Core Insights - SES AI Corporation is recognized as a promising small-cap AI stock, particularly favored by hedge funds [1] - The company has appointed Andrew Boyd to its Board of Directors, replacing Michael Noonen [1][3] - SES AI is pioneering the use of superintelligent AI in battery technology across various stages of production and monitoring [3] Company Overview - SES AI Corporation specializes in developing AI-enhanced lithium metal and lithium-ion rechargeable battery technologies for various applications, including electric vehicles (EVs), urban air mobility, drones, robotics, and energy storage systems [4] - The company is noted for being the first battery manufacturer to integrate superintelligent AI throughout its business processes, from R&D to manufacturing and safety monitoring [3] Leadership Background - Andrew Boyd, the newly appointed board member, has extensive experience in the investment community, currently serving as a Partner at Bramalea Partners, a technology-focused fund he founded [2] - Prior to Bramalea, Boyd had a significant 15-year tenure at Fidelity Management & Research Company, culminating in the role of Global Head of Equity Capital Markets [2]

Core Viewpoint - SES AI has successfully completed the acquisition of UZ Energy, significantly broadening its product range and enhancing its position in the energy storage systems market [1][2]. Group 1: Acquisition Details - SES AI announced the completion of its acquisition of UZ Energy, with a purchase price of approximately $25.5 million, excluding potential earnout adjustments based on financial performance [2]. - UZ Energy specializes in energy storage systems (ESS), having achieved over 500 megawatt-hours of storage deployments [4]. Group 2: Market Strategy - The acquisition is expected to accelerate SES AI's growth strategy by utilizing UZ's marketing team and hardware platform to increase market share in the $300 billion ESS market, particularly in the United States [5]. - Data centers are identified as a key customer demographic for SES AI's new business, with projections indicating that their share of electrical consumption in the U.S. will triple by 2028 due to the rise of artificial intelligence technology [5].

Core Insights - QuantumScape Corp. (QS) and SES AI Corp. (SES) are key players in the development of next-generation lithium batteries, each pursuing distinct strategies [1] - QuantumScape focuses on fully solid-state batteries for electric vehicles, while SES AI employs a hybrid lithium-metal approach enhanced by AI [2] QuantumScape Overview - QuantumScape aims to create lighter, faster-charging, and safer solid-state batteries, which are considered the ideal solution for electric vehicles [5] - The company has introduced the Cobra separator process, which is 25 times more productive and 200 times more efficient than previous methods, addressing scalability challenges [6] - Backed by Volkswagen's PowerCo, QuantumScape has secured up to $131 million in milestone payments, with $797.5 million in liquidity as of Q2 2025, extending its funding runway into 2029 [7][9] - A new joint development agreement with another global automaker indicates growing industry interest beyond Volkswagen [8] - Although still pre-revenue, QuantumScape's technological advancements and partnerships position it as a compelling investment opportunity in the battery sector [10] SES AI Overview - SES AI combines lithium-metal batteries with AI, aiming for higher energy density and a diverse range of applications beyond electric vehicles [11] - The company's Molecular Universe platform utilizes AI for discovering and optimizing new battery materials, with its first electrolyte material already in use for drones and robotics [12] - SES AI is expanding into the energy storage system (ESS) market through the acquisition of UZ Energy, targeting a $300 billion opportunity [13] - The company reported $9.3 million in revenues in H1 2025, with expectations of $15-$25 million by year-end, and has $229 million in liquidity with no debt [14] - SES AI is positioning itself as an AI-driven platform, which may create value through software, materials, and hardware [15] Investment Verdict - The investment case currently favors QuantumScape due to its revolutionary battery technology and strong funding, while SES AI faces execution and scaling challenges [16] - QuantumScape is rated as a Zacks Rank 2 (Buy), while SES AI holds a Zacks Rank 3 (Hold) [17]

FORM 10-Q [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements and Risks](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risks) This section outlines the company's forward-looking statements and warns investors about potential risks and uncertainties that could cause actual results to differ materially from expectations - The Company faces significant challenges in developing and commercializing Lithium-Metal (Li-Metal) batteries for EVs, UAM, and other applications, with development pace being unpredictable and subject to delays[8](index=8&type=chunk) - The Company expects to continue incurring losses for the foreseeable future and will require substantial additional capital to fund its business, with no assurance of achieving or maintaining profitability[8](index=8&type=chunk) - Recent risk factors include the termination of certain EV tax credits by the 'One Big Beautiful Bill Act' (OBBBA) in **July 2025**, which may reduce demand for EVs, and changes in U.S. and foreign government trade policies, including tariffs, which could adversely affect global economic conditions and the Company's business[130](index=130&type=chunk)[131](index=131&type=chunk) - The Company's Class A common stock has been volatile, and a failure to satisfy NYSE listing requirements could result in delisting, negatively affecting its market price and trading volume[12](index=12&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for SES AI Corporation, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the nature of business, accounting policies, revenue recognition, partnerships, and other financial components for the periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Presents the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------- | :------------ | :---------------- | :-------------------- | :------- | | Cash and cash equivalents | $11,757 | $128,796 | $(117,039) | -90.9% | | Short-term investments | $217,123 | $133,748 | $83,375 | 62.3% | | Total current assets | $242,963 | $276,904 | $(33,941) | -12.3% | | Total assets | $290,460 | $329,785 | $(39,325) | -11.9% | | Total current liabilities | $19,501 | $22,815 | $(3,314) | -14.5% | | Total liabilities | $41,233 | $51,475 | $(10,242) | -19.9% | | Total stockholders' equity | $249,227 | $278,310 | $(29,083) | -10.4% | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) Reports the company's financial performance, including revenues, expenses, and net loss over specific periods | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $3,527 | $— | $9,320 | $— | | Gross profit | $2,600 | $— | $7,157 | $— | | Research and development | $19,087 | $15,057 | $39,597 | $26,822 | | General and administrative | $6,520 | $9,570 | $13,840 | $19,076 | | Loss from operations | $(23,007) | $(24,627) | $(46,280) | $(45,898) | | Net loss | $(22,651) | $(19,897) | $(35,083) | $(35,454) | | Basic and diluted net loss per share | $(0.07) | $(0.06) | $(0.11) | $(0.11) | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) Details changes in the company's equity accounts, such as stock-based compensation and net loss, over specific periods | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Balance – December 31 | $278,310 | $358,950 | | Stock-based compensation | $6,668 | $9,586 | | Net loss | $(35,083) | $(35,454) | | Balance – June 30 | $249,227 | $331,573 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(33,654) | $(31,071) | | Net cash (used in) provided by investing activities | $(83,187) | $547 | | Net cash (used in) provided by financing activities | $(345) | $128 | | Net decrease in cash, cash equivalents and restricted cash | $(116,987) | $(30,897) | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Nature of Business](index=10&type=section&id=Note%201.%20Nature%20of%20Business) SES AI Corporation is a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal and Lithium-ion rechargeable battery technologies. The company's mission is to accelerate the world's energy transition through material discovery and battery management, focusing on combining high energy density with cost-effective manufacturability for EVs, UAM, drones, robotics, and ESS. Principal operations commenced and revenue was derived from business activities starting in October 2024 - SES AI Corporation develops and manufactures high-performance, AI-enhanced Lithium-Metal and Lithium-ion rechargeable battery technologies[26](index=26&type=chunk) - The Company's mission is to accelerate the world's energy transition through material discovery and battery management, aiming to combine high energy density of Li-Metal with cost-effective manufacturability[26](index=26&type=chunk) - Principal operations commenced and revenue from principal business activities started in **October 2024**[26](index=26&type=chunk) [Note 2. Basis of Presentation and Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note details the basis of presentation for the unaudited condensed consolidated financial statements, prepared in accordance with U.S. GAAP and SEC regulations. It highlights the use of estimates in financial reporting and outlines the fair value hierarchy (Level 1, 2, 3) for financial instruments. The note also discusses recently issued accounting pronouncements, including ASU 2023-9 (Improvements to Income Tax Disclosures) and ASU No. 2024-03 (Disaggregation of Income Statement Expenses), which the company is evaluating for future impact - The financial statements are prepared in accordance with U.S. GAAP and SEC regulations for interim financial reporting, relying on management's estimates and assumptions[27](index=27&type=chunk)[29](index=29&type=chunk) - Fair value measurements are categorized into a hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (unobservable inputs)[33](index=33&type=chunk)[36](index=36&type=chunk) - The Company is evaluating the impact of recently issued accounting pronouncements, ASU 2023-9 (Income Tax Disclosures) and ASU No. 2024-03 (Disaggregation of Income Statement Expenses), which are effective for annual periods beginning after **December 15, 2024**, and **December 15, 2026**, respectively[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) Fair Value Measurements (in thousands) | (in thousands) | Level 1 | Level 2 | Level 3 | Total | | :------------- | :------ | :------ | :------ | :---- | | **June 30, 2025** | | | | | | Cash equivalents in money market funds | $6,447 | $— | $— | $6,447 | | U.S. treasury securities | $215,865 | $— | $— | $215,865 | | Equity securities | $1,258 | $— | $— | $1,258 | | Sponsor Earn-Out liabilities | $— | $— | $3,036 | $3,036 | | **December 31, 2024** | | | | | | Cash equivalents in money market funds | $120,888 | $— | $— | $120,888 | | U.S. treasury securities | $132,782 | $— | $— | $132,782 | | Equity securities | $967 | $— | $— | $967 | | Sponsor Earn-Out liabilities | $— | $— | $9,472 | $9,472 | [Note 3. Revenue](index=14&type=section&id=Note%203.%20Revenue) The Company disaggregates revenue by type of arrangement, primarily from the sale of battery products and research and development services. For the three and six months ended June 30, 2025, total revenue was $3.5 million and $9.3 million, respectively, predominantly from service revenue. As of June 30, 2025, remaining performance obligations totaled $3.7 million, expected to be recognized within the next twelve months - As of June 30, 2025, the aggregate amount of transaction price allocated to remaining performance obligations was **$3.7 million**, expected to be recognized as revenue within the next **twelve months**[41](index=41&type=chunk) Revenue from Customers (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Service revenue | $3,527 | $— | $9,311 | $— | | Product revenue | $— | $— | $9 | $— | | Total revenue | $3,527 | $— | $9,320 | $— | [Note 4. Partnerships](index=14&type=section&id=Note%204.%20Partnerships) The Company has ongoing joint development agreements (JDAs) and service agreements with major OEMs. The JDA with Hyundai Motor Company was extended until December 2025 for B-sample Li-Metal battery technology. The B-sample JDA with Honda Motor Company was replaced with a services agreement through the end of 2025. The A-Sample JDA with General Motors concluded in September 2024. Research and development reimbursements from these partnerships decreased significantly in 2025 compared to 2024 - The JDA with Hyundai Motor Company for B-sample Li-Metal battery technology was extended until **December 2025**[42](index=42&type=chunk) - The B-sample JDA with Honda Motor Company, Ltd. was replaced with a B-sample services agreement in **January 2025**, with a term through the end of **2025**[43](index=43&type=chunk) - The A-Sample JDA with General Motors concluded in **September 2024**[43](index=43&type=chunk) Total Reimbursements to Research and Development (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total reimbursements | $— | $577 | $— | $4,102 | [Note 5. Cash and Cash Equivalents](index=14&type=section&id=Note%205.%20Cash%20and%20Cash%20Equivalents) This note provides a breakdown of cash, cash equivalents, and restricted cash. As of June 30, 2025, total cash and cash equivalents significantly decreased to $11.8 million from $128.8 million at December 31, 2024, primarily due to a reduction in money market funds. Restricted cash, held as collateral, remained relatively stable Cash and Cash Equivalents (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Cash | $5,310 | $7,908 | | Money market funds | $6,447 | $120,888 | | Total cash and cash equivalents | $11,757 | $128,796 | | Restricted cash | $651 | $599 | | Total cash, cash equivalents, and restricted cash | $12,408 | $129,395 | [Note 6. Short-Term Investments](index=16&type=section&id=Note%206.%20Short-Term%20Investments) The Company's short-term investments primarily consist of available-for-sale U.S. treasury securities and marketable equity securities. As of June 30, 2025, the fair value of U.S. treasury securities increased to $215.9 million from $132.8 million at December 31, 2024. Marketable equity securities also saw an increase in fair value - Marketable equity securities increased from **$1.0 million** at December 31, 2024, to **$1.3 million** at June 30, 2025, with an initial cost of **$0.5 million**, resulting in unrealized gains recorded in miscellaneous income[49](index=49&type=chunk) Short-Term Marketable Securities (in thousands) | (in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :------------- | :------------- | :--------------------- | :---------------------- | :--------- | | **June 30, 2025** | | | | | | U.S. treasury securities | $215,772 | $133 | $(40) | $215,865 | | **December 31, 2024** | | | | | | U.S. treasury securities | $132,615 | $167 | $— | $132,782 | [Note 7. Accrued Expenses and Other Current Liabilities](index=16&type=section&id=Note%207.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) This note details the components of accrued expenses and other current liabilities, which decreased from $18.3 million at December 31, 2024, to $14.8 million at June 30, 2025. The primary drivers of this decrease were reductions in vendor project charges, employee compensation, and construction in process Accrued Expenses and Other Current Liabilities (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Vendor project charges | $5,956 | $7,500 | | Employee compensation and related costs | $4,048 | $6,646 | | Income taxes payable | $1,049 | $313 | | Professional and consulting services | $871 | $1,480 | | Deferred income | $862 | $— | | Software services | $837 | $— | | Construction in process | $339 | $1,408 | | Other | $826 | $982 | | Total | $14,788 | $18,329 | [Note 8. Government Grant](index=16&type=section&id=Note%208.%20Government%20Grant) The Company received a grant from Korean government agencies in December 2022, intended for facilities and equipment. As of June 30, 2025, the Company has received 12.0 billion Korean won ($8.9 million) but has not yet earned it, as it has not fulfilled all required minimum investment and employment conditions, leading to recorded interest payable - The Company was awarded a grant from Korean government agencies in **December 2022** for facilities and equipment[51](index=51&type=chunk) - As of June 30, 2025, the Company has received **$8.9 million** (**12.0 billion Korean won**) in cash grants, but these remain unearned due to unfulfilled minimum investment and employment conditions[52](index=52&type=chunk)[53](index=53&type=chunk) [Note 9. Sponsor Earn-Out Liabilities](index=18&type=section&id=Note%209.%20Sponsor%20Earn-Out%20Liabilities) Sponsor Earn-Out liabilities are measured at estimated fair value using a Monte Carlo simulation model. The balance decreased significantly from $9.5 million at December 31, 2024, to $3.0 million at June 30, 2025, primarily due to a $6.4 million gain from the change in fair value. Key valuation inputs include expected term, risk-free rate, expected volatility, and stock price - Sponsor Earn-Out liabilities are measured at estimated fair value using a Monte Carlo simulation valuation model[54](index=54&type=chunk) Sponsor Earn-Out Liabilities Reconciliation (in thousands) | (in thousands) | Balance as of December 31, 2024 | Change in fair value | Balance as of June 30, 2025 | | :------------- | :------------------------------ | :------------------- | :-------------------------- | | Sponsor Earn-Out liabilities | $9,472 | $(6,436) | $3,036 | Key Inputs for Monte Carlo Simulation Model | Input | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Expected term (in years) | 5.5 | 5.9 | | Risk free rate | 3.80% | 4.38% | | Expected volatility | 100.0% | 95.0% | | Stock price | $0.89 | $2.19 | [Note 10. Commitments and Contingencies](index=18&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) The Company has a remaining commitment of up to $9.9 million under a joint development agreement (JDA) as of June 30, 2025, for research and development activities and equipment purchases. The Company also has lease obligations and is subject to ordinary course legal proceedings, but management expects no material adverse effect on financial condition - As of June 30, 2025, the Company has a remaining commitment of up to **$9.9 million** under a JDA for research and development activities and equipment purchases[56](index=56&type=chunk) - The Company assesses the probability of incurring liability for relinquishment charges on an office lease as remote[57](index=57&type=chunk) - Management expects that any liabilities from legal proceedings or indemnification provisions would not have a material effect on the Company's financial condition, results of operations, or cash flows[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 11. Stock-Based Compensation](index=20&type=section&id=Note%2011.%20Stock-Based%20Compensation) Stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to the prior year. Total stock-based compensation was $2.7 million for the three months and $6.7 million for the six months ended June 30, 2025. The decrease was primarily driven by reductions in Restricted Stock Units (RSUs) and Performance Stock Units (PSUs) Total Stock-Based Compensation (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total stock-based compensation | $2,695 | $4,802 | $6,668 | $9,586 | Stock-Based Compensation Expense by Award Type (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | RSUs | $1,956 | $3,604 | $4,771 | $6,689 | | PSUs | $256 | $700 | $913 | $1,632 | | RSAs | $474 | $487 | $952 | $978 | | Stock options | $9 | $11 | $32 | $287 | [Note 12. Income Taxes](index=20&type=section&id=Note%2012.%20Income%20Taxes) The Company's effective tax rate for the three and six months ended June 30, 2025, was (3.4)% and (2.1)%, respectively, an increase compared to the prior year. This difference from the statutory federal income tax rate of 21% is primarily due to income taxes on foreign earnings offset by U.S. losses where no benefit was recorded due to fully reserved deferred tax assets - The difference from the **21% statutory federal income tax rate** is mainly due to foreign income taxes offset by U.S. losses with no recorded benefit, as deferred tax assets are fully reserved[62](index=62&type=chunk) Effective Tax Rate | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :----- | :------------------------ | :------------------------ | | 3 Months Ended June 30 | (3.4)% | (0.4)% | | 6 Months Ended June 30 | (2.1)% | (0.80)% | [Note 13. Net Loss Per Share](index=21&type=section&id=Note%2013.%20Net%20Loss%20Per%20Share) Basic and diluted net loss per share for the three months ended June 30, 2025, was $(0.07) and for the six months was $(0.11). The weighted-average shares outstanding increased compared to the prior year. A significant number of common stock equivalents were excluded from diluted EPS calculation due to their anti-dilutive effect or unfulfilled performance criteria Net Loss Per Share and Weighted-Average Shares Outstanding | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders | $(22,651) | $(19,897) | $(35,083) | $(35,454) | | Weighted average shares outstanding (basic and diluted) | 331,731,923 | 320,833,854 | 330,539,801 | 319,812,287 | | Net loss per share (basic and diluted) | $(0.07) | $(0.06) | $(0.11) | $(0.11) | Common Stock Equivalents Excluded from Diluted Net Loss Per Share (as of June 30) | Type of Equivalent | 2025 | 2024 | | :----------------- | :----------- | :----------- | | Escrowed earn-out shares | 27,690,978 | 27,690,978 | | Options to purchase common stock | 5,922,855 | 11,634,356 | | 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 | 14,236,250 | 14,687,464 | | Unvested PSUs | 5,784,050 | 6,159,793 | | Earn-out Restricted Shares | 742,399 | 831,171 | | Unvested RSAs | 63,749 | 454,561 | | Total | 74,173,561 | 81,191,603 | [Note 14. Segment and Geographic Information](index=21&type=section&id=Note%2014.%20Segment%20and%20Geographic%20Information) The Company operates as one operating and reportable segment, with the CEO serving as the Chief Operating Decision Maker (CODM) and reviewing financial information on a consolidated basis. All revenue for the three and six months ended June 30, 2025, was generated outside of the United States, specifically in the Asia Pacific region - The Company operates in one operating and reportable segment, with the CEO as the CODM, reviewing consolidated financial information[64](index=64&type=chunk)[65](index=65&type=chunk) - For the three and six months ended June 30, 2025, **100% of total revenue** was generated outside of the United States, specifically in the Asia Pacific region[68](index=68&type=chunk) Significant Expenses Reported to CODM (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Compensation and benefits | $7,930 | $9,844 | $14,299 | $16,957 | | Stock compensation | $2,797 | $4,802 | $6,728 | $9,586 | | Lab and equipment | $3,074 | $1,757 | $8,883 | $3,087 | | General and administrative | $4,091 | $2,718 | $7,993 | $7,548 | | Professional services | $6,080 | $2,233 | $12,165 | $4,252 | | Facility | $1,444 | $2,998 | $2,991 | $4,026 | | Marketing and sales | $191 | $275 | $378 | $442 | | Total | $25,607 | $24,627 | $53,437 | $45,898 | [Note 15. Related-Party Transactions](index=23&type=section&id=Note%2015.%20Related-Party%20Transactions) General Motors (GM) is no longer considered a related party as of 2025, following the mutual termination of the Director Nomination Agreement on October 29, 2024, and GM's termination of its board representation - General Motors (GM) is no longer considered a related party during **2025**, as the Director Nomination Agreement was mutually terminated on **October 29, 2024**, and GM terminated its board representation[69](index=69&type=chunk) [Note 16. Subsequent Events](index=23&type=section&id=Note%2016.%20Subsequent%20Events) Subsequent to June 30, 2025, the Company entered into an agreement to acquire Shenzhen UZ Energy Co., Ltd., a China-based battery energy storage system manufacturer, for an estimated purchase consideration of approximately $25.5 million. Additionally, the 'One Big Beautiful Bill Act' (OBBBA) was enacted in the U.S. on July 4, 2025, which will impact corporate tax provisions, and the Company is evaluating its financial effect - On **July 25, 2025**, SES AI International I Pte Ltd agreed to acquire **100%** of Shenzhen UZ Energy Co., Ltd., a China-based battery energy storage system manufacturer, for an estimated purchase consideration of approximately **RMB 183,460,000** (**$25,480,556**)[70](index=70&type=chunk) - The 'One Big Beautiful Bill Act' (OBBBA) was enacted on **July 4, 2025**, restoring **100% bonus depreciation**, immediate expensing for R&D, and making other corporate tax changes. The Company is evaluating its financial impact[71](index=71&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three and six months ended June 30, 2025. It covers an overview of the business, detailed analysis of operating results including revenue, cost of revenue, R&D, and G&A expenses, as well as non-operating items. It also discusses liquidity and capital resources, cash flow summaries, contractual obligations, recent accounting pronouncements, and critical accounting estimates [Overview](index=25&type=section&id=Overview) SES AI Corporation is a leading developer of AI-enhanced Lithium-Metal and Li-ion batteries for EVs, UAM, and other applications, aiming to accelerate the energy transition. The Company has partnered with OEMs like GM, Hyundai, and Honda, transitioning from A-Sample to B-Sample battery development. Current R&D focuses on scaling up cell production, module and pack design, AI software/BMS, advanced materials, and cathode materials - The Company is a leading developer and manufacturer of high-performance, AI-enhanced Lithium-Metal and Li-ion rechargeable batteries for EVs, UAM, drones, robotics, and ESS[75](index=75&type=chunk) - SES's mission is to accelerate the world's energy transition through material discovery and battery management, partnering with OEMs (GM, Hyundai, Honda) for Li-Metal battery development[76](index=76&type=chunk) - The Company has transitioned from A-Sample to B-Sample battery development, with B-Sample batteries manufactured at higher throughput and tested in actual vehicles[76](index=76&type=chunk) - Key R&D focus areas include Li-Metal recycling, scaling up cell manufacturing to **50 Ah** and **100 Ah** capacity, module and pack design, AI software and Battery Management System (BMS) development, advanced materials and coatings, and cathode materials and design[77](index=77&type=chunk)[79](index=79&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) The Company began generating revenue in October 2024, primarily from service-related contracts. Operating expenses, particularly Research and Development, increased significantly due to AI infrastructure investments and lab equipment purchases, while General and Administrative expenses decreased due to headcount reductions. Non-operating items saw a decrease in interest income due to lower investment balances and a gain from changes in fair value of Sponsor Earn-Out liabilities Operating Results (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from customers | $3,527 | $— | $9,320 | $— | | Cost of revenue | $927 | $— | $2,163 | $— | | Gross profit | $2,600 | $— | $7,157 | $— | | Research and development | $19,087 | $15,057 | $39,597 | $26,822 | | General and administrative | $6,520 | $9,570 | $13,840 | $19,076 | | Total operating expenses | $25,607 | $24,627 | $53,437 | $45,898 | | Loss from operations | $(23,007) | $(24,627) | $(46,280) | $(45,898) | [Revenue from Customers](index=27&type=section&id=Revenue%20from%20Customers) The Company began generating revenue in October 2024. For the three and six months ended June 30, 2025, revenue was $3.5 million and $9.3 million, respectively, primarily from service-related contracts with OEMs and other manufacturers - Revenue for the three and six months ended June 30, 2025, was **$3.5 million** and **$9.3 million**, respectively, primarily from service-related contracts[82](index=82&type=chunk) - Revenue sources include product revenue (Li-Metal battery cells and materials) and service revenue (design and development of battery materials)[87](index=87&type=chunk) [Cost of Revenue](index=27&type=section&id=Cost%20of%20Revenue) Cost of revenue includes materials, labor, depreciation, inventory, and freight. For the three and six months ended June 30, 2025, costs were $0.9 million and $2.2 million, respectively, primarily driven by personnel costs. The Company anticipates continued increases in cost of revenue with new contracts - Cost of revenue for the three and six months ended June 30, 2025, was **$0.9 million** and **$2.2 million**, respectively, primarily attributable to personnel costs[84](index=84&type=chunk) - Cost of revenue is expected to increase as the Company enters into new revenue contracts[83](index=83&type=chunk) [Research and Development](index=27&type=section&id=Research%20and%20Development) Research and development expenses increased by 27% to $19.1 million for the three months and 48% to $39.6 million for the six months ended June 30, 2025, compared to the prior year. This growth was primarily driven by significant investments in AI infrastructure (GPU and Molecular Universe costs) and lab equipment, partially offset by decreases in personnel and stock-based compensation due to headcount reductions and reduced JDA reimbursements - Increase in R&D for the three months was driven by a **$4.4 million increase** in AI infrastructure costs (GPU and Molecular Universe) and a **$1.2 million increase** in lab-related expenses, partially offset by a **$1.4 million decrease** in personnel costs and a **$0.8 million decrease** in stock-based compensation[86](index=86&type=chunk)[88](index=88&type=chunk) - Increase in R&D for the six months was driven by an **$8.5 million increase** in AI infrastructure costs, an **$8.0 million increase** in lab equipment, and a **$4.0 million decrease** in JDA reimbursements, partially offset by a **$4.1 million decrease** in personnel costs and a **$1.0 million decrease** in stock-based compensation[89](index=89&type=chunk) Research and Development Expenses (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | R&D expenses | $19,087 | $15,057 | $39,597 | $26,822 | | Change | $4,030 | | $12,775 | | | % Change | 26.8% | | 47.6% | | [General and Administrative](index=29&type=section&id=General%20and%20Administrative) General and administrative expenses decreased by 32% to $6.5 million for the three months and 27% to $13.8 million for the six months ended June 30, 2025, compared to the prior year. This reduction was primarily due to decreases in stock-based compensation, personnel costs from headcount reductions, and professional services - The decrease in G&A for the three months was primarily due to a **$1.3 million decrease** in stock-based compensation, **$1.0 million** in personnel costs (headcount reductions), and a **$0.4 million decrease** in professional services[91](index=91&type=chunk) - The decrease in G&A for the six months was primarily due to a **$2.0 million decrease** in stock-based compensation, **$1.9 million** in personnel costs (headcount reductions), and a **$1.1 million decrease** in professional services[92](index=92&type=chunk) General and Administrative Expenses (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | G&A expenses | $6,520 | $9,570 | $13,840 | $19,076 | | Change | $(3,050) | | $(5,236) | | | % Change | (31.9)% | | (27.4)% | | [Non-Operating Items](index=29&type=section&id=Non-Operating%20Items) Non-operating items include interest income, changes in fair value of Sponsor Earn-Out liabilities, miscellaneous income/expense, and provision for income taxes. Interest income decreased due to lower investment balances, while the change in fair value of Sponsor Earn-Out liabilities resulted in a loss for the three months but a gain for the six months. Miscellaneous income increased, and income tax provision rose due to foreign local taxes [Interest Income](index=29&type=section&id=Interest%20Income) Details the interest earned from the company's cash and investment balances - Interest income decreased by **$1.6 million** for the three months and **$3.2 million** for the six months ended June 30, 2025, primarily due to lower investment balances resulting from cash used in operations[94](index=94&type=chunk) Interest Income (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest income | $2,367 | $3,995 | $5,037 | $8,157 | [Change in Fair Value of Earn-Out Liabilities](index=29&type=section&id=Change%20in%20Fair%20Value%20of%20Earn-Out%20Liabilities) Reports the gains or losses resulting from revaluing the Sponsor Earn-Out liabilities to their estimated fair value - The fair value of Sponsor Earn-Out liabilities is tied to the Company's stock price, and continued volatility or changes in expected term could result in further gains or losses[95](index=95&type=chunk) (Loss) Gain on Change in Fair Value of Sponsor Earn-Out Liabilities (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | (Loss) Gain | $(1,443) | $1,411 | $6,436 | $2,286 | [Miscellaneous Income (Expense), Net](index=30&type=section&id=Miscellaneous%20Income%20(Expense),%20Net) Captures other non-operating income and expenses, including foreign currency translation gains or losses - The **$0.7 million increase** in miscellaneous income for the three months was primarily due to an increase in gain on foreign currency translation[96](index=96&type=chunk) - The **$0.1 million increase** in miscellaneous income for the six months was due to increased other expenses and foreign currency translation gains, offset by a decrease in fair value of publicly traded investments[97](index=97&type=chunk) Miscellaneous Income (Expense), Net (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Income (Expense) | $100 | $(580) | $396 | $294 | [Provision from Income Taxes](index=30&type=section&id=Provision%20from%20Income%20Taxes) Outlines the income tax expense or benefit recognized by the company for the reporting period - The provision for income taxes increased primarily due to local taxes in foreign jurisdictions where the Company operates[98](index=98&type=chunk) Provision for Income Taxes (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision | $(668) | $(96) | $(672) | $(293) | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the Company had $11.8 million in cash and cash equivalents and $217.1 million in marketable securities. The Company expects to incur substantial operating expenses and net operating losses for several years but believes existing liquidity will be sufficient for at least 12 months and through full commercialization. Additional funding may be required for future needs, potentially through equity, debt, or strategic arrangements. The Company has an at-the-market equity offering program for up to $150.0 million, with no shares sold to date - As of June 30, 2025, the Company had **$11.8 million** in cash and cash equivalents and **$217.1 million** in marketable debt and equity securities[99](index=99&type=chunk) - The Company expects to sustain substantial operating expenses and net operating losses for a number of years but believes current liquidity is sufficient for at least **12 months** and through full commercialization[100](index=100&type=chunk) - Additional funding may be required for future needs, including AI model development, commercial operations, acquisitions, or unexpected delays, potentially through joint ventures, equity/debt issuance, or credit from financial institutions[100](index=100&type=chunk)[101](index=101&type=chunk) - The Company has an at-the-market equity offering program for up to **$150.0 million**, established on **February 28, 2025**, but no shares have been sold under this program as of **June 30, 2025**[101](index=101&type=chunk) [Summary of Cash Flows](index=30&type=section&id=Summary%20of%20Cash%20Flows) The Company experienced a net decrease in cash, cash equivalents, and restricted cash of $117.0 million for the six months ended June 30, 2025, significantly higher than the $30.9 million decrease in the prior year. This was primarily driven by increased cash used in investing activities Summary of Cash Flow Data (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------- | :----------------------------- | :----------------------------- | | Operating activities | $(33,654) | $(31,071) | | Investing activities | $(83,187) | $547 | | Financing activities | $(345) | $128 | | Effect of exchange rates on cash | $199 | $(501) | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(116,987) | $(30,897) | [Operating Activities](index=32&type=section&id=Operating%20Activities) Net cash used in operating activities increased to $33.7 million for the six months ended June 30, 2025, from $31.1 million in the prior year. This was mainly due to the net loss, adjusted for non-cash items, and a working capital outflow driven by decreases in accrued expenses and increases in receivables, partially offset by an increase in prepaid expenses - Net cash used in operating activities was **$33.7 million** for the six months ended June 30, 2025, primarily due to a net loss of **$35.1 million**, adjusted for non-cash items like stock-based compensation (**$6.7 million**) and a gain on Sponsor Earn-Out liabilities (**$6.4 million**)[104](index=104&type=chunk) - Working capital outflow of **$2.2 million** was driven by a **$2.5 million decrease** in accrued expenses and other current liabilities and a **$2.1 million increase** in accounts receivable, partially offset by a **$2.3 million increase** in prepaid expenses[104](index=104&type=chunk) - For the six months ended June 30, 2024, net cash used in operating activities was **$31.1 million**, driven by a net loss of **$35.5 million** and a **$1.2 million** working capital outflow, partially offset by a **$3.3 million** receipt from a related party[105](index=105&type=chunk) [Investing Activities](index=32&type=section&id=Investing%20Activities) Net cash used in investing activities was $83.2 million for the six months ended June 30, 2025, a significant change from net cash provided of $0.5 million in the prior year. This shift was primarily due to net purchases of marketable investments totaling $81.5 million and reduced capital expenditures as the Company focuses on AI-related infrastructure over manufacturing equipment - Net cash used in investing activities was **$83.2 million** for the six months ended June 30, 2025, compared to net cash provided of **$0.5 million** in the prior year[106](index=106&type=chunk) - Net purchases of marketable investments were **$81.5 million** in 2025, a change from net proceeds of **$11.0 million** in 2024[107](index=107&type=chunk) - Capital expenditures decreased to **$1.7 million** in 2025 from **$10.5 million** in 2024, reflecting a shift in focus to AI-related infrastructure classified as R&D expense rather than manufacturing equipment[108](index=108&type=chunk) [Financing Activities](index=32&type=section&id=Financing%20Activities) Net cash used in financing activities was $0.3 million for the six months ended June 30, 2025, compared to net cash provided of $0.1 million in the prior year. This change was primarily due to payments for taxes withheld on vested restricted stock and a decrease in proceeds from stock option exercises - Net cash used in financing activities was **$0.3 million** for the six months ended June 30, 2025, compared to net cash provided of **$0.1 million** in the prior year[109](index=109&type=chunk) - The change was driven by **$0.3 million** in payments for taxes withheld to cover vested restricted stock and a **$0.1 million decrease** in proceeds from stock option exercises[109](index=109&type=chunk) [Contractual Obligations and Commitments](index=32&type=section&id=Contractual%20Obligations%20and%20Commitments) As of June 30, 2025, the Company's total material contractual obligations for cash expenditures amounted to $35.4 million, with $27.4 million due in the short term. These obligations primarily consist of purchase obligations from JDA agreements and supplier contracts, and operating lease obligations - As of June 30, 2025, the Company's total material contractual obligations for cash expenditures amounted to **$35.4 million**, with **$27.4 million** due in the short term[110](index=110&type=chunk) - Purchase obligations include commitments from a JDA agreement, outstanding purchase orders, and supplier contracts for lab supplies and equipment[111](index=111&type=chunk) Material Contractual Obligations (in thousands) | (in thousands) | Short Term | Long Term | Total | | :------------- | :--------- | :-------- | :---- | | Purchase obligations | $23,981 | $89 | $24,070 | | Operating lease obligations | $3,449 | $7,881 | $11,330 | | Total | $27,430 | $7,970 | $35,400 | [Recent Accounting Pronouncements](index=34&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for information on recent accounting pronouncements, their adoption timing, and potential impact on the Company's financial statements - Refer to Note 2 for details on recent accounting pronouncements, their adoption timing, and potential impact on financial condition, results of operations, and cash flows[112](index=112&type=chunk) [Critical Accounting Estimates and Judgments](index=34&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) The Company's financial statements rely on management's judgments, estimates, and assumptions in accordance with U.S. GAAP. There have been no significant changes to the critical accounting policies or underlying assumptions and estimates since the 2024 Annual Report on Form 10-K - The preparation of financial statements requires judgment in making estimates and assumptions that affect reported amounts[113](index=113&type=chunk) - There have been no significant changes to critical accounting policies or underlying assumptions and estimates from those disclosed in the **2024 Annual Report on Form 10-K**[114](index=114&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section provides information on how to access the Company's SEC filings and other material company information, primarily through its website (www.ses.ai) and the SEC's website (www.sec.gov) - The Company's website (www.ses.ai) serves as a distribution channel for material company information, including SEC filings[115](index=115&type=chunk)[116](index=116&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no significant changes to the Company's market risk during the three months ended June 30, 2025. Further details on market risk are available in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to the Company's market risk occurred during the three months ended **June 30, 2025**[117](index=117&type=chunk) [Item 4. Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in the review control for Sponsor Earn-Out liabilities valuation. Despite this, the financial statements are believed to fairly represent the Company's financial condition. Remediation initiatives are underway to address this weakness [Evaluation of Disclosure Controls and Procedures](index=34&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Assesses the effectiveness of the company's controls and procedures for ensuring timely and accurate disclosure of financial information - As of **June 30, 2025**, the Company's disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting[118](index=118&type=chunk) - Despite the identified material weaknesses, management believes the condensed consolidated financial information in this report fairly represents the Company's financial condition, results of operations, and cash flows[121](index=121&type=chunk) [Material Weakness](index=36&type=section&id=Material%20Weakness) Identifies specific deficiencies in internal control over financial reporting that could lead to a material misstatement - A material weakness was identified in a review control associated with the valuation of Sponsor Earn-Out liabilities, which did not operate effectively to evaluate a key assumption at an appropriate level of precision[122](index=122&type=chunk) - This material weakness did not result in any material misstatements to the condensed consolidated financial statements for the periods ended **June 30, 2025** or **2024**[123](index=123&type=chunk) [Changes in Internal Control over Financial Reporting](index=36&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) Reports any changes in the company's internal control over financial reporting during the fiscal quarter - Other than the remediation initiatives, there have been no changes in internal control over financial reporting during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[124](index=124&type=chunk) [Management's Remediation Initiatives](index=36&type=section&id=Management's%20Remediation%20Initiatives) Describes the actions management is taking to address and correct identified material weaknesses in internal controls - Management is designing updated processes and controls and will maintain sufficient and appropriate review documentation for the assessment of all key assumptions related to the valuation of Sponsor Earn-Out liabilities to remediate the identified material weakness[124](index=124&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any litigation or legal proceedings that management believes are likely to have a material adverse effect on its business. However, litigation, regardless of outcome, can impact the Company due to defense costs and diversion of management resources - The Company is not currently a party to any litigation or legal proceedings likely to have a material adverse effect on its business[125](index=125&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section highlights updates to the Company's risk factors, emphasizing the potential adverse effects of changes in government and economic incentives or subsidies, particularly the termination of EV tax credits by the OBBBA. It also addresses risks related to changes in U.S. and foreign government trade policies, including tariffs, and the ongoing risk of NYSE delisting due to stock price volatility - The unavailability or reduction of government and economic incentives or subsidies for EV battery developers, end-users, or OEMs could materially adversely affect the Company's business[127](index=127&type=chunk)[129](index=129&type=chunk) - The enactment of the 'One Big Beautiful Bill Act' (OBBBA) in **July 2025** terminated federal tax credits for EV purchases and charging infrastructure, which may reduce demand for EVs[130](index=130&type=chunk) - Changes in U.S. and foreign government trade policy, including tariffs (e.g., additional tariffs on imports from China), could increase costs, decrease gross margins, and adversely affect the Company's business[131](index=131&type=chunk) - The Company's Class A common stock has been volatile, and while it regained NYSE compliance in **July 2025**, the risk of future non-compliance and potential delisting remains, which could severely diminish the value of an investment[132](index=132&type=chunk)[134](index=134&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the fiscal quarter ended June 30, 2025 - None[135](index=135&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the fiscal quarter ended June 30, 2025 - None[136](index=136&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not applicable[137](index=137&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended June 30, 2025, none of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' - None of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the fiscal quarter ended **June 30, 2025**[138](index=138&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the Certificate of Incorporation, Bylaws, various certifications (CEO, CFO), and Inline XBRL documents Exhibits Filed | Exhibit No. | Description | | :---------- | :---------- | | 3.1 | Certificate of Incorporation of SES AI Corporation | | 3.2 | Bylaws of SES AI Corporation | | 31.1† | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 31.2† | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | 32.1* | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 32.2* | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | 101.INS† | Inline XBRL Instance Document | | 101.SCH† | Inline XBRL Taxonomy Extension Schema Document. | | 101.CAL† | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | | 101.DEF† | Inline XBRL Taxonomy Extension Definition Linkbase Document. | | 101.LAB† | Inline XBRL Taxonomy Extension Label Linkbase Document. | | 101.PRE† | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | | 104† | Cover Page Interactive Data File | SIGNATURES

分组1 - SES AI Corporation reported a quarterly loss of $0.07 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, and compared to a loss of $0.06 per share a year ago, indicating an earnings surprise of -40.00% [1] - The company posted revenues of $3.53 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 21.62%, and this is a significant increase from zero revenues a year ago [2] - SES AI shares have declined approximately 44.8% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] 分组2 - The earnings outlook for SES AI is uncertain, with current consensus EPS estimates of -$0.05 on $5 million in revenues for the coming quarter and -$0.15 on $20.8 million in revenues for the current fiscal year [7] - The Zacks Industry Rank indicates that the Automotive - Original Equipment sector is currently in the top 37% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Core Insights - SES AI's share price increased by over 13% following positive news regarding its stock listing compliance, outperforming the S&P 500 index which rose by 1.5% [1] - The company received notification from the New York Stock Exchange confirming it regained compliance with the listing requirement of trading at approximately $1 per share for a 30-day period [2] - SES AI reported that the compliance notice was based on a 30-day trading period that ended on July 31 [4] Company Performance - SES AI is an early-stage company that has started generating revenue and gaining attention for its advanced battery solutions, although it has faced challenges with a decline in EV sales and has recorded a series of bottom-line losses [4] - The company is pursuing growth through acquisitions, recently acquiring energy storage systems developer UZ Energy for approximately $25.5 million, which could enhance its business if integrated effectively [5]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.5 million with a gross margin of 74% primarily driven by contracts with automotive OEM customers for AI-enhanced lithium metal and lithium-ion battery materials for EV applications [15] - The company affirmed its full-year 2025 revenue guidance of $15 million to $25 million [15] - Cash utilized for operations in Q2 was $10.8 million, representing a 51% decrease from Q2 2024 and a 53% decrease from Q1 2025 [16] - The company concluded the quarter with a strong liquidity position of $229 million and no debt [16] Business Line Data and Key Metrics Changes - The company is focusing on five areas for revenue growth: software and service, materials, sales, EV development service, and energy storage systems (ESS) [10][12] - The acquisition of UC Energy is expected to provide a foothold in the global ESS market, with projected revenue growth from approximately $10 million to $15 million for the full year 2025 [17] Market Data and Key Metrics Changes - The global ESS market is projected to be $300 billion, presenting significant growth opportunities for the company [17] - The company is experiencing increased revenue from drones and urban air mobility (UAM) applications, with a focus on updating and certifying its supply chain to meet customer demands [28] Company Strategy and Development Direction - The company aims to accelerate the world's energy transition through material discovery and battery management, leveraging its Molecular Universe platform [5][12] - The integration of hardware and software solutions is a key focus, with plans to enhance the AI platform and explore inorganic acquisition opportunities [12][17] - The company is actively recruiting top talent to strengthen its material discovery team [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued momentum in profitability and revenue growth through strategic acquisitions and partnerships [5][17] - The company is focused on demonstrating the superiority of its AI platform in solving complex problems that human scientists cannot, which is expected to drive wider adoption [32] Other Important Information - The company has initiated share repurchases, canceling 871,754 shares for a total investment of $1.1 million at approximately $1.27 per share [17] Q&A Session Summary Question: Can you elaborate on the acquisition of UC Energy and future M&A opportunities? - Management highlighted UC Energy's established presence in the ESS market and its hardware capabilities, which will enhance the company's material development and data integration [21][22] - The company is open to exploring additional M&A opportunities across various applications, including drones and ESS [23] Question: What is the status of the UAM and drone opportunities? - Management noted an increase in revenue from drones and UAM, with ongoing efforts to update the supply chain to meet customer needs [28] Question: What feedback is being received from enterprises using the Molecular Universe platform? - Enterprises are primarily seeking more accurate results rather than additional features, with a focus on solving complex problems that human scientists have struggled with [37] Question: When can we expect the next release of the Molecular Universe platform? - The next version is expected to be released around September to October, which will include more accurate cell-level data [39]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.5 million with a gross margin of 74% driven primarily by contracts with automotive OEM customers for AI-enhanced battery materials [14] - The company affirmed its full-year 2025 revenue guidance of $15 million to $25 million [14] - Cash utilized for operations in Q2 2025 was $10.8 million, a 51% decrease from Q2 2024 and a 53% decrease from Q1 2025 [15] - The company concluded the quarter with a strong liquidity position of $229 million and no debt [15] Business Line Data and Key Metrics Changes - The company is focusing on five areas for revenue growth: software and service, materials, sales, EV development service, and energy storage systems (ESS) [9][11] - Revenue from drones and urban air mobility (UAM) has increased this year, with customers seeking to move away from their current supply chains [28] Market Data and Key Metrics Changes - The global ESS market is projected to be $300 billion, with the company aiming to grow UC Energy's business from approximately $10 million to $15 million in projected revenue for 2025 [16] Company Strategy and Development Direction - The company is pursuing a strategic acquisition of UC Energy to establish a foothold in the growing ESS market and enhance its intelligent energy storage solutions [15][16] - The integration of Molecular Universe with hardware capabilities from Uzi Energy is expected to enhance material development and data access [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of the ESS market and the integration of AI in battery development, emphasizing the unique capabilities of the Molecular Universe platform [20][22] - The company is actively looking for additional M&A opportunities to enhance its material discovery and production capabilities [23] Other Important Information - The company has been emphasizing operational discipline, resulting in significant reductions in cash usage while growing revenue [15] - The next version of the Molecular Universe tool is expected to be released in September or October, which will include more accurate cell-level data [39] Q&A Session Summary Question: Can you elaborate on the acquisition of Uzi Energy and future M&A opportunities? - The acquisition of Uzi Energy is strategic for entering the ESS market, leveraging their hardware capabilities and integrating them with Molecular Universe for enhanced material development and data access [20][21] - The company is open to new M&A opportunities across various applications, including drones and ESS [23] Question: What is the status of the UAM and drone opportunities? - Revenue from drones and UAM has increased, and the company is updating its supply chain to meet customer demands [28] Question: What is the feedback from enterprises using Molecular Universe? - Enterprises are primarily seeking more accurate results rather than additional features, focusing on solving complex problems that human scientists cannot [36][37]

Acquisition Details - SES AI Corporation entered into a Share Transfer and Share Purchase Agreement to acquire 100% of UZ Energy for approximately RMB 183,460,000 ($25,480,556) [4] - The acquisition consideration includes a capital contribution of RMB 90,000,000 ($12,500,000) and additional payments contingent on UZ Energy's performance [5] - The closing of the acquisition is expected in Q3 2025, subject to regulatory approvals and other customary conditions [6] - The total consideration includes performance-based adjustments based on UZ Energy's revenue and cash balances in 2026 [5] - The agreement includes customary representations, warranties, and covenants, along with indemnification provisions [6] Financial Information - Preliminary unaudited revenue results for Q2 2025 will be disclosed in a press release on July 28, 2025 [9] - The financial information in the press release is preliminary and subject to finalization, indicating potential material variations from estimates [10] - The press release regarding the acquisition will be included in the Company's Quarterly Report for Q3 2025 [8] Strategic Objectives - The acquisition aims to enhance SES AI's capabilities in energy storage solutions, targeting both domestic and international markets [4] - The company emphasizes that forward-looking statements regarding the acquisition involve substantial risks and uncertainties [13]

Group 1 - The break-even point for SES AI Corporation is estimated to be approximately $32 million, based on a cost-behavioral analysis [1] - The methodology used for the estimate is described as crude but adjustable, allowing for flexibility in measures [1] - The author has extensive experience in accounting and finance, including roles as CFO and government auditor, which adds credibility to the analysis [1] Group 2 - The author has a background in academia, having taught at multiple universities and published numerous articles, indicating a strong foundation in financial analysis [1] - Personal health challenges have been faced by the author, including a significant cancer diagnosis, which may influence their perspective on long-term investments [1]