results atmay ~~GWh~~not ~~scale~~be ~~(five~~indicative of our future results for reasons that may be difficult to ~~seven~~anticipate ~~cells-per-minute)~~and isour ~~needed~~ability to ~~achieve~~generate ~~commercialization~~revenue in ~~EVs~~the ~~and~~future ~~UAMs~~that atis asufficient ~~large,~~enough ~~global~~to ~~scale.~~achieve Weprofitability ~~are~~will ~~developing~~depend ~~processes~~largely ~~and~~on ~~upgrading~~the ~~equipment~~successful todevelopment ~~scale~~of upour products and services. Accordingly, the ~~manufacturing~~drivers of our ~~current~~future ~~cell~~financial ~~design~~results, ~~from~~as ~~three~~well toas ~~nine~~the Ahcomponents ~~capacity~~of tosuch 50results, Ahmay ~~and~~not ~~100~~be Ahcomparable ~~capacity~~to our historical results of operations.

● Module and Pack Design: Li-Metal cells must be integrated into modules and packs as part of their integration into vehicles. Our active development efforts are focused on the integration of our Li-Metal cells in modules to enable our Li-Metal cells to perform as intended once they are integrated into vehicles.32

●Table ~~AI Software and BMS: Software is critical to the ongoing monitoring~~ of battery health and safety. We continue to develop AI algorithms to diagnose battery cell-related health issues, develop control algorithms and charging methods to enhance cycle life and safety, and port such software on to a BMS that could be integrated into a battery pack.Contents

~~● Advanced Materials and Coatings:~~ We ~~continue~~believe tothat ~~research~~our ~~and~~performance ~~develop advanced electrolyte~~ and ~~anodes~~future tosuccess ~~further~~depend ~~improve~~on ~~cycle~~several ~~life~~factors ~~and~~that ~~safety.~~present Insignificant ~~addition,~~opportunities wefor ~~continue~~us tobut ~~develop~~also ~~novel~~pose ~~methods~~significant ofrisks ~~laminating~~and orchallenges, ~~depositing~~including ~~lithium~~those ~~metal~~discussed ~~onto~~below ~~current~~and ~~collector~~in ~~that~~“Part ~~can~~I, beItem ~~deployed~~1A. atRisk ~~commercial GWh scale~~Factors.”

●Acquisition ~~Cathode Materials and Design: We develop our Li-Metal cells for a variety~~ of ~~different~~UZ ~~cathode materials, cathode design and cathode processing methods that can provide ultra-high energy density and/or significant cost-reduction.~~Energy

●On ~~Li-Metal~~July ~~Recycling:~~25, ~~Along~~2025, our wholly owned subsidiary, SES AI International I Pte Ltd, entered into an agreement with ~~other~~UZ ~~battery~~Energy ~~components~~and ~~that~~its ~~are~~shareholders ~~already~~to ~~being~~acquire ~~recycled~~100% ~~today~~of the share capital of UZ Energy, Lia China-~~Metal~~based ~~foil~~battery ~~will~~energy ~~also~~storage ~~need~~system tomanufacturer. beThe ~~recycled~~aggregate inconsideration for the ~~future~~acquisition of UZ Energy is approximately RMB 183.5 million We($25.8 million), ~~continue~~consisting toof ~~explore~~the ~~methods~~purchase consideration of ~~recycling~~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 ~~are~~the ~~productive~~acquisition of UZ Energy strengthens our capabilities in the ESS market and ~~cost-effective~~will provide opportunities for revenue generation.

Commercialization of Molecular Universe

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.

Shift to Joint Venture Manufacturing with Hisun

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.

NDAA-Compliant Drone Cell Manufacturing

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.

Results of Operations

The following table sets forth a comparison of our operating results for the periods indicated:


	Years Ended December 31,				$		%
(in thousands)	~~2024~~2025		~~2023~~2024		Change		Change
Revenue from customers	$	221,~~040~~000	$	-2,040	$	218,~~040~~960	~~100~~929.04	%
Cost of revenue		~~752~~9,693		-752		~~752~~8,941	~~100~~1,189.0	%
Gross profit		111,~~288~~307		-1,288		110,~~288~~019	~~100~~777.09	%
Operating Expenses
Research and development		7267,~~141~~045	$	3072,~~675~~141		41(5,~~466~~096)	~~135~~(7.21)	%
General and administrative		3826,~~395~~876		4738,~~483~~395		(911,~~088~~519)	(1930.10)	%
Total operating expenses	$	~~110~~93,~~536~~921	$	78110,~~158~~536	$	41(16,~~466~~615)	53(15.10)	%
Loss from operations		(82,614)		(109,248)		26,634	(24.4)	%

3533

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~~Loss~~Revenue from ~~operations (109,248) (78,158) 32,378 (41.4) %~~customers

~~Further,~~For ~~we have incurred net losses of $100.2 million and $53.4 million for~~ the years ended December 31, ~~2024~~2025 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.~~we ~~Our~~generated ~~historical results may not be indicative of our future results for reasons that may be difficult to anticipate and our ability to generate~~ revenue infrom ~~the~~two ~~future~~primary 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.sources:

~~Factors~~● ~~Affecting~~Product ~~Operating~~revenue ~~Results~~generally consists of sales of residential and commercial ESS systems, Li-ion and Li-metal based battery cells for drones, and battery materials such as electrolytes sold to automotive OEMs and other manufacturers.

~~Revenue~~● ~~from~~Service ~~Customers~~revenue generally consists of services for the discovery, design and development of Li-ion and Li-Metal battery materials in accordance with the customer’s specifications.

InSee ~~October~~“Note ~~2024,~~2 we– ~~began~~Summary of Significant Accounting Policies” to ~~generate~~the ~~revenue~~consolidated ~~from~~financial ~~our~~statements ~~principal~~for ~~business~~further ~~activities.~~discussion Weon ~~generate~~our revenue ~~from~~streams ~~two~~and ~~primary~~revenue ~~sources:~~recognition policies.

●Revenue ~~Product~~from ~~revenue~~customers ~~generally~~for ~~consists~~the ofyear ~~Li-Metal~~ended ~~battery~~December ~~cells~~31, ~~and~~2025 ~~battery~~increased ~~materials,~~$19.0 ~~such~~million asto ~~electrolyte,~~$21.0 ~~sold~~million compared to ~~automotive~~$2.0 ~~OEMs~~million ~~and~~for ~~other~~the ~~manufactures~~year ended December 31, 2024.

● Service ~~revenue~~revenues ~~generally~~increased ~~consists~~$11.6 ofmillion ~~services~~to $13.6 million for the ~~design~~year ~~and~~ended ~~development~~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 Lirevenue from service-~~ion~~related contracts with OEMs and ~~Li-Metal~~other ~~battery~~manufacturers ~~materials~~compared with only one quarter of activities in ~~accordance~~the ~~with~~prior year. Product revenue increased $7.3 million to $7.4 million for the ~~customer’s~~year ~~specifications~~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.

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.

Cost of Revenue

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. ~~We anticipate that cost of revenue will continue to increase as we enter into new revenue contracts.~~

~~Cost~~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. ~~was~~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 ~~personnel~~full ~~costs~~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.

Gross Profit

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 and service offerings to automotive OEMs and other manufacturers.

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.

Research and Development

We are an early-stage growth company ~~that~~conducting ~~has~~business ~~just~~activities ~~begun~~through ~~the~~one ~~commercialization stage~~operating ofsegment. Research and development expenses include personnel-related expenses, such as salaries, benefits, and ~~conduct~~stock-based ~~our~~compensation, ~~business~~for ~~through~~scientists, ~~one~~experienced ~~operating~~engineers ~~segment~~and technicians. WeThese ~~have~~expenses ~~spent~~also ~~$81.5~~cover ~~million~~materials and ~~$44.9~~supplies ~~million~~used onin product research and development ~~activities~~, ~~which~~process isengineering ~~prior~~efforts toand ~~credits~~testing, ~~received~~payments bymade ~~our~~to ~~OEM~~consultants, ~~partners~~and ~~under~~patent ~~the~~related ~~JDAs~~legal ~~during~~costs. ~~the~~Furthermore, ~~years~~they ~~ended~~encompass ~~December 31~~depreciation, ~~2024~~allocated facilities expenses, and ~~2023~~information technology costs, ~~respectively~~including costs incurred for renting graphic processing units (“GPUs”) to train AI models.

Research and development expenses ~~consist~~for ~~primarily~~the ofyear ~~costs~~ended ~~incurred~~December 31, 2025 decreased $5.1 million, or 7.1%, to $67.0 million, compared to $72.1 million for ~~personnel-related~~the ~~expenses~~year ended December 31, 2024. ~~including~~The decrease was driven by $13.0 million decrease in personnel costs mainly attributable to salaries, benefits, and stock-based compensation ~~expenses,~~attributable ~~for~~to ~~scientists,~~reduced ~~experienced~~headcount ~~engineers~~resulting ~~and~~from ~~technicians,~~the ~~expenses~~company’s ~~for~~strategic ~~materials~~shift ~~and~~to ~~supplies~~an ~~used~~AI-based infocus, ~~product~~a ~~research~~$4.9 ~~and~~million ~~development,~~decrease ~~process~~in ~~engineering~~lab ~~efforts~~expenses due to lower research and ~~testing~~development activities, asa ~~well~~$4.0 asmillion ~~payments~~decrease toin ~~consultants,~~automotive ~~patent~~OEM JDA related ~~legal~~lab ~~costs,~~equipment ~~depreciation~~expenses, and ~~allocated~~a ~~facilities~~$0.6 ~~and~~million ~~information~~decrease ~~technology~~in ~~costs~~professional service fees. These decreases were

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 costs due 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. 34

Out-of-Period Adjustment

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.

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~~The~~offset ~~Company~~by ~~corrected~~a ~~this~~$9.1 ~~misstatement~~million ~~during~~increase ~~the~~in ~~year~~AI ~~ended~~infrastructure ~~December~~costs ~~31,~~incurred ~~2024,~~from ~~which~~renting ~~resulted~~Graphic inProcessing aUnit ~~$2.0~~(“GPU”) ~~million~~computing ~~overstatement~~resources ofand ~~research~~from ~~and~~the development ~~expense~~of ~~for~~ the ~~year ended~~Company’s ~~December~~Molecular ~~31,~~Universe ~~2024~~platform, ~~with~~ a ~~corresponding impact on APIC. The correction of~~ $28.03 million isdecrease ~~included~~ in ~~the~~reimbursements ~~increase~~compared ofto ~~$9.2 million noted in~~ the ~~above~~prior ~~paragraph.~~period Infrom ~~accordance~~billings ~~with~~from ~~ASC~~our ~~250~~automotive –OEM ~~Accounting~~JDA ~~Changes~~partners ~~and~~due ~~Error~~to ~~Corrections,~~ the ~~Company~~culmination ~~evaluated the materiality~~ of ~~the~~certain ~~misstatement~~JDA ~~from~~activities ~~both~~in ~~quantitative~~2024, and ~~qualitative~~a ~~perspectives~~$1.0 ~~for~~million ~~the~~increase ~~prior~~in ~~period~~rent, ~~errors~~depreciation, and ~~concluded~~utilities ~~that it was immaterial to both the prior period and the current period~~costs.

General and Administrative

General and administrative expenses ~~consist~~include ~~primarily~~personnel-related ofexpenses, ~~costs~~such ~~incurred~~as ~~for~~ salaries, ~~and personnel-related expenses~~benefits, ~~including~~and stock-based compensation ~~expense,~~ for our finance, legal and human resource functions,. These expenses ~~for~~also cover director and officer insurance, outside contractor fees, and professional ~~service fees~~services, including audit, ~~and~~ compliance ~~expenses~~, legal, accounting, investor relations, and other advisory services. Additionally, asthe ~~well~~expenses asencompass allocated facilities and information technology costs, ~~including~~such as depreciation and amortization. ~~Upon commencement of commercial operations, we also expect to incur customer and sales support and advertising costs.~~

General and administrative ~~expenses~~expense for the year ended December 31, ~~2024~~2025 decreased $911.15 million, or 1930.10%, to $3826.49 million, compared ~~with~~to $4738.54 million for the year ended December 31, ~~2023~~2024. This decrease ~~primarily~~was ~~resulted~~driven ~~from~~by a $58.21 million decrease in personnel~~-related~~ ~~expenses,~~costs ~~including~~primarily ~~stock-based~~attributable ~~compensation~~to ~~expense~~salaries, ~~that~~benefits ~~relates~~and ~~to lower~~ stock-based compensation due to ~~forfeitures~~reduced ~~from~~ headcount ~~reductions. In addition~~, a $13.71 million decrease in ~~general~~professional ~~liability~~services ~~insurance~~including ~~costs~~marketing ~~due~~and topublic ~~lower rates~~relations, ~~and~~ a $30.36 ~~million~~ decrease in ~~audit~~insurance ~~fees~~costs, ~~legal expenses~~ and ~~professional and consulting fees due to change in auditors and nonrecurring prior period expenses. These decreases were partly offset by~~ a $1.0.3 million ~~increase~~decrease in ~~rent~~audit and ~~facility~~legal ~~costs~~fees ~~due~~partially tooffset ~~expansion~~by ~~of facility in our headquarters office and~~ a $0.36 million increase in ~~expenses~~other ~~related~~operating tocosts ~~investor~~including ~~relations,~~franchise ~~repairs~~tax ~~and~~fees ~~maintenance,~~ and ~~information~~regulatory ~~technology services~~costs.

Non-Operating Items

Interest Income

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.

~~During~~Interest income for the year ended December 31, ~~2024,~~2025 wedecreased ~~had~~$5.7 ~~interest~~million, ~~income~~or of37.9%, to $159.03 million compared ~~with~~to $1615.70 million for the year ended December 31, ~~2023~~2024. This $15.7 million decrease was primarily ~~due~~attributable to alower ~~decrease~~average inshort-term investment balances ~~resulting~~and ~~from~~a ~~cash~~decline ~~used~~ in ~~operations~~market interest rates during the current year.

Change of Fair Value of Sponsor Earn-Out Liabilities

During the year ended December 31, ~~2024~~2025, we incurred a $51.37 million ~~loss~~gain compared with a $65.83 million ~~gain~~loss for the year ended December 31, ~~2023~~2024 associated with the change in fair value of the Sponsor Earn-Out liabilities. This $127.10 million ~~decrease~~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 1112 – Sponsor Earn-Out Liabilities” to the consolidated financial statements for additional information.

Miscellaneous Income (Expense), Net

During the year ended December 31, ~~2024~~2025, we had miscellaneous expense of $01.52 million, compared with miscellaneous ~~income~~expense of $0.45 million for the year ended December 31, ~~2023~~2024. This $0.97 million increase in miscellaneous expense was primarily due to a $01.73 million loss on ~~sale~~the disposal of ~~assets~~property and ~~$0.6~~equipment, ~~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~~recognized toin the ~~weakening~~current ofyear ~~the Chinese renminbi and South Korean won compared with the U~~period.S. ~~dollar.~~

(Provision) Benefit from Income Taxes

Income tax expense was $0.2 million on pre-tax loss of $~~100~~74.06 million for the year ended December 31, ~~2024~~2025 compared with an income tax ~~benefit~~expense of $0.92 million on pre-tax loss of $54100.30 million for the year ended December 31, ~~2023~~2024. Our effective tax rate was (0.23)% and 1(0.62)% for the years ended December 31, ~~2024~~2025 and ~~2023~~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 1617 – Income Taxes” to the consolidated financial statements for additional information on our income tax expense.

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Liquidity and Capital Resources

As of December 31, ~~2024~~2025, we had total cash and cash equivalents of $~~128~~29.85 million, and short-term investments in marketable securities of $~~133~~170.71 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.

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.” 35

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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 for deferred cash payments of an estimated approximately RMB 59.9 million ($8.4 million) related to the acquisition of UZ Energy as well as activities 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.

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.

Summary of Cash Flows

The following table provides a summary of our cash flow data for the periods indicated:


	Years Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Cash (used in) provided by:
Operating activities	$	(6658,~~086~~362)	$	(5666,~~412~~086)
Investing activities		~~108~~(39,~~192~~186)		32108,~~719~~192
Financing activities		(1,~~010~~961)		31,~~275~~010
Effect of exchange rate changes on cash		~~(687)~~327		(~~552~~687)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	42,429	$	(20,970)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(99,182)	$	42,429

Operating Activities

Our cash flows used in operating activities to date have been ~~comprised~~attributable ofto 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~~outflows infrom operating activities ~~to increase~~ before we start to generate any material cash inflows from our operations.

Net cash used in operating activities of $6658.14 million for the year ended December 31, ~~2024~~2025 was primarily attributable to net loss of $~~100~~73.20 million, as adjusted for non-cash operating items such as stock-based compensation expense of $1911.90 million, depreciation and amortization expense of $810.3 million, accretion income from available-for-sale short-term investments of $73.21 million, a ~~loss~~gain on change in fair value of Sponsor Earn-Out liabilities of $51.37 million, ~~and~~ a loss on ~~sale~~disposal of fixed ~~asset~~assets of $01.73 million., ~~These~~other ~~non-cash~~adjustments, ~~operating~~and ~~items were combined with~~ a $83.45 million working capital ~~inflow~~outflow. The working capital ~~inflow~~outflow was ~~driven~~ primarily byattributable to a $710.64 million ~~increase~~decrease in accrued expenses and other liabilities, ~~and~~ a $32.96 million ~~decrease~~increase in accounts receivable, ~~from~~and ~~related~~a ~~party~~$1.0 ~~These~~million ~~working~~increase ~~capital~~in ~~inflows~~inventories, ~~were~~ partially offset by ~~working capital outflows of~~ a $210.20 million ~~increase~~decrease in prepaids and other assets and a $1.0 million increase in accounts ~~receivable~~payable. The increase in ~~accrued~~accounts ~~expenses~~payable ~~and other liabilities~~ was primarily due to ~~accruals~~timing ~~for purchases~~ of ~~equipment~~vendor ~~for a JDA, accrued income taxes payable, and payroll related accruals~~payments. The decrease in ~~receivable~~accrued ~~from~~expenses ~~related party was driven by cessation of activity from a JDA. The increase in prepaids~~ and other ~~assets~~liabilities was primarily due to AIreductions ~~infrastructure license and rental advance payments, license fees for software, and advance payments for research agreements. The increase~~ in ~~accounts~~accruals ~~receivable is due to outstanding balances~~ for ~~earned~~lab ~~but~~equipment ~~unbilled revenue.~~

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~~Net~~related ~~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~~JDA, asprofessional ~~adjusted for non-cash operating items such as stock-based compensation expense of $20.6 million~~fees, ~~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~~payroll ~~and~~related ~~amortization expense of $5~~accruals.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~~accounts ~~and other assets, a $1.5 million increase in~~ receivable ~~from~~was ~~related~~primarily ~~party,~~driven aby ~~$1.1~~increases ~~million increase~~ in ~~deferred~~product ~~tax assets, a $0~~shipments.1 ~~million~~The ~~decrease in accrued expenses and a $0.2 million~~ increase in inventories, ~~partially~~is ~~offset~~primarily bydue ato ~~$0.1~~purchases ~~million~~for ~~increase~~product ~~in accounts payable~~sales. The ~~increase~~decrease in prepaids and other assets was primarily due to ~~insurance~~AI ~~costs~~infrastructure tolicense ~~cover~~and ~~potential~~GPU ~~liabilities~~rental ~~under~~advance ~~our indemnification obligations to our directors and certain officers~~payments, license fees for software, and 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.

Net cash used in operating activities of $66.1 million for the year ended December 31, 2024 was primarily attributable to net loss of $100.2 million, as adjusted for non-cash operating items such as stock-based compensation expense of $19.9 million, depreciation and amortization expense of $8.3 million, accretion income from available-for-sale short-term investments of $7.2 million, a loss on change in fair value of Sponsor Earn-Out liabilities of $5.3 million, and a loss on sale of fixed asset of $0.7 million. These non-cash operating items were combined with a $8.4 million working capital inflow. The working capital inflow was driven primarily by a $7.6 million increase in accrued expenses and other liabilities and a $3.9 million decrease in receivable from related party. These working capital inflows were partially offset by working capital outflows of a $2.2 million increase in prepaids and other assets and a $1.0 increase in accounts receivable. The increase in accrued expenses and other liabilities was primarily due to accruals for purchases of equipment for a JDA, accrued income taxes payable, and payroll related accruals. The decrease in receivable from related party was driven by cessation of activity from a JDA. The increase in prepaids and other assets was primarily due to AI infrastructure license and rental advance payments, license fees for software, and advance payments for research agreements. The increase in accounts receivable is due to outstanding balances for earned but unbilled revenue.

Investing Activities

Net cash ~~provided~~used byin investing activities was $~~108~~39.2 million for the year ended December 31, ~~2024~~2025, compared with net cash ~~used~~provided inby investing activities of $32108.72 million for the year ended December 31, ~~2023~~2024. ~~Investing~~This ~~activities~~increase ~~include~~in ~~purchases~~cash used was primarily attributable to a $158.7 million reduction in cash provided by the maturities of short-term investments, ~~maturities~~net of ~~investments~~purchases, and ~~purchases~~$3.0 million in the payment of ~~property,~~deferred ~~plant~~consideration related to the acquisition of UZ Energy, partially offset by $9.3 million of lower capital expenditures and ~~equipment~~$5.0 million from the sale of short-term investments in the current year period.

~~Purchases~~The ~~and~~decrease ~~Maturities~~in ofcapital ~~Investments~~expenditures –was ~~Net~~primarily ~~proceeds~~attributable ofto ~~short-term~~reductions ~~investments~~in ~~were~~purchases ~~$120.4~~of ~~million~~manufacturing ~~for~~equipment, ~~the~~lab ~~year~~machinery ~~ended~~and ~~December 31~~equipment, ~~2024,~~ ~~compared~~and ~~with~~leasehold ~~net~~improvements ~~proceeds~~to ~~from~~manufacture ~~maturities~~battery ofcells ~~short-term~~due ~~investments~~to ofthe ~~$48.5~~current ~~million~~year ~~for~~strategic ~~the~~shift ~~year~~to ~~ended~~AI ~~December 31, 2023.~~focused ~~The~~spending ~~$71.9~~which ~~million~~consisted ~~increase~~of inpurchases ~~net~~of ~~proceeds~~software ~~was~~and ~~driven~~computer byequipment, ~~the~~lab ~~nature~~tools and ~~time~~instruments toand ~~maturity~~AI ~~for~~related ~~the~~infrastructure. ~~treasury~~We ~~securities~~expect ~~included~~capital inexpenditures ~~our~~to ~~portfolio~~remain consistent in ~~the~~2026 ~~current~~compared ~~year~~with ~~and~~2025 ~~cash~~as ~~needs~~we ~~for~~continue ~~operations~~to spend on AI related infrastructure rather than invest in manufacturing equipment.

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.

Financing Activities

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.

Net cash provided by financing activities of $1.0 million for the year ended December 31, 2024 was primarily attributable to proceeds from the exercise of stock options.

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

Contractual Obligations and Commitments

The following table summarizes our material contractual obligations for cash expenditures as of December 31, ~~2024~~2025, and the periods in which these obligations are due:


	Short Term		Long Term		Total
Purchase obligations(1)	$	2916,~~774~~456	$	~~3,870~~-	$	3316,~~644~~456
Operating lease obligations(2)		32,~~458~~831		96,~~429~~665		129,~~887~~496
Total	$	3319,~~232~~287	$	136,~~299~~665	$	4625,~~531~~952

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⁽¹⁾ Purchase obligations include commitments for the purchase of lab supplies and equipment as well as committed spend related to a JDA. These commitments are derived from purchase orders, supplier contracts and open orders based on projected demand information.

⁽²⁾ Operating lease obligations represent the fixed lease payments for the noncancelable lease term, fixed lease payments for optional renewal periods where the Company is reasonably certain the renewal option will be exercised, variable lease payments that depend on an underlying index or rate in effect at lease commencement, and future minimal lease payments for executed but not yet commenced lease agreements.

For additional information regarding our operating lease obligations, see “Note 13 – Leases” of our accompanying consolidated financial statements.

Recent Accounting Pronouncements

See “Note 2 – Summary of Significant Accounting Policies” of our accompanying consolidated financial statements included in this Annual Report on Form 10-K for more information about recent accounting pronouncements, the timing of their adoption, and their potential impact on our financial condition, results of operations and cash flows.

Critical Accounting Estimates and Judgments

Our consolidated financial statements have been prepared in accordance with U.S. GAAP which requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods.

We consider an accounting estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the financial statements. Our significant accounting policies are described in “Note 2 – Summary of Significant Accounting Policies” of our accompanying consolidated financial statements included in this Annual Report on Form 10-K. We consider the following to be our critical accounting estimates.

HIDDEN_ROW
Description	Judgments and Uncertainties	Effect if Results Differ From Assumptions
Stock-Based Compensation
We record stock-based compensation expense according to the provisions of ASC Topic 718 – Stock Compensation. ASC Topic 718 requires all share-based awards to employees, including grants of Restricted Stock Units (RSUs), Performance Stock Units (PSUs), Restricted Stock Awards (RSAs), and employee stock options, to be recognized in the financial statements based on their fair values.Prior to the Business Combination, the RSAs and stock option grant date fair value of Old SES common stock was historically determined by its board of directors with the assistance of management and an independent valuation.Post Business Combination, as our common stock is publicly traded, the fair value of RSU grants is based on the closing market price on the date grants are made. The fair value of PSU grants is determined through an independent valuation of the likelihood of the performance metrics being met within the terms of the award.	We determine the appropriate fair value model (Black-Scholes model for Options and RSAs, Monte Carlo simulation for PSUs) to be used for valuing share-based issuances and the amortization method for recording compensation cost, which can be impacted by the following assumptions:●expected term●expected volatility●expected dividend yield●risk-free interest rate	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of stock-based compensation expense reported.

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HIDDEN_ROW
Description	Judgments and Uncertainties	Effect if Results Differ From Assumptions
Business Combinations, Goodwill, and Intangibles
In accordance with the provisions of ASC Topic 805, Business Combinations, the Company recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade names and intellectual property. Any excess of the purchase price over the fair value of identifiable net assets in a business combination is recognized as goodwill. Intangibles acquired from business combinations, including trademarks and patents, are initially measured at their estimated fair values and are then amortized on a straight-line basis over their estimated useful lives.	For Intangible assets, the fair value assigned to the assets are based on reasonable assumptions and estimates that a market participant would use, including revenue forecasts, discount rates, margins, and market factors. Additionally, management evaluates whether triggering events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised.	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of fair value allocated to goodwill based on the purchase price less net assets.
Deferred Consideration related to Business Combination
In accordance with the provisions of ASC Topic 805, cash payments related to purchase consideration that are contingent on future financial performance metrics are recorded as liabilities at fair value after using management judgment to determine the likelihood of achieving the performance metric.	The deferred consideration contingent on financial performance used appropriate fair value model (capped put and capped call Black-Scholes option pricing model for 2025 and 2026 consideration payments) to be used for valuing fair value adjustment to deferred consideration, which can be impacted by the following assumptions: ● revenue discount rate ● credit spread ● payout percentage above call or below put ● forecasted revenue ● interest rate ● expected volatility risk factor adjustment	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the liability recorded for deferred consideration.

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Impairment of Goodwill and Intangible Assets

Goodwill and indefinite-lived intangible assets are evaluated for impairment in accordance with ASC Topic 350, Intangibles—Goodwill and Other.

We evaluate goodwill and indefinite-lived intangible assets for impairment annually or more frequently whenever events or circumstances make it more likely than not that impairment may have occurred. These events or circumstances could include a significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, customer engagement, changes in the carrying amount of net assets, sale or disposition of a significant portion of a reporting unit or a sustained decrease in stock price. Operating as a single reporting unit, the Company’s entire goodwill balance is subject to this assessment.

We have the option to perform a qualitative assessment (commonly referred to as a "step zero" test) to determine whether further quantitative analysis for impairment of goodwill and indefinite-lived intangible assets is necessary. The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors. If, after assessing the totality of events or circumstances we determine that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, we do not need to perform a quantitative analysis.

If a quantitative assessment is required, we estimate the fair value of each reporting unit using a market-based valuation methodology. Determining fair value using a quantitative approach using the market approach requires the use of market capitalization, current stock price multiplied by outstanding shares, less non-operating assets as a significant estimate of fair value. In assessing the reasonableness of our determined fair values, we evaluate our results against our book value of equity.

For December 31, 2025 we elected to perform the quantitative assessment for impairment considerations. Based upon our latest assessment, we determined that our goodwill was not impaired as of December 31, 2025. We will monitor future results and will perform a test if indicators trigger an impairment review.

Changes in these estimates and assumptions could materially affect the determination of fair value and impact the goodwill impairment assessment.

Stock-Based Compensation

We record stock-based compensation expense according to the provisions of ASC Topic 718 – Stock Compensation. ASC Topic 718 requires all share-based awards to employees and non-employee directors and consultants to be recognized in the financial statements based on their fair values.

As our common stock is publicly traded, the fair value of RSU grants is based on the closing market price on the date grants are made. The fair value of PSU grants is determined through an independent valuation of the likelihood of the performance metrics being met within the terms of the award.

We determine the appropriate fair value model (Monte Carlo simulation for certain PSUs) to be used for valuing share-based issuances and the amortization method for recording compensation cost, which can be impacted by the following assumptions:

●

expected term

●

expected volatility

●

expected dividend yield

●

risk-free interest rate

If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of stock-based compensation expense reported.

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HIDDEN_ROW
Description	Judgments and Uncertainties	Effect if Results Differ From Assumptions
Business Combinations, Goodwill, and Intangibles
In accordance with the provisions of ASC Topic 805, Business Combinations, the Company recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade names and intellectual property. Any excess of the purchase price over the fair value of identifiable net assets in a business combination is recognized as goodwill.Intangibles acquired from business combinations, including trademarks and patents, are initially measured at their estimated fair values and are then amortized on a straight-line basis over their estimated useful lives.	For Intangible assets, the fair value assigned to the assets are based on reasonable assumptions and estimates that a market participant would use, including revenue forecasts, discount rates, margins, and market factors. Additionally, management evaluates whether triggering events or circumstances have occurred that indicate the remaining useful life or carrying value of the amortizing intangible should be revised.	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of fair value allocated to goodwill based on the purchase price less net assets.
Deferred Consideration related to Business Combination
In accordance with the provisions of ASC Topic 805, cash payments related to purchase consideration that are contingent on future financial performance metrics are recorded as liabilities at fair value after using management judgment to determine the likelihood of achieving the performance metric.	The deferred consideration contingent on financial performance used appropriate fair value model (capped put and capped call Black-Scholes option pricing model for 2025 and 2026 consideration payments) to be used for valuing fair value adjustment to deferred consideration, which can be impacted by the following assumptions:●revenue discount rate●credit spread●payout percentage above call or below put●forecasted revenue●interest rate●expected volatility risk factor adjustment	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the liability recorded for deferred consideration.
Impairment of Goodwill and Intangible Assets
Goodwill and indefinite-lived intangible assets are evaluated for impairment in accordance with ASC Topic 350, Intangibles—Goodwill and Other. We evaluate goodwill and indefinite-lived intangible assets for impairment annually or more frequently whenever events or circumstances make it more likely than not that impairment may have occurred. These events or circumstances could include a significant change in general economic conditions, deterioration in industry environment, changes in cost factors, declining operating performance indicators, legal factors, competition, customer engagement, changes in the carrying amount of net assets, sale or disposition of a significant portion of a reporting unit or a sustained decrease in stock price. Operating as a single reporting unit, the Company’s entire goodwill balance is subject to this assessment.We have the option to perform a qualitative assessment (commonly referred to as a "step zero" test) to determine whether further quantitative analysis for impairment of goodwill and indefinite-lived intangible assets is necessary. The qualitative assessment includes a review of macroeconomic conditions, industry and market considerations, internal cost factors, and our own overall financial and share price performance, among other factors. If, after assessing the totality of events or circumstances we determine that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, we do not need to perform a quantitative analysis.	If a quantitative assessment is required, we estimate the fair value of each reporting unit using a market-based valuation methodology. Determining fair value using a quantitative approach using the market approach requires the use of market capitalization, current stock price multiplied by outstanding shares, less non-operating assets as a significant estimate of fair value. In assessing the reasonableness of our determined fair values, we evaluate our results against our book value of equity. For December 31, 2025 we elected to perform the quantitative assessment for impairment considerations. Based upon our latest assessment, we determined that our goodwill was not impaired as of December 31, 2025. We will monitor future results and will perform a test if indicators trigger an impairment review.	Changes in these estimates and assumptions could materially affect the determination of fair value and impact the goodwill impairment assessment.
Revenue Recognition
We recognize revenue within the scope of Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, we apply the following five-steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation.Satisfaction of the performance obligation based on percentage of completion or cost to completion basis, which determines the amount of revenue to be recognized using either the output method or the input method. Both methods are used in our contract revenue recognition.	We use estimation and judgment to determine the proper allocation of labor and overhead costs to these contracts. Direct materials, labor, and overhead costs are used to estimate total cost to complete for the contract. Adjustments to this total cost to complete estimate impact revenue recognition since actual costs for the period compared to total estimated contract costs to complete is used to determine the satisfaction of performance obligations for revenue recognition	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of revenue reported.
Earn-Out Restricted Shares
Warranty Reserve
The Earn-Out Restricted Shares are accounted for as a single tranche equity award issued to employees subject to time and share price vesting hurdle. These Earn-Out Restricted Shares have a share price vesting hurdle and are also subject to forfeiture if a recipient’s service terminates prior to the vesting. Pursuant to ASC 718 – Stock Compensation, we recognize stock-based compensation based on the fair value determined as of Closing with the assistance of management and an independent valuation.	We determine the appropriate fair value model (Monte Carlo simulation) to be used for valuing share-based issuances and the amortization method for recording compensation cost, which can be impacted by the following assumptions:●expected term●expected volatility●expected dividend yield●risk-free interest rate●probability of change of control	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amountof stock-based compensation expense reported.
The Company’s ESS products are sold with a warranty that covers the products for manufacturing defects for up to a ten-year period after the sale of our products. The Company establishes a warranty reserve based on anticipated warranty claims using historical data at the time product revenue is recognized. Warranty expense is recorded in cost of revenues and the related liabilities are record in accrued expenses and other current liabilities and other liabilities based on expected warranty term.	This reserve requires us to make estimates regarding the amount and costs of warranty repairs we expect to make over a period of time. Factors affecting warranty reserve levels include the historical rates of warranty claims and cost to replace equipment.	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of warranty reserve liability reported.
Sponsor Earn-Out Liabilities
Certain Sponsor Earn-Out Shares are accounted for as a derivative liability measured at fair value, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss at each reporting period, because the earn-out events that determine the number of Sponsor Earn-Out Shares to be earned back by the Sponsor include events that are not solely indexed to the common stock of the Company. The fair value of our common stock, which is publicly traded, is used in determining the fair value of the derivative liability at each valuation date with the assistance of management and an independent valuation.	We determine the appropriate fair value model (Monte Carlo simulation) to be used for valuing the derivative liability to record the change in fair value in our consolidated statements of operations and comprehensive loss, which may be impacted by the following assumptions:●expected volatility●risk free rate●expected term●probability of change of control	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of earn out liability reported.
Certain Sponsor Earn-Out Shares (as defined in note 2 to the accompanying consolidated financial statements) are accounted for as a derivative liability measured at fair value, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss at each reporting period, because the earn-out events that determine the number of Sponsor Earn-Out Shares to be earned back by the Sponsor include events that are not solely indexed to the common stock of the Company. The fair value of our common stock, which is publicly traded, is used in determining the fair value of the derivative liability at each valuation date with the assistance of management and an independent valuation.	We determine the appropriate fair value model (Monte Carlo simulation) to be used for valuing the derivative liability to record the change in fair value in our consolidated statements of operations and comprehensive loss, which may be impacted by the following assumptions:●expected volatility●risk free rate●expected term●probability of change of control	If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of earn out liability reported.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to a variety of markets and other risks including the effects of change in interest rates and foreign currency translation and transaction risks.

Interest Rate Risk

The market interest risk in our financial instruments and our financial positions represents the potential loss arising from adverse changes in interest rates. As of December 31, 2024, we had cash and cash equivalents of $128.8 million, primarily consisting of interest-bearing money market funds, and short-term investments of $133.7 million, consisting of U.S treasury securities, respectively. A 100 basis point increase in the general level of U.S. interest rates relative to interest rates as of December 31, 2024 would decrease the fair value of our short-term investments by approximately $0.5 million. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur. Such a decrease in fair value would only be realized if we sold the investments prior to maturity.41

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The market interest risk in our financial instruments and our financial positions represents the potential loss arising from adverse changes in interest rates. As of December 31, 2025, we had cash and cash equivalents of $29.5 million, primarily consisting of interest-bearing money market funds, and short-term investments of $170.1 million, consisting of U.S treasury securities, respectively. A 100 basis point increase in the general level of U.S. interest rates relative to interest rates as of December 31, 2025 would decrease the fair value of our short-term investments by approximately $0.6 million. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur. Such a decrease in fair value would only be realized if we sold the investments prior to maturity.

Foreign Currency Risk

The functional currency of all our entities and all its subsidiaries is the U.S. dollar, except for our subsidiaries in China and South Korea, which ~~has~~have Chinese renminbi (RMB) and South Korean won (KRW), respectively, as ~~its~~their functional currency, reflecting its principal operating economic environment. We expect to be exposed to both currency transaction remeasurement and translation risk. Any fluctuations in exchange rates may adversely affect our financial position, results of operations and cash flows. However, the Company engages in a minimal number of transactions outside of the functional currency of the reporting unit, resulting in alimited ~~negligible~~ exposure to foreign currency risk. We have not hedged such exposure, although we may do so in the future.

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Item 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Report of Independent Registered Public Accounting Firm (Grant Thornton LLP, PCAOB ID Number 248)	44
Consolidated Balance Sheets as of December 31, 2024 and 2023	46
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2024 and 2023	47
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023	48
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023	49
Notes to Consolidated Financial Statements	50


Report of Independent Registered Public Accounting Firm (Grant Thornton LLP, PCAOB ID Number 248)	44

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Consolidated Balance Sheets as of December 31, 2025 and 2024	46
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 2025 and 2024	47
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025 and 2024	48
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024	49
Notes to Consolidated Financial Statements	50

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Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

SES AI Corporation

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of SES AI Corporation, (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, ~~2024~~2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Valuation of Sponsor Earn-Out Liabilities

As described further in Notes 2 and 1112 to the consolidated financial statements, the Company has issued Sponsor Earn-Out Shares that are accounted for as a derivative liability (the “Sponsor Earn-Out ~~Liability~~Liabilities”) measured at fair value, with changes in fair value recorded in the consolidated statement of operations and comprehensive loss each reporting period. The fair value of the Sponsor Earn-Out Liabilities are estimated using a Monte Carlo simulation model. The fair value of the Sponsor Earn-Out ~~Liability~~Liabilities was determined to be $97,~~472~~795,000 at December 31, ~~2024~~2025. The ~~loss~~gain on change in fair value of Sponsor Earn-Out ~~Liability~~Liabilities was $51,~~306~~677,000 for the year ended December 31, ~~2024~~2025. We identified the assessment of the fair value of the Sponsor Earn-Out ~~Liability~~Liabilities as a critical audit matter.

The principal considerations for our determination that the valuation of the Sponsor Earn-Out Liabilities is a critical audit matter were (1) the high degree of subjective auditor judgment required due to the complex valuation model and expected term assumption used in the determination of fair value; and (2) the specialized skills and knowledge required to evaluate the Company’s determination of the fair value of the Sponsor Earn-Out Liabilities.

~~The~~Our ~~principal~~audit ~~considerations~~procedures ~~for~~related ~~our~~to ~~determination that~~ the ~~valuation of the~~ Sponsor Earn-Out ~~Liability~~Liabilities isincluded ~~a critical audit matter were (1)~~ the ~~high~~following, ~~degree~~among of subjective auditor judgment required due to the complex valuation model and expected term assumption used in the determination of fair value; and (2) the specialized skills and knowledge required to evaluate the Company’s determination of the fair value of the Sponsor Earn-Out Liabilityothers.

Our audit procedures related to the Sponsor Earn-Out Liability included the following, among others.

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●

We evaluated the judgments and assumptions made by management in the determination of the expected term.

●

With the assistance of our valuation specialists, we:

o

Evaluated the appropriateness of the Monte Carlo simulation model.

o Performed an independent calculation of the fair value using management’s assumptions and comparing to the fair value of the Sponsor Earn-Out ~~Liability~~Liabilities determined by the Company.

●

We evaluated the design and implementation of controls related to the Sponsor Earn-Out Liabilities.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2023.

Boston, Massachusetts

~~February~~March 284, ~~2025~~2026

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SES AI Corporation

Consolidated Balance Sheets


(in thousands, except share and per share amounts)	December 31, 2025			December 31, 2024
Assets
Current Assets
Cash and cash equivalents	$	29,541		$	128,796
Short-term investments		170,091			133,748
Accounts receivable		4,783			950
Inventories		5,154			212
Prepaid expenses and other assets		6,707			13,198
Total current assets		216,276			276,904
Property and equipment, net		28,866			38,165
Goodwill		13,272			—
Intangible assets, net		2,809			1,217
Right-of-use assets, net		7,638			9,927
Deferred tax assets		1,521			1,335
Other assets, non-current		2,264			2,237
Total assets	$	272,646		$	329,785
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	5,694		$	1,901
Operating lease liabilities		2,298			2,585
Deferred consideration, current		1,093			—
Accrued expenses and other liabilities		15,071			18,329
Total current liabilities		24,156			22,815
Sponsor Earn-Out liabilities		7,795			9,472
Operating lease liabilities, non-current		5,813			7,977
Unearned government grant		9,042			8,606
Deferred consideration, non-current		7,677			—
Other liabilities, non-current		3,408			2,605
Total liabilities		57,891			51,475
Commitments and contingencies (Note 13)
Stockholders’ Equity
Common stock: Class A shares, $0.0001 par value, 2,100,000,000 shares authorized; 321,551,078 and 317,676,034 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively; Class B shares, $0.0001 par value, 200,000,000 shares authorized; 43,881,251 shares issued and outstanding as of December 31, 2025 and December 31, 2024		37			36
Additional paid-in capital		588,355			579,378
Accumulated deficit		(371,911)			(298,871)
Accumulated other comprehensive loss		(1,726)			(2,233)
Total stockholders' equity		214,755			278,310
Total liabilities and stockholders' equity	$	272,646		$	329,785


(in thousands, except share and per share amounts)	December 31, 2024		December 31, 2023
Assets
Current Assets
Cash and cash equivalents	$	128,796	$	85,671
Short-term investments		133,748		246,775
Accounts receivable		950		—
Receivable from related party		—		3,911
Inventories		212		558
Prepaid expenses and other assets		13,198		11,712
Total current assets		276,904		348,627
Property and equipment, net		38,165		37,959
Intangible assets, net		1,217		1,345
Right-of-use assets, net		9,927		13,099
Deferred tax assets		1,335		1,057
Other assets, non-current		2,237		4,723
Total assets	$	329,785	$	406,810
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	1,901	$	4,830
Operating lease liabilities		2,585		2,404
Accrued expenses and other liabilities		18,329		13,121
Total current liabilities		22,815		20,355
Sponsor Earn-Out liabilities		9,472		4,166
Operating lease liabilities, non-current		7,977		11,316
Unearned government grant		8,606		9,270
Other liabilities, non-current		2,605		2,753
Total liabilities		51,475		47,860
Commitments and contingencies (Note 13)
Stockholders’ Equity
Common stock: Class A shares, $0.0001 par value, 2,100,000,000 shares authorized; 317,676,034 and 310,266,922 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively; Class B shares, $0.0001 par value, 200,000,000 shares authorized; 43,881,251 shares issued and outstanding as of December 31, 2024 and December 31, 2023		36		35
Additional paid-in capital		579,378		559,214
Accumulated deficit		(298,871)		(198,686)
Accumulated other comprehensive loss		(2,233)		(1,613)
Total stockholders' equity		278,310		358,950
Total liabilities and stockholders' equity	$	329,785	$	406,810

The accompanying notes are an integral part of these consolidated financial statements.

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SES AI Corporation

Consolidated Statements of Operations and Comprehensive Loss


	Years Ended December 31,
(in thousands, except share and per share amounts)	~~2024~~2025		~~2023~~2024
Revenue from contracts with customers:
Revenue	$	221,~~040~~000	$	—2,040
Cost of revenues		~~752~~9,693		—752
Gross profit		111,~~288~~307		—1,288
Operating expenses:
Research and development		7267,~~141~~045		3072,~~675~~141
General and administrative		3826,~~395~~876		4738,~~483~~395
Total operating expenses		~~110~~93,~~536~~921		78110,~~158~~536
Loss from operations		(~~109~~82,~~248~~614)		(78109,~~158~~248)
Other income (expense):
Interest income		159,~~036~~338		1615,~~685~~036
(Loss) Gain on change in fair value of Sponsor Earn-Out liabilities		(5,306)		6,795
Gain (Loss) on change in fair value of Sponsor Earn-Out liabilities		1,677		(5,306)
Miscellaneous (expense) income, net		(479)		425
Miscellaneous expense, net		(1,210)		(479)
Total other income, net		9,~~251~~805		239,~~905~~251
Loss before income taxes		(9972,~~997~~809)		(5499,~~253~~997)
(Provision) benefit from income taxes		(188)		853
Provision for income taxes		(231)		(188)
Net loss		(~~100~~73,~~185~~040)		(53100,~~400~~185)
Other comprehensive (loss) income, net of tax:
Other comprehensive income (loss), net of tax:
Foreign currency translation loss		(456)		(937)
Foreign currency translation gain (loss)		492		(456)
Unrealized (loss) gain on short-term investments		(164)		575
Unrealized gain (loss) on short-term investments		15		(164)
Total other comprehensive (loss), net of tax		(620)		(362)
Total other comprehensive income (loss), net of tax		507		(620)
Total comprehensive loss	$	(~~100~~72,~~805~~533)	$	(53100,~~762~~805)


Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.3122)	$	(0.1731)

Weighted-average shares outstanding:
Basic and diluted		~~321~~330,~~824~~917,~~143~~166		~~315~~321,~~051~~824,~~508~~143

The accompanying notes are an integral part of these consolidated financial statements.

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SES AI Corporation

Consolidated Statements of Stockholders’ Equity


	Class A and Class B							Accumulated		Total
	Common Stock			Additional		Accumulated		Other Comprehensive		Stockholders’
(in thousands, except share and per share amounts)	Shares	Amount		Paid-in-Capital		Deficit		Income (Loss)		Equity
Balance – December 31, 2022	349,714,840	$	35	$	538,041	$	(145,286)	$	(1,251)	$	391,539
Issuance of common stock upon exercise of stock options	3,691,340		—		524		—		—		524
Restricted stock units vested	1,063,863		—		—		—		—		—
Forfeitures of Restricted Stock Awards	(10,824)		—		—		—		—		—
Forfeitures of Earn-Out restricted shares	(311,046)		—		—		—		—		—
Stock-based compensation	—		—		20,649		—		—		20,649
Net loss	—		—		—		(53,400)		—		(53,400)
Foreign currency translation loss	—		—		—		—		(937)		(937)
Unrealized gain on short-term investments	—		—		—		—		575		575
Balance — December 31, 2023	354,148,173	$	35	$	559,214	$	(198,686)	$	(1,613)	$	358,950
Issuance of common stock upon exercise of stock options	6,507,475		1		1,010		—		—		1,011
Net restricted stock units vested	1,896,743		—		(635)		—		—		(635)
Restricted stock units vested	1,896,743		—		(635)		—		—		(635)
Forfeitures of Restricted Stock Awards	(854,008)		—		—		—		—		—
Forfeitures of Earn-Out restricted shares	(141,098)		—		(146)		—		—		(146)
Stock-based compensation	—		—		19,935		—		—		19,935
Net loss	—		—		—		(100,185)		—		(100,185)
Foreign currency translation loss	—		—		—		—		(456)		(456)
Unrealized loss on short-term investments	—		—		—		—		(164)		(164)
Balance — December 31, 2024	361,557,285	$	36	$	579,378	$	(298,871)	$	(2,233)	$	278,310
Issuance of common stock upon exercise of stock options	614,255		2		75		—		—		77
Net restricted stock units vested	4,742,097		—		—		—		—		—
Forfeitures of Restricted Stock Awards	(116,942)		—		(433)		—		—		(433)
Forfeitures of Earn-Out restricted shares	(23,710)		—		—		—		—		—
Repurchase and retirement of Class A common stock	(1,340,656)		(1)		(1,605)		—		—		(1,606)
Stock issuance costs	—		—		(13)		—		—		(13)
Stock-based compensation	—		—		10,953		—		—		10,953
Net loss	—		—		—		(73,040)		—		(73,040)
Foreign currency translation gain	—		—		—		—		492		492
Unrealized gain on short-term investments	—		—		—		—		15		15
Balance — December 31, 2025	365,432,329	$	37	$	588,355	$	(371,911)	$	(1,726)	$	214,755

The accompanying notes are an integral part of these consolidated financial statements.

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SES AI Corporation

Consolidated Statements of Cash Flows


	Years Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Cash Flows From Operating Activities
Net loss	$	(~~100~~73,~~185~~040)	$	(53100,~~400~~185)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss (gain) on change of fair value of Sponsor Earn-Out liabilities		5,306		(6,795)
(Gain) loss on change of fair value of Sponsor Earn-Out liabilities		(1,677)		5,306
Stock-based compensation		1910,~~935~~971		2019,~~649~~935
Depreciation and amortization		810,~~308~~295		58,~~541~~308
Accretion income from available-for-sale short-term investments		(73,~~215~~132)		(117,~~050~~215)
Loss on sale of fixed assets		701		—
Loss on sale or disposal of fixed assets		1,306		701
Other		~~(1,323)~~389		(~~244~~1,323)
Changes in operating assets and liabilities:
Receivable from related party		~~3,911~~—		(13,~~528)~~911
Accounts receivable		(~~950~~2,631)		—(950)
Inventories		~~330~~(1,035)		~~(184)~~330
Prepaid expenses and other assets		(29,~~198)~~982		(82,~~170~~198)
Right of use assets		2,~~941~~528		(12,~~871)~~941
Deferred tax assets		(~~278~~137)		(~~1,057~~278)
Accounts payable		~~(72)~~1,039		(6272)
Lease liabilities		(2,915)		1,801
Operating lease liabilities		(2,825)		(2,915)
Accrued expenses and other liabilities		7(10,~~618~~395)		~~(42)~~7,618
Net cash used in operating activities		(6658,~~086~~362)		(5666,~~412~~086)
Cash Flows From Investing Activities
Purchases of property and equipment		(122,~~206~~858)		(1512,~~763~~206)
Purchase of short-term investments		(215,102)		(281,518)
Acquisition of business, net of cash acquired		(3,029)		—
Proceeds from the maturities of short-term investments		335,500		330,000
Proceeds from the sale of short-term investments		4,997		—
Net cash provided by investing activities		108,192		32,719
Purchase of short-term investments		(238,176)		(215,102)
Proceeds from the maturities of short-term investments		199,880		335,500
Net cash (used in) provided by investing activities		(39,186)		108,192
Cash Flows From Financing Activities
Proceeds from government grant		—		2,751
Repurchase and retirement of Class A common stock		(1,605)		—
Proceeds from stock option exercises		1,010		524
Payments for taxes withheld on vesting of restricted stock		(433)		—
Net cash provided by financing activities		1,010		3,275
Proceeds from stock option exercises		77		1,010
Effect of exchange rates on cash		(687)		(552)
Net cash (used in) provided by financing activities		(1,961)		1,010
Net increase (decrease) in cash, cash equivalents and restricted cash		42,429		(20,970)
Effect of exchange rates on cash		327		(687)
Cash, cash equivalents and restricted cash at beginning of period (Note 5)		86,966		107,936
Net (decrease) increase in cash, cash equivalents and restricted cash		(99,182)		42,429
Cash, cash equivalents and restricted cash at end of period (Note 5)	$	129,395	$	86,966
Cash, cash equivalents and restricted cash at beginning of period (Note 6)		129,395		86,966
Cash, cash equivalents and restricted cash at end of period (Note 6)	$	30,213	$	129,395

Supplemental Cash and Non-Cash Information:
Accounts payable and accrued expenses related to purchases of property and equipment	$	~~1,497~~645	$	31,~~808~~497
Incomes taxes paid	$	286	$	222
Income taxes paid	$	—	$	286
Lease liabilities arising from obtaining right-of-use assets	$	12	$	6,008
Deferred consideration payable for acquisition	$	8,770		—
Lease liabilities arising from obtaining right-of-use assets	$	—	$	12

The accompanying notes are an integral part of these consolidated financial statements.

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SES AI Corporation

Notes to Consolidated Financial Statements

Note 1. Nature of Business

SES AI Corporation, and its consolidated subsidiaries (together the “Company”) consists of SES AI Corporation (“SES”) and its wholly-owned subsidiary SES Holdings Pte. Ltd. (“SES Holdings” or “Old SES”), along with its wholly owned subsidiaries SolidEnergy Systems, LLC (“SES LLC”), SES (Shanghai) Co., Ltd. (“SES Shanghai”), SolidEnergy Systems Securities Corporation (“SES Securities”), Viking Power Systems Pte. Ltd. (“SES Viking”), SES AI Korea Co., Ltd. (“SES Korea”), ~~and~~Molecular Universe Pte. Ltd. (“Molecular Universe Ltd.”), SES Energy ~~Pte~~Storage (Shanghai) Co., Ltd. (“SES Energy Storage”), and Shenzhen UZ Energy Co., Ltd. (“UZ Energy”).

SES Holdings is a Singapore private company limited by shares formed in November 2018. SES LLC is a Delaware limited liability company formed in November 2018 as a result of the conversion from a corporation to a limited liability company by SolidEnergy Systems Corp, a Delaware corporation formed in April 2012. SES Shanghai was registered in Shanghai, China in August 2018. SES Securities was incorporated in December 2017 as a Massachusetts Security Corporation. SES Viking is a Singapore private company limited by shares and was formed in May 2019. SES Korea, formerly known as Massachusetts Solid Energy Co., Ltd., was registered in South Korea in November 2021. ~~SES~~Molecular ~~Energy~~Universe Ltd. is a Singapore private company and was incorporated in September 2022. SES Energy Storage is a China private company and was incorporated in August 2025. UZ Energy is a China private company that was acquired in September 2025.

The Company is engaged in the development of AI-enhanced high-performance, Lithium-Metal (“Li-Metal”) and Lithium-ion (“Li-ion) rechargeable battery technologies and battery materials for ~~electric~~Energy ~~vehicles~~Storage Systems (“~~EVs~~ESS”), Urban Air Mobility (“UAM”), drones, robotics, electric vehicles (“EVs”), and other applications. The Company’s mission is to accelerate the world’s energy transition through AI-enhanced material discovery and battery management. The Company’s differentiated battery technology has been designed to combine the high energy density of Li-Metal with the ~~cost-effective,~~ large-scale manufacturability of conventional ~~Lithium-ion (“~~Li-ion”) batteries ~~which~~in ~~will~~order ~~help~~ to help promote the transition ~~from~~to new cleaner technologies. The Company is seeking to accelerate the ~~global~~pace ~~dependence~~of oninnovation ~~fossil~~by ~~fuel-based~~currently ~~automotive~~utilizing ~~vehicles~~AI across the spectrum of our business, from engineering and manufacturing to ~~clean~~battery health and ~~efficient~~safety ~~EVs~~monitoring and AI-accelerated battery materials discovery. The Company’s headquarter is located in Woburn, Massachusetts with research and development facilities located there, in Shanghai, China, and in Chungju, South Korea. Principal operations have commenced, and the Company has derived revenue from its principal business activities starting in October 2024.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and have been prepared on a going concern basis and in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). The Company’s fiscal year ends on December 31.

Principles of Consolidation

The consolidated financial statements include the accounts of SES and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation.

Reclassification of Prior Period Amounts

Certain amounts have been reclassified to conform to the current year financial statement presentation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of commitments and contingencies, and the reported amounts of revenues and expenses. The Company bases its estimates on available historical experience and on various other factors that the Company believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from those estimates.

Significant estimates and assumptions include those related to the valuation of (i) certain equity awards, including ~~common stock awards prior to the Business Combination~~, the Sponsor Earn-Out Shares, ~~the~~(as ~~Earn-Out~~defined ~~Restricted Shares~~below), and performance stock units, (ii) revenue from customers, (iii) deferred tax assets and uncertain income tax positions, (iv) the measurement of operating lease liabilities, ~~and~~ (v) the evaluation of the recoverability of long-lived assets, ~~including~~and ~~intangible assets. On an ongoing basis~~goodwill, ~~the Company evaluates these judgments and estimates for reasonableness.~~

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including intangible assets, (vi) fair value measurement of acquired intangible assets and deferred consideration, and (vii) warranty reserve. On an ongoing basis, the Company evaluates these judgments and estimates for reasonableness.

Foreign Currency Translation

For the foreign subsidiaries of the Company, assets and liabilities are translated into U.S. dollars using exchange rates as of the balance sheet date, and income and expenses are translated using the average exchange rates in effect for the related month. The net effect of these translation adjustments is reported in accumulated other comprehensive (loss) income within total stockholders’ equity on the consolidated balance sheets. Net realized and unrealized gains (losses) from foreign currency transactions are included in miscellaneous income (expense), net in the consolidated statements of operations and comprehensive loss and were $0.27 million and $0.32 million for the years ended December 31 ~~2024~~2025 and ~~2023~~2024, respectively.

Business Combinations

In accordance with the provisions of ASC Topic 805, Business Combinations, the Company recognizes the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. Determining these fair values requires management to make significant estimates and assumptions, especially with respect to intangible assets.

During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill, or bargain purchase if applicable. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, any subsequent adjustments are recorded to the condensed consolidated statements of operations and comprehensive loss.

The results of operations of an acquired business are included in the Company’s consolidated financial statements from the date of acquisition. Acquisition-related costs, including advisory, legal, accounting, valuation and other costs are expensed as incurred and are included in general and administrative expenses on the consolidated statements of operations. Contingent consideration liabilities are recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liabilities are recognized in miscellaneous expense, net in the consolidated statements of operations and comprehensive loss.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments that have original maturity periods of 90 days or less at the time of purchase that are readily convertible to known amounts of cash.

Restricted Cash

Restricted cash includes cash held in checking and money market funds as collateral to secure certain insurance policies. If the date of availability or disbursement is less than one year, restricted cash is reported within prepaid expenses and other current assets on the consolidated balance sheets. If the date of availability or disbursement is longer than one year and the balances are maintained under an agreement that legally restricts the use of such funds, restricted cash is reported within other assets on the consolidated balance sheets. As of December 31, ~~2024~~2025 and ~~2023~~2024, the Company had restricted cash balances of $0.67 million and $10.36 million, respectively.

Revenue from Contracts with Customers

In October 2024, the Company began to generate revenue from its planned principal business activities. The Company recognizes revenue within the scope of ~~Accounting Standards Codification (“~~ASC”) 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five-steps:

identify the contract(s) with the customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to the performance obligations in the contract; and

recognize revenue as performance obligations are satisfied.

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The Company only applies the five-step model to contracts when it is probable the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. The Company’s contracts do not contain significant financing components.

Product Revenue

The Company sells ESS products to its global customer base that were contract manufactured and enhanced through the installation of the Company’s battery management system. The Company also manufactures and sells ~~Li-Metal~~ battery cells and battery materials, such as electrolytes, to automotive and drone original equipment manufacturers (“OEMs”) and other ~~manufactures~~manufacturers. Product revenue is recognized at a point in time upon transfer of control of the product. Transfer of control generally occurs upon delivery to the customer, which is when the customer obtains physical possession of the goods, legal title is transferred, the customer has all risks and rewards of ownership and an obligation to pay for the goods is created. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for the promised goods.

Service Revenue

The Company provides services for the design and development of Li-ion and Li-Metal battery materials in accordance with the customer’s specifications. Customers of the Company’s design and development services include OEM’s and other companies who use our battery technology and battery materials in their products, not limited to EV, UAM, and drones. Service revenue contracts generally have a term that extends from one to two years beginning at the effective date of the contract.

Consideration for service revenue contracts generally include up-front payments as well as further payments that become payable when the Company meets specific contractual milestones. The Company has an enforceable right to payment for performance completed to date and the deliverable has no alternative use to the Company. Judgment is required in the assessment of progress toward completion of the performance obligations. Service revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward the satisfaction of its performance obligations.

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the deliverable has no alternative use to the Company. Judgment is required in the assessment of progress toward completion of the performance obligations. Service revenue is recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward the satisfaction of its performance obligations.

Some of the Company’s service revenue contracts contain multiple performance obligations that are to be satisfied in sequential order and require customer acceptance to progress to the next performance obligation. This creates variable consideration in the context of the contract, which is included in the transaction price if it is probable that a significant future reversal of cumulative revenue under the contract will not occur; otherwise, the Company reduces transaction price by the amount of the variable consideration.

Deferred Revenue

Deferred revenue represents situations where the cash is collected, but the related revenue has not yet been recognized. Revenue is subsequently recognized when the revenue recognition criteria are met. Service revenue is generally invoiced based on contractual milestones and recognized based the Company’s estimated progress toward the satisfaction of the performance obligations.

Costs to Fulfill a Customer Contract

Certain costs, such as employee compensation for design, discovery and development services, are recognized as an asset if they relate directly to a customer contract, generate or enhance resources of the entity that will be used in satisfying future performance obligations, and are expected to be recovered. If these three criteria are not met, the costs are expensed in the period incurred. Deferred costs are recognized as cost of revenue in the period when the related revenue is recognized. As of December 31, 2025 and 2024, total deferred contract costs were $0.3 million and $0.1 million, respectively.

Cost of Revenue

Cost of revenue includes materials, labor, inventory, freight costs, overhead and other costs related to manufacturing our products and completing service contracts. Labor consists of personnel-related expenses such as salaries and benefits, and stock-based compensation. Overhead and other costs consist primarily of expenses incurred for outside services, utilities, rent, depreciation expense and other facilities-related costs. Costs related to battery materials and design services are recognized in the same period as the associated revenue is recognized.

Accounts Receivable

Accounts receivable and notes receivable are recorded at invoiced amounts less allowance for any credit losses. We recognize credit losses based on a forward-looking current expected credit losses (“CECL”) model. We make estimates of expected credit losses based upon the assessment of various factors, including the age of receivable balances, credit quality of our customers, current economic conditions,

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reasonable and supportable forecasts of future economic conditions, and other factors that may affect our ability to collect from customers. The allowance for credit losses is recognized in the Consolidated Statement of Operations and Comprehensive Loss. The uncollectible receivables are written off in the period in which a determination is made that all commercially reasonable means of recovering them have been exhausted. We did not recognize an amount for the allowance for expected credit loss as of December 31, 2025 and 2024, respectively, and there were no write-offs of accounts receivable for the periods. As of December 31, 2025 and December 31, 2024, our accounts receivable was $4.8 million and $1.0 million, respectively. As of December 31, 2025, we have an immaterial amount of notes receivable and no notes receivable as of December 31, 2024.

Warranty Reserve

The Company’s ESS products are sold with a warranty that covers the products for manufacturing defects for up to a ten-year period after the sale of our products. The Company establishes a warranty reserve based on anticipated warranty claims using historical data at the time product revenue is recognized. This reserve requires us to make estimates regarding the amount and costs of warranty repairs we expect to make over a period of time. Factors affecting warranty reserve levels include the historical rates of warranty claims and cost to replace equipment. Warranty expense is recorded in cost of revenues and the related liabilities are record in accrued expenses and other current liabilities and other liabilities based on expected warranty term. We evaluate the adequacy of this reserve each reporting period.

Investments

The Company has investments in marketable debt and equity securities. Investments in marketable debt securities consist of U.S. treasury securities and are classified as available-for-sale at the time of purchase. The Company reevaluates the available-for-sale classification at each balance sheet date. These available-for-sale marketable debt securities are recorded at fair value, with any unrealized gains and losses included as a component of accumulated other comprehensive (loss) income in total stockholders’ equity on the consolidated balance sheets until realized or until a determination is made that an other-than-temporary decline in market value has occurred. The amortized cost of U.S. treasury securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are reported within interest income in the consolidated statements of operations and comprehensive loss. Investments in marketable debt securities with a stated maturity date of less than one year are classified as short-term investments, while these with a stated maturity date of more than one year, and that are not expected to be used in current operations, are classified as long-term investments on the consolidated balance sheets, respectively. Investments in marketable equity securities are classified as short-term investments when the Company’s intention is to sell within a year, otherwise they will be classified as long-term investments. Investments in marketable equity securities with a readily determinable fair value, not accounted for under the equity method, are recorded at fair value with changes to fair value reported within miscellaneous income (expense), net in the consolidated statements of operations and comprehensive loss.

Inventories

~~Inventories~~Inventory ~~consist~~is stated at the lower of ~~raw~~average cost or net realizable value on a first-in, first-out basis. Inventory costs include purchase of materials, freight, storage, hauling, and ~~are~~certification ~~stated~~costs. atThe cost basis of the ~~lower~~Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. Once established, write-downs of ~~average~~inventory are considered permanent adjustments to the cost basis of inventory and cannot be reversed due to subsequent increases in demand forecasts. As of December 31, 2025 and 2024, the Company did not have excess or ~~net~~obsolete ~~realizable~~inventory ~~value~~reserves.

~~Concentrations~~Inventories consisted of the following:

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash, cash equivalents, restricted cash and short-term investments. The Company seeks to mitigate its credit risk with respect to such concentrations by holding its deposits with large, reputable, domestic financial institutions and investing in high credit rated shorter-term instruments. The account balances at these institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and as a result, there may be a concentration


	Year Ended December 31,
(in thousands)	2025		2024
Inventories:
Raw materials	$	3,327	$	212
Work-in-process		27		—
Finished goods		1,110		—
In-transit		690		—
Total inventories	$	5,154	$	212

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of risk related to amounts invested in excess of FDIC insurance coverage. As of December 31, 2024 and 2023, the amount of cash, cash equivalents and restricted cash held by our subsidiaries in foreign bank accounts was $4.4 million and $11.1 million, respectively.Concentrations

~~The~~Financial ~~Company~~instruments ~~had~~that ~~one~~potentially ~~customer~~subject ~~during~~ the ~~year~~Company ~~ended~~to ~~December~~concentrations 31of credit risk consist of cash, ~~2024~~cash ~~that~~equivalents, ~~accounted~~restricted ~~for approximately~~cash ~~90%~~and ofshort-term ~~the~~investments. The Company’s ~~revenue~~seeks to mitigate its credit risk with respect to such concentrations by holding its deposits with large, reputable, domestic financial institutions and ~~outstanding~~investing ~~accounts~~in ~~receivable~~high credit rated shorter-term instruments. The account balances at these institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, ~~respectively~~and as a result, ~~for~~there ~~the~~may ~~year~~be ~~ended~~a concentration of risk related to amounts invested in excess of FDIC insurance coverage. As of December 31, 2025 and 2024, the amount of cash, cash equivalents and restricted cash held by our subsidiaries in foreign bank accounts was $27.9 million and $4.4 million, respectively.

Fair Value Measurements

Fair value is defined as an exchange price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability.

The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. GAAP establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows:

Level 1 Observable inputs such as quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3 Unobservable inputs in which there are little or no market data and which require the Company to develop its own assumptions.

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Certain of the Company’s financial instruments, including cash and cash equivalents, accounts payable, accrued expenses and other current liabilities are carried at cost, which approximates their fair value because of their short-term nature. The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:


(in thousands)	Level 1		Level 2		Level 3		Total
December 31, 2025
Current assets
Cash equivalents in money market funds (Note 6)	$	15,554	$	—	$	—	$	15,554
U.S. treasury securities (Note 7)		169,229		—		—		169,229
Equity securities(1)		862		—		—		862
Total current assets at fair value	$	185,645	$	—	$	—	$	185,645

Current Liabilities
Deferred consideration, current(2)		—		—		1,093		1,093
Total current liabilities at fair value	$	—	$	—	$	1,093	$	1,093

Long-term Liabilities
Sponsor Earn-Out liabilities	$	—	$	—	$	7,795	$	7,795
Deferred consideration, non-current(2)	$	—	$	—	$	7,677	$	7,677
Total long-term liabilities at fair value	$	—	$	—	$	15,472	$	15,472

December 31, 2024
Current assets
Cash equivalents in money market funds (Note 5)	$	120,888	$	—	$	—	$	120,888
Cash equivalents in money market funds (Note 6)	$	120,888	$	—	$	—	$	120,888
U.S. treasury securities		132,782		—		—		132,782
U.S. treasury securities (Note 7)		132,782		—		—		132,782
Equity securities(1)		967		—		—		967
Total current assets at fair value	$	254,637	$	—	$	—	$	254,637

Non-current liabilities
Sponsor Earn-Out liabilities	$	—	$	—	$	9,472	$	9,472
Total non-current liabilities at fair value	$	—	$	—	$	9,472	$	9,472

December 31, 2023
Current assets
Cash equivalents in money market funds (Note 5)	$	74,997	$	—	$	—	$	74,997
U.S. treasury securities (Note 6)		246,127		—		—		246,127
Equity securities(1)		648		—		—		648
Total current assets at fair value	$	321,772	$	—	$	—	$	321,772

Non-current assets
Restricted cash in money market funds	$	614	$	—	$	—	$	614
Total non-current assets at fair value	$	614	$	—	$	—	$	614
Total assets at fair value	$	322,386	$	—	$	—	$	322,386

Non-current liabilities
Sponsor Earn-Out liabilities	$	—	$	—	$	4,166	$	4,166
Total non-current liabilities at fair value	$	—	$	—	$	4,166	$	4,166

⁽¹⁾ Fair value was determined using publicly quoted market prices obtained from third-party sources in their respective markets.

~~There~~(2) ~~were~~Fair novalue ~~transfers~~was indetermined orusing ~~out~~the ofBlack ~~Level~~Scholes 3option ~~measurements~~pricing ~~during~~formula ~~the~~capped ~~years~~call ~~ended~~and ~~December 31, 2024~~capped put methodology using risk adjusted discount rate for the revenue and ~~2023~~adjusted revenue forecasts.

There were no transfers in or out of Level 3 measurements during the years ended December 31, 2025 and 2024.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation for property and equipment, other than construction in progress, is based upon the following useful lives using the straight-line method:


Laboratory machinery and equipment		5 – 10 years
Office and computer equipment		3 – 5 years
Furniture and fixtures		5 years
Leasehold improvements		Shorter of useful life of asset or lease term

The Company periodically assesses the useful lives of the assets to determine whether events or circumstances may indicate that a revision to the useful life is warranted. Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to placing the asset in service.

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Intangible Assets

Intangible assets purchased are recorded at cost and stated at cost less accumulated amortization. Intangibles assets with finite useful lives are amortized based on the pattern in which the economic benefits of the assets are estimated to be consumed over the following estimated useful lives:

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Intellectual property		15 years

Amortization expense is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including amortizable intangible assets and ~~ROU~~right-of-use assets, annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such events or circumstances arise, the Company will compare the carrying amount of the asset group comprising the long-lived assets to the estimated future undiscounted cash flows expected to be generated by the asset group. If the estimated aggregate undiscounted cash flows are less than the carrying amount of the asset group, an impairment charge is recorded as the amount by which the carrying amount of the asset group exceeds the fair value of the assets, as based on the expected discounted future cash flows attributable to those assets. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. There were no impairments of long-lived assets during the years ended December 31, ~~2024~~2025 and ~~2023~~2024.

Goodwill, long-lived assets, and other intangible assets

Goodwill and other intangible assets that arise from acquisitions are recorded in accordance with ASC Topic 805, Business Combinations and ASC Topic 350, Intangibles—Goodwill and Other. In accordance with this guidance, specifically identified intangible assets must be recorded as a separate asset from goodwill if either of the following two criteria is met: (1) the intangible asset acquired arises from contractual or other legal rights; or (2) the intangible asset is separable. Intangibles are typically trade names and intellectual property. Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination.

The Company recorded goodwill for the first time in connection with its acquisition of UZ Energy in September 2025. As the Company determined there to be a single reporting unit subsequent to the acquisition, management identified the historical losses of the legacy business to be an indicator of a triggering event, in accordance with ASC Topic 350. The Company performed a quantitative test for impairment, noting that the fair value of the Company using the market cap under the market approach exceeded its book value and concluded there was no impairment of goodwill.

Notes Payable

During 2025, the Company acquired notes payable liabilities, including accrued interest, as part of the UZ Energy acquisition detailed in “Note 3– Acquisitions.” The Company recorded notes payable at their carrying amount, including accrued interest, based on the rates and terms detailed in the original agreements for the notes payable. As of December 31, 2025, the outstanding notes payable and accrued interest balance was $0.8 million.

Leases

The Company determines if an arrangement includes a lease at inception. Lease arrangements generally have lease and non-lease components, which the Company has elected to account for as a single lease component. At the lease commencement date, the Company recognizes an operating lease liability and an operating lease asset, which represents the right to use the underlying asset for the lease term (the “ROU asset”). The operating lease liability is equal to the present value of (1) fixed lease payments for the noncancelable lease term, (2) fixed lease payments for optional renewal periods where it is reasonably certain the renewal option will be exercised, and (3) variable lease payments that depend on an underlying index or rate in effect at lease commencement. Variable lease payments as the difference between underlying index and the actual index, or that do not depend on an underlying index or rate in effect at lease commencement, such as common area maintenance, insurance, and property tax, are recognized in operating expenses when incurred. The operating ROU asset is initially measured at cost, which primarily comprises the initial amount of the lease liability and lease payments made prior to lease commencement, less any lease incentives received.

As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at lease commencement in determining the present value of lease payments. The Company’s incremental borrowing rate estimates a secured rate that reflects the term of the lease, the nature of the underlying asset and the economic environment. The Company recognizes rent expense on a straight-line basis over the lease term, with any lease incentives amortized as a reduction of rent expense over the lease term. All ROU assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheets. See “Note 12 – Leases” for additional information about the Company’s leases.56

Government Grants

The Company occasionally receives government grants that provide financial assistance for certain eligible expenditures. Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to it, and that the grant will be received. The Company records such grants either as a reduction of the related expense or as other income, depending on the nature of the grant, in the consolidated statements of operations and comprehensive loss or as a reduction of the cost of the related asset in the consolidated balance sheets. If a grant amount is received but not earned, then such amount is deferred and shown as a liability in the

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~~consolidated~~As ~~balance~~the ~~sheet.~~Company’s ~~See~~leases ~~“Note~~do 10not –provide ~~Government~~an ~~Grant”~~implicit ~~for~~rate, ~~additional~~the Company uses an incremental borrowing rate based on the information ~~about~~available at lease commencement in determining the present value of lease payments. The Company’s incremental borrowing rate estimates a ~~government~~secured ~~grant~~rate ~~awarded~~that toreflects the term of the lease, the nature of the underlying asset and the economic environment. The Company recognizes rent expense on a straight-line basis over the lease term, with any lease incentives amortized as a reduction of rent expense over the lease term. All ROU assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. The Company excludes leases with an expected term of one year or less from recognition on the consolidated balance sheets.

Government Grants

Sponsor Earn-Out Liabilities

On February 2, 2022, in connection with the Domestication, 6,900,000 of Ivanhoe’s Class B ordinary shares held by Ivanhoe Capital Sponsor LLC (the “Sponsor”) converted into an equal number of shares of duly authorized, validly issued, fully paid and nonassessable Class B common stock, par value $0.0001 per share (the “Class B common stock”), of the Company. At Closing, these 6,900,000 shares of Class B common stock converted into an equal number of shares of duly authorized, validly issued, fully paid and nonassessable Class A common stock, par value $0.0001 per share (the “Class A common stock,” and together with the Class B common stock, “common stock”), of the Company (the “Sponsor Earn-Out Shares”). These Sponsor Earn-Out Shares are subject to certain transfer restrictions and forfeiture terms following the Closing, which will be released as follows:

● 20% ~~are~~were subject to transfer restrictions until the date that is 180 days after the Closing (“Tranche 1”);

●

20% are subject to transfer restrictions until SES’s closing stock price equals or exceeds $12.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 2”);

●

20% are subject to transfer restrictions until SES’s closing stock price equals or exceeds $14.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 3”);

●

20% are subject to transfer restrictions until SES’s closing stock price equals or exceeds $16.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 4”); and

●

20% are subject to transfer restrictions until SES’s closing stock price equals or exceeds $18.00 for 20 out of 30 consecutive trading days following the date that is 150 days after the Closing (“Tranche 5”).

If there is a change in control of SES at a per share value of greater than $18.00, then 100% of the Sponsor Earn-Out Shares will be released from these transfer restrictions; however if the per share value is less than $18.00 upon a change in control, then the Sponsor Earn-Out Shares will be released pro rata based on the per share value of the change in control and the stock price thresholds for release specified above. Any Sponsor Earn-Out Shares not released will be forfeited and cancelled.

The Sponsor Earn-Out Shares in Tranche 1 are accounted for as equity instruments because they are legally owned by the Sponsor, cannot be forfeited and were subject only to transfer restrictions that lapsed 180 days after February 3, 2022 (the “Closing Date”), which occurred on August 2, 2022, and as such meet the equity classification criteria in accordance with ASC 505, Equity. The Sponsor Earn-Out Shares under Tranche 2 through Tranche 5 are accounted for as a derivative liability measured at fair value, with changes in fair value reported within other expense, net on the consolidated statements of operations and comprehensive loss at each reporting period, because the earn-out triggering events that determine the number of Sponsor Earn-Out Shares to be earned back by the Sponsor include events that are not solely indexed to the shares of Class A common stock. As of December 31, ~~2024~~2025, the earn-out triggering events were not achieved for any of Tranche 2 through Tranche 5. See “Note 1112 – Sponsor Earn-Out Liabilities” for further information on fair value.

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Earn-Out Shares

In connection with the Business Combination, holders of Old SES common stock, redeemable convertible preferred stock, options and restricted shares received 29,999,947 earn-out shares of common stock, including (i) 23,691,182 shares of Class A common stock (the “Earn-Out Shares”) issued for the benefit of the former holders of Old SES common and redeemable convertible preferred stock; (ii) 2,308,969 shares of restricted Class A common stock (the “Earn-Out Restricted Shares”) issued to Old SES option holders and pre-Closing recipients of Old SES restricted shares; and (iii) 3,999,796 shares of Class B common stock (“Founder Earn-Out Shares”) issued to the CEO and certain entities affiliated with the CEO (the “SES Founder Group”).

The Earn-Out Shares and the Founder Earn-Out Shares (collectively, the “Escrowed Earn-Out Shares”) were placed into escrow at the Closing and shall vest on the date that the closing price of shares of Class A common stock is equal to or greater than $18.00 (“Triggering Event”) during the period beginning on the date that is one year following the Closing and ending on the date that is five years following the Closing (the “Earn-Out Period”). If a Triggering Event has not occurred by the expiration of the Earn-Out Period, then the Escrowed Earn-Out Shares shall be cancelled, and holders of such shares shall have no right to receive such Escrowed Earn-Out Shares. The Earn-Out Restricted Shares are subject to vesting based on the same terms as the Escrowed Earn-Out Shares and are also subject to forfeiture if such recipient’s service with the Company terminates prior to vesting. Any such forfeited Earn-Out Restricted Shares shall be available for grant pursuant to the Company’s incentive plan. If, during the earn-out period of five years, there is a change in control transaction at a per share price of greater than or equal to $18.00 per share, then all 29,999,947 earn-out shares will vest immediately prior to the consummation of such change in control, otherwise, all earn-out shares will be forfeited.

56The Escrowed Earn-Out Shares to be released upon achievement of the vesting condition are classified as equity instruments and recorded at fair value in stockholders’ equity as vesting is indexed to the common stock of the Company. The Earn-Out Restricted Shares are accounted for as a single tranche equity award. See “Note 16 – Stock-Based Compensation” for further information on fair value of the Earn-Out Restricted Shares.

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grant pursuant to the Company’s incentive plan. If, during the earn-out period of five years, there is a change in control transaction at a per share price of greater than or equal to $18.00 per share, then all 29,999,947 earn-out shares will vest immediately prior to the consummation of such change in control, otherwise, all earn-out shares will be forfeited.

The Escrowed Earn-Out Shares to be released upon achievement of the vesting condition are classified as equity instruments and recorded at fair value in stockholders’ equity as vesting is indexed to the common stock of the Company. The Earn-Out Restricted Shares are accounted for as a single tranche equity award. See “Note 15 – Stock-Based Compensation” for further information on fair value of the Earn-Out Restricted Shares.

Common Stock Warrants

Prior to the Business Combination, Ivanhoe had issued 9,200,000 public warrants (“Public Warrants”) and 5,013,333 private placement warrants (“Private Warrants” and collectively with the Public Warrants, the “Warrants”) which were assumed by the Company at Closing. On February 1, 2022, prior to Closing, the Ivanhoe warrant holders approved certain amendments to the terms of the Warrants such that the Warrants met the derivative scope exception for contracts in the Company’s own stock and were recorded in stockholders’ equity. Prior to the amendment, the Warrants were accounted for as derivative liabilities measured at fair value, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss at each reporting period. Each whole Warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share. Pursuant to the Warrant agreement, a Warrant holder may exercise its Warrants only for a whole number of shares of Class A common stock. This means only a whole Warrant may be exercised at a given time by a warrant holder.

The amendments, among other things, include the following:

●

amendments to the rights specific to the Private Warrants such that (a) the rights specific to Private Warrants are retained by the holder thereof regardless of such holder’s identity, (b) the Private Warrants are no longer subject to redemption by the Company when such warrants are trading at a price equal to or in excess of $10.00 per share but less than $18.00 per share and (c) the Private Warrants are no longer generally exercisable on a “cashless basis”;

●

eliminates the Company’s ability to redeem any Public Warrants unless the Class A common stock is trading at a price equal to or in excess of $18.00 per share; and

●

removes certain language related to the treatment of Warrants in the event of a tender offer for the shares underlying such Warrants.

Subsequent to the Closing, the Company registered 14,213,280 shares of Class A common stock issuable upon the exercise of the Warrants.

Research and Development

Research and development costs with no alternative future use are expensed as incurred. Research and development ~~costs~~expenses ~~are~~include ~~comprised~~personnel-related of expenses, ~~incurred~~such inas ~~performing research and development activities~~salaries, ~~including compensation and~~ benefits ~~for employees~~, ~~materials~~ and ~~supplies,~~stock-based ~~payments to consultants~~compensation, ~~patent~~for ~~related legal costs~~scientists, ~~facility~~experienced ~~costs,~~engineers ~~depreciation,~~ and ~~travel expenses~~technicians. ~~Additionally,~~These ~~payments~~expenses ~~received~~also bycover ~~the~~materials ~~Company~~and ~~under~~supplies ~~its~~used ~~JDAs~~in ~~are~~product ~~recognized as a reduction to~~ research and development, ~~expense~~process inengineering ~~the~~efforts ~~consolidated statements of operations~~ and ~~comprehensive~~testing, ~~loss.~~

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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 GPUs to train AI models. Additionally, payments received by the Company under its JDAs are recognized as a reduction to research and development expense in the consolidated statements of operations and comprehensive loss.

General and Administrative

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.

Stock-Based Compensation

The Company measures compensation expense for all stock-based awards made to employees, directors, and non-employees, based on estimated fair values as of the grant date and recognizes the compensation expense using the straight-line method over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures when they occur. Changes in the assumptions can materially affect the fair value and ultimately how much stock-based compensation expense is recognized. The inputs used in valuation models to estimate the fair value of certain stock-based awards are subjective and generally require significant analysis and judgment to develop. See “Note 15 – Stock-Based Compensation” for additional information about stock-based awards.

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models to estimate the fair value of certain stock-based awards are subjective and generally require significant analysis and judgment to develop. See “Note 15 – Stock-Based Compensation” for additional information about stock-based awards.

Income Taxes

Income tax expense has been provided using the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts and tax bases of existing assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax expense or benefit is the result of changes in the deferred tax asset and liability. The Company provides a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that the deferred tax assets will not be realized. In evaluating the Company’s ability to recover deferred tax assets, the Company considers all available positive and negative evidence, including historical operating results, ongoing tax planning, and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis.

The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Company’s consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision and includes accrued interest and penalties with the related income tax liability within accrued expenses and other current liabilities on the consolidated balance sheets.

Other Comprehensive Income (Loss)

Other Comprehensive income (loss) includes changes in the balances of items that are reported directly as a separate component of stockholders’ equity on the consolidated balance sheets. The components of comprehensive loss are net loss, foreign currency translation adjustments and unrealized gains and losses from available-for-sale marketable debt securities. The Company does not provide for income taxes on foreign currency translation adjustments since it does not provide for taxes on the unremitted earnings of its foreign subsidiaries. The tax effects of unrealized gains and loss from available-for-sale marketable debt securities is recorded in deferred tax assets (liabilities) and fully offset by the valuation allowance. The changes in accumulated other comprehensive income (loss) are included in the Company’s consolidated statements of operations and comprehensive loss.

Net Income (Loss) Per Share

As the liquidation and dividend rights of Class A common stock and Class B common stock are identical, the net loss attributable to common stockholders is allocated on a proportionate basis, and the resulting net loss per share is identical for Class A common stock and Class B common stock under the two-class method.

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Basic net income or loss per share attributable to Class A common stock and Class B common stock stockholders is computed by dividing the net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The diluted net income or loss per share attributable to common stockholders is calculated by giving effect to all potentially dilutive common stock equivalents outstanding during the period.

Recently Adopted Accounting Pronouncements

InOn ~~November~~December 4, 2023, the FASB issued ASU No. 2023-709, Improvements to ~~Reportable~~Income ~~Segment~~Tax Disclosures, ~~which~~("ASU ~~requires~~2023-09"). ~~disclosures~~ASU of2023-09 ~~significant~~amends ~~reportable~~ASC ~~segment~~740, ~~expenses~~Income ~~that~~Taxes ~~are regularly provided~~ to ~~the~~expand ~~Chief~~income ~~Operating~~tax ~~Decision~~disclosures ~~Maker (“CODM”)~~ and ~~included~~requires ~~within~~that ~~each~~the ~~reported~~Company ~~measure~~disclose of(i) athe ~~segment's~~income ~~profit~~tax orrate ~~loss.~~reconciliation ~~This~~using ~~ASU~~both ~~also~~percentages ~~requires disclosure of the title~~ and ~~position~~reporting ofcurrency ~~the~~amounts; (ii) ~~individual~~specific ~~identified~~categories aswithin the ~~CODM~~income ~~and~~tax anrate ~~explanation~~reconciliation; of(iii) ~~how~~additional ~~the~~information ~~CODM~~for ~~uses~~reconciling ~~the~~items ~~reported~~that ~~measures~~meet of a ~~segment’s~~quantitative ~~profit~~threshold; or(iv) ~~loss~~the incomposition ~~assessing~~of ~~segment~~state ~~performance~~ and ~~deciding~~local ~~how~~income totaxes ~~allocate~~by ~~resources.~~jurisdiction; ~~The~~and ~~Company~~(v) ~~adopted~~ the ~~new~~amounts ~~guidance~~of ~~beginning~~income ~~for~~taxes ~~fiscal~~paid ~~year~~disaggregated ~~2024~~by jurisdiction. The ~~See~~Company ~~Note~~adopted 18ASU 2023-09 for the ~~Company’s~~year ~~disclosures~~ended inDecember ~~accordance~~31, ~~with~~2025 ~~this~~on ~~new~~a ~~guidance~~prospective basis.

In November 2024, The FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires more detailed information about the types of expenses included in certain expense captions presented on the consolidated statements of operations. Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses. The new standard is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of adoption on our financial disclosures.

In ~~December~~July ~~2023~~2025, the FASB issued ASU ~~2023~~2025-905, ~~Improvements~~Financial toInstruments—Credit ~~Income~~Losses ~~Tax~~(Topic ~~Disclosures,~~326): ~~which~~Measurement ~~requires~~of ~~disaggregated~~Credit ~~information~~Losses ~~about~~for aAccounts ~~reporting~~Receivable ~~entity’s~~and ~~effective~~Contract ~~tax~~Assets, ~~rate~~which ~~reconciliation~~allows asfor ~~well~~a aspractical ~~additional~~expedient ~~information~~election onto ~~income~~assume ~~taxes~~that ~~paid.~~current ~~The~~conditions ~~ASU~~as isof ~~effective~~the onbalance asheet ~~prospective~~date ~~basis~~do ~~for~~not ~~annual~~change ~~periods~~for ~~beginning~~the ~~after~~remaining ~~December~~life ~~15,~~of ~~2024.~~the ~~Early~~asset ~~adoption~~in isthe ~~also~~development ~~permitted~~of ~~for~~a ~~annual~~reasonable ~~financial~~and ~~statements~~supportable ~~that~~forecast ~~have~~as ~~not~~part ~~yet~~of ~~been~~estimating ~~issued~~expected orcredit ~~made available for issuance~~losses. WeThe ~~are~~new ~~currently~~standard ~~evaluating~~is ~~the~~effective ~~impact~~for ~~this~~annual ~~ASU~~periods ~~will~~beginning ~~have~~after ~~when~~December ~~adopted~~15, ~~and~~2025, ~~anticipate~~with ~~this~~early ~~ASU~~adoption ~~will~~permitted. ~~likely~~We ~~result~~are incurrently evaluating the ~~required~~impact ~~additional~~of ~~disclosures~~adoption ~~being~~on ~~included in~~ our consolidated financial statements.

58In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which removes references to project stages and clarifies the timing of capitalizing costs based on certain thresholds. Additionally, this amendment requires certain disclosures in the notes to the financial statements regardless of financial statement presentation of software costs. The new standard is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods with early adoption permitted. We are currently evaluating the impact of adoption on our consolidated financial statements and disclosures.

The Company has reviewed all other accounting pronouncements issued during the year ended December 31, 2025 and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements.

Note 3. Acquisition

Acquisition of Shenzhen UZ Energy Co. Ltd. “(UZ Energy”)

On July 25, 2025, our wholly owned subsidiary, SES AI International I Pte Ltd, entered into a Share Transfer and Share Purchase Agreement (the “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 acquisition closed on September 15, 2025 (the “Closing”). The acquisition of UZ Energy was accounted for as a business combination and the results of UZ Energy’s operations from the date of closing have been included in our consolidated financial statements.

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 in exchange for newly issued shares of UZ Energy. Purchase consideration consists of cash payments of approximately RMB 23.5 million ($3.3 million), which was paid during the fourth quarter of 2025, and deferred consideration of approximately RMB 70.0 million ($9.8 million) tied to performance targets, assuming such targets are met but not exceeded. At the Closing, total purchase consideration was valued at RMB 83.3 million ($11.7 million), reflecting the acquisition date fair value of the deferred cash payments. The capital contribution was excluded from purchase consideration as the proceeds will remain with UZ Energy and will be used for working capital requirements.

The deferred consideration is contingent on UZ Energy meeting specified thresholds relating to revenue and cash balances for fiscal years 2025 and 2026. As of the Closing, the fair value of the deferred consideration was estimated using a Black-Scholes option-pricing model. As of December 31, 2025, the possible outcomes for the range of deferred cash payments, on an undiscounted basis, are from $1.1 million

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to $11.8 million. The analysis considered, among other items, contractual terms of the Agreement, the Company’s discount rate, the timing of expected future cash flows and the probability that the revenue and cash balance thresholds required for payment of the deferred consideration will be achieved. The Company recorded the acquisition date fair value of the short-term portion of the deferred payment liability within accrued expenses and other current liabilities and the long-term portion of the deferred payment liability within other liabilities, non-current on the consolidated balance sheets, respectively.

InThe ~~November~~purchase ~~2024,~~price ~~The~~was ~~FASB~~allocated ~~issued~~to ~~ASU~~the ~~No.~~assets ~~2024-03,~~acquired ~~Disaggregation~~and ofliabilities ~~Income~~assumed ~~Statement~~based ~~Expenses,~~on ~~which~~the ~~requires~~estimated ~~more~~fair ~~detailed~~values ~~information~~at ~~about~~ the ~~types~~date of ~~expenses~~acquisition. ~~included~~The inexcess ~~certain~~of ~~expense~~the ~~captions~~purchase ~~presented~~price onover the ~~consolidated~~fair ~~statements~~value of ~~operations. Additionally, this amendment requires~~ the ~~disclosure~~net ofassets aacquired ~~qualitative~~was ~~description~~allocated ofto ~~the~~goodwill. ~~amounts~~Goodwill ~~remaining~~is inprimarily ~~relevant~~attributed ~~expense~~to ~~captions~~the ~~that~~expected ~~are~~synergies ~~not~~from ~~separately~~future ~~disaggregated~~expected ~~quantitatively~~economic ~~and~~benefits, ~~the~~including ~~disclosure~~enhanced ofrevenue ~~the~~growth ~~total~~from ~~amount~~expanded ofproducts ~~selling~~and ~~expenses.~~capabilities ~~The~~related ~~new~~to ~~standard~~ESS, isas ~~effective~~well ~~for~~as ~~annual~~substantial ~~periods~~cost ~~beginning~~savings ~~after~~from ~~December~~duplicative 15overheads, ~~2026,~~streamlined operations and ~~interim~~enhanced ~~periods~~efficiency. ~~within~~Goodwill ~~fiscal~~is ~~years~~not ~~beginning~~deductible ~~after~~for ~~December~~tax ~~15, 2027~~purposes. The Wefollowing ~~are~~table ~~currently~~summarizes ~~evaluating~~ the ~~impact~~preliminary allocation of ~~adoption~~the onpurchase ~~our~~price ~~consolidated~~(in ~~financial statements.~~thousands):


Cash and cash equivalents	$	795
Accounts receivable		1,139
Inventory		3,807
Prepaid expenses and other current assets		3,465
Property, plant and equipment		1,023
Intangible assets, net		1,753
Goodwill		13,272
Other assets		195
Accounts payable		(2,644)
Accrued expenses and other liabilities		(1,828)
Deferred revenue		(6,862)
Operating lease liability		(174)
Note payable, current		(1,966)
Total	$	11,975

The above fair values of assets acquired and liabilities assumed are based on the information that was available as of the reporting date. During the fourth quarter, the Company ~~has~~recorded ~~reviewed~~measurement ~~all~~period ~~other~~adjustments ~~accounting~~to ~~pronouncements~~the ~~issued~~preliminary ~~during~~purchase price allocation for the ~~year~~acquisition ~~ended~~of ~~December 31~~UZ Energy. These adjustments, ~~2024~~ which reflect new information obtained about facts and ~~concluded~~circumstances ~~they~~that ~~were~~existed ~~either~~as ~~not~~of ~~applicable~~the oracquisition ~~not~~date, ~~expected~~resulted toin ~~have~~an increase in warranty reserve liability and a ~~material~~corresponding ~~impact~~increase onin ~~the~~goodwill. The fair values include Level 3 unobservable inputs and were determined using generally accepted valuation techniques. The Company’s ~~consolidated~~allocation ~~financial~~of ~~statements~~the purchase price to certain assets acquired and liabilities assumed is provisional and the Company will continue to adjust those estimates as additional information pertaining to events or circumstances present as of the closing becomes available and final valuation and analysis are completed. The Company will finalize the purchase price allocation no later than one year from the acquisition date.

The following table presents a reconciliation of the deferred consideration liability:


	(in thousands)
Balance as of December 31, 2024	$	—
Additions during the year		11,698
Payments during the year		(3,357)
Change in fair value		205
Foreign exchange impact		224
Balance as of December 31, 2025	$	8,770

~~Note~~The 3deferred consideration liability, which was measured at fair value on Acquisition Date and was remeasured to fair value for actual 2025 results and expected 2026 results. ~~Revenue~~The change in fair value was recorded within miscellaneous expense, net of the Company’s Consolidated Statements of Operations.

The following table sets forth the components of the identifiable intangible assets acquired and their estimated fair values and useful lives as of the date of the acquisition:

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(in thousands)	Fair Value		Weighted Average Useful Lives
Patents	$	1,685		15 years
Trademarks		68		15 years
Total acquired intangible assets	$	1,753

The amount of revenue and pre-tax loss the Company recognized since the acquisition, which is included in the consolidated statements of operations and comprehensive loss for the years ending December 31, 2025, was approximately $7.4 million and $0.4 million, respectively.

The Company has not included pro-forma financial information for the acquisition of UZ Energy in these consolidated financial statements. It was determined that the preparation of such information is impracticable as UZ Energy was a foreign, privately held entity that did not historically maintain financial statements in accordance with the U.S. GAAP. The Company has, however, included the results of UZ Energy's operations in its consolidated financial statements from the Closing date forward.

Note 4. Revenue

We disaggregate our revenue from customers by the type of arrangement, primarily from the sale of battery products and from providing research and development services, as this depicts how the nature, amount, timing, and cash flows are affected by economic factors. The following table summarizes the Company’s disaggregated revenue:


	Year Ended December 31,
(in thousands)	~~2024~~2025		2024
Revenue from customers:
Service revenue	$	113,~~920~~582	$	1,920
Product revenue		~~120~~7,418		120
Total revenue from customers	$	221,~~040~~000	$	2,040

Remaining Performance Obligations

We have performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue. As of December 31, ~~2024~~2025, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied, was approximately $30.43 million, which is expected to be recognized as revenue within one year. This amount does not include contracts to which the customer is not committed. The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications.

~~Note~~Contract ~~4. Partnerships~~Assets

InThe ~~December~~Company ~~2020,~~records ~~the~~accounts ~~Company~~receivable ~~established~~when athe ~~partnership~~right ~~with~~to ~~Hyundai~~consideration ~~Motor~~is ~~Company~~unconditional, ~~(“Hyundai”)~~subject ~~when~~only itto ~~entered~~the ~~into~~passage aof ~~joint~~time. ~~development~~Contract ~~agreement~~assets ~~(“JDA”)~~primarily relate to ~~jointly~~unbilled ~~research~~service ~~and~~revenue. ~~develop~~The ~~Li-Metal~~Company ~~battery~~does ~~technology,~~not ~~which~~have ~~concluded~~the inright ~~November~~to ~~2023. Further,~~bill inand ~~May~~collect ~~2021,~~revenue for certain performance obligations until the ~~Company~~milestone ~~executed~~is ~~another~~complete. ~~JDA~~Estimated ~~with~~revenue ~~Hyundai~~related to ~~jointly~~milestone ~~develop~~achievement ~~the~~cannot ~~A-Sample~~be ~~Li-Metal~~billed ~~batteries~~or ~~effective~~collected ~~August~~until ~~31,~~customer ~~2021~~acceptance of milestone is completed. InContract ~~March~~assets ~~2024,~~are included in prepaid and other current assets in the Company's ~~extended~~consolidated ~~this~~balance ~~JDA~~sheets. ~~until~~The ~~December~~following ~~2025~~table toreflects ~~develop~~ the ~~B-sample~~change ~~Li-Metal~~in ~~batteries.~~contract assets between December 31, 2024 and December 31, 2025:

In February 2021, the Company established a partnership with GM Global Technology Operations LLC (“GM Technology”), an affiliate of GM Ventures LLC (“GM Ventures”), and General Motors Holdings LLC (“GM Holdings”) (collectively, “General Motors” or “GM”) when it entered into a JDA to jointly research and develop the A-Sample Li-Metal batteries and build-out a prototype manufacturing line for GM Technology. The JDA concluded in September 2024.

In December 2021, the Company established a partnership with Honda Motor Company, Ltd. (“Honda”) when it entered into a JDA to jointly research and develop the A-Sample Li-Metal batteries, which concluded in June 2023. The Company entered into a B-sample services agreement with Honda to replace the JDA in January 2025, with a term through the end of 2025.


	Year Ended December 31,
(in thousands)	2025
Contract assets:
Balance at December 31	$	—
Additions		12,775
Billings to customer		(11,650)
Balance at December 31	$	1,125

~~In November 2023, the Company entered into a B-Sample JDA with one of our OEM partners for delivery of the B-Sample batteries. The JDA has a term of two and half years.~~ 62

Under the terms of certain JDAs, the Company will fund research and development activities and capital expenditures related to the buildout of pilot manufacturing lines and the JDA partner will be required to refund such expenses to the Company, regardless of the results of the

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~~R&D~~Contract ~~activities. The following table summarizes credits to research and development recorded in accordance with the terms of the JDA agreements:~~Liabilities

Contract liabilities primarily relate to the advance consideration received from customers. Contract liabilities are included in accrued expenses and other current liabilities in the Company's consolidated balance sheets. The following table reflects the change in contract liabilities between December 31, 2024 and December 31, 2025:


	Year Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~
Research and development (related party)	$	3,190	$	10,594
Contract liabilities:
Research and development		5,385		12,472
Balance at December 31	$	—
Total credits to research and development	$	8,575	$	23,065
Additions		8,442
Revenue recognized		(5,749)
Foreign exchange adjustments		(24)
Balance at December 31	$	2,669

AsNote of December 31, 2024, there were no receivables from related party outstanding compared to $3.9 million outstanding as a receivable from related party as of December 31, 2023, as disclosed in the consolidated balance sheets. As of December 31, 2024, there was no non-related party receivable outstanding compared to $5.~~1 million outstanding as of December 31, 2023. Amounts for non-related party receivables are recorded within prepaid expenses and other current assets in the consolidated balance sheets.~~ Partnerships

In December 2020, the Company established a partnership with Hyundai Motor Company (“Hyundai”) when it entered into a joint development agreement (“JDA”) to jointly research and develop Li-Metal battery technology, which concluded in November 2023. Further, in May 2021, the Company executed another JDA with Hyundai to jointly develop the A-Sample Li-Metal batteries effective August 31, 2021. In March 2024, the Company extended this JDA until December 2025 to develop the B-sample Li-Metal batteries. The JDA concluded in December 2025.

In November 2023, the Company entered into a B-Sample JDA with one of our OEM partners for delivery of the B-Sample batteries. The JDA had a term of two and half years. The JDA concluded in December 2025.

Under the terms of certain JDAs, the Company funded research and development activities and capital expenditures related to the buildout of pilot manufacturing lines and the JDA partner was required to refund such expenses to the Company, regardless of the results of the R&D activities. The following table summarizes credits to research and development recorded in accordance with the terms of the JDA agreements:

Note 5. Cash and Cash Equivalents


	Year Ended December 31,
(in thousands)	2025			2024
Research and development (related party)	$	—		$	3,190
Research and development		—			5,385
Total credits to research and development	$	—		$	8,575

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Note 6. Cash and Cash Equivalents

The following table presents information about the Company’s cash, cash equivalents, and restricted cash, as shown in the consolidated statements of cash flows:



(in thousands)	December 31, ~~2024~~2025		December 31, ~~2023~~2024
Cash	$	713,~~908~~987	$	107,~~674~~908
Money market funds		~~120~~15,~~888~~554		74120,~~997~~888
Total cash and cash equivalents		~~128~~29,~~796~~541		85128,~~671~~796
Restricted cash included in other assets		~~599~~672		~~1,295~~599
Total cash, cash equivalents, and restricted cash	$	~~129~~30,~~395~~213	$	86129,~~966~~395

Note 7. Short-Term Investments

The following table provides amortized costs, gross unrealized gains and losses, and fair values for the Company’s investments in available-for-sale U.S treasury securities as of December 31, 2025 and December 31, 2024, which had maturity dates that range from 0 months to 10 months, respectively. Fair value was determined using market prices obtained from third-party sources. Realized gains or losses were insignificant for the years ended December 31, 2025 and 2024.


December 31, 2025				Gross			Gross
(in thousands)	Amortized Cost			Unrealized Gains			Unrealized Losses			Fair Value
Short-term U.S. treasury securities	$	169,046		$	183		$	—		$	169,229
Total	$	169,046		$	183		$	—		$	169,229

December 31, 2024				Gross			Gross
(in thousands)	Amortized Cost			Unrealized Gains			Unrealized Losses			Fair Value
Short-term U.S. treasury securities	$	132,615		$	167		$	—		$	132,782
Total	$	132,615		$	167		$	—		$	132,782

~~Note~~The 6Company had $0. ~~Short-Term~~9 ~~Investments~~million and $1.0 million marketable equity securities as of December 31, 2025 and 2024, respectively, with an initial cost of $0.5 million. Total unrealized gain of $0.4 million and $0.5 million is recorded under miscellaneous (expense) income, net in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024, respectively.

~~The~~Note ~~following table provides amortized costs, gross unrealized gains and losses, and fair values for the Company’s investments in available-for-sale U~~8.S Property ~~treasury securities as of December 31, 2024~~ and ~~December 31~~Equipment, ~~2023,~~ which had maturity dates that range from 0 months to 10 months, respectively. Fair value was determined using market prices obtained from third-party sources. Realized gains or losses were insignificant for the years ended December 31, 2024 and 2023.Net


December 31, 2024			Gross		Gross
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-term U.S. treasury securities	$	132,615	$	167	$	—	$	132,782
Total	$	132,615	$	167	$	—	$	132,782

December 31, 2023			Gross		Gross
(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-term U.S. treasury securities	$	245,797	$	337	$	(7)	$	246,127
Total	$	245,797	$	337	$	(7)	$	246,127

The Company has $1.0 million and $0.6 million marketable equity securities as of December 31, 2024 and 2023, respectively, with an initial cost of $0.5 million. Total unrealized gain of $0.5 million and $0.1 million is recorded under miscellaneous (expense) income, net in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023, respectively.

Note 7. Property and Equipment, Net

Property and equipment, net consisted of the following:


		As of December 31,
(in thousands)		2025			2024
Laboratory machinery and equipment		$	33,273		$	31,092
Office and computer equipment			2,054			1,595
Leasehold improvements			23,343			24,390
Construction in progress			39			1,971
Total property and equipment			58,709			59,048
Less: accumulated depreciation			(29,843)			(20,883)
Property and equipment, net		$	28,866		$	38,165

Depreciation expense was $10.1 million and $8.2 million for the years ended December 31, 2025 and 2024, respectively.

Note 9. Goodwill and Intangible Assets, Net

Changes in the carrying amount of goodwill were as follows:


		(in thousands)
Balance as of December 31, 2024		$	—
Acquisitions			13,272

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	As of December 31,
(in thousands)	2024		2023
Laboratory machinery and equipment	$	31,092	$	21,762
Office and computer equipment		1,595		1,169
Leasehold improvements		24,390		18,228
Construction in progress		1,971		9,773
Total property and equipment		59,048		50,932
Less: accumulated depreciation		(20,883)		(12,973)
Property and equipment, net	$	38,165	$	37,959

Balance as of December 31, 2025

13,272

Depreciation expense was $8.2 million and $5.4 million for the years ended December 31, 2024 and 2023, respectively.

Note 8. Intangible Assets, Net

Intangible assets, net consisted of the following:


	As of December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Intellectual property	$	13,~~918~~672	$	1,918
Less: accumulated amortization		(~~701~~863)		(~~573~~701)
Intangible assets, net	$	12,~~217~~809	$	1,~~345~~217

Amortization expense was $0.2 million and $0.1 million for the years ended December 31, 2025 and 2024, respectively. Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheets as of December 31, 2025 is expected to be as follows:

Amortization expense was $0.1 million for each of the years ended December 31, 2024 and 2023, respectively. Amortization expense associated with the intangible assets included on the Company’s consolidated balance sheets as of December 31, 2024 is expected to be as follows:


Years Ending December 31,	(in thousands)
2026	$	242
2027		242
2028		242
2029		242
2030		242
Thereafter		1,599
Total	$	2,809

Note 10. Accrued Expenses and Other Current Liabilities


Years Ending December 31,	(in thousands)
2025	$	128
2026		128
2027		128
2028		128
2029		128
Thereafter		577
Total	$	1,217

Note 9. Accrued Expenses and Other Current Liabilities

The components of accrued expenses and other current liabilities consisted of the following:


	As of December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Vendor project charges	$	7,500	$	—
Employee compensation and related costs	$	4,347	$	6,646
Employee compensation and related costs		6,646		7,022
Vendor project charges		3,000		7,500
Professional and consulting services		1,480		1,273
Contract liabilities		2,669		—
Construction in process		1,408		3,182
Professional and consulting services		891		1,480
Income taxes payable		313		288
Short-term notes payables		830		—
Other		982		1,356
Software services		769		—
Accrued expenses and other current liabilities	$	18,329	$	13,121
Income taxes payable		490		313
Construction in process		53		1,408
Other		2,022		982
Accrued expenses and other current liabilities	$	15,071	$	18,329

Note 11. Government Grant

In December 2022, the Company was awarded a grant (the “Grant”) from certain Korean government agencies. The incentives received under the Grant, which is in the form of cash, can be used for facilities related expenses and the purchase of property and equipment. The Company is required to adhere to the following conditions attached to the incentives, which include purchase of a government grant guarantee insurance policy, required minimum investments into specified spending categories and the creation of a minimum amount of permanent full-time jobs in a certain geographical location over the next five years, with the option to extend to 10 years by remaining in a certain geographical location. If determined that we were ineligible to receive the Grant, we could be required to repay the Grant in its entirety with interest. The Company has yet to fulfill the required minimum investment and minimum employment conditions hence interest payable was recorded. The compliance with these conditions will continue to be monitored over the remaining grant period.

As of December 31, 2025 and 2024, respectively, the Company had received, but not yet earned 12 billion Korean won. These balances are equivalent to $8.3 million and $8.1 million, after translation, as of December 31, 2025 and December 31, 2024, respectively, which is disclosed as a noncurrent liability in the consolidated balance sheets.

Note 10. Government Grant

In December 2022, the Company was awarded a grant (the “Grant”) from certain government agencies. The incentives received under the Grant, which is in the form of cash, can be used for facilities related expenses and the purchase of property and equipment. The Company is required to adhere to the following conditions attached to the incentives, which include purchase of a government grant guarantee insurance policy, required minimum investments into specified spending categories and the creation of a minimum amount of permanent

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~~full-time~~Note ~~jobs in a certain geographical location over the next five years, with the option to extend to 10 years by remaining in a certain geographical location~~12. Sponsor IfEarn-Out determined that we were ineligible to receive the Grant, we could be required to repay the Grant in its entirety with interest. The Company has yet to fulfill the required minimum investment and minimum employment conditions hence interest payable was recorded. The compliance with these conditions will continue to be monitored over the remaining grant period.Liabilities

As of December 31, 2024 and 2023, respectively, the Company had received, but not yet earned 12 billion Korean won. These balances are equivalent to $8.1 million and $9.3 million, after translation, as of December 31, 2024 and December 31, 2023, respectively, which is disclosed as a noncurrent liability in the consolidated balance sheets.

Note 11. Sponsor Earn-Out Liabilities

The Sponsor Earn-Out shares in Tranche 2 through Tranche 5 have been measured at their estimated fair value using a Monte Carlo simulation valuation model. Inherent in the valuation model are assumptions related to expected stock price volatility, risk-free interest rate, expected life, and dividend yield. The key inputs used in the Monte Carlo simulation model for the Sponsor Earn-Out liabilities at their measurement dates were as follows:


		December 31, ~~2024~~2025		December 31, ~~2023~~2024
Expected term (in years)		5.97		35.19
Risk free rate		43.3877%		4.0438%
Expected volatility		95100.0%		9195.0%
Expected dividends		0%		0%
Stock price	$	21.1980	$	12.8319

The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. Expected volatility is based on the weighted average historical volatilities of the Company’s Class A common stock and public warrants as well as the common stock of select peer companies’ that matches the expected term of the awards (range of the weighted average of volatility is 96.2% - 101.2% and 87.3% - 122.5% for the years ended December 31, 2025 and 2024, respectively). The expected term is derived from the probability weighted model, considering the number of inputs, including the probability of a change in control. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. Expected volatility is based on the weighted average historical volatilities of the Company’s Class A common stock and public warrants as well as the common stock of select peer companies’ that matches the expected term of the awards (range of the weighted average of volatility is 87.3% - 122.5% and 83.8% - 96.2% for the years ended December 31, 2024 and 2023, respectively). The expected term is derived from the probability weighted model, considering the number of inputs, including the probability of a change in control. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

The following table provides a reconciliation of the beginning and ending balances for the Sponsor Earn-Out liabilities:


		(in thousands)
Balance as of December 31, 2023	$	4,166
Change in fair value		5,306
Balance as of December 31, 2024		9,472
Change in fair value		(1,677)
Balance as of December 31, 2025	$	7,795


		(in thousands)
Balance as of December 31, 2022	$	10,961
Change in fair value		(6,795)
Balance as of December 31, 2023		4,166
Change in fair value		5,306
Balance as of December 31, 2024	$	9,472

Note 13. Leases

Note 12. Leases

The Company’s operating leases consist primarily of leases for office and plant spaces. Certain of the Company’s operating leases include escalating rental payments, some of which include the option to extend the lease term for up to 5 years, and some include options to terminate the lease at certain times within the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company’s total operating lease cost was $3.52 million and $23.95 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Cash paid for amounts included in the measurement of lease liabilities was $3.54 million and $23.95 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024.

62The following table summarizes the future minimum undiscounted lease payments under existing operating leases as of December 31, 2025:

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The following table summarizes the future minimum undiscounted lease payments under existing operating leases as of December 31, 2024:


Years Ending December 31,	(in thousands)
2025	$	3,458
2026	$	2,831
2026		2,789
2027		1,925
2027		1,900
2028		1,664
2029		1,163
Thereafter		1,913
2030		1,138
Total future minimum lease payments		12,887
Thereafter		775
Less: imputed interest		(2,325)
Total future minimum lease payments		9,496
Total future minimum lease payments	$	10,562
Less: imputed interest		(1,385)
Total future minimum lease payments	$	8,111

As of December 31, 2024 and 2023, the weighted average remaining lease term for operating leases was 4.9 years and 5.6 years, respectively, and the weighted average discount rate used to determine the operating lease liability was 7.4% and 7.4%, respectively.66

Woburn Lease

In August 2016, the Company entered into an operating lease agreement to lease an office space in Woburn, Massachusetts with the original lease term expiring in August 2021. The lease agreement has one five-year renewal option and has variable lease payment that depends on the CPI index and is measured annually. In May 2020, the Company extended the term of the lease by 5 years through August 2026. In February and March 2021, the Company amended the lease agreement increasing the leased space. In December 2021, the Company further amended the lease agreement reducing the leased space. The amendment includes an obligation to pay monthly relinquishment charges (equal to the total rental obligation for the duration of the lease term), only if the new tenant does not pay monthly rental amount and lessor has provided a notice to collect the relinquishment charges from the Company. As of December 31, 2024, the Company assessed the probability of any liability to be incurred for relinquishment charges as remote. Total future minimum lease payments under this lease are $6.0 million.

In October 2022, the Company entered into an amendment to the operating lease agreement for its Woburn facility to add additional space and is accounted for as a separate lease (“Addition Lease”). Pursuant to the amendment, the landlord has agreed to construct an addition to the existing facility for such additional space, which commenced in June 2023 and expires at the same time as the original lease. The Addition Lease also contains a variable lease payment that depends on the CPI Index and is measured annually. The additional space consists of approximately 5,000 square feet and the total undiscounted future minimum lease payments for the addition through the expected 8-year term will be approximately $1.3 million.

Electrolyte Foundry Lease

In June 2023, the Company entered into an operating lease agreement to lease a lab space in Woburn, Massachusetts with the original lease term expiring five years after the delivery date upon completion of the build-out. The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least six months before the expiry and has variable lease payment that depends on the CPI index and is measured annually. In January 2024, the Company started using the lab space. Total future minimum lease payments under this lease are $2.3 million.

Shanghai Lease

In September 2018, the Company entered into an operating lease agreement to lease a manufacturing space in Shanghai, China with the original lease term expiring in August 2023. In September 2021, the Company amended the lease agreement. The amendment increased the amount of leased space and extended the term of the lease by three years through August 2026. Total future minimum lease payments under this lease are $2.4 million. The lease agreement has renewal terms that can extend the lease term by providing application for renewal at least 90 days before the expiry and provides for annual cost of living increases of up to 3%.

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~~South~~As ~~Korea~~of ~~Leases~~December 31, 2025 and 2024, the weighted average remaining lease term for operating leases was 4.4 years and 4.9 years, respectively, and the weighted average discount rate used to determine the operating lease liability was 7.2% and 7.4%, respectively.

InNote November 2022, the Company entered into an operating lease agreement with a lease commencement date of July 2022 to lease a manufacturing building in the Chungju, South Korea industrial complex with the original lease term expiring in September 202414. Commitments ~~The lease agreement was renewed in September 2024 for an additional two-year term that can be terminated with 90-day notice~~ and ~~provides for annual cost of living increases in rent. Total future minimum lease payments under this lease are $1.0 million.~~Contingencies

In February 2023, the Company entered into an operating lease agreement with a commencement date of February 1, 2023 to lease a second manufacturing space in the Chungju, South Korea industrial complex with the original lease term expiring in December 2024. In June 2024, the Company terminated this lease agreement resulting in no future lease payments and the removal of the corresponding lease asset and liability.

Note 13. Commitments and Contingencies

Commitments

Under the terms of one of the JDAs entered into in 2021, the Company is committed to undertake certain research and development activities to the benefit of both itself and its OEM Partners which involves expenditures related to engineering efforts and purchases of related equipment. The JDA ~~has~~had an agreed-upon commitment value of up to $35 million,. As of ~~which~~December 31, 2025, the Company has ~~spent~~a ~~$16.1~~remaining ~~million~~commitment asto ofspend ~~December 31, 2024~~up to $7.3 million.

Legal Contingencies

From time-to-time, the Company may be subject to claims arising in the ordinary course of business or become involved in litigation or other legal proceedings. While the outcome of such claims or other proceedings cannot be predicted with certainty, the Company’s management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Company’s financial condition, results of operations or cash flows.

Indemnifications

The Company enters into indemnification provisions under agreements with other companies in the ordinary course of business, including, but not limited to, partnerships, landlords, vendors, and contractors. Pursuant to these arrangements, the Company agrees to indemnify, defend, and hold harmless the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Company’s activities. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. The Company has never incurred costs to defend lawsuits or settle claims related to these indemnification provisions. In addition, the Company indemnifies its officers, directors, and certain key employees against claims made with respect to matters that arise while they are serving in their respective capacities as such, subject to certain limitations set forth under applicable law, and applicable indemnification agreements. The Company maintains insurance, including commercial general liability insurance, product liability insurance, and directors and officers insurance to offset certain potential liabilities under these indemnification provisions. To date, there have been no claims under these indemnification provisions.

Note 15. Stockholders’ Equity

Note 14. Stockholders’ Equity

Class A and Class B Common Stock

Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 2,100,000,000 shares of Class A common stock, par value $0.0001 per share and 200,000,000 shares of Class B common stock, par value $0.0001 per share. Class A common stock and Class B common stock are referred to as common stock throughout the notes to these financial statements, unless otherwise noted.

The rights of holders of Class A common stock and Class B common stock are identical, except with respect to voting. The holder of each share of Class A common stock is entitled to one vote, while the holder of each share of Class B common stock is entitled to ten votes. Each share of Class B common stock is convertible on a one-for-one basis into a share of Class A common stock at the holder’s option or otherwise automatically upon the occurrence of certain events, namely: (i) each share of Class B common stock that is transferred by SES Founder Group, or certain permitted transferee holders (“Qualified Holders”), will convert into a share of Class A common stock; (ii) all outstanding shares of Class B common stock will convert into shares of Class A common stock if the SES Founder Group or Qualified Holders collectively cease to beneficially own at least 20 percent of the number of shares of Class B common stock (as such number of shares is equitably adjusted in respect of any reclassification, stock dividend, subdivision, combination or recapitalization of the Class B common stock) collectively held by the SES Founder Group and Qualified Holders of Class B common stock as of the time the Business Combination took effect; or (iii) all outstanding shares of Class B common stock will convert into shares of Class A common stock upon the date specified by the affirmative vote of the holders of at least two-thirds of the then-outstanding shares of Class B common stock, voting as a separate class. Each outstanding share of Class B common stock is entitled to ten votes per share and each outstanding share of Class A common stock is entitled to one vote per share.

64For accounting purposes, only shares that are fully vested or that are not subject to repurchase are considered issued and outstanding, as reconciled in the table below:

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Combination took effect; or (iii) all outstanding shares of Class B common stock will convert into shares of Class A common stock upon the date specified by the affirmative vote of the holders of at least two-thirds of the then-outstanding shares of Class B common stock, voting as a separate class. Each outstanding share of Class B common stock is entitled to ten votes per share and each outstanding share of Class A common stock is entitled to one vote per share.

As of December 31, 2024, the Company had 317,676,034 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively and as of December 31, 2023 had 310,266,922 and 43,881,251 shares of Class A common stock and Class B common stock issued and outstanding, respectively. For accounting purposes, only shares that are fully vested or that are not subject to repurchase are considered issued and outstanding.

Below is a reconciliation of shares of common stock issued and outstanding:


	December 31, 2024	December 31, 2023
Total shares of common stock legally issued and outstanding	361,557,285	354,148,173
Less: Shares subject to future vesting:
Escrowed Earn-Out Shares	(27,690,978)	(27,690,978)
Sponsor Earn-Out Shares	(5,520,000)	(5,520,000)
Earn-Out Restricted Shares	(765,990)	(1,619,998)
RSAs	(255,458)	(649,567)
Total shares issued and outstanding	327,324,859	318,667,630

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	December 31, 2025	December 31, 2024
Class A Shares Outstanding	321,551,078	317,676,034
Class B Shares Outstanding	43,881,251	43,881,251
Total shares of common stock legally issued and outstanding	365,432,329	361,557,285
Less: Shares subject to future vesting:
Escrowed Earn-Out Shares	(27,690,978)	(27,690,978)
Sponsor Earn-Out Shares	(5,520,000)	(5,520,000)
Earn-Out Restricted Shares	(742,280)	(765,990)
RSAs	—	(255,458)
Total shares issued and outstanding	331,479,071	327,324,859

Preferred Stock

Pursuant to the Company’s certificate of incorporation, the Company is authorized to issue 20,000,000 shares of preferred stock having a par value of $0.0001 per share. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights of such preferred stock. As of December 31, ~~2024~~2025 and ~~2023~~2024, no shares of the Company’s preferred stock were issued and outstanding.

Dividends

Common stock is entitled to dividends when and if declared by the Company’s board of directors, subject to the rights of all classes of stock outstanding having priority rights to dividends. The Company has not paid any cash dividends on common stock to date. The Company may retain future earnings, if any, for the further development and expansion of its business and has no current plans to pay cash dividends for the foreseeable future.

Common Stock Warrants

Prior to the Business Combination, Ivanhoe issued 9,200,000 Public Warrants and 5,013,333 Private Warrants and prior to the Closing, Ivanhoe amended the terms of the Warrants, as discussed in “Note 2 – Summary of Significant Accounting Policies,” which resulted in the Warrants being classified as a component of stockholders’ equity. There is an effective registration statement and prospectus relating to the shares issuable upon exercise of the Warrants.

Public Warrants

Public Warrants have an exercise price of $11.50 and the Company may, in its sole discretion, reduce the exercise price of the Public Warrants to induce early exercise, provided that adequate notice is provided to warrant holders pursuant to the terms of the Warrant Agreement. The exercise price and number of shares of Class A common stock issuable upon exercise of the Warrants may also be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. In no event is the Company required to net cash settle the Public Warrants.

The Public Warrants became exercisable 30 days following the Business Combination and expire at the earliest of five years following the Business Combination, liquidation of the Company, or the date of redemption elected at our option provided that the value of the Class A common stock exceeds $18.00 per share.

Under certain circumstances, the Company may elect to redeem the Public Warrants at a redemption price of $0.01 per Public Warrant at any time during the term of the Warrant in which the Class A common stock share trading price has been at least $18.00 per share for 20 trading days within the 30 trading-day period. If the Company elects to redeem the Warrants, it must notify the Public Warrant holders in advance, who would then have at least 30 days from the date of notification to exercise their respective Warrants. If any such Warrants are not exercised within that 30-day period, they will be redeemed pursuant to this provision.

65As of December 31, 2025 and 2024, the Company had outstanding Public Warrants to purchase 9,199,947 shares of Class A common stock.

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advance, who would then have at least 30 days from the date of notification to exercise their respective Warrants. If any such Warrants are not exercised within that 30-day period, they will be redeemed pursuant to this provision.

As of December 31, 2024 and 2023, the Company had outstanding Public Warrants to purchase 9,199,947 shares of Class A common stock.

Private Warrants

The Private Warrants have similar terms to the Public Warrants, except that the Private Warrants are not redeemable. As of December 31, ~~2024~~2025 and ~~2023~~2024, the Company had outstanding Private Warrants to purchase 5,013,333 shares of Class A common stock.

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The Company has the following shares of common stock available for future issuance on an as-if converted basis:



	December 31, ~~2024~~2025	December 31, ~~2023~~2024
Shares reserved for issuance under the SES AI Corporation 2021 Plan	3738,~~263~~518,~~345~~171	3437,~~965~~263,~~909~~345
Common stock options outstanding	65,~~063~~431,~~110~~725	136,~~619~~063,~~793~~110
Public Warrants	9,199,947	9,199,947
Private Warrants	5,013,333	5,013,333
RSUs	13,~~282~~883,~~923~~881	613,~~359~~282,~~474~~923
PSUs	5,~~973~~963,~~050~~154	35,~~364~~973,~~810~~050
Total common stock available for future issuance	7678,~~795~~010,~~708~~211	7276,~~523~~795,~~266~~708

Note 16. Stock-Based Compensation

Note 15. Stock-Based Compensation

Equity Award Plan

Old SES established its initial share incentive plan in 2013 (the “2013 Plan”), which was subsequently replaced with a new share incentive plan in 2018 (the “2018 Plan”). Under the terms of the 2013 Plan and 2018 Plan, certain number of shares were reserved for the issuance of incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) to employees, officers, directors, consultants and advisors. On March 30, 2021, the Company amended the 2018 Plan with the SES Holdings Pte. Ltd. 2021 Share Incentive Plan (the “2021 Plan”) and increased the total shares reserved for future issuance by 486,975 shares. Upon approval of the 2021 Plan, any shares that, as of the date of stockholder approval, were reserved but not issued pursuant to any awards granted under the Company’s 2018 Plan were rolled into the 2021 Plan. In addition, any shares issued pursuant to or subject to stock options or similar awards granted under the 2018 Plan that expired or otherwise terminated without having been exercised in full or that were forfeited or repurchased by the Company, rolled into the 2021 Plan. The 2021 Plan provided for the discretionary grant of ISOs, NSOs, and Restricted Share Awards (“RSAs”).

In connection with the Business Combination, the 2021 Plan was terminated and the remaining unallocated share reserve was cancelled, and no new awards will be granted under the 2021 Plan. At Closing, a total of 20,748,976 ISOs and NSOs and 2,273,727 RSAs (as converted, due to retroactive application of reverse recapitalization) outstanding under the 2021 Plan were assumed by the Company under the SES AI Corporation 2021 Plan (defined below).

SES AI Corporation 2021 Plan

In connection with the Business Combination, the Company adopted the SES AI Corporation 2021 Incentive Award Plan (the “SES 2021 Plan”) under which 36,862,002 shares of Class A common stock were initially reserved for issuance of ISOs, NSOs, stock appreciation rights (“SARs”), RSAs, restricted stock units (“RSUs”), performance compensation awards (“PSUs”), other stock-based and cash-based awards, and dividend equivalents. In addition, and subject to certain limitations, any shares issued pursuant to or subject to awards granted under the 2021 Plan that expired or otherwise terminated without having been exercised in full or that were forfeited or repurchased by the Company, rolled into the SES 2021 Plan. The SES 2021 Plan allows for the maximum number of shares issuable to automatically increase on January 1st of each year for a period of ten years commencing on January 1, 2023 and ending on (and including) January 1, 2031, in an amount equal to two percent of the total number of shares of stock outstanding on December 31st of the preceding year. As of December 31, ~~2024~~2025, 3738,~~263~~518,~~345~~171 shares remain available for future issuance under the SES 2021 Plan.

Stock-Based Compensation Expense

Compensation expense related to stock-based awards was recorded as follows:


	Years Ended December 31,
(in thousands)	2025			2024
Research and development	$	3,037		$	8,021
General and administrative		7,595			11,896
Cost of revenue		339			18
Total	$	10,971		$	19,935

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	Years Ended December 31,
(in thousands)	2024		2023
Research and development	$	8,021	$	3,796
General and administrative		11,896		16,853
Cost of revenue		18		—
Total	$	19,935	$	20,649

The following table summarizes share-based compensation expense by award type:


	Years Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Earn-Out Restricted Shares	$	1,997	$	2,689
RSUs	$	8,359	$	12,733
RSUs		12,733		9,644
PSUs		1,380		2,885
PSUs		2,885		4,781
RSAs		1,199		1,950
RSAs		1,950		3,133
Stock options		33		370
Stock options		370		402
Earn-Out Restricted Shares		—		1,997
Total	$	1910,~~935~~971	$	2019,~~649~~935

Restricted Stock Units

RSUs granted under the SES 2021 Plan vest in equal annual installments over a three-year period and have only service vesting conditions. The fair value of RSUs is estimated based on the closing price of the Company’s Class A common stock at the date of grant and is amortized to expense on a straight-line basis over the vesting period. RSU activity is as follows:


	Number of Shares	Weighted Average Fair Value
Outstanding at December 31, 2022	2,807,660	$	8.61
Granted	5,365,427	$	2.25
Vested	(1,063,863)	$	8.41
Forfeited and canceled	(749,750)	$	4.95
Outstanding at December 31, 2023	6,359,474	$	3.71
Granted	11,729,289	$	1.32
Gross vested units	(2,413,455)	$	4.14
Vested	(2,413,455)	$	4.14
Forfeited and canceled	(2,392,385)	$	1.95
Outstanding at December 31, 2024	13,282,923	$	1.83
Granted	9,029,793	$	0.75
Gross vested units	(5,209,010)	$	2.40
Forfeited and canceled	(3,219,825)	$	1.31
Outstanding at December 31, 2025	13,883,881	$	1.03

The total fair value of RSUs vested was $1012.05 million and $810.90 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

As of December 31, ~~2024~~2025, there was $148.38 million of unrecognized compensation cost related to RSUs, which is expected to be recognized over a weighted-average period of 1.07 years.

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Restricted Stock Awards

RSAs granted under the 2021 Plan and assumed under the SES 2021 Plan generally vest 1/4^th upon completion of one year of service and 1/48^th per month thereafter and have only service vesting conditions. The fair value of RSAs is estimated based on the closing price of the Company’s Class A common stock at the date of grant and is amortized to expense on a straight-line basis over the vesting period. RSA activity is as follows:


	Number of Shares	Weighted Average Fair Value
Outstanding at December 31, 2022	1,270,726	$	5.09
Granted	—	$	-
Vested	(610,335)	$	5.14
Forfeited and canceled	(10,824)	$	5.13
Outstanding at December 31, 2023	649,567	$	5.05
Granted	—	$	—-
Vested	(386,964)	$	5.05
Forfeited and canceled	(7,145)	$	5.07
Outstanding at December 31, 2024	255,458	$	5.04
Granted	—	$	—
Vested	(253,358)	$	5.04
Forfeited and canceled	(2,100)	$	5.30
Outstanding at December 31, 2025	—	$	—

The total fair value of RSAs vested was $21.03 million and $32.10 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

As of December 31, ~~2024~~2025, ~~there~~the ~~was $1.2 million of unrecognized~~ compensation cost related to RSAs, ~~which~~was isfully ~~expected to be~~ recognized ~~over a weighted-average period of 0~~.~~3 years.~~

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Performance Stock Units

PSUs granted under the SES 2021 Plan generally vest over a three-year period and have both service and market vesting conditions. PSUs are measured at their estimated fair value using a Monte Carlo simulation valuation model with the effect of the market condition reflected in the grant date fair value of the award. The fair value of PSU awards is amortized to expense on a straight-line basis over the requisite service period, irrespective of whether the market vesting condition is satisfied, which is generally two to three years. There were no awards granted in 2025 that required meeting market conditions for vesting that would require a valuation. The key inputs used in the Monte Carlo simulation model for PSUs granted during the ~~years~~year ended December 31, 2024 ~~and 2023~~ at their measurement date were as follows:


		2024		~~2023~~
Expected term (in years)		3.0		~~5.0~~
Risk free rate		4.06%		~~3.57%~~
Expected volatility		90.0%		~~80.0%~~
Expected dividends		0%		0%
Stock price	$	1.36	$	~~2.25~~

The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. Expected volatility is based on the weighted average historical volatilities of the Company’s Class A common stock and select peer companies’ common stock that matches the expected term of the awards. The expected term is derived from the vesting period. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the expected term of the awards. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

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PSU activity is as follows:


	Number of Shares	Weighted Average Fair Value
Outstanding at December 31, 2022	2,116,942	$	5.98
Granted	1,631,800	$	0.58
Vested	—	$	—
Forfeited and canceled	(383,932)	$	3.86
Outstanding at December 31, 2023	3,364,810	$	3.60
Granted	3,637,556	$	0.42
Vested	—	$	—
Forfeited and canceled	(1,029,316)	$	6.96
Outstanding at December 31, 2024	5,973,050	$	1.34
Granted	264,469	$	2.32
Vested	—	$	—
Forfeited and canceled	(274,365)	$	1.31
Outstanding at December 31, 2025	5,963,154	$	1.39

As of December 31, 2025, there was $0.9 million of unrecognized compensation cost related to PSUs, which is expected to be recognized over a weighted-average period of 1.0 years.

As of December 31, 2024, there was $1.8 million of unrecognized compensation cost related to PSUs, which is expected to be recognized over a weighted-average period of 1.5 years.

Earn-Out Restricted Shares

The Earn-Out Restricted Shares granted in connection with the Business Combination have a contractual term of five years and have both service and market vesting conditions. ~~The~~During ~~Earn-Out Restricted Shares have been measured at their estimated fair value using a Monte Carlo simulation valuation model with~~ the ~~effect~~year ofended ~~the~~December ~~market~~31, ~~condition~~2023, ~~reflected in~~ the ~~grant date fair value of the award. The aggregate grant date fair value of the~~ Earn-Out Restricted Shares ismet ~~$15.0 million and is amortized to expense on a straight-line basis over~~ the requisite service period, ~~irrespective~~and ~~of whether~~ the ~~market~~related ~~vesting~~expense ~~condition~~was isfully ~~satisfied, which is 1~~amortized.~~45 years. The key inputs used in the Monte Carlo simulation model for the Earn-Out Restricted Shares at their measurement dates were as follows:~~


	February 3, 2022 (Closing Date)
Contractual term (in years)		5.0
Risk-free rate		1.63%
Expected volatility		81.0%
Expected dividends		0%
Stock price	$	7.68

The stock price is based on the closing price of the Company’s Class A common stock as of the valuation date and simulated through the end of the earn-out period following Geometric Brownian Motion. The Company estimates the volatility of its common stock by using select peer companies’ common stock that matches the contractual term of the awards. The risk-free interest rate is based on the yield curve for zero-coupon U.S. Treasury notes with maturities corresponding to the contractual term of the restricted shares. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.

Earn-Out Restricted Shares activity is as follows:


	Number of Shares	Weighted Average Fair Value
Outstanding at December 31, 2022	1,931,044	$	6.53
Granted/vested	—	$	—
Forfeited and canceled	(311,046)	$	6.53
Outstanding at December 31, 2023	1,619,998	$	6.53
Granted/vested	—	$	—
Forfeited and canceled	(854,008)	$	6.53
Outstanding at December 31, 2024	765,990	$	6.53
Granted/vested	—	$	—
Forfeited and canceled	(23,710)	$	6.53
Outstanding at December 31, 2025	742,280	$	6.53

During the year ended December 31, 2023, the Earn-Out Restricted Shares met the requisite service period and the related expense was fully amortized.

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Stock Options

Options granted under the 2021 Plan and assumed under the SES 2021 Plan vest 1/4th upon completion of one year of service and 1/48th per month thereafter, however in certain instances options have been granted with immediate vesting. Options under the Plan generally expire 10 years from the date of grant and have only service vesting conditions. Stock option activity is as follows:


	Number of Options		Weighted Average Exercise Price	Weighted Average Remaining Contractual Term(in years)		Aggregate Intrinsic Value(in millions)
Outstanding at December 31, 2022	18,308,233	$	0.17	7.6	$	54.6
Granted	—	$	—
Exercised	(3,691,340)	$	0.14		$	7.0
Forfeited and canceled	(997,100)	$	0.18
Outstanding at December 31, 2023	13,619,793	$	0.17	6.8	$	22.7
Granted	—	$	—
Exercised	(6,507,475)	$	0.16		$	4.0
Forfeited and canceled	(1,049,208)	$	0.19
Outstanding at December 31, 2024	6,063,110	$	0.19	5.5	$	12.2
Vested, December 31, 2024	5,848,933	$	0.18	5.5	$	11.8
Granted	—	$	—
Vested or expected to vest, December 31, 2024	6,063,110	$	0.19	5.5	$	12.2
Exercised	(614,255)	$	0.12		$	0.9
Forfeited and canceled	(17,130)	$	0.39
Outstanding at December 31, 2025	5,431,725	$	0.19	4.7	$	8.8
Vested, December 31, 2025	5,431,725	$	0.19	4.7	$	8.8
Vested or expected to vest, December 31, 2025	5,431,725	$	0.19	4.7	$	8.8

No income tax benefit was recognized for stock options exercised as the Company does not anticipate realizing any such benefit in the near future. The fair value of stock options vested for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 were $118.8 million and $1611.48 million, respectively.

~~The~~As ~~Company~~of ~~uses~~December 31, 2025, ~~the~~there ~~Black-Scholes~~was ~~pricing~~less ~~model~~than ~~to determine the fair value of options granted~~$0.1 ~~The~~million ~~calculation~~ of ~~the~~unrecognized ~~fair~~compensation ~~value~~cost ofrelated ~~stock~~to ~~options is affected by the~~ stock ~~price on the grant date~~options, ~~the~~which ~~expected~~is ~~volatility of the Company’s stock over the~~ expected ~~term~~to ofbe ~~the~~recognized ~~award, the expected life of the award, the risk-free interest rate and the dividend yield. There were no options granted~~ during ~~the years ended December 31, 2024 and 2023~~2026.

AsNote ~~of December 31, 2024, there was less than $0~~17.1 Income ~~million of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted-average period of 0.1 years.~~Taxes

Note 16. Income Taxes

As discussed in “Note 1 – Nature of Business,” SES Holdings Pte. Ltd. is a Singapore private limited company and was formed in November 2018. As a result of the reorganization the Company undertook in 2018, SES Holdings Pte. Ltd. is also treated as a U.S. taxpayer for U.S. Federal income tax purposes in accordance with Internal Revenue Code Section 7874. SES Holdings Pte. Ltd. is the parent of the U.S. Federal consolidated income tax group.

The Company adopted ASU No. 2023-09, Improvements to Income Tax Disclosures, effective for the fiscal year ended December 31, 2025. In accordance with the transition guidance, the Company applied the amendments prospectively. As a result, the disclosures required by ASU 2023-09 are presented for fiscal year 2025 only and prior periods have not been restated.

The U.S. and foreign components of loss before income taxes were as follows:


	Years Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
U.S.	$	~~(13~~25,~~573)~~933	$	(1513,~~314~~573)
Foreign		(8698,~~424~~742)		(3886,~~939~~424)
Loss before income taxes	$	(9972,~~997~~809)	$	(5499,~~253~~997)

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Income tax expense consists of the following:


	Years Ended December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Current:
Federal	$	—	$	—
State		7(130)		897
Foreign		~~459~~832		~~115~~459
Total current expense		~~466~~702		~~204~~466
Deferred:
Federal		—		—
State		—		—
Foreign		(~~278~~471)		(~~1,057~~278)
Total deferred expense		(~~278~~471)		(~~1,057~~278)
Income tax (benefit) expense	$	~~188~~231	$	~~(853)~~188

The following table provides a reconciliation of the U.S. statutory income tax rate to the Company’s provision for income taxes and respective effective tax rate disaggregated by required category for the year ended December 31, 2025 in accordance with ASU 2023-09:


	Year Ended December 31,
	2025
(in thousands, except percentages)	Amount		Percent
U.S. Federal Statutory Tax Rate		(15,679)		21.0%

State and Local Income Taxes, Net of Federal Income Tax Effect		(131)		0.2%

Foreign Tax Effects
Singapore
Singapore Local NOL		(12,996)		17.4%
DTA not recognized due to DCL election		12,996		(17.4)%
Other		39		(0.1)%
Other foreign jurisdictions		(68)		0.1%

Tax Credits
Research and development tax credits		(2,669)		3.6%
Energy-related tax credits		-		0.0%
Other		-		0.0%

Changes in Valuation Allowances		11,640		(15.6)%

Nontaxable or Nondeductible Items
Share-based payment awards		1,542		(2.1)%
Other		(398)		0.5%

Changes in Unrecognized Tax Benefits		1,301		(1.7)%

Other Adjustments
Statutory tax rate difference between Elimination and United States		4,654		(6.2)%

Effective Tax Rate		231		(0.3)%

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Reconciliations of the federal statutory income tax rate to the Company’s effective income tax rate are as follows:


	~~Years~~Year Ended December 31,
	2024		~~2023~~
Tax provision (benefit) at U.S. statutory rate		21.0%		~~21.0%~~
State income taxes, net of federal benefit		(0.0)%		(0.2)%
Foreign tax		(0.3)%
Foreign tax		(0.3)%		0.9%
Other permanent items		(0.1)%
Foreign income taxed at non US rates		0.0%		(0.1)%
Section 162(m)		(0.7)%
Other permanent items		(0.1)%		(0.1)%
Stock-based compensation		(1.0)%
Section 162(m)		(0.7)%		(4.4)%
Research and development tax credits		1.3%
Stock-based compensation		(1.0)%		(0.8)%
Unrecognized tax benefits		(0.4)%
Research and development tax credits		1.3%		2.7%
Change in valuation allowance		(16.5)%
Unrecognized tax benefits		(0.4)%		(0.8)%
Deferred adjustments		(2.5)%
GILTI		0.0%		(0.3)%
Change in Sponsor Earn-Out liabilities		(1.1)%
Change in valuation allowance		(16.5)%		(18.3)%
Effective tax rate		(0.2)%
Deferred adjustments		(2.5)%		0.0%
Change in Sponsor Earn-Out liabilities		(1.1)%		2.6%
Others		0.0%		(0.6)%
Effective tax rate		(0.2)%		1.6%

The Company ~~files~~is ~~federal,~~subject ~~state~~to ~~and~~income ~~foreign~~taxes ~~tax~~in ~~returns,~~the ~~which~~U.S. ~~are~~federal, ~~subject~~state, toand ~~examination~~various byforeign ~~the relevant tax authorities~~jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The ~~statute~~Company’s oftax ~~limitations~~years remain open for ~~assessment~~examination bywithin the ~~Internal~~U.S. ~~Revenue Service (“IRS”),~~ and ~~state~~foreign ~~tax~~ authorities ~~remains open~~ for all ~~tax~~ years, ~~ended~~until ~~after~~such ~~2012.~~time Toas the ~~extent~~net ~~the~~operating ~~Company~~losses ~~has~~are ~~tax~~initially ~~attribute~~utilized. ~~carryforwards,~~The ~~the~~Company’s tax years inremain ~~which~~open ~~the~~for ~~attribute was generated may still be adjusted upon~~ examination by ~~the~~foreign ~~IRS or state tax~~ authorities tobeginning with the ~~extent~~tax ~~utilized~~year inended aDecember ~~future~~31, ~~period~~2018.

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The components of the net deferred tax asset at the end of each year are as follows:


	As of December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Deferred tax assets:
Net operating losses	$	3544,~~191~~948	$	3035,~~453~~191
Section 174		2529,~~306~~141		1225,~~146~~306
Research and development tax credits		46,~~298~~821		34,~~720~~298
Lease liabilities		32,~~060~~110		3,~~980~~060
Stock-based compensation		2,~~741~~044		32,~~349~~741
Accruals and reserves		1,547		1,499
Fixed assets		1,802		562
Fixed assets		562		321
Accruals and reserves		1,491		1,547
Intangibles		138		—
Deferred revenue		1,135		—
Other		94		120
Intangibles		—		138
Total deferred tax assets		72,937		55,588
Other		—		94
Deferred tax liabilities:
Total deferred tax assets		89,492		72,937
ROU assets		(2,781)		(3,801)
Deferred tax liabilities:
Total deferred tax liabilities		(2,781)		(3,801)
ROU assets		(1,913)		(2,781)
Net deferred tax asset before valuation allowance		70,156		51,787
Intangibles		(162)		—
Valuation allowance		(68,821)		(50,730)
Other		(23)		—
Net deferred tax asset	$	1,335	$	1,057
Total deferred tax liabilities		(2,098)		(2,781)
Net deferred tax asset before valuation allowance		87,394		70,156
Valuation allowance		(85,877)		(68,821)
Net deferred tax asset	$	1,517	$	1,335

The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% was due primarily to the research and development credit and change in valuation allowance. The Company maintains full valuation allowance against its U.S. and Viking Power System Pte. Ltd., net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2024. The Company's valuation allowance balance increased by $1817.1 million and $1118.91 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

AAs ~~full~~of ~~valuation~~December ~~allowance~~31, ~~was established for SES AI Korea Co.~~2025, ~~Ltd since~~ the ~~fiscal~~Company ~~year~~has ~~2021.~~Federal ~~However,~~net ~~SES~~operating ~~Korea~~loss ~~operates under a cost-plus model in adherence to transfer pricing~~ (TP“NOLs”) ~~regulations,~~carryforward ~~ensuring~~of ~~its~~approximately ~~profitability~~$169.0 inmillion, ~~accordance~~of ~~with~~which U$9.S.2 ~~GAAP.~~million ~~Upon~~is ~~reevaluation~~for ofpre-2018 ~~the subsidiary's consistent profitability~~ and ~~other~~$159.7 ~~favorable~~million ~~indicators, it~~ is ~~determined~~post ~~that a valuation allowance was no longer warranted~~2017. InThe ~~the~~pre-2018 ~~fiscal~~Federal ~~year~~NOLs ~~2023,~~carryforwards ~~the~~will ~~Company~~begin ~~released~~to ~~the~~expire ~~Korean~~in ~~valuation allowance~~2033. The

As of December 31, 2024, the Company has Federal net operating loss (“NOLs”) carryforward of approximately $144.5 million, of which $9.2 million is for pre-2018 and $135.3 million is post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also has Massachusetts NOLs carryforwards of approximately $81.2 million, which begins to expire in 2033.74

As of December 31, 2023, the Company had Federal NOLs carryforward of approximately $124.7 million, of which $9.3 million was for pre-2018 and $115.4 million was post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also had Massachusetts NOLs carryforwards of approximately $74.9 million, which begins to expire in 2033.

As of December 31, 2024 and 2023, the Company had federal research credit carryforwards of approximately $4.5 million and $3.8 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $2.1 million and $1.9 million, respectively, which begins to expire in 2030.

The utilization of the Company’s NOLs and R&D credits and carryforwards may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code. The annual limitation may result in the expiration of the NOL carryforwards before their utilization. During 2024, management does not believe there were significant ownership changes that would trigger a Section 382 limitation.

The Company records unrecognized tax benefits in accordance with ASC 740-10, Income Taxes. ASC 740-10 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected

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topost-2017 beFederal ~~taken~~NOLs inwill ~~the~~carryforward ~~Company’s~~indefinitely ~~income~~but ~~tax~~can ~~return~~only ~~and~~offset ~~also~~80% ~~provides~~of ~~guidance~~annual ontaxable ~~de-recognition,~~income. ~~classification,~~The ~~interest~~Company ~~and~~also ~~penalties,~~has ~~accounting~~Massachusetts inNOLs ~~interim~~carryforwards ~~periods,~~of ~~disclosure~~approximately $85.2 million, ~~and~~which ~~transition~~begins to expire in 2033.

As of December 31, 2024 ~~and 2023~~, the ~~total~~Company ~~amount~~had ofFederal ~~unrecognized~~NOLs ~~tax~~carryforward ~~benefits~~of ~~was~~approximately $7144.65 million, ~~and~~of which $59.52 million ~~respectively,~~was offor ~~which~~pre-2018 and $7135.3 million ~~would~~was ~~affect~~post ~~2024~~2017. ~~income~~The ~~tax~~pre-2018 ~~expense,~~Federal ifNOLs ~~recognized,~~carryforwards ~~without~~will ~~considering~~begin ~~any~~to ~~valuation~~expire ~~allowance~~in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company ~~does~~also ~~not~~had ~~expect~~Massachusetts ~~the~~NOLs ~~unrecognized~~carryforwards ~~tax~~of ~~benefits~~approximately to$81.2 ~~change~~million, ~~significantly~~which ~~over~~begins ~~the~~to ~~next~~expire 12in ~~months~~2033.

The utilization of the Company’s ~~includes~~NOLs ~~interest~~and R&D credits and ~~penalties~~carryforwards ~~related~~may be subject to ~~unrecognized~~a ~~tax~~limitation ~~benefits~~due ~~within~~to the ~~benefit~~“change ~~from~~in ~~(provision~~ownership ~~for)~~provisions” ~~income~~under ~~taxes.~~Section As382 of the ~~years~~Internal ~~ended~~Revenue ~~December~~Code. ~~31,~~The ~~2024~~annual ~~and~~limitation ~~2023~~may ~~the~~result ~~total~~in ~~amount~~the expiration of ~~gross~~the ~~interest~~NOL ~~accrued~~carryforwards inbefore ~~each~~their ~~year~~utilization. ~~was~~During ~~less~~2025, ~~than~~management ~~$0.1~~does ~~million,~~not ~~respectively~~believe there were significant ownership changes that would trigger a Section 382 limitation.

As of December 31, 2025 and 2024, the Company had federal research credit carryforwards of approximately $7.2 million and $4.5 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $3.5 million and $2.1 million, respectively, which begins to expire in 2030.

The Company records unrecognized tax benefits in accordance with ASC 740-10, Income Taxes. ASC 740-10 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

As of December 31, 2025 and 2024, the total amount of unrecognized tax benefits was $10.5 million and $7.6 million respectively, of which $10.1 million would affect 2025 income tax expense, if recognized, without considering any valuation allowance.

The Company includes interest and penalties related to unrecognized tax benefits within the benefit from (provision for) income taxes. As of the years ended December 31, 2025 and 2024 the total amount of gross interest accrued in each year was $0.1 million and less than $0.1 million, respectively.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:


	As of December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Beginning of the year	$	57,~~502~~600	$	45,~~573~~502
Increase – prior year positions		1,~~521~~728		~~311~~1,521
Increase – current year positions		~~577~~1,168		~~618~~577
Decrease – prior year positions		—		—
End of the year	$	10,496	$	7,600
End of the year	$	7,600	$	5,502

The Company is subject to income taxes in the U.S. federal, state, and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination within the U.S. and foreign authorities for all years, until such time as the NOLs are initially utilized. The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018.

The Company maintains full valuation allowance against its US and Viking Power System Pte. Ltd and UZ Energy, net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2025.

~~Beginning~~Note in 2022, the 2017 Tax Cuts and Jobs Act amended Section 174 to eliminate current-year deductibility of research and experimentation (R&E) expenditures and software development costs (collectively, R&E expenditures) and instead require taxpayers to charge their R&E expenditures to a capital account amortized over five years (15 years for expenditures attributable R&E activity performed outside the United States)18. ~~The~~ Net ~~Company~~Loss ~~generated~~Per ~~a deferred tax asset for capitalized R&E expenditures for the year ended December 31, 2024 which was fully offset with a valuation allowance.~~Share

Note 17. Net Income (Loss) Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing net loss, as adjusted for changes in fair value recognized in earnings from equity contracts classified as liabilities, by the weighted average number of common shares outstanding and, when dilutive, common share equivalents from outstanding stock options and restricted stock units (using the treasury-stock method). The weighted-average number of common shares used in the computation of basic and diluted net income per share were as follows:


	Years Ended December 31,
(in thousands, except share and per share amounts)	2024		2023
Numerator:
Net loss attributable to common stockholders - basic and diluted	$	(100,185)	$	(53,400)
Denominator:
Weighted average shares of common stock outstanding - basic and diluted		321,824,143		315,051,508
Net loss per share attributable to common stockholders - basic and diluted	$	(0.31)	$	(0.17)

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	Years Ended December 31,
(in thousands, except share and per share amounts)	2025		2024
Numerator:
Net loss attributable to common stockholders - basic and diluted	$	(73,040)	$	(100,185)
Denominator:
Weighted average shares of common stock outstanding - basic and diluted		330,917,166		321,824,143
Net loss per share attributable to common stockholders - basic and diluted	$	(0.22)	$	(0.31)

The number of common stock equivalents excluded from the computation of diluted net loss per share because either the effect would have been anti-dilutive, or the performance criteria related to such shares and awards had not been met, were as follows:


	Years Ended December 31,
	~~2024~~2025		~~2023~~2024
Escrowed Earn-Out Shares		27,690,978		27,690,978
Options to purchase common stock		65,~~063~~431,~~110~~725		136,~~619~~063,~~793~~110
Public Warrants		9,199,947		9,199,947
Sponsor Earn-Out Shares		5,520,000		5,520,000
Private Warrants		5,013,333		5,013,333
Unvested RSUs		13,~~282~~883,~~923~~881		613,~~359~~282,~~474~~923
Unvested PSUs		5,~~973~~963,~~050~~154		35,~~364~~973,~~810~~050
Earn-Out Restricted Shares		~~765~~742,~~990~~280		1765,~~619,998~~990
Unvested RSAs		~~255,458~~—		~~649~~255,~~567~~458
Total		73,~~764~~445,~~789~~298		73,~~037~~764,~~900~~789

Note 19. Segment and Geographic Information

Note 18. Segment and Geographic Information

Operating Segments

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating and reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM uses ~~operating~~net income (loss) as the measure of financial performance and for resource allocation decisions. When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews revenue and significant expenses included in the net income (loss). In addition, the CODM reviews and monitors operating expenses and cash forecasts to ensure that enough capital is available for operations.

Significant Expenses

The Company concluded it operates as one operating and reportable segment based on the information regularly reviewed by the CODM for decision making, resource allocation, and evaluating financial performance. The information included is categorized into different significant expense lines such as compensation and benefits, lab and equipment, professional services, general and administrative, facility, and sales and marketing. ~~For~~The ~~the year ended December 31, 2024, the~~ Company reported to its CODM $33.5 million in compensation and benefits excluding stock compensation and net of reimbursements, $18.3 million in lab and equipment net of reimbursements, $16.0 million in general and administrative, $12.7 million in professional services, $8.6 million in facility, and $1.6 million in sales and marketing. For the ~~year~~following ~~ended~~significant ~~December~~expenses ~~31,~~to ~~2023,~~ the ~~Company reported to its~~ CODM $16.9 million in compensation and benefits excluding stock compensation and net of reimbursements, $5.7 million in lab and equipment net of reimbursements, $13.7 million in general and administrative, $12.6 million in professional services, $7.4 million in facility, and $1.2 million in sales and marketing.:

Geographic Information

For the year ended December 31, 2024, revenue outside of the United States, based on customer billing address in the Asia Pacific region, was 100% of total revenue.

The Company’s long-lived assets consist primarily of property and equipment and intangible assets and are attributed to the geographic location in which they are located. Long-lived assets by geographical area were as follows:


	AsYears ofEnded December 31,
(in thousands)	~~2024~~2025		~~2023~~2024
Property and equipment, net:
Compensation and benefits	$	26,462	$	33,464
Asia Pacific	$	24,041	$	24,032
Stock compensation		10,633		19,935
United States		14,124		13,927
Lab and equipment		13,439		18,277
Total property and equipment, net	$	38,165	$	37,959
General and administrative		14,923		16,015
Professional services		21,770		12,686
Facility		5,906		8,588
Marketing and sales		788		1,571
	$	93,921	$	110,536

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~~Note~~Geographic ~~19. Defined~~& ~~Contribution~~Concentration ~~Plan~~Information

~~The~~Revenue ~~Company~~outside ~~offers~~of athe ~~defined~~United ~~contribution~~States, ~~retirement~~based ~~savings~~on ~~plan~~customer ~~under~~billing ~~Section~~address, ~~401(k)~~ was 99% and 100% of total revenue for the ~~Internal~~years ~~Revenue~~ending ~~Code~~December 31 2025 and 2024, respectively. ~~This~~For ~~plan~~the ~~covers~~year ~~employees~~ending ~~who~~December ~~meet~~31, ~~minimum~~2025, ~~age~~there ~~and~~were ~~service~~three ~~requirements~~customers ~~and~~that ~~allows~~accounted ~~participants~~for to48%, ~~defer~~15%, aand ~~portion~~12% of ~~their~~revenue, ~~annual~~respectively, ~~compensation~~compared onwith aone ~~pre-tax~~customer ~~basis.~~that ~~The~~accounted ~~Company~~for ~~contributed~~93% ~~$0.7~~in ~~million~~the ~~and~~year ~~$0.5~~ending ~~million~~December to31, ~~the~~2024. ~~defined~~As ~~contribution~~of ~~retirement~~December ~~savings~~31, ~~plan~~2025, ~~for~~there ~~the~~were ~~years~~three ~~ended~~customers ~~December~~that accounted for 31%, ~~2024~~12%, and ~~2023~~10% of accounts receivable compared to one customer that accounted for 94% of accounts receivable as of December 31, ~~respectively~~2024.

Note 20. Related-Party Transactions


		As of December 31,
(in thousands)		2025			2024
Property and equipment, net:
Asia Pacific		$	18,346		$	24,041
United States			10,520			14,124
Total property and equipment, net		$	28,866		$	38,165

~~Pursuant~~Note to the director nomination agreement, dated as of July 12, 2021, with the Company (the “Director Nomination Agreement”), General Motors Company and its affiliates (“GM”) were considered related parties due to their board representation and the board member’s employment position at GM, which remained in effect as long as GM continues to hold more than 5% of the fully diluted outstanding equity securities of SES as per the agreement20. Defined OnContribution October 29, 2024, GM and the Company mutually agreed to terminate the Director Nomination Agreement and GM terminated its board representation. Hence, GM is no longer considered a related party. See “Note 4 – Partnerships” for more details about our prior partnership with GM.Plan

The Company offers a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. This plan covers employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. The Company contributed $0.6 million and $0.7 million to the defined contribution retirement savings plan for the years ended December 31, 2025 and 2024, respectively.

Note 21. Related-Party Transactions

Pursuant to the director nomination agreement, dated as of July 12, 2021, with the Company (the “Director Nomination Agreement”), General Motors Company and its affiliates (“GM”) were considered related parties due to their board representation and the board member’s employment position at GM, which remained in effect as long as GM continues to hold more than 5% of the fully diluted outstanding equity securities of SES as per the agreement. On October 29, 2024, GM and the Company mutually agreed to terminate the Director Nomination Agreement and GM terminated its board representation. Hence, GM is no longer considered a related party. See “Note 5 – Partnerships” for more details about our prior partnership with GM.

Item 9. Changes in and Disagreements With Accountants On Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our chief executive officer (“CEO”) and chief financial officer (“CFO”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, ~~2024~~2025, as such term is defined in Rules 13a-15(e) and 15d-15(e) under Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. Based on this evaluation, our principal executive officer and principal financial officer have concluded that as of December 31, ~~2024~~2025, our disclosure controls and procedures were ~~not~~ effective ~~due to a material weakness in our internal control over financial reporting, as discussed below~~.

Management’s Report on Internal Controls Over Financial Reporting

As required by SEC rules and regulations implementing Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”), our management is responsible for establishing and maintaining adequate internal control over financial reporting, as this term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

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and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect errors or misstatements in our financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

75We completed the acquisition of UZ Energy on September 15, 2025, and we are currently integrating UZ Energy into our internal control system. Consistent with guidance issued by the SEC, our assessment as of December 31, 2025 of the effectiveness of the Company’s disclosure controls and procedures described above and internal control over financial reporting described below excludes UZ Energy, which represented approximately 7% of total assets and 35% of total revenue of the consolidated financial statement amounts of the Company as of and for the year ended December 31, 2025.

~~Table~~Management with participation of ~~Contents~~the principal executive officer and principal financial officer under the oversight of the Audit Committee of our Board of Directors evaluated the effectiveness of our internal control over financial reporting as of December 31, 2025 using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013).

~~Management~~Based ~~with~~on ~~participation of~~ the ~~CEO~~evaluation ~~and~~described ~~CFO~~above, ~~under~~management ~~the~~determined ~~oversight~~that ~~of the Audit Committee of~~ our ~~Board of Directors evaluated the effectiveness of our~~ internal control over financial reporting was effective as of December 31, ~~2024~~ ~~using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013)~~2025.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Based on the evaluation described above, management determined that our internal control over financial reporting was not effective as of December 31, 2024, because of a material weakness. Specifically, a management review control associated with the valuation of the sponsor earn-out liabilities did not operate effectively as it did not evaluate a key assumption used in the valuation at an appropriate level of precision.

The material weaknesses did not result in any material misstatements to our consolidated financial statements or disclosures in the years ended December 31, 2024 and 2023.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal controls over financial reporting because we are exempt from this requirement as a smaller reporting company and non-accelerated filer.

Remediation ~~Plan~~of ~~for~~Previously ~~Current~~Reported Material Weakness

WeA ~~are taking the following actions to remediate the~~ material weakness ~~described~~is ina ~~this~~deficiency, ~~Item~~or 9Acombination ~~and~~of todeficiencies, ~~enhance~~in ~~our~~internal ~~overall~~ control ~~environment.~~over Wefinancial ~~will~~reporting, ~~design~~such ~~updated~~that ~~processes~~there ~~and~~is ~~controls~~a ~~and~~reasonable ~~maintain~~possibility ~~sufficient~~that ~~and~~a ~~appropriate~~material ~~review~~misstatement ~~documentation~~of ~~for~~a ~~the~~company’s ~~assessment~~annual ofor ~~all~~interim ~~key~~financial ~~assumptions~~statements ~~related~~will tonot ~~the~~be ~~valuation~~prevented ofor ~~sponsor~~detected ~~earn~~on ~~out~~a ~~liabilities.~~timely basis.

~~Remediation~~We previously identified a material weakness, as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, namely, that a management review control associated with the valuation of ~~Previously~~the ~~Reported~~Sponsor ~~Material~~Earn-Out ~~Weaknesses~~liabilities did not operate effectively, as it did not evaluate a key assumption used in the valuation at an appropriate level of precision. The material weakness did not result in any material misstatements to our consolidated financial statements or disclosures in the years ended December 31, 2024 and 2023.

WeIn ~~previously~~response ~~identified~~to athe above material weakness, ~~as disclosed in our Annual Report on Form 10-K for~~ the ~~fiscal year ended December 31, 2023, the~~ Company ~~did~~executed ~~not~~a ~~design~~remediation ~~and~~plan ~~maintain~~in ~~sufficient~~2025, ~~user~~which ~~access~~included ~~and~~steps ~~monitoring controls~~ (1) to ~~ensure~~enhance ~~appropriate~~the ~~segregation~~design of ~~duties~~existing ~~and~~control ~~adequately~~activities ~~restrict~~related ~~access~~ to aevaluation ~~financial~~of ~~application.~~all Askey aassumptions used ~~result,~~in ~~automated and manual business process controls that are dependent on~~ the ~~affected~~valuation ITat ~~general~~an ~~controls~~appropriate ~~were~~level ~~also~~of ~~deemed~~precision and ~~ineffective,~~(2) asto ~~they~~maintain ~~could~~an ~~have~~additional ~~been~~layer ~~adversely~~of ~~affected~~internal ~~due~~review toover ~~their~~the ~~reliance~~accounting onof ~~information~~the ~~and~~valuation ~~configurations~~of ~~from~~ the ~~affected~~Sponsor ITEarn-Out ~~system~~liabilities.

~~Further,~~As asa ~~disclosed~~result, inwe ~~our~~have ~~Quarterly~~concluded ~~Report~~that, onas ~~Form~~of ~~10-Q~~December ~~for the quarter ended March~~ 31, ~~2024~~2025, ~~in the first quarter of 2024~~ we ~~identified~~have anremediated ~~additional~~the above-mentioned material weakness inrelated ato management review control ~~because~~associated wewith ~~failed~~the tovaluation ~~detect~~of ~~an error in~~ the ~~accounting~~Sponsor ~~for forfeitures of~~ Earn-Out ~~Restricted Shares upon a holder’s termination of employment~~liabilities.

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