Solid Power(SLDP) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information This section provides essential filing details for Solid Power, Inc., including registrant information, securities registered, and filing status Registrant Information This section provides the basic identification details for Solid Power, Inc., including its exact name, state of incorporation, address, telephone number, and securities registered on Nasdaq. It also confirms the company's filing status as a non-accelerated filer and smaller reporting company, and that it is not a shell company - Registrant: SOLID POWER, INC.[3] - State of Incorporation: Delaware[4] - Principal Executive Offices: 486 S. Pierce Ave., Suite E, Louisville, Colorado 80027[4] Securities Registered Pursuant to Section 12(b) of the Act | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common stock, par value $0.0001 per share | SLDP | The Nasdaq Stock Market LLC | | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 | SLDPW | The Nasdaq Stock Market LLC | - Filing Status: Non-accelerated filer, Smaller reporting company[6] - Shares of common stock issued and outstanding as of August 5, 2025: 181,284,380 shares[6] Table of Contents This section outlines the structure and content of the Form 10-Q report, providing navigation to key financial and operational disclosures Cautionary Note Regarding Forward-Looking Statements This section warns that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially General Disclosure This section highlights that the report contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially. The company disclaims any duty to update these statements, emphasizing that they are based on current expectations and projections - The report contains forward-looking statements regarding future financial performance, strategy, expansion plans, market opportunity, operations, and operating results[9] - These statements are subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[9] - The Company disclaims any duty to update forward-looking statements, except as required by applicable law[9] Specific Risk Factors Key risks include the uncertainty of R&D success, the company's status as a research and development stage company with a history of losses, the non-exclusive nature of partnerships, and the ability to secure new business relationships and commercial agreements - Risks related to the uncertainty of R&D success, including achieving technological objectives and commercializing technology ahead of competitors[10] - Risks associated with being a research and development stage company with a history of financial losses and expected future significant expenses[10] - Risks concerning the non-exclusive nature of partnerships and the ability to secure and manage new business relationships[10] - Challenges in negotiating and executing commercial agreements with partners and customers on reasonable terms[10] - Dependence on broad market adoption of EVs and other technologies[16] - Ability to attract and retain executive officers, key employees, and qualified personnel[16] - Ability to protect and maintain intellectual property, including internationally[16] - Ability to secure government contracts and grants, and risks from changes in government priorities or subsidies[16] - Delays in construction and operation of facilities for R&D and electrolyte production[16] - Changes in applicable laws or regulations, and risks related to IT infrastructure and data security breaches[16] - Other economic, business, or competitive factors, including supply chain interruptions and market conditions[16] Trademarks This section clarifies the ownership and usage of the company's trademarks and references to other entities' trademarks within the report Trademark Ownership and Usage This section clarifies that the company's logo and trademarks are its property, while references to other entities' trademarks do not imply a relationship or endorsement. The use of symbols like ® or ™ is for convenience and does not waive rights - The Company's logo and trademarks are its property[15] - References to other companies' trademarks do not imply a relationship with, or endorsement or sponsorship by, those companies[15] Market and Industry Data This section describes the sources and reliability of market and industry data used in the report, acknowledging inherent risks and uncertainties Data Sources and Reliability The company uses internal estimates, independent market research, industry publications, and governmental agencies for market and industry data. It acknowledges that such data involves risks and uncertainties and is subject to change - Industry and market data are sourced from internal estimates, independent market research, industry publications, governmental agencies, and third-party studies[18] - Internal estimates are based on publicly available information, internal research, and industry experience, with assumptions believed to be reasonable[18] - The data involves material risks and uncertainties and is subject to change, potentially causing results to differ materially from estimates[18] Available Information This section details how to access the company's SEC filings and other public disclosures, including its investor relations website and social media Access to Company Filings and Information The company's SEC filings (10-K, 10-Q, 8-K) are available free of charge on its investor relations website and the SEC's website. The company also uses its website and social media channels to disclose information, which investors should monitor - Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments are filed with the SEC[20] - These reports are available free of charge at https://www.solidpowerbattery.com/investor-relations/financials/sec-filings and http://www.sec.gov[20](index=20&type=chunk) - The company uses its website (www.solidpowerbattery.com) and social media (e.g., LinkedIn) for disclosing information, which may be deemed material, and investors should monitor these channels[21] PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, asset breakdowns, revenue recognition, fair value measurements, and related party transactions for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets Key Balance Sheet Data (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :---------------------------------- | :-------------------------- | :------------------ | | Total current assets | $239,672 | $125,236 | | Total long-term assets | $158,323 | $323,014 | | Total assets | $397,995 | $448,250 | | Total current liabilities | $12,399 | $19,970 | | Total long-term liabilities | $14,825 | $17,966 | | Total liabilities | $27,224 | $37,936 | | Total stockholders' equity | $370,631 | $410,280 | - Total assets decreased by $50.255 million from December 31, 2024, to June 30, 2025[25] - Total liabilities decreased by $10.712 million over the same period[25] - Total stockholders' equity decreased by $39.649 million from December 31, 2024, to June 30, 2025[25] Condensed Consolidated Statements of Operations and Comprehensive Loss Key Income Statement Data (in thousands, except per share amounts) | 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 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $6,485 | $5,075 | $11,609 | $11,028 | | Grant income | $1,055 | $— | $1,947 | $— | | Total revenue and grant income | $7,540 | $5,075 | $13,556 | $11,028 | | Total operating expenses | $33,411 | $32,012 | $63,455 | $63,746 | | Operating Loss | $(25,871) | $(26,937) | $(49,899) | $(52,718) | | Net Loss Attributable to Common Stockholders | $(25,338) | $(22,274) | $(40,488) | $(43,481) | | Basic and diluted loss per share | $(0.14) | $(0.13) | $(0.22) | $(0.24) | - Total revenue and grant income increased by $2.465 million (49%) for the three months ended June 30, 2025, compared to the same period in 2024[26] - Total revenue and grant income increased by $2.528 million (23%) for the six months ended June 30, 2025, compared to the same period in 2024[26] - Net loss attributable to common stockholders increased by $3.064 million (14%) for the three months ended June 30, 2025, compared to the same period in 2024[26] - Net loss attributable to common stockholders decreased by $2.993 million (7%) for the six months ended June 30, 2025, compared to the same period in 2024[26] Condensed Consolidated Statement of Stockholders' Equity Stockholders' Equity Changes (in thousands) | Metric | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :---------------------------------- | :------------------------- | :-------------------------- | | Total Stockholders' Equity | $410,280 | $370,631 | | Net loss (6 months) | $(40,488) | | | Stock-based compensation expense (6 months) | $3,983 | | | Repurchase and retirement of shares of common stock (6 months) | $(3,537) | | - Total stockholders' equity decreased by $39.649 million from December 31, 2024, to June 30, 2025[28] - Net loss for the six months ended June 30, 2025, was $(40,488) thousand[28] - Stock-based compensation expense for the six months ended June 30, 2025, was $3,983 thousand[28] - Repurchase and retirement of common stock resulted in a decrease of $3,537 thousand in additional paid-in capital for the six months ended June 30, 2025[28] Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash and cash equivalents used in operating activities | $(40,734) | $(40,179) | | Net cash and cash equivalents provided by investing activities | $45,073 | $44,811 | | Net cash and cash equivalents used in financing activities | $(3,504) | $(8,531) | | Net increase (decrease) in cash and cash equivalents | $835 | $(3,899) | | Cash and cash equivalents at end of period | $26,248 | $30,638 | - Net cash used in operating activities increased slightly by $0.555 million in the first six months of 2025 compared to 2024[30] - Net cash provided by investing activities increased by $0.262 million in the first six months of 2025 compared to 2024[30] - Net cash used in financing activities decreased significantly by $5.027 million in the first six months of 2025 compared to 2024, primarily due to reduced stock repurchases[30] Notes to Condensed Consolidated Financial Statements Note 1 – Nature of Business - Solid Power, Inc. is developing solid-state battery technology for the EV and other markets[31] - The planned business model is to sell its electrolyte and license its cell designs and manufacturing processes[31] Note 2 – Significant Accounting Policies - Financial statements are prepared under U.S. GAAP and reflect normal recurring adjustments[33] - The Company accounts for its equity ownership in Dahae Energy Co., Ltd. using the equity method, as it does not meet control requirements for consolidation[34] - Effective January 1, 2025, the Company changed its revenue recognition input method for collaborative arrangements from labor hours to the cost-to-cost method, treated as a change in estimate[38] - Grant income from the U.S. Department of Energy's Assistance Agreement (up to $50,000 for electrolyte production pilot line) is recognized in accordance with International Accounting Standards 20[41] - The Company operates in one operating and one reportable segment, with the CEO reviewing consolidated financial information[44] - New FASB ASUs (2023-09 on Income Taxes and 2024-03 on Expense Disaggregation) are being evaluated for impact, with effective dates in 2025 and 2026/2027 respectively[45][46] Note 3 – Property, Plant and Equipment, Net Property, Plant and Equipment, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Production equipment | $43,578 | $41,750 | | Laboratory equipment | $14,073 | $12,611 | | Leasehold improvements | $73,257 | $73,114 | | Furniture and computer equipment | $4,478 | $4,298 | | Construction in progress | $5,485 | $5,141 | | Total cost | $140,871 | $136,914 | | Accumulated depreciation | $(48,829) | $(39,706) | | Property, plant and equipment, net | $92,042 | $97,208 | Depreciation Expense (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation expense | $4,595 | $4,061 | $9,131 | $7,966 | - Depreciation expense increased by $0.534 million (13.1%) for the three months ended June 30, 2025, and by $1.165 million (14.6%) for the six months ended June 30, 2025, compared to the prior year periods[48] - Construction in progress for the continuous electrolyte pilot manufacturing line increased from $1,194 thousand at December 31, 2024, to $3,458 thousand at June 30, 2025[48] - The continuous electrolyte production pilot line is expected to be substantially complete and commissioned by the end of 2026[48] Note 4 – Intangible Assets Intangible Assets (in thousands) | Category | Gross Carrying Amount (June 30, 2025) | Accumulated Amortization (June 30, 2025) | Gross Carrying Amount (Dec 31, 2024) | Accumulated Amortization (Dec 31, 2024) | | :---------------- | :------------------------------------ | :--------------------------------------- | :----------------------------------- | :-------------------------------------- | | Licenses | $149 | $(74) | $149 | $(69) | | Patents | $225 | $(18) | $135 | $(12) | | Patents pending | $2,385 | $— | $1,831 | $— | | Trademarks | $13 | $— | $13 | $— | | Trademarks pending | $30 | $— | $25 | $— | | Total amortizable intangible assets | $2,802 | $(92) | $2,153 | $(81) | Amortization Expense (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization expense | $3 | $11 | $6 | $7 | - Amortization expenses are recorded within research and development expense[50] Note 5 – Revenue and Grant Income Revenue and Grant Income by Type (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Government - revenue | $505 | $675 | $1,168 | $1,292 | | Government - grant income | $1,055 | $— | $1,947 | $— | | Non-government revenue | $5,980 | $4,400 | $10,441 | $9,736 | | Total revenue and grant income | $7,540 | $5,075 | $13,556 | $11,028 | - Total revenue and grant income increased by $2.465 million (49%) for the three months ended June 30, 2025, compared to the prior year[52] - Total revenue and grant income increased by $2.528 million (23%) for the six months ended June 30, 2025, compared to the prior year[52] - Grant income, primarily from the DOE Assistance Agreement, contributed $1.055 million and $1.947 million for the three and six months ended June 30, 2025, respectively (none in prior year periods)[52] Note 6 – Fair Value Measurements Marketable Securities and Investments (in thousands) | Asset Classification | Maturity | June 30, 2025 | December 31, 2024 | | :------------------- | :--------------- | :-------------- | :---------------- | | Commercial Paper | 1 year or less | $44,425 | $47,046 | | Corporate Bonds | 1 year or less | $129,393 | $28,614 | | Government Bonds | 1 year or less | $24,794 | $— | | U.S. Treasuries | 1 year or less | $6,073 | $17,124 | | Total Marketable securities | | $204,685 | $92,784 | | Corporate Bonds | 1 to 5 years | $33,147 | $173,369 | | Government Bonds | 1 to 5 years | $15,729 | $35,904 | | Equity Method Investment | | $1,834 | $1,127 | | Total Investments | | $50,710 | $210,400 | - Marketable securities increased by $111.901 million from December 31, 2024, to June 30, 2025[55] - Investments decreased by $159.690 million over the same period, primarily due to a shift from long-term corporate and government bonds to short-term marketable securities[55] - Fair value of Public Warrants (Level 1) was $0.33 per warrant at June 30, 2025, up from $0.17 at March 31, 2025[62] - Fair value of Private Placement Warrants (Level 2) was $0.28 per warrant at June 30, 2025, up from $0.10 at March 31, 2025[62] Note 7 – Warrant Liabilities Outstanding Warrants | Warrant Type | June 30, 2025 | December 31, 2024 | | :---------------------- | :-------------- | :---------------- | | Public Warrants | 13,182,501 | 13,182,501 | | Private Placement Warrants | 6,150,802 | 6,150,802 | Fair Value of Warrant Liabilities (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Fair value of warrant liabilities | $6,072 | $8,735 | Gain (Loss) Recognized from Warrant Liabilities (in thousands) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Gain (Loss) recognized associated with warrant liabilities | $(3,216) | $703 | $2,663 | $202 | - Warrants are exercisable at $11.50 per share and expire on December 8, 2026[64] Note 8 – Stockholders' Equity Common Stock Activity (Shares) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options exercised | 350,757 | 1,230,581 | 1,883,177 | 3,590,897 | | Shares issued under ESPP | 180,091 | 187,614 | 180,091 | 187,614 | | Shares issued for vested RSUs | 1,096,546 | 689,221 | 1,648,374 | 851,216 | | Shares repurchased | (3,361,396) | (1,816,362) | (3,361,396) | (5,000,000) | Cash Flow from Common Stock Activities (in thousands) | Activity | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cash received from stock options exercised | $478 | $100 | $659 | $197 | | Cash received from ESPP shares | $156 | $238 | $156 | $238 | | Cash paid for shares repurchased | $(3,592) | $(3,360) | $(3,592) | $(8,274) | - The stock repurchase program, approved on January 23, 2024, authorizes up to $50 million in repurchases until December 31, 2025[70] - As of June 30, 2025, $37.335 million remains available[70] - In the six months ended June 30, 2025, 3,361,396 shares were repurchased at an average price of $1.07 per share, totaling $3.592 million[71] - In the six months ended June 30, 2024, 5,000,000 shares were repurchased at an average price of $1.65 per share, totaling $8.274 million[71] Note 9 – Stock-Based Compensation Stock-Based Compensation Costs (in thousands) | Category | 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 | $1,435 | $1,397 | $2,487 | $2,609 | | Stock options | $634 | $1,612 | $1,358 | $3,226 | | ESPP | $84 | $42 | $138 | $79 | | Total stock-based compensation costs | $2,153 | $3,051 | $3,983 | $5,914 | - Total stock-based compensation costs decreased by $0.898 million (29.4%) for the three months ended June 30, 2025, and by $1.931 million (32.6%) for the six months ended June 30, 2025, compared to the prior year periods[73] - Unrecognized future compensation costs as of June 30, 2025, were $22.215 million, expected to be recognized over a weighted-average period of 2.9 years[77] - Restricted stock grants to Dahae executives (238,806 shares issued in October 2024) vested 63,966 shares during the six months ended June 30, 2025[77] Note 10 – Basic and Diluted Loss Per Share Basic and Diluted Loss Per Share | 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 (in thousands) | $(25,338) | $(22,274) | $(40,488) | $(43,481) | | Weighted average shares outstanding – basic and diluted | 180,343,931 | 177,588,035 | 180,871,314 | 179,186,027 | | Basic and diluted loss per share | $(0.14) | $(0.13) | $(0.22) | $(0.24) | - Diluted loss per share was computed without consideration of potentially dilutive instruments due to net loss, as their inclusion would be anti-dilutive[79] - Total potentially dilutive securities excluded from diluted EPS calculation were 45,755,244 shares for the six months ended June 30, 2025, down from 49,158,768 in 2024[79][80] Note 11 – Leases Lease Expense Components (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Finance lease costs: Amortization of right-of-use assets | $199 | $58 | $303 | $116 | | Finance lease costs: Interest on lease liabilities | $7 | $12 | $15 | $26 | | Operating lease costs | $376 | $290 | $752 | $580 | | Total lease expense | $582 | $360 | $1,070 | $722 | - Total lease expense increased by $0.222 million (61.7%) for the three months ended June 30, 2025, and by $0.348 million (48.2%) for the six months ended June 30, 2025, compared to the prior year periods[86] - Weighted-average remaining lease term for operating leases is 7.5 years with a discount rate of 6.4% as of June 30, 2025[87] - Future minimum operating lease payments total $10.611 million, with $0.682 million remaining in 2025 and $1.403 million in 2026[87] Note 12 – Related Party Transactions - BMW of North America LLC: The JDA was further amended in 2024 to extend the term, revise payment schedules, and adjust deliverables[88][90] - The Company recognized $0 revenue from the JDA for the three and six months ended June 30, 2025, compared to $430 thousand and $5,410 thousand in 2024, respectively[90] - Dahae Energy Co., Ltd.: The Company incurred $2,884 thousand and $4,285 thousand in costs for services provided by Dahae for the three and six months ended June 30, 2025, respectively[91] Summarized Transactions with Dahae (in thousands) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Bond | $3,169 | $3,105 | | Loan | $1,162 | $1,161 | | Warrants | $607 | $607 | | Equity method investment (a) | $1,227 | $520 | | Mezzanine equity | $140 | $34 | - The Company holds a 20% equity interest in Dahae, accounted for using the equity method[92] - The Company granted 298,508 shares of restricted stock to two Dahae executives, recorded in Mezzanine Equity, with a remeasurement of $88 thousand for the six months ended June 30, 2025[95] - A term loan facility with Dahae had a principal balance of $1,161 thousand at November 3, 2024, with the Company committed to provide up to $2,000 thousand of additional financing[96][97] Note 13 – Income Taxes Effective Tax Rate | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Effective tax rate | 0.0% | (2.4)% | 0.0% | (1.2)% | - The Company was in a full valuation allowance for the six months ended June 30, 2025, and the year ended December 31, 2024[101] Note 14 – Contingencies - The Company may be involved in litigation in the normal course of business, and resolution is not expected to have a material adverse effect[103] - A putative class action lawsuit filed on December 3, 2024, against former officers and directors of DCRC alleges breach of fiduciary duties and unjust enrichment[104] - The Company could be liable for legal fees and defense costs for certain Hamilton Defendants[104] Note 15 – Subsequent Events - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted, permanently extending certain provisions of the U.S. Tax Cuts and Jobs Act of 2017, modifying international tax framework, restoring favorable business tax treatment, and accelerating the phase-out of EV credits[105] - The Company is currently assessing the OBBBA's impact on its consolidated financial statements[105] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting progress on development objectives, key factors affecting performance, and detailed analysis of revenue, expenses, and liquidity. It also discusses critical accounting estimates and recent accounting pronouncements Overview - Solid Power is a U.S.-based leader in solid-state battery technology, focusing on sulfide-based solid electrolyte material[107] - The technology aims to improve battery cell performance (energy density, life, safety) beyond conventional lithium-ion, primarily targeting the EV market[107] 2025 Development Objectives - Continued productive customer feedback on electrolyte sampling, driving process engineering for improved performance[110] - Progress towards installing a continuous electrolyte production pilot line, with detailed design work in process and long-lead time equipment ordered; commissioning expected in 2026[110] - Continued demand for multiple generations of electrolyte from existing and new customers, with active sampling to key strategic customers[110] - Completed factory acceptance testing milestone under the line installation agreement with SK On Co., Ltd. and began site acceptance testing[116] - Maintained fiscal discipline while investing in technology developments and process improvements[116] - BMW Group introduced an i7 test vehicle powered by Solid Power's cells and solid-state battery technology[116] Key Factors Affecting Operating Results - As a research and development-stage company, Solid Power has not generated adequate cash flows from product sales or licensing to cover costs[111] - Commercialization depends on improving products to meet customer performance requirements and negotiating acceptable commercial agreements[112] - Scaling electrolyte production will require time and capital, impacting operating results[112] - Revenue to date primarily from R&D licensing, line installation agreements, and government contracts[113] - Future growth is highly dependent on consumer adoption of EVs, a rapidly evolving market influenced by technology, pricing, regulation, and consumer behavior[114] Basis of Presentation - The company conducts its business through one operating segment and one reportable segment[115] - Historical results are reported under U.S. GAAP and in U.S. dollars, with activities primarily in the United States and Republic of Korea[115] Results of Operations Revenue and Grant Income Revenue and Grant Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Revenue | $6,485 | $5,075 | $1,410 | 28% | | Grant income | $1,055 | $— | $1,055 | 100% | | Total revenue and grant income | $7,540 | $5,075 | $2,465 | 49% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Revenue | $11,609 | $11,028 | $581 | 5% | | Grant income | $1,947 | $— | $1,947 | 100% | | Total revenue and grant income | $13,556 | $11,028 | $2,528 | 23% | - Increase in revenue and grant income for both periods primarily driven by performance on collaboration agreements and the DOE Assistance Agreement[121] - Collaborative revenue of $5.9 million (3 months) and $10.5 million (6 months) from SK On Agreements, including factory acceptance testing completion[122] - Government revenue and grant income of $1.6 million (3 months) and $3.1 million (6 months) primarily from the DOE Assistance Agreement for the continuous electrolyte production pilot line[124] Operating Expenses Operating Expenses (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Direct costs | $8,462 | $5,437 | $3,025 | 56% | | Research and development | $18,342 | $18,526 | $(184) | (1)% | | Selling, general and administrative | $6,607 | $8,049 | $(1,442) | (18)% | | Total operating expenses | $33,411 | $32,012 | $1,399 | 4% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Direct costs | $11,158 | $9,727 | $1,431 | 15% | | Research and development | $37,363 | $37,400 | $(37) | 0% | | Selling, general and administrative | $14,934 | $16,619 | $(1,685) | (10)% | | Total operating expenses | $63,455 | $63,746 | $(291) | 0% | - Direct costs increased by $3.0 million (3 months) and $1.4 million (6 months) due to milestone achievements under collaboration agreements, including $6.7 million in services from Dahae for the SK On line[125][126] - Research and development costs remained materially unchanged[127] - Selling, general and administrative expenses decreased by $1.4 million (3 months) and $1.7 million (6 months) primarily due to decreased stock-based compensation expense from forfeitures and reduced contractor/consultant support[129][130] - Overall operating expenses are expected to remain consistent for the remainder of the year, with a focus on cost reduction[131] Nonoperating Income and Expense Nonoperating Income and Expense (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Interest income | $3,237 | $4,520 | $(1,283) | (28)% | | Change in fair value of warrant liabilities | $(3,216) | $703 | $(3,919) | (557)% | | Total nonoperating income and expense | $(137) | $5,174 | $(5,311) | (103)% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Interest income | $6,836 | $9,637 | $(2,801) | (29)% | | Change in fair value of warrant liabilities | $2,663 | $202 | $2,461 | 1218% | | Total nonoperating income and expense | $8,811 | $9,748 | $(937) | (10)% | - Nonoperating income and expense decreased by $5.3 million (3 months) due to a $1.3 million decrease in interest income and a $3.9 million period-over-period loss from changes in fair value of warrant liabilities[133] - Nonoperating income and expense decreased by $0.9 million (6 months) due to a $2.8 million decrease in interest income, partially offset by a $2.5 million period-over-period gain from changes in fair value of warrant liabilities[134] Liquidity and Capital Resources Sources of Liquidity - Primary sources of cash historically include equity sales, performance milestones from partner agreements, government contracts, and interest from available-for-sale securities[135] Total Liquidity (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Cash and cash equivalents | $26,248 | $25,413 | | Available-for-sale securities | $253,561 | $302,057 | | Total liquidity | $279,809 | $327,470 | - Total liquidity decreased by $47.7 million from December 31, 2024, to June 30, 2025[136] Short-Term Liquidity Requirements - Short-term liquidity needs include operating and capital expenses for research and development programs and the installation of the continuous electrolyte production pilot line[137] - Most significant capital expenditures for the remainder of the year relate to facility engineering and construction of the pilot line, and improvements to cell development capabilities[137] Long-Term Liquidity Requirements - The company believes current cash on hand is sufficient for operating cash needs, working capital, and capital expenditures for at least the next 12 months, including the stock repurchase program[138] - Longer term, additional liquidity may be required before generating adequate cash flows from electrolyte sales/licensing, or due to business changes, development delays, market adoption, supply chain issues, or regulatory changes[139] - The company may seek equity or debt financing if needed or opportunistically, but unavailability or unfavorable terms could adversely affect development and financial condition[139] Stock Repurchase Program - The Board approved a stock repurchase program on January 23, 2024, authorizing up to $50 million in common stock repurchases until December 31, 2025[141] - During the six months ended June 30, 2025, 3,361,396 shares were repurchased at an average price of $1.05 per share, for an aggregate cost of approximately $3.59 million[141] - During the six months ended June 30, 2024, 5,000,000 shares were repurchased at an average price of $1.63 per share, for an aggregate cost of approximately $8.27 million[141] Cash Flows Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash and cash equivalents used in operating activities | $(40,734) | $(40,179) | | Net cash and cash equivalents provided by investing activities | $45,073 | $44,811 | | Net cash and cash equivalents used in financing activities | $(3,504) | $(8,531) | - Cash used in operating activities increased by $0.5 million, driven by offsetting cash uses, including $3.9 million for Dahae payments (down from $7.7 million in 2024) and $19.4 million for employee compensation (up from $16.9 million in 2024)[143] - Cash provided by investing activities increased by $0.3 million, influenced by changes in available-for-sale securities activity and capital expenditures[144] - Cash used for capital expenditures was $3.4 million less in 2025, primarily for the continuous electrolyte production pilot line, partially offset by $2.0 million from DOE[146] - Cash used in financing activities decreased by $5.0 million, mainly due to reduced stock repurchases ($3.6 million in 2025 vs. $8.3 million in 2024)[148] Off-Balance Sheet Arrangements - The Company is not a party to any off-balance sheet arrangements as defined under SEC rules[149] Critical Accounting Estimates - The primary change is in collaborative revenue recognition, where the Company shifted from using labor hours to the cost-to-cost method for input measurement, effective January 1, 2025, to better reflect performance satisfaction[151] - This change is treated as a change in estimate, with prior periods not adjusted[151] Recent Accounting Pronouncements - Refer to Note 2 of the unaudited financial statements for details on recent accounting pronouncements[153] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Solid Power is not required to provide the information typically mandated by this item - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[154] Item 4. Controls and Procedures Management, including the principal executive and financial officers, evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of June 30, 2025. No material changes in internal control over financial reporting occurred during the period Evaluation of Disclosure Controls and Procedures - Management, with the participation of the principal executive officer and principal financial officer, concluded that disclosure controls and procedures were effective as of June 30, 2025[156] Changes in Internal Control Over Financial Reporting - There were no material changes in internal control over financial reporting during the three months ended June 30, 2025[157] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, and a list of exhibits filed with the Form 10-Q Item 1. Legal Proceedings The company may be involved in litigation in the normal course of business, with potential adverse impacts from defense and settlement costs or diversion of management resources. Further details are provided in Note 14 of the financial statements - The Company may be involved in litigation or other legal proceedings from time to time[159] - Litigation, including indemnity claims, can adversely impact the company due to defense and settlement costs and diversion of management resources[159] - Refer to Note 14 for more information on specific legal proceedings[159] Item 1A. Risk Factors This section updates the risk factors from the 2024 Form 10-K, emphasizing uncertainties related to government contracts and grants, the dependence on EV adoption, and potential limitations on utilizing net operating losses or tax credits due to changes in tax law, including the OBBBA - Reliance on government contracts and grants for revenue and R&D funding, which are subject to uncertainties like changes in government priorities, funding reductions, or termination (e.g., DOE Assistance Agreement and the 'Unleashing American Energy' Executive Order)[161][163] - Compliance with government contracting laws and regulations imposes costs and risks, including potential penalties, payment delays, or debarment for non-compliance[165] - Future growth and success are highly dependent on consumer adoption of EVs, a rapidly evolving market influenced by changing technologies, pricing, regulations, and consumer behaviors[166][167] - Changes in tax law, such as the OBBBA, could limit the ability to utilize net operating losses or tax credit carryforwards, potentially increasing future income tax liabilities[169] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchase program activity for the three months ended June 30, 2025, including the number of shares purchased, average price, and remaining authorization Common Stock Repurchase Program Activity (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet Be Purchased under the Program | | :-------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------- | :-------------------------------------------------------------------------- | | April 1 - April 30, 2025 | 3,361,396 | $1.05 | 3,361,396 | $37,335,408 | | May 1 - May 31, 2025 | — | $— | — | $37,335,408 | | June 1 - June 30, 2025 | — | $— | — | $37,335,408 | | Total | 3,361,396 | $1.05 | 3,361,396 | | - The stock repurchase program, approved on January 23, 2024, authorizes up to $50 million in repurchases until December 31, 2025[170] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including organizational documents, amendments to agreements, certifications, and XBRL-related documents - Exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and an Amendment to Assistance Agreement with the U.S. Department of Energy[171] - Certifications pursuant to Rule 13a-14(a) and Section 1350, along with various XBRL taxonomy extension documents, are also filed[171] Signature This section formally certifies the filing of the Form 10-Q report by the company's principal executive and financial officers Filing Authorization This section confirms the official signing and authorization of the Form 10-Q report by Solid Power, Inc.'s President, Chief Executive Officer, and Director (Principal Executive Officer), and Chief Financial Officer, Treasurer, and Secretary (Principal Financial and Accounting Officer) - The report was signed on August 7, 2025, by John Van Scoter, President, Chief Executive Officer, and Director (Principal Executive Officer)[176] - The report was also signed by Linda Heller, Chief Financial Officer, Treasurer, and Secretary (Principal Financial and Accounting Officer)[176]