10-Q 1 ampx-20220930.htm 10-Q ampx-20220930
000189928712-312022Q3falsehttp://fasb.org/us-gaap/2022#AccountingStandardsUpdate201602Memberfour yearsP2Y00018992872022-01-012022-09-300001899287us-gaap:CommonStockMember2022-01-012022-09-300001899287ampx:RedeemableWarrantsMember2022-01-012022-09-3000018992872022-11-04xbrli:shares00018992872022-09-30iso4217:USD00018992872021-12-31iso4217:USDxbrli:shares00018992872022-07-012022-09-3000018992872021-07-012021-09-3000018992872021-01-012021-09-300001899287us-gaap:CommonStockMembersrt:ScenarioPreviouslyReportedMember2022-06-300001899287us-gaap:AdditionalPaidInCapitalMembersrt:ScenarioPreviouslyReportedMember2022-06-300001899287srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2022-06-300001899287srt:ScenarioPreviouslyReportedMember2022-06-300001899287us-gaap:CommonStockMembersrt:RestatementAdjustmentMember2022-06-300001899287us-gaap:AdditionalPaidInCapitalMembersrt:RestatementAdjustmentMember2022-06-300001899287srt:RestatementAdjustmentMember2022-06-300001899287us-gaap:CommonStockMember2022-06-300001899287us-gaap:AdditionalPaidInCapitalMember2022-06-300001899287us-gaap:RetainedEarningsMember2022-06-3000018992872022-06-300001899287us-gaap:CommonStockMember2022-07-012022-09-300001899287us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001899287us-gaap:RetainedEarningsMember2022-07-012022-09-300001899287us-gaap:CommonStockMember2022-09-300001899287us-gaap:AdditionalPaidInCapitalMember2022-09-300001899287us-gaap:RetainedEarningsMember2022-09-300001899287us-gaap:CommonStockMembersrt:ScenarioPreviouslyReportedMember2021-12-310001899287us-gaap:AdditionalPaidInCapitalMembersrt:ScenarioPreviouslyReportedMember2021-12-310001899287srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2021-12-310001899287srt:ScenarioPreviouslyReportedMember2021-12-310001899287us-gaap:CommonStockMembersrt:RestatementAdjustmentMember2021-12-310001899287us-gaap:AdditionalPaidInCapitalMembersrt:RestatementAdjustmentMember2021-12-310001899287srt:RestatementAdjustmentMember2021-12-310001899287us-gaap:CommonStockMember2021-12-310001899287us-gaap:AdditionalPaidInCapitalMember2021-12-310001899287us-gaap:RetainedEarningsMember2021-12-3100018992872021-01-012021-12-310001899287srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2021-12-310001899287srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2021-12-310001899287us-gaap:CommonStockMember2022-01-012022-09-300001899287us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001899287us-gaap:RetainedEarningsMember2022-01-012022-09-300001899287us-gaap:CommonStockMembersrt:ScenarioPreviouslyReportedMember2021-06-300001899287us-gaap:AdditionalPaidInCapitalMembersrt:ScenarioPreviouslyReportedMember2021-06-300001899287srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2021-06-300001899287srt:ScenarioPreviouslyReportedMember2021-06-300001899287us-gaap:CommonStockMembersrt:RestatementAdjustmentMember2021-06-300001899287us-gaap:AdditionalPaidInCapitalMembersrt:RestatementAdjustmentMember2021-06-300001899287srt:RestatementAdjustmentMember2021-06-300001899287us-gaap:CommonStockMember2021-06-300001899287us-gaap:AdditionalPaidInCapitalMember2021-06-300001899287us-gaap:RetainedEarningsMember2021-06-3000018992872021-06-300001899287us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001899287us-gaap:RetainedEarningsMember2021-07-012021-09-300001899287us-gaap:CommonStockMember2021-09-300001899287us-gaap:AdditionalPaidInCapitalMember2021-09-300001899287us-gaap:RetainedEarningsMember2021-09-3000018992872021-09-300001899287us-gaap:CommonStockMembersrt:ScenarioPreviouslyReportedMember2020-12-310001899287us-gaap:AdditionalPaidInCapitalMembersrt:ScenarioPreviouslyReportedMember2020-12-310001899287srt:ScenarioPreviouslyReportedMemberus-gaap:RetainedEarningsMember2020-12-310001899287srt:ScenarioPreviouslyReportedMember2020-12-310001899287us-gaap:CommonStockMembersrt:RestatementAdjustmentMember2020-12-310001899287us-gaap:AdditionalPaidInCapitalMembersrt:RestatementAdjustmentMember2020-12-310001899287srt:RestatementAdjustmentMember2020-12-310001899287us-gaap:CommonStockMember2020-12-310001899287us-gaap:AdditionalPaidInCapitalMember2020-12-310001899287us-gaap:RetainedEarningsMember2020-12-3100018992872020-12-310001899287us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001899287us-gaap:CommonStockMember2021-01-012021-09-300001899287us-gaap:RetainedEarningsMember2021-01-012021-09-3000018992872022-09-142022-09-140001899287ampx:PurchaseAgreementMember2022-09-272022-09-270001899287us-gaap:SubsequentEventMember2022-10-192022-10-1900018992872022-09-14xbrli:pureampx:executiveEmployee0001899287us-gaap:FairValueInputsLevel1Member2022-09-300001899287us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberampx:TwoCustomersMember2022-07-012022-09-300001899287us-gaap:SalesRevenueNetMemberampx:OneCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-07-012021-09-300001899287us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberampx:FourCustomersMember2022-01-012022-09-300001899287us-gaap:SalesRevenueNetMemberus-gaap:CustomerConcentrationRiskMemberampx:TwoCustomersMember2021-01-012021-09-300001899287us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberampx:ThreeCustomersMember2022-07-012022-09-300001899287us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMemberampx:FiveCustomersMember2022-07-012022-09-3000018992872022-01-010001899287srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2022-01-010001899287ampx:PIPEWarrantsMember2022-09-140001899287ampx:PIPEWarrantsMember2022-09-142022-09-140001899287ampx:KensingtonMember2022-09-142022-09-1400018992872022-10-012022-09-3000018992872023-10-012022-09-300001899287us-gaap:TransferredAtPointInTimeMember2022-07-012022-09-300001899287us-gaap:TransferredAtPointInTimeMember2022-01-012022-09-300001899287us-gaap:TransferredAtPointInTimeMember2021-07-012021-09-300001899287us-gaap:TransferredAtPointInTimeMember2021-01-012021-09-300001899287ampx:PilotProductionEquipmentMember2022-09-300001899287ampx:PilotProductionEquipmentMember2021-12-310001899287ampx:LaboratoryEquipmentMember2022-09-300001899287ampx:LaboratoryEquipmentMember2021-12-310001899287us-gaap:LeaseholdImprovementsMember2022-09-300001899287us-gaap:LeaseholdImprovementsMember2021-12-310001899287us-gaap:FurnitureAndFixturesMember2022-09-300001899287us-gaap:FurnitureAndFixturesMember2021-12-310001899287ampx:TwoThousandEightStockPlanMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001899287ampx:TwoThousandEightStockPlanMemberus-gaap:EmployeeStockOptionMembersrt:MinimumMember2022-01-012022-09-300001899287srt:MaximumMemberampx:TwoThousandEightStockPlanMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001899287ampx:TwoThousandEightStockPlanMemberus-gaap:EmployeeStockOptionMember2022-09-300001899287ampx:TwentySixteenEquityIncentivePlanMember2022-01-012022-09-300001899287ampx:TwentySixteenEquityIncentivePlanMember2022-09-300001899287ampx:TwentyTwentyTwoEquityIncentivePlanMember2022-09-140001899287srt:MaximumMemberampx:TwentyTwentyTwoEquityIncentivePlanMember2022-07-012022-09-300001899287ampx:TwentyTwentyTwoEquityIncentivePlanMember2022-01-012022-09-300001899287ampx:TwentyTwentyTwoEquityIncentivePlanMember2022-09-142022-09-300001899287ampx:TwentyTwentyTwoEquityIncentivePlanMember2022-09-300001899287us-gaap:EmployeeStockMemberampx:TwentyTwentyTwoEmployeeStockPurchasePlanMember2022-09-140001899287srt:MaximumMemberus-gaap:EmployeeStockMemberampx:TwentyTwentyTwoEmployeeStockPurchasePlanMember2022-01-012022-09-300001899287us-gaap:EmployeeStockMemberampx:TwentyTwentyTwoEmployeeStockPurchasePlanMember2022-01-012022-09-300001899287us-gaap:CostOfSalesMember2022-07-012022-09-300001899287us-gaap:CostOfSalesMember2021-07-012021-09-300001899287us-gaap:CostOfSalesMember2022-01-012022-09-300001899287us-gaap:CostOfSalesMember2021-01-012021-09-300001899287us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001899287us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001899287us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001899287us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001899287us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300001899287us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300001899287us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300001899287us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300001899287us-gaap:EmployeeStockOptionMemberampx:TwentySixteenEquityIncentivePlanMember2022-09-300001899287us-gaap:EmployeeStockOptionMemberampx:TwentySixteenEquityIncentivePlanMember2022-01-012022-09-300001899287ampx:PublicWarrantsMember2022-09-140001899287ampx:PrivateWarrantsMember2022-09-140001899287ampx:BRPCIIMemberampx:PurchaseAgreementMember2022-09-272022-09-270001899287ampx:BRPCIIMemberampx:PurchaseAgreementMember2022-09-270001899287us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001899287us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001899287us-gaap:WarrantMember2022-01-012022-09-300001899287us-gaap:WarrantMember2021-01-012021-09-3000018992872022-01-012022-05-01ampx:lease0001899287ampx:ProceedsFromContributionsFromParentStockBasedCompensationMemberus-gaap:MajorityShareholderMember2022-07-012022-09-300001899287ampx:ProceedsFromContributionsFromParentStockBasedCompensationMemberus-gaap:MajorityShareholderMember2021-07-012021-09-300001899287ampx:ProceedsFromContributionsFromParentStockBasedCompensationMemberus-gaap:MajorityShareholderMember2022-01-012022-09-300001899287ampx:ProceedsFromContributionsFromParentStockBasedCompensationMemberus-gaap:MajorityShareholderMember2021-01-012021-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentOtherAllocatedCorporateCostsMember2022-07-012022-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentOtherAllocatedCorporateCostsMember2021-07-012021-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentOtherAllocatedCorporateCostsMember2022-01-012022-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentOtherAllocatedCorporateCostsMember2021-01-012021-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentCashMember2022-07-012022-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentCashMember2021-07-012021-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentCashMember2022-01-012022-09-300001899287us-gaap:MajorityShareholderMemberampx:ProceedsFromContributionsFromParentCashMember2021-01-012021-09-300001899287us-gaap:MajorityShareholderMember2022-07-012022-09-300001899287us-gaap:MajorityShareholderMember2021-07-012021-09-300001899287us-gaap:MajorityShareholderMember2022-01-012022-09-300001899287us-gaap:MajorityShareholderMember2021-01-012021-09-300001899287srt:SubsidiariesMember2022-01-012022-09-30ampx:subsidiary0001899287srt:SubsidiariesMember2021-07-012021-09-300001899287srt:SubsidiariesMember2021-01-012021-09-300001899287srt:SubsidiariesMember2021-12-310001899287ampx:AmpriusHoldingsMembersrt:ChiefExecutiveOfficerMemberus-gaap:SubsequentEventMember2022-10-052022-10-050001899287us-gaap:SubsequentEventMemberampx:DepartmentOfEnergyGrantMember2022-10-112022-10-110001899287us-gaap:SubsequentEventMemberampx:DepartmentOfEnergyGrantMember2022-10-192022-10-19
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to          
Commission file number 001-04321
_______________________
AMPRIUS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
_______________________
Delaware
98-1591811
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1180 Page Avenue, Fremont, California
94538
(Address of Principal Executive Offices)
(Zip Code)
(800) 425-8803
Registrant's telephone number, including area code

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading
Symbol(s)
Name of each exchange on which registered
Common stock, $0.0001 par valueAMPXThe New York Stock Exchange
Redeemable warrants, each exercisable for one share of common stock at an exercise price of $11.50AMPX.WThe New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
As of November 4, 2022, the registrant had 84,468,087 shares of common stock, par value $0.0001, outstanding.


Table of Contents
1

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q of Amprius Technologies, Inc. (f/k/a Kensington Capital Acquisition Corp. IV, “Amprius,” the “Company,” “we,” “us,” or “our”) and in documents incorporated herein by reference may constitute “forward-looking statements” for purposes of the federal securities laws. Such forward-looking statements include, but are not limited to, statements regarding our and our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:
the expected benefits of the Business Combination as defined below;
our financial and business performance, including financial and business metrics;
changes in our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans;
our ability to develop a high-volume manufacturing line and otherwise scale in a cost-effective manner;
the expected addressable market for our products;
developments relating to our competitors and industry;
the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto;
our expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others;
our future capital requirements and sources and uses of cash;
our ability to obtain funding for its operations;
our business, expansion plans and opportunities; and
the outcome of any known and unknown litigation and regulatory proceedings.
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include:
our ability to execute our business model, including scaling production and the increase in addressable market for its products and services;
our ability to raise capital;
the outcome of any legal proceedings that may be instituted against us;
the ability to maintain the listing of our securities on the New York Stock Exchange;
our ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and our ability to grow and manage growth profitably;
changes in applicable laws or regulations;
the effect of the COVID-19 pandemic and/or the military conflict between Russia and Ukraine on our business;
the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and
2

other risks and uncertainties described in the “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.
3

Part I - Financial Information
Item 1. Financial Statements
AMPRIUS TECHNOLOGIES, INC.
(A CARVE-OUT OF AMPRIUS, INC.)
CONDENSED BALANCE SHEETS
(Unaudited, in thousands, except per share amounts)

September 30,
2022
December 31,
2021
ASSETS
Current assets:
Cash and cash equivalents$73,803 $11,489 
Accounts receivable782 262 
Inventories, net503 500 
Prepaid expenses and other current assets2,319 156 
Deferred costs412 1,769 
Total current assets77,819 14,176 
Non-current assets:
Operating lease right-of-use asset, net2,830  
Property and equipment, net3,824 4,210 
Deferred costs1,425 141 
Other assets604  
Total assets$86,502 $18,527 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$2,641 $359 
Accrued and other current liabilities2,183 1,446 
Deferred revenue795 2,363 
Operating lease liabilities517  
Total current liabilities6,136 4,168 
Non-current liabilities:
Deferred revenue1,787 501 
Operating lease liabilities2,577  
Total liabilities10,500 4,669 
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value, 950,000 shares authorized as of September 30, 2022 and December 31, 2021, 84,254 and 65,772 shares were issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
8 7 
Additional paid-in capital162,825 89,252 
Accumulated deficit(86,831)(75,401)
Total stockholders’ equity76,002 13,858 
Total liabilities and stockholders’ equity $86,502 $18,527 

The accompanying notes are an integral part of these condensed financial statements.
4

AMPRIUS TECHNOLOGIES, INC.
(A CARVE-OUT OF AMPRIUS, INC.)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share amounts)

Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Revenue$816 $330 $3,617 $1,556 
Cost of revenue2,284 1,986 7,448 4,990 
Gross loss(1,468)(1,656)(3,831)(3,434)
Operating expenses:
Research and development488 327 1,340 978 
Selling, general and administrative2,367 1,154 6,223 2,508 
Total operating expenses2,855 1,481 7,563 3,486 
Loss from operations(4,323)(3,137)(11,394)(6,920)
Other income (expense), net:    
Interest income and other, net79 (4)118 (17)
Gain on forgiveness of PPP loan   743 
Total other income (expense), net79 (4)118 726 
Net loss$(4,244)$(3,141)$(11,276)$(6,194)
Weighted-average common shares outstanding:
Basic and diluted69,01365,77266,85965,762
Net loss per share of common stock:
Basic and diluted$(0.06)$(0.05)$(0.17)$(0.09)

The accompanying notes are an integral part of these condensed financial statements.
5

AMPRIUS TECHNOLOGIES, INC.
(A CARVE-OUT OF AMPRIUS, INC.)
CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited, in thousands)

Three Months Ended September 30, 2022
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of July 1, 202245,179$1 $91,117 $(82,587)$8,531 
Retroactive conversion of common
   stock due to business combination
20,5986(6)
Balance as of July 1, 2022,
   as adjusted
65,777791,111(82,587)8,531
Issuance of common stock in
   connection with business
   combination and PIPE investment,
   net of issuance costs
18,392170,93770,938
Issuance of common stock in
   connection with a stock purchase
   agreement
85
Stock-based compensation646646
Contribution from Amprius Holdings
   related to stock-based compensation
131131
Net loss(4,244)(4,244)
Balance as of September 30, 202284,254$8 $162,825 $(86,831)$76,002 

Nine Months Ended September 30, 2022
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of January 1, 202245,176$1 $89,258 $(75,401)$13,858 
Retroactive conversion of common
   stock due to business combination
20,5966(6)
Balance as of January 1, 2022,
   as adjusted
65,772789,252(75,401)13,858
Cumulative effect adjustment from
   the adoption of ASC 842
(154)(154)
Issuance of common stock in
   connection with business
   combination and PIPE investment,
   net of issuance costs
18,392170,93770,938
Issuance of common stock in
   connection with a stock purchase
   agreement
85
Capital contribution from Amprius
   Holdings
505505
Exercise of stock options588
Stock-based compensation1,7461,746
Contribution from Amprius Holdings
   related to stock-based compensation
377377
Net loss(11,276)(11,276)
Balance as of September 30, 202284,254$8 $162,825 $(86,831)$76,002 
6

Three Months Ended September 30, 2021
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of July 1, 202145,176$1 $72,048 $(68,558)$3,491 
Retroactive conversion of common
   stock due to business combination
20,5966 (6)—  
Balance as of July 1, 2021,
   as adjusted
65,772 7 72,042 (68,558)3,491 
Capital contribution from Amprius
   Holdings
— 14,697 — 14,697 
Stock-based compensation— 286 — 286 
Contribution from Amprius Holdings
   related to stock-based compensation
— 37 — 37 
Net loss— — (3,141)(3,141)
Balance as of September 30, 202165,772 $7 $87,062 $(71,699)$15,370 

Nine Months Ended September 30, 2021
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of January 1, 202145,156$1 $66,673 $(65,505)$1,169 
Retroactive conversion of common
   stock due to business combination
20,5876(6)
Balance as of January 1, 2021,
   as adjusted
65,743766,667(65,505)1,169
Capital contribution from Amprius
   Holdings
19,69219,692
Exercise of stock options2911
Stock-based compensation586586
Contribution from Amprius Holdings
   related to stock-based compensation
116116
Net loss(6,194)(6,194)
Balance as of September 30, 202165,772$7 $87,062 $(71,699)$15,370 

The accompanying notes are an integral part of these condensed financial statements.
7

AMPRIUS TECHNOLOGIES, INC.
(A CARVE-OUT OF AMPRIUS, INC.)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)

Nine Months Ended September 30,
20222021
Cash flows from operating activities:
Net loss$(11,276)$(6,194)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation2,123 702 
Depreciation and amortization1,116 1,068 
Non-cash operating lease expense417  
Gain on forgiveness of PPP loan and other24 (743)
Changes in operating assets and liabilities:
Accounts receivable(520)(465)
Inventories(3)286 
Prepaid expenses and other current assets(2,206)38 
Deferred costs73 (1,020)
Accounts payable 2,275 (1,837)
Accrued and other current liabilities425 380 
Deferred revenue(282)1,478 
Operating lease liabilities(350) 
Net cash used in operating activities(8,184)(6,307)
Cash flows from investing activities:
Purchase of property and equipment(747)(276)
Net cash used in investing activities(747)(276)
Cash flows from financing activities:
Proceeds from exercise of stock options8 1 
Proceeds from issuance of common stock in connection with business
   combination and PIPE investment, net of issuance costs
71,090  
Capital contributions from Amprius Holdings505 19,692 
Payment of costs in connection with a stock purchase agreement(25) 
Net cash provided by financing activities71,578 19,693 
Net increase in cash and cash equivalents62,647 13,110 
Cash, cash equivalents, and restricted cash, beginning of period11,4892
Cash, cash equivalents, and restricted cash, end of period$74,136 $13,112 
Components of cash, cash equivalents, and restricted cash:
Cash and cash equivalents$73,803 $13,112 
Restricted cash included in other assets
333  
Total cash, cash equivalents, and restricted cash$74,136 $13,112 

The accompanying notes are an integral part of these condensed financial statements.
8

AMPRIUS TECHNOLOGIES, INC.
(A CARVE-OUT OF AMPRIUS, INC.)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share amounts)
NOTE 1 ORGANIZATION
Business Combination
Amprius Technologies, Inc. (f/k/a Kensington Capital Acquisition Corp. IV, a Cayman Islands exempted company incorporated with limited liability) (the “Company” or “Amprius”) was initially incorporated as a Cayman Islands exempted company on March 19, 2021. The Company was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses.
On September 14, 2022 (the “Closing Date”), the Company completed a business combination pursuant to the Business Combination Agreement, dated May 11, 2022 (the “Business Combination Agreement”), by and among the Company, Kensington Capital Merger Sub Corp., a wholly owned subsidiary of the Company (“Merger Sub”), and Amprius Technologies Operating, Inc. (f/k/a Amprius Technologies, Inc., a Delaware corporation) (“Legacy Amprius”). Pursuant to the terms of the Business Combination Agreement, the Company changed its jurisdiction of incorporation by domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which the Company changed its name to “Amprius Technologies, Inc.,” and a business combination between the Company and Legacy Amprius was effected through the merger of Merger Sub with and into Legacy Amprius, with Legacy Amprius surviving as a wholly owned subsidiary of Amprius (together with the Domestication and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”).
The Business Combination was treated as a reverse recapitalization. Legacy Amprius was determined as the accounting acquirer and Kensington as the accounting acquiree for financial reporting purposes based on evaluation of the following facts and circumstances:
the stockholders of Legacy Amprius owned a majority of the shares of the Company following the Business Combination;
the board of directors of the Company following the Business Combination was comprised of all of the board members of Legacy Amprius;
the senior management of the Company following the Business Combination was the senior management of Legacy Amprius; and
Legacy Amprius is larger than Kensington in terms of existing operations and number of employees.
Unless the context otherwise provides, the “Company” and “Amprius” refer (i) prior to the Closing Date, to Legacy Amprius and (ii) after the Closing Date, to Amprius Technologies, Inc. and its subsidiaries, including Legacy Amprius. Kensington Capital Acquisition Corp. IV prior to the Business Combination is referred to herein as “Kensington.” Please see Notes 2 and Note 3 below for further details.
Nature of Operations
Amprius has developed, and since 2018, been in commercial production of lithium-ion batteries for mobility applications leveraging a disruptive silicon nanowire anode. The Company’s silicon nanowire anode technology is intended to enable batteries with higher energy density, higher power density, and fast charging capabilities over a wide range of operating temperatures. Amprius’ sole location and headquarters is in Fremont, California.
The Company previously had an intercompany agreement with Amprius, Inc. (“Amprius Holdings”) to license intellectual property rights to continue to develop silicon nanowire technology. Under this agreement, Amprius Holdings provided resources and rights to use its assets to the Company, such as rights to the use of intellectual property, cash, equipment, manufacturing and office facilities, personnel, and management oversight. Amprius Holdings assigned or contributed those assets to the Company beginning in 2020 and effective May 2022, the operating assets are owned by the Company and the Company treated them as contributions from Amprius Holdings. The intercompany agreement with Amprius Holdings was terminated effective May 2022.
9

Liquidity and Capital Resources
The Company has an accumulated deficit of $86,831 as of September 30, 2022, which represents the carved-out portion of costs incurred by the Company from the inception of Amprius Holdings. Since inception, the Company has incurred recurring operating losses and cash flow deficits from operations. For the three and nine months ended September 30, 2022, the Company incurred a net loss of $4,244 and $11,276, respectively. The Company expects to incur additional losses and increased expenditures in future periods, including those associated with the design and build out of a manufacturing facility, continued research and development efforts and increased employee headcount.
As of September 30, 2022, we had $73,803 of cash and cash equivalents, which includes the $70,938 net proceeds from the consummation of the Business Combination. On September 27, 2022, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital II, LLC (“BRPC II”), pursuant to which the Company has the option to sell up to $200,000 of its common stock over a 24-month period from the date of initial satisfaction of the conditions to BRPC II’s purchase obligation set forth in the Purchase Agreement, subject to certain contractual terms (the “Committed Equity Financing”). However, there can be no assurance that the Company will be able to raise $200,000 over the 24-month period as the Committed Equity Financing contains certain limitations and conditions. In addition, effective October 19, 2022, the U.S. Department of Energy’s (“DOE”) Office of Manufacturing and Energy Supply Chains (“MESC”) awarded us a $50,000 grant. This cost sharing grant is dependent on the successful negotiation of a final contract, and among the terms to be finalized are the portion of relevant costs that may be covered by the grant. There can be no assurance that negotiation of the final contract will be successful.
The Company believes its current cash and cash equivalents will be sufficient to fund its operations for at least the next 12 months from the date these financial statements are issued. If sufficient capital is not raised, the Company may need to reduce its spending on building the manufacturing facility, as well as research and development and other operations, and this may negatively affect its ability to achieve corporate growth goals.
Other Risk and Uncertainties
The global spread of the COVID-19 pandemic has caused business disruption affecting production and sales across a range of industries. In response, the U.S. Government enacted the CARES Act, which included significant provisions to provide relief and assistance to affected organizations. While the disruption is currently expected to be temporary, there is considerable uncertainty around potential future closings, shelter in place orders, containment of the recent COVID-19 variants, and the ultimate impact of the CARES Act and other government initiatives. The COVID-19 pandemic and its resulting economic and other effects could result in significant adverse effects on the Company’s customers’ cash flow and their ability to manufacture, distribute, and sell products. This in turn may cause customers to be less able to pay invoices for customization design service or the purchase of finished batteries or may result in a reduction in the revenue from customization design service or sales of finished battery that the Company earns which are often dependent on the demand from the customer for the scope of the customized service or number of units to be purchased. This reduction could cause adverse effects on the business, results of operations, financial condition, cash flows and ability to raise operating capital. To date, this matter has not had a significant adverse impact on the Company. However, the financial impact and duration cannot be reasonably determined. 
Additionally, the U.S. and global markets are experiencing volatility and disruption following the geopolitical tensions and military conflict between Russia and Ukraine. The ongoing military conflict is highly unpredictable and has impacted commodity prices, volatility in credit and capital markets, and supply chain interruptions. The Company continues to monitor the situation and assess its potential impact on its business. This geopolitical conflict has led to sanctions and other penalties being levied by the United States, the European Union and other countries against Russia. Such sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for the Company to obtain additional funds. Although the Company has not been adversely impacted by this ongoing military conflict to date, it is impossible to predict the extent to which its operations, or those of its customers’ suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact its business.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
10

In connection with the closing of the Business Combination, whereby Legacy Amprius was determined as the accounting acquirer for accounting and reporting purposes, the historical financial statements of Legacy Amprius became the historical financial statements of the combined company and no goodwill or other intangible assets were recorded. As a result, the accompanying condensed financial statements reflect (i) the assets and liabilities of Legacy Amprius at their historical cost; (ii) the historical operating results of Legacy Amprius prior to the Business Combination; (iii) the combined results of the Company and Legacy Amprius following the closing of the Business Combination; and (iv) Legacy Amprius’ equity structure, which has been retroactively restated in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock issued to Legacy Amprius stockholders. As such, the shares, corresponding capital amounts, and net loss per share related to Legacy Amprius common stock have been retroactively restated to reflect the effect of the exchange ratio of 1.45590 (the “Exchange Ratio”) established in the Business Combination.
The accompanying condensed financial statements have been prepared from the financial records of Amprius Holdings on a carve-out basis. The carve-out basis is derived from the accounting records of Amprius Holdings using the historical results of operations and the historical basis of assets and liabilities of the Company adjusted as necessary to conform to U.S. GAAP.
More specifically, the accompanying condensed balance sheets include all of the Company’s owned assets, assets provided by Amprius Holdings, and liabilities incurred by Amprius Holdings on behalf of the Company. The accompanying condensed statements of operations reflect all activities directly attributable to the Company, as well as an allocation of Amprius Holdings’ general and administrative expenses. The Company did not share facilities or costs with the other subsidiaries of Amprius Holdings prior to them being distributed by Amprius Holdings with the exception of expenses at Amprius Holdings for payroll related expenses for two executive employees of Amprius Holdings and other legal, tax, insurance and accounting fees, which were not identifiable as related to a specific subsidiary (“Shared Expenses”). Amprius Holdings executives supported the Company and other subsidiaries of Amprius Holdings with governance, management, and investor relations. The Shared Expenses were allocated to the Company based on the time incurred by Amprius Holdings executives to support each of its subsidiaries as the level of effort required was not correlated to the level of activity, revenue, or other financial operating metrics for the subsidiaries. This allocation methodology resulted in an equal allocation of Shared Expenses to each subsidiary. Prior to the distribution of the subsidiaries of Amprius Holdings in late January and early February 2022, the general and administrative expenses of Amprius Holdings were allocated among each subsidiary, including the Company. After the distribution, such costs incurred by Amprius Holdings were wholly allocated to the Company as the only remaining subsidiary.
Prior to the Closing of the Business Combination, the Company’s operations were funded by Amprius Holdings. The source of financing consisted of proceeds received by Amprius Holdings from its issuance of preferred stock.
Management believes the expense allocation methodology and results are reasonable and consistently applied for all comparative periods presented. However, these allocations may not be indicative of the actual expenses that would have been incurred by an independent company or of the costs to be incurred in the future. The unaudited condensed financial statements presented may not be indicative of the Company’s future performance and do not necessarily reflect what the financial position, results of operations, and cash flows would have been had it operated as a standalone company during the period presented.
The significant accounting policies described below, together with other notes that follow, are an integral part of the condensed financial statements.
Unaudited Interim Condensed Financial Statements
The condensed balance sheet as of December 31, 2021, which has been derived from audited financial statements as filed in the Company’s Registration Statement on Form S-1 with the Securities and Exchange Commission (“SEC”) on September 30, 2022, and the unaudited interim condensed financial statements have been prepared in accordance with U.S. GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. Any reference in these notes to applicable accounting guidance is meant to refer to the authoritative U.S. GAAP included in the Accounting Standards Codification (“ASC”), and Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). The condensed financial statements have been prepared on a basis consistent with the audited annual financial statements. In management’s opinion, all adjustments made during the periods were normal or recurring in nature and necessary for the fair statement of the Company’s financial position as of September 30, 2022, its results of operations for the three and nine months ended September 30, 2022 and 2021 and its cash flows for the nine months ended September 30, 2022 and 2021. The financial data and the other financial information disclosed in the notes to these condensed financial
11

statements related to the three-month and nine-month periods are also unaudited. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the full fiscal year or any other period.
Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
Emerging Growth Company
The Company is an emerging growth company as defined in Section 2(a) of the Securities Act of 1933 (as amended), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised accounting standards until private companies are required to comply with such standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected to not opt out of such extended transition period. This means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt such new or revised standard unless the Company is no longer deemed an emerging growth company. As a result, these condensed financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Use of Estimates
The preparation of condensed financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances; the results of which form the basis for making judgements that are not readily apparent from other sources. Actual results could materially differ from management estimates using different assumptions or under different conditions.
Significant accounting estimates made by the Company include useful lives of property and equipment, valuation of deferred taxes, valuation of inventory, carve-out of condensed financial statements including the allocation of assets, liabilities and expenses, incremental borrowing rate used in calculating lease obligations and right-of-use asset, and fair value of common stock used to determine stock-based compensation expense prior to the merger with Kensington, and other inputs used to value stock-based compensation awards.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents consist of deposits at banks and a money market fund with original maturities of 90 days or less from the date of purchase.
Restricted cash pertains to cash collateral required by the Company’s lessor to satisfy a letter of credit requirement under its lease agreement. As of September 30, 2022, restricted cash was $333 and is included in other assets in the accompanying condensed balance sheet.
Accounts Receivable
Accounts receivable are recorded at the invoiced amount less any estimated allowance for doubtful accounts. An allowance for doubtful accounts is based on the Company’s assessment of the collectability of accounts by considering the age of outstanding invoices and the collection history of the customer, as well as an evaluation of potential risk of loss. A receivable deemed to be uncollectible is written off against a previously established allowance and recoveries are recognized when the cash is received. The Company has not experienced any significant losses from accounts receivable.
Fair Value Measurements
The carrying amounts of cash, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these items. Assets and liabilities recorded at fair value in the financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical
12

levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities are as follows:
Level 1 Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2 Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.
Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
The Company had $72,828 of cash equivalents measured at Level 1 fair value on a recurring basis as of September 30, 2022.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and accounts receivable.

Cash is deposited with a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250. As of September 30, 2022 and December 31, 2021, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks of loss.
Accounts receivable mainly consist of amounts due from U.S. government agencies or sponsored entities and large public entities which limits the Company’s credit risk. Through September 30, 2022, the Company has not experienced any credit losses.
For the three months ended September 30, 2022 and 2021, two customers and one customer represented 82% and 82% of the Company’s revenues, respectively. For the nine months ended September 30, 2022 and 2021, four and two customers represented 83% and 84% of the Company’s revenues, respectively.
As of September 30, 2022 and December 31, 2021, three and five customers represented 76% and 96%, respectively, of the Company’s total accounts receivable.
Segment Reporting
The Company has determined that the Chief Executive Officer is its Chief Operating Decision Maker (CODM). The CODM reviews financial information presented on an aggregate basis for the purposes of assessing the Company’s performance and making decisions on how to allocate resources. Accordingly, the Company has determined that it operates in a single operating and reportable segment. All of the Company’s revenues are geographically earned in the United States and the Company’s property and equipment are located in the United States.
Revenue Recognition
The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers, when a customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.
The Company generates revenue from both its arrangements for customization design services for the development of silicon-anode lithium-ion battery technology and delivery of prototypes and providing finished battery products to its customers.
13

The customization design services generally provide design and development efforts to configure the Company’s existing battery technology towards a customer’s required specifications, including the delivery of the prototypes. The development and delivery of these battery prototypes is a single performance obligation as the individual customization activities performed through delivery of the prototype batteries are not distinct. Revenue is recognized at the point in time when control transfers to the customer upon final delivery of prototype batteries or completion of the defined service.
The Company recognizes revenue from follow-on orders and standalone sales of battery products to customers at the point in time that control of the product has been transferred to the customer which is generally upon shipment.
To achieve the core principle of revenue recognition, the Company applies the following steps:
1.Identify the contract with the customer. A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations. The Company generally enters into fixed-price agreements with its customers which outline the terms of the business relationship between the customer and the Company. Additionally, the Company may receive purchase orders from customers or enter into statements of work that indicate pricing, performance and delivery obligations, progress payments (if any) and the timing for each transaction. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. At contract inception, the Company also evaluates prior incomplete contracts to determine whether the contract with the customer should be combined and accounted for as a single contract with any prior contract.
2.Identify the performance obligations in the contract. The promises within each contract for customization design services may vary depending on the customer requirements; however, those contracts contain promises which generally include (i) custom battery design to conform with customer’s requirements, (ii) design progress reporting, (iii) development of preliminary batteries, (iv) testing of battery design and performance, and (v) delivery of final battery prototypes that meet pre-defined customer specifications along with test results of the delivered batteries. Those promises are generally inputs to a combined output to deliver a single final prototype battery and are accounted for as a single performance obligation. Contracts for standard batteries for commercial sales are generally ready-made with no customization. Within these contracts, each battery is a distinct performance obligation.
3.Determine the transaction price. Payment terms for the Company’s development contracts are generally based on the achievement of defined milestones. Since revenue is generally recognized at the point in time when control transfers to the customer upon final delivery of prototype battery or completion of the service at the end of the contract as discussed below in Step 5, Recognize revenue when, or as, a performance obligation is satisfied, the variable consideration is not considered to be constrained at the inception of the contract and the transaction price equals the cumulative payments to which the Company is entitled to at the end of the contract. The Company elected to use the practical expedient to disregard the effect of the time value of money in a significant financing component when its payment terms are less than one year. In cases when there is a period of more than one year, the Company only adjusts the transaction price when the financing component is significant and beyond the mitigating effect of the progress payments.
4.Allocate the transaction price to the performance obligations in the contract. The transaction price is allocated to the performance obligations. The Company’s revenue contracts contain a single performance obligation; therefore, allocation is not necessary.
5.Recognize revenue when, or as, a performance obligation is satisfied. Under the Company’s customized design services arrangements, control generally transfers upon the completion of the battery design and delivery of the final prototype batteries. For follow-on orders and standalone sales of battery products to customers, control generally transfers upon shipment of the product. In some instances, customers may request that the Company bill them for a product but the Company retains physical possession of the product until later delivery, commonly known as “bill-and-hold” arrangements. The Company has a customer that has requested an arrangement whereby the Company may store finished product until the customer’s employees arrive at a specific site for a customer flight test. The finished products for such customer are stored in a storage area that are identified separately as belonging to such customer and are ready for immediate shipment upon the customer’s request. Additionally, title and risk of loss has passed to the customer. as such, the Company does not have the ability to use the finished products or direct them to other customers. In these “bill-and-hold”
14

arrangements, the Company recognizes revenue when the product is identified separately as belonging to the customer and the product is ready for delivery to the customer.
Sales and Transaction Taxes
Sales and other taxes collected from customers and remitted to governmental authorities on revenue producing transactions are reported on a net basis and are therefore excluded from revenue in the condensed statements of operations.
Deferred Costs
Certain costs, which consist primarily of payroll-related costs, are initially deferred when (i) the costs relate directly to a customer contract, (ii) generate or enhance resources of the Company that will be used in satisfying future performance obligations, and (iii) are expected to be recovered. If these three criteria are not met, the costs are expensed into cost of revenue in the period incurred. Deferred costs are recognized as cost of revenues in the period when the related revenue is recognized, except when such costs incurred are in excess of the amount expected to be recoverable, in which case they are expensed as incurred into cost of revenues. The recoverable amount equals the total of the amount of consideration that the entity expects to receive in the future and that the entity has received but has not recognized as revenue, in exchange for the goods or services to which the asset relates, less the costs that relate directly to providing those goods or services and that have not been recognized as expenses.
Cost of Revenues
Cost of revenues primarily includes cost of materials, direct labor costs, and allocation of indirect costs, such as facilities and overhead expenses. Costs are recognized when incurred during the period revenue is recognized.
Stock-Based Compensation
Prior to the formation of the Company, certain employees, directors, and contract workers were granted stock option awards under Amprius Holdings’ equity incentive plan. The stock-based compensation costs of those stock option awards to employees, directors and contract workers, who were transferred to the Company or continued to provide services to the Company, were recorded by the Company with a corresponding increase to additional paid-in capital.
In 2016, the Company adopted its equity incentive plan separate from the equity incentive plan of Amprius Holdings. Certain qualified employees, directors and contract workers of Amprius Holdings have received stock option awards of the Company. The cost of the stock-based compensation of those awards was recorded by the Company.
The Company measures stock-based compensation expense for all stock-based payment awards based on the estimated fair value of the awards on the date of grant. The fair value of each employee stock option is estimated on the date of grant using the Black-Scholes option-pricing model. The Company recognizes compensation costs for all employee stock-based compensation awards on a straight-line basis over the period from the date of the grant to the date the award is fully vested. The Company has elected to account for forfeitures as they occur.
The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. These assumptions include:
Expected Term — The expected term of stock options represents the period that the Company’s stock-based awards are expected to be outstanding. As the Company does not have sufficient historical experience for determining the expected term, the expected term has been derived based on the simplified method for awards that qualify as plain-vanilla options.
Expected Volatility — The Company estimates volatility for option grants by evaluating the average historical volatility of a peer group of companies for the period immediately preceding the option grant for a term that is approximately equal to the option’s expected term.
Risk-Free Interest Rate — The Company bases the risk-free interest rate on the implied yield available on the U.S. Treasury zero coupon issues with a remaining term equivalent to the expected term of the option.
Expected Dividend — The expected dividend assumption is based on the Company’s current expectations about its anticipated dividend policy. The Company has not paid dividends since inception and currently, management does not anticipate a dividend.
15

To the extent that future evidence regarding these variables is available and provides estimates that the Company determines are more indicative of actual trends, the Company may refine or change its approach to derive these input estimates. These changes could significantly impact the stock-based compensation expense recorded in the future.
Common Stock Warrants

The Company classified the common stock warrants as equity in accordance with FASB ASC Topic 815-40, Derivatives and Hedging - Contracts in Entity’s Own Equity. The classification is determined based upon the Company’s assessment that the common stock warrants are considered indexed to the Company’s own stock and the Company has the ability to settle them by issuing shares of the Company’s common stock.

Recently Adopted Accounting Standards
In February 2016, FASB issued ASU 2016-02, Leases, and subsequent amendments to the initial guidance: ASU 2017-13, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively, “Topic 842”). Lessees will need to recognize almost all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting. Lessor accounting is similar to the current model but updated to align with certain changes to the lessee model and the new revenue recognition standard. Existing sale-leaseback guidance, including guidance for real estate, is replaced with a new model applicable to both lessees and lessors. The Company adopted Topic 842 on January 1, 2022, using the modified retrospective approach, therefore, the effects of adoption on comparative periods have not been and are not required to be restated or disclosed.
As of the adoption date, the Company accounts for its leases under ASC 842, Leases. Under this guidance, lessees classify arrangements meeting the definition of a lease as operating or financing leases, and leases are recorded on the balance sheet as both a right-of-use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right-of-use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right-of-use asset results in front-loaded expense over the lease term. Variable lease expenses, including common maintenance fees, insurance and property tax, are recorded when incurred.
In calculating the right-of-use asset and lease liability, the Company elects to combine lease and non-lease components for its real estate lease. The Company will assess this election for other asset classes as they arise. The Company excludes short-term leases having initial terms of 12 months or less as an accounting policy election, and instead recognizes rent expense on a straight-line basis over the lease term.
The Company has a single lease of a real estate asset, which includes administrative and sales offices, research and development space, manufacturing and a dry room. This lease also requires the Company to pay maintenance, utilities, taxes, insurance, and other operating expenses associated with the leased space. The Company elected the transition package of three practical expedients which allow companies not to reassess whether agreements contain leases, the classification of leases, and the capitalization of initial direct costs.
As a result of the adoption of Topic 842, the lease continued to be classified as an operating lease, and the Company recognized the following on January 1, 2022:
Operating lease liabilities of $3,256, which represents the present value of the remaining lease payments, as of the date of adoption, discounted using the Company’s incremental borrowing rate of 7.9%.
Operating lease right-of-use (“ROU”) assets of $3,059, which represents the operating lease liabilities of $3,256, adjusted for deferred rent of $240 and prepaid rent of $43.
The adoption of the new lease accounting standard increased the Company’s accumulated deficit by $154.
The adoption of Topic 842 did not have any other impact on the Company’s condensed balance sheet as of September 30, 2022, operating results for the three and nine months ended September 30, 2022, and condensed cash flows for the nine months ended September 30, 2022.
16

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, which requires entities to provide disclosures on material government transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements, and any significant terms and conditions of the agreements, including commitments and contingencies. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2021, with early adoption permitted. The Company adopted this guidance on January 1, 2022, with no impact on the Company’s condensed financial statements and related disclosures as the Company does not have any government assistance accounted for by applying a grant or contribution accounting model by analogy in the periods presented.
Accounting Pronouncements Not Yet Adopted
In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Targeted Transition Relief (“ASU 2019-10”), which amends the transition guidance for ASU 2016-13. ASU 2019-10 provides entities with the option to irrevocably elect the fair value option in Subtopic 825-10 on an instrument-by-instrument basis. ASU 2019-10 is effective for years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of ASU 2019-10 on its financial statements.
NOTE 3 BUSINESS COMBINATION

On September 14, 2022, the Company completed the Business Combination, discussed above, which was treated as a reverse recapitalization. The effects of the Business Combination include the following:

the Company’s certificate of incorporation was amended and restated to, among other things, authorize the issuance of 1,000,000 shares, of which 950,000 shares are designated as common stock, $0.0001 par value per share, and 50,000 shares are designated as preferred stock, $0.0001 par value per share;
all outstanding shares of Legacy Amprius’ common stock were exchanged for a number of the Company’s common stock equal to the number of Legacy Amprius’ shares multiplied by the Exchange Ratio of approximately 1.45590, or for an aggregate of 65,777 shares of the Company’s common stock; and
Each option to purchase Legacy Amprius’ common stock (a “Legacy Amprius Option”), whether vested or unvested, was converted into an option to purchase a number of the Company’s common stock (an “Option”), subject to substantially the same terms and conditions as were applicable prior to the merger, equal to the product of the number of shares of Legacy Amprius’ common stock subject to such Legacy Amprius Option immediately prior to the closing and the Exchange Ratio, at an exercise price per share calculated by dividing the exercise price per share of such Legacy Amprius Option immediately prior to the Business Combination by the Exchange Ratio. At closing, the Legacy Amprius Options were converted to Options to receive an aggregate of 14,223 shares of common stock, of which 6,665 shares remained subject to vesting obligations.
On the Closing Date, a number of investors (the “PIPE Investors”) purchased from the Company an aggregate of 2,052 PIPE units at a price of $10.00 per share (such transaction, the “PIPE”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into with the PIPE Investors. Each PIPE unit consists of (i) one share of common stock and (ii) one warrant (each, a “PIPE Warrant”) to purchase one share of common stock. The PIPE Warrants are substantially identical to the Public Warrants, except that the exercise price of each PIPE Warrant is $12.50 per share, and the average sales price of the common stock will need to exceed $20.00 per share for the Company to be able to redeem the PIPE Warrants. The PIPE was consummated immediately prior to the closing of the Business Combination.

Immediately after giving effect to the Business Combination and the PIPE, the Company’s shares of common stock consisted of the following:

Common stock - Legacy Amprius65,777 
Common stock - PIPE investment2,052 
Common stock - Kensington16,340 
Total shares of common stock immediately after Business Combination84,169 

The Company received net proceeds from the Business Combination and the PIPE totaling $70,938, after deducting transaction and issuance costs. Transaction costs paid by the Company, which consisted of direct and incremental costs,
17

such as legal, consulting and advisory fees incurred in connection with the Business Combination, totaled $6,794 during the nine months ended September 30, 2022. These costs were initially deferred and subsequently classified as a reduction to additional paid-in capital in the accompanying condensed balance sheet upon the consummation of the Business Combination.
NOTE 4 REVENUE
Contract Balances
The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities).
Contract assets primarily relate to the rights to consideration for progress on contractual requirements performed but not billed at the reporting date. The contract assets are transferred to accounts receivable when the rights become unconditional. As of September 30, 2022 and December 31, 2021, the Company did not have contract assets recorded.
Accounts receivable is the Company’s right to consideration that is unconditional. A right to consideration is unconditional if only the passage of time is required before payment of that consideration is due. As of September 30, 2022 and December 31, 2021, the accounts receivable balances were $782 and $262, respectively.
Contract liabilities primarily consist of deferred revenue. Deferred revenue is the amount invoiced as progress payments in advance of revenue recognition; and is recognized as revenue when the recognition criteria are met. The Company’s contracts generally permit invoicing based on pre-defined milestones as outlined in the contract. As of September 30, 2022 and December 31, 2021, the total deferred revenue balances were $2,582 and $2,864, respectively.
Deferred revenue is classified as long term when the performance obligation is to be satisfied more than twelve months following the balance sheet date. As of September 30, 2022 and December 31, 2021, $1,787 and $501 of the total deferred revenue balance was considered long-term, respectively.
As of September 30, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied was $8,447. Given the applicable contract terms, $3,110 is expected to be recognized as revenue within one year and $5,337 is expected to be recognized between two to five years. This amount does not include contracts to which the customer is not committed. The estimated timing of the recognition of remaining unsatisfied performance obligations, all of which are recognized at a point in time, is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications.
For the three and nine months ended September 30, 2022, $340 and $736 was recognized under bill-and-hold arrangements, respectively. For the three and nine months ended September 30, 2021, $270 and $670 was recognized under bill-and-hold arrangements, respectively.
The following table reflects the changes in the Company’s contract liabilities, which is classified as deferred revenue:
September 30,December 31,
20222021
Deferred revenues, beginning of period$2,864 $1,661 
Unconditional rights to invoice but not yet recognized1,381 1,770 
Revenue recognized from prior period deferred revenue(1,663)(567)
Deferred revenues, end of period$2,582 $2,864 
Deferred Costs
During the three and nine months ended September 30, 2022, $286 and $1,182 of deferred costs, respectively, were recognized as costs of revenue in the condensed statements of operations. During each of the three and nine months ended September 30, 2021, $211 of deferred costs were recognized as costs of revenue in the condensed statement of operations. Deferred costs were $1,837 and $1,910 as of September 30, 2022 and December 31, 2021, respectively. During the nine month period ended September 30, 2022 and 2021, cost of revenues also includes costs incurred on certain customized
18

design service contracts that were in excess of the amount expected to be recovered; however, those costs were not material.
NOTE 5 INVENTORY
Inventory consisted of the following:
September 30,December 31,
20222021
Raw materials$272 $231 
Work in progress127 14 
Finished goods 104 255 
Inventories, net$503 $500 
NOTE 6 PROPERTY AND EQUIPMENT, NET
Property and equipment, net consisted of the following:
September 30,December 31,
20222021
Pilot production equipment$4,662 $4,041 
Laboratory equipment2,291 2,287 
Leasehold improvements3,509 3,439 
Furniture, fixtures, and other equipment207 242 
Property and equipment, at cost10,669 10,009 
Less: accumulated depreciation(6,845)(5,799)
Property and equipment, net$3,824 $4,210 
Pilot production equipment, above, includes construction in progress of $384 as of September 30, 2022. Depreciation and amortization expense was $386 and $441 for the three months ended September 30, 2022 and 2021, respectively, and $1,116 and $1,068 for the nine months ended September 30, 2022 and 2021, respectively.
NOTE 7 ACCRUED AND OTHER CURRENT LIABILITIES
Accrued and other current liabilities consisted of the following:
September 30,December 31,
20222021
Accrued compensation and benefits$1,035 $1,066 
Accrued offering costs399  
Accrued professional fees330 18 
Accrued property tax228 67 
Deferred rent 87 
Other191 208 
Accrued and other current liabilities$2,183 $1,446 
NOTE 8 STOCKHOLDERS’ EQUITY
As of September 30, 2022, the Company was authorized to issue 1,000,000 shares of stock, of which 950,000 shares are designated as common stock, $0.0001 par value per share, and 50,000 shares are designated as preferred stock, $0.0001 par value per share. Holders of common stock are entitled to one vote for each share held and entitled to receive dividends when and if declared by the board of directors. Through and as of September 30, 2022, the Company has not declared any dividends.
Equity Incentive Plans
19

2008 Plan
Prior to the formation of the Company, Amprius Holdings granted stock options under its 2008 Stock Plan (the “2008 Plan”) to its qualified employees, including those employees who later transferred to the Company following the incorporation of the Company. Stock option grants under the 2008 Plan expire 10 years from the date of grant or 90 days from the termination of the employee, generally vest over two to four years, and are exercisable for shares of Amprius Holdings’ common stock.
The stock-based compensation under the 2008 Plan associated with those awards granted to the Company’s employees and Amprius Holdings’ employees who provide services to the Company is recorded by the Company as stock-based compensation and as contribution from Amprius Holdings. The completion of the merger with Kensington did not affect the terms of the outstanding options under the 2008 Plan. There were no options granted, exercised, or expired under the 2008 Plan during the nine months ended September 30, 2022. As of September 30, 2022, there were 12,642 shares of common stock reserved for the 2008 Plan, with 376 available to be issued.

2016 Plan
Prior to the closing of the merger with Kensington, the Company maintained the 2016 Equity Incentive Plan (the “2016 Plan”), which was adopted effective December 1, 2017. The 2016 Plan permitted the grant of incentive stock options, non-qualified stock options, restricted stock awards, and restricted stock unit awards to the Company and its affiliates’ employees, consultants and directors. Options granted under the 2016 Plan during the nine months ended September 30, 2022 totaled 3,875 shares with a weighted average exercise price of $2.62 per share. The 2016 Plan was terminated concurrently with the adoption of the 2022 Equity Incentive Plan (the “2022 Plan”). As a result, no additional awards will be granted under the 2016 Plan. However, the 2016 Plan continues to govern the terms and conditions of the outstanding awards previously granted under the 2016 Plan. As of September 30, 2022, a total of 14,216 stock options were outstanding under the 2016 Plan.

2022 Plan
The Company adopted the 2022 Plan effective September 14, 2022. The 2022 Plan authorizes awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, or performance awards and may be granted to directors, employees or consultants. Subject to the adjustment provisions and the evergreen provisions contained in the 2022 Plan, a total of 9,900 shares of the Company’s common stock is reserved for issuance pursuant to the 2022 Plan. In addition, the shares reserved for issuance under the 2022 Plan include any assumed awards that, on or after the Closing Date, were cancelled, expired or otherwise terminated without having been exercised in full, were tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or were forfeited to or repurchased by the Company due to failure to vest (provided that the maximum number of shares that may be added to the 2022 Plan is 15,000 shares). The number of shares available for issuance under the 2022 Plan may be increased annually beginning on January 1, 2023 subject to certain limitations under the 2022 Plan.
The 2022 Plan provides for stock options to be granted to employees at an exercise price not less than 100% of the fair value at the grant date, unless the optionee is a 10% stockholder, in which case the option price will not be less than 110% of such fair market value. Options granted generally have a maximum term of 10 years from grant date and are exercisable upon vesting. There were no grants under the 2022 Plan during the three months ended September 30, 2022. As of September 30, 2022, a total of 9,907 shares of common stock were reserved for issuance under the 2022 Plan.

ESPP

The Company adopted the 2022 Employee Stock Purchase Plan (“ESPP”) effective September 14, 2022. Under the ESPP, the Company the maximum number of shares available for issuance is 990 shares of common stock, which number may be increased annually beginning January 1, 2023, subject to certain limitations under the ESPP. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code of 1986 (as amended) and will provide eligible employees an opportunity to purchase the Company’s common stock at a discount through payroll deductions. Under the ESPP, the Company may specify offering periods, provided that no offering period will have a duration exceeding 27 months. The purchase price per share is equal to 85% of the fair market value of a share of the Company’s common stock on the (i) offering date or (ii) purchase date, whichever is lower. The Company has not established an offering under the ESPP as of September 30, 2022.

Executive Incentive Compensation Plan

On September 14, 2022, the Company’s board of directors approved the Company’s Executive Incentive Compensation Plan, which will allow the Company to grant incentive awards to certain executive employees, generally payable in cash, based upon achieving specified goals. The Company has the right to settle the award by granting an equity
20

award, which may be subject to vesting conditions. All awards under the Executive Incentive Compensation Plan will be subject to reduction, cancellation, forfeiture, or recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to applicable laws. As of September 30, 2022, there were no awards granted under the Executive Incentive Compensation Plan.
Stock-Based Compensation
The table below shows stock-based compensation expense recognized for both the 2008 and 2016 Plans for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Cost of revenue$125 $86 $357 $250 
Research and development6 7 20 11 
Selling, general and administrative646 230 1,746 441 
Total stock-based compensation expense$777 $323 $2,123 $702 
As of September 30, 2022, there was approximately $9,164 of unrecognized compensation cost related to the 2016 Plan, which is expected to be recognized over a weighted-average period of approximately 3.3 years.
Common Stock Warrants
Each redeemable warrant to purchase Kensington ordinary shares, exercisable for one ordinary share at an exercise price of $11.50 per share (the “Public Warrants”) and each warrant to purchase ordinary shares owned by Kensington, exercisable for one ordinary share at an exercise price of $11.50 (the “Private Warrants” and, together with the Public Warrants, the “Warrants”) outstanding at the time of the Business Combination converted into a warrant exercisable for one share of the Company’s common stock pursuant to the Warrant Agreement, dated as of March 1, 2022 (the “Warrant Agreement”). At closing, there were 29,483 Public Warrants and 16,400 Private Warrants.
Concurrent to the closing of the Business Combination, a number of PIPE Investors purchased from the Company an aggregate of 2,052 PIPE units at a price of $10.00 per share, which consist of (i) one share of common stock and (ii) one PIPE warrant to purchase one share of common stock. The PIPE Warrants are substantially identical to the Public Warrants, except that the exercise price of each PIPE Warrant is $12.50 per share, and the average sales price of the common stock will need to exceed $20.00 per share for the Company to be able to redeem the PIPE Warrants. The PIPE was consummated immediately prior to the closing of the Business Combination. As of September 30, 2022, the Company had 2,052 PIPE warrants outstanding.
Common Stock Purchase Agreement
On September 27, 2022, the Company entered into the Purchase Agreement with BRPC II, pursuant to which the Company, at its option, has the right to sell to BRPC II up to $200,000 of its common stock from time to time over a period of 24 months from and after the effective date of the registration statement related to the offering and resale of such shares of common stock. The purchase price will be determined by reference to the volume weighted average price of the Company’s common stock (as defined in the Purchase Agreement), less a discount of 3%. The Company cannot issue to BRPC II more than 19.99% of the aggregate number of shares of the common stock issued and outstanding immediately prior to the execution of the Purchase Agreement, except in limited circumstances. Proceeds from the sale of the Company’s common stock to BRPC II will depend upon the frequency and the market price of the Company’s common stock on the date of sale.
The Company issued 85 shares of common stock to BRPC II upon execution of the Purchase Agreement as consideration for BRPC II’s commitment to purchase shares of the Company’s common stock. The Company incurred a total of $272 in costs related to the execution of the Purchase Agreement and the issuance of the initial commitment shares and such amount is initially recorded as deferred stock issuance costs and included in other assets in the accompanying condensed balance sheet. There were no other shares issued under the Purchase Agreement as of September 30, 2022.
21

NOTE 9 INCOME TAXES
The Company had no income tax expense as a result of the continued generation of net operating losses (“NOLs”) offset by a full valuation allowance recorded on such NOLs, as the Company determined it is not more-likely-than-not that its NOLs will be utilized.
NOTE 10 NET LOSS PER SHARE
The following table presents the calculation of basic and diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Numerator:
Net loss$(4,244)$(3,141)$(11,276)$(6,194)
Denominator:
Weighted-average number of common shares
    outstanding
69,01365,77266,85965,762
Basic and diluted net loss per common share$(0.06)$(0.05)$(0.17)$(0.09)
The following table summarizes the outstanding shares of potentially dilutive securities as of the periods presented that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive:
September 30,
20222021
Stock options14,216 9,831 
Common stock warrants47,935  
Total62,1519,831
NOTE 11 LEASES
The Company had a space and facility sharing arrangement with Amprius Holdings to use the equipment owned by Amprius Holdings and the spaces leased by Amprius Holdings as its administrative and sales office, research and development laboratory, and production and engineering facilities. Effective May 1, 2022, Amprius Holdings assigned to the Company the office lease that covers all facilities that the Company uses in its operations. For the period from January 1, 2022 until May 1, 2022 and the nine months ended September 30, 2021, the Company paid Amprius Holdings an average monthly fee to share the facilities of $43 and $42, respectively. The current lease has an expiration date of June 30, 2024, with a single option to extend the lease for 60 months that the Company determined it is reasonably certain to exercise. The Company had no leases that were classified as a financing lease as of September 30, 2022.
Operating lease expense under ASC 842 for the three and nine months ended September 30, 2022 amounted to $139 and $417, respectively.
The total amount paid for amounts included in the measurement of operating lease liabilities was $132 and $350 during the three and nine months ended September 30, 2022.
22

Future operating lease payments as of September 30, 2022 are as follows:
Year Ending December 31:Amount
2022 (remaining three months)$132 
2023540 
2024565 
2025586 
2026604 
2027622 
Thereafter966
Gross lease payments4,015 
Less - Present value adjustments(921)
Total operating lease liabilities$3,094 
Operating lease disclosures for the Company’s single operating lease are as follows:
September 30, 2022
Remaining lease term (in years)6.8
Discount rate for operating lease liabilities7.9%
NOTE 12 COMMITMENTS AND CONTINGENCIES
From time to time, the Company may be involved in lawsuits, claims or legal proceedings that arise in the ordinary course of business. The Company accrues a contingent liability when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management believes that there are no claims against the Company for which the outcome is expected to have a material effect on the financial position, results of operations or cash flows of the Company.
NOTE 13 RELATED PARTY TRANSACTIONS
Related Party Transactions with Amprius Holdings
Prior to the closing of the Business Combination, the Company had intercompany arrangements with Amprius Holdings regarding sharing the facilities, service, and licensing to support the operation of the Company in the ordinary course of its business, as further described below. Pursuant to a termination agreement entered into by Amprius Holdings and the Company on June 8, 2022, the intercompany service agreements were terminated upon the Closing of Business Combination on September 14, 2022.
The Company had a service agreement for Amprius Holdings to provide certain services such as administration, management service, information technology and engineering services to support the operation of its business. Prior to the distribution of the subsidiaries of Amprius Holdings to its stockholders in late January and early February 2022, the general and administrative expenses of Amprius Holdings were allocated among each subsidiary, including the Company. After the distribution, such costs incurred by Amprius Holdings were wholly allocated to the Company as the only remaining subsidiary. The Company received financing for these amounts through capital contributions from Amprius Holdings as Amprius Holdings does not intend to demand repayment of the funds received.
23

The composition of the capital contributions from Amprius Holdings for the three and nine months ended September 30, 2022 and 2021 were as follows:
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Stock-based compensation$131 $37 $377 $116 
Other allocated corporate costs 85 295 246 
Cash 14,612 210 19,446 
Total capital contributions from
   Amprius Holdings
$131 $14,734 $882 $19,808 
The Company’s board of directors formally approved the treatment of all intercompany advances as forgiven in March 2021. In substance, since inception and during the nine months ended September 30, 2022, the intercompany transactions between the Company and Amprius Holdings have been included in these condensed financial statements and are determined to be forgiven at the time the transaction occurs as the intent of the arrangement from inception was capital contributions. Intercompany transactions subsequent to March 2021 were also made in the form of capital contributions. The total net effect of the settlement of these transactions is presented as financing activities within the statement of cash flows and shown as additional paid-in capital on the condensed balance sheet.

Prior to the Business Combination, the Company had a licensing agreement with Amprius Holdings to use patents and licenses owned by Amprius Holdings. Effective May 12, 2022, Amprius Holdings assigned to the Company all patents and patent applications, as well as registered trademarks and trademark applications, used by the Company in its operations under an Intellectual Property Rights agreement. This transfer of intellectual property does not have any financial impact on the Company’s balance sheet.
Related Party Transactions with Affiliate Subsidiaries
The Company also purchases raw materials and development materials from two subsidiaries that were owned and controlled by Amprius Holdings. Amprius Holdings distributed all of its shares in the two subsidiaries to its stockholders and optionees in February 2022. For the two-month period prior to the distribution of the subsidiaries of Amprius Holdings during the nine months ended September 30, 2022, such purchases recorded as cost of revenues totaled $86. For the three and nine months ended September 30, 2021, such purchases recorded as cost of revenues totaled $69 and $144, respectively. As of December 31, 2021, the outstanding payables balance from affiliate subsidiaries totaled $18.
NOTE 14 - SUBSEQUENT EVENTS

Bonus Payout

On October 5, 2022, Amprius Holdings’ board of directors approved the acceleration of a cash bonus payment of approximately $2,310 to Dr. Kang Sun, the Chief Executive Officer of Amprius Holdings and the Company. The payment of such cash bonus by Amprius Holdings has no effect on the cash or operating results of the Company.

Department of Energy (“DOE”) Grants

On October 11, 2022, the DOE’s Advanced Manufacturing Office awarded the Company a $1,000 grant, which will be used to further mature the Company’s process for manufacturing nanowire-based silicon anodes. The grant will promote the maturation of its technology to achieve the Company’s goal of high volume, low-cost ultra-high energy density battery production that significantly increases yield and throughput.

On October 19, 2022, the DOE’s Office of Manufacturing and Energy Supply Chains awarded the Company a $50,000 cost sharing grant in connection with the U.S. government’s infrastructure spending plan to expand domestic manufacturing of batteries for electric vehicles and electrical grid. This cost sharing grant is dependent on the successful negotiation of a final contract, and among the terms to be finalized are the portion of relevant costs that will be covered by the grant.



24

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Unless otherwise indicated or the context otherwise requires, references in this section to the “Company,” “Amprius,” “we,” “us,” “our” and other similar terms refer (i) prior to the Closing Date, to Legacy Amprius and (ii) after the Closing Date, to Amprius Technologies, Inc.
Overview
Amprius Technologies, Inc. (f/k/a Kensington Capital Acquisition Corp. IV, a Cayman Islands exempted company incorporated with limited liability) has developed and, since 2018, been in commercial production of ultra-high energy density lithium-ion batteries for mobility applications leveraging a disruptive silicon nanowire anode. Our silicon nanowire anode technology enables batteries with higher energy density, higher power density, and extreme fast charging capabilities over a wide range of operating temperatures, which results in our batteries providing superior performance compared to conventional graphite lithium-ion batteries. Our silicon nanowire anode is a direct drop-in replacement of the graphite anode in traditional lithium-ion batteries, and our manufacturing process leverages the manufacturing process for conventional lithium-ion batteries and the related supply chain.
Currently, our batteries are primarily used for existing and emerging aviation applications, including unmanned aerial systems, such as drones and high-altitude pseudo satellites. We believe our proprietary technology has the potential for broad application in electric transportation. Our batteries and their performance specifications have been tested and validated for application by over 30 customers, including Airbus, AeroVironment, BAE Systems, the U.S. Army and Teledyne FLIR, and we have shipped over 10,000 batteries as of September 30, 2022, which have enabled mission critical applications. Our proprietary silicon nanowire anode structures, battery designs and manufacturing processes are defended by our portfolio of patents, trade secrets and know-how developed over 10 years of research and development.
We currently manufacture batteries on a kWh-scale manufacturing line at our headquarters in Fremont, California, where we believe demand for our batteries exceeds our manufacturing capacity. We are working to meet the expected demand in several rapidly growing addressable markets, including by designing and building a large-scale manufacturing facility that can manufacture at GWh+ scale, including an automated, high-volume manufacturing line for our silicon nanowire anode.
Business Combination
On September 14, 2022 (the “Closing Date”), the Company completed a business combination pursuant to the Business Combination Agreement, dated May 11, 2022 (the “Business Combination Agreement”), by and among the Company, Kensington Capital Merger Sub Corp., a wholly owned subsidiary of the Company (“Merger Sub”), and Amprius Technologies Operating, Inc. (f/k/a Amprius Technologies, Inc., a Delaware corporation) (“Legacy Amprius”). Pursuant to the terms of the Business Combination Agreement, the Company changed its jurisdiction of incorporation by domesticating as a corporation incorporated under the laws of the State of Delaware (the “Domestication”), upon which the Company changed its name to “Amprius Technologies, Inc.,” and a business combination between the Company and Legacy Amprius was effected through the merger of Merger Sub with and into Legacy Amprius, with Legacy Amprius surviving as a wholly owned subsidiary of Amprius (together with the Domestication and the other transactions contemplated by the Business Combination Agreement, the “Business Combination”). Kensington Capital Acquisition Corp. IV prior to the Business Combination is referred to herein as “Kensington.”
The Business Combination was accounted for as a reverse recapitalization for financial statement reporting purposes with Legacy Amprius deemed to be the acquirer and Kensington deemed to be the acquiree. As a result, the assets, liabilities and results of operations of Legacy Amprius became the historical financial statements after the Business Combination. Our assets and liabilities continued to be stated at historical cost and there were no goodwill or other intangible assets recorded.
We received net proceeds from the Business Combination and the PIPE totaling $70.9 million, after deducting transaction and issuance costs.
Committed Equity Financing
25

On September 27, 2022, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Committed Equity Registration Rights Agreement”) with B. Riley Principal Capital II, LLC (“BRPC II”). Pursuant to the Purchase Agreement, subject to the satisfaction of the conditions set forth therein, we have the right, but not the obligation, to sell to BRPC II up to $200,000,000 of newly issued shares of common stock (subject to certain conditions and limitations), from time to time during the term of the Purchase Agreement (the “Committed Equity Financing”). Sales of common stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell any securities to BRPC II under the Purchase Agreement. As consideration for BRPC II’s commitment to purchase shares of common stock at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, we issued 84,793 shares of common stock (the “Initial Commitment Shares”) to BRPC II. Upon our receipt of total aggregate gross cash proceeds equal to $100,000,000 from BRPC II under the Purchase Agreement, we will issue 84,793 additional shares of common stock (collectively with the Initial Commitment Shares, the “Commitment Shares”) to BRPC II. Also, any shares of common stock issued in the Committed Equity Financing to BRPC II other than the Commitment Shares will be purchased by BRPC II at current market prices less a 3.0% fixed discount.
Upon the initial satisfaction of the conditions to BRPC II’s purchase obligation set forth in the Purchase Agreement (the “Commencement”), including that a registration statement registering under the Securities Act of 1933, as amended (the “Securities Act”), the resale by BRPC II of shares of common stock issued to it by the Company under the Purchase Agreement, which we agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the Committed Equity Registration Rights Agreement, is declared effective by the SEC and a final prospectus relating thereto is filed with the SEC, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period from and after the Commencement, to direct BRPC II to purchase a specified maximum amount of shares of common stock, not to exceed certain limitations as set forth in the Purchase Agreement (each, a “VWAP Purchase”), by delivering written notice to BRPC II prior to the commencement of trading of the common stock on the New York Stock Exchange (the “NYSE”) on any trading day (the “Purchase Date”), so long as (i) the closing sale price of the common stock on the trading day immediately prior to such Purchase Date is not less than the specified threshold price as set forth in the Purchase Agreement and (ii) all shares of common stock subject to all prior VWAP Purchases and all prior Intraday VWAP Purchases (as defined below) by BRPC II under the Purchase Agreement have been received by BRPC II prior to the Company’s delivery of such applicable purchase notice to BRPC II.
In addition to the regular VWAP Purchases described above, after the Commencement, we will also have the right, but not the obligation, subject to the continued satisfaction of the conditions set forth in the Purchase Agreement, to direct BRPC II to purchase, on any trading day, including the same Purchase Date on which a regular VWAP Purchase is effected (as applicable), a specified amount of shares of common stock, not to exceed certain limitations set forth in the Purchase Agreement that are similar to those that apply to a regular VWAP Purchase (each, an “Intraday VWAP Purchase”), by the delivery to BRPC II of an irrevocable written purchase notice, after 10:00 a.m., New York City time, and prior to 3:30 p.m., New York City time, on such Purchase Date.
Under the applicable NYSE rules, in no event may we issue to BRPC II under the Purchase Agreement more than 16,825,366 shares of common stock, which number of shares is equal to 19.99% of the shares of the common stock outstanding immediately prior to the execution of the Purchase Agreement (the “Exchange Cap”), unless we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap in accordance with the applicable NYSE rules. The Exchange Cap is not applicable to issuances and sales of common stock pursuant to VWAP Purchases and Intraday VWAP Purchases that we may effect pursuant to the Purchase Agreement, to the extent such shares of common stock are sold in such VWAP Purchases and Intraday VWAP Purchases (as applicable) at a price equal to or in excess of the applicable “minimum price” (as defined in the applicable listing rules of the NYSE) of the common stock, calculated at the time such VWAP Purchases and Intraday VWAP Purchases (as applicable) are effected by us under the Purchase Agreement, if any, as adjusted to take into account our issuance of the Commitment Shares to BRPC II and our reimbursement of a certain amount of BRPC II’s legal fees and expenses. Moreover, we may not issue or sell any shares of common stock to BRPC II under the Purchase Agreement which, when aggregated with all other shares of common stock then beneficially owned by BRPC II and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13d-3 thereunder), would result in BRPC II beneficially owning more than 4.99% of the outstanding shares of common stock.
From and after Commencement, we will control the timing and amount of any sales of common stock to BRPC II. Actual sales of shares of common stock to BRPC II under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the common stock and determinations by us as to the appropriate sources of funding for us and our operations.
26

U.S. Department of Energy Cost Sharing Grant
In October 2022, we were awarded a $50.0 million cost sharing grant from the U.S. Department of Energy. This cost sharing grant is dependent on the successful negotiation of a final contract, and among the terms to be finalized are the portion of relevant costs that will be covered by the grant.
Known Trends, Demands, Commitments, Events, or Uncertainties Impacting Our Business
We believe that our performance and future success depends on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled “Risk Factors.”
Establishing Manufacturing Capacity
While we have manufactured on a kWh-scale capacity to date, we have started our phased build out of capacity with parallel paths. We have received the first large-scale anode production machine from Centrotherm at our current facility in Fremont. We are customizing the machine for our production processes and must then complete tuning and testing before the machine goes online for production purposes. We expect this machine to increase our capacity for silicon anode production to approximately 2 MWh by the end of 2023. This is expected to accelerate our development of technological processes for building batteries at a GWh-scale as we prepare, in parallel, for the design and build of our high volume manufacturing facility using the proceeds obtained from the Business Combination and, if any, the Committed Equity Financing. Achieving capacity at commercial scale of high energy density lithium-ion batteries will require us to make significant capital expenditures to scale our production capacity and improve our supply chain processes. Based on our current expectations, we estimate that our capital equipment expenditures will range between $120.0 million and $150.0 million to achieve 1.0 GWh per year of manufacturing capacity, and that it will take approximately two years following the Closing to start volume manufacturing. Because our silicon nanowire anode process requires different equipment than traditional anode manufacturing, our capital equipment costs are likely to be higher than equipment used for production of graphite anodes.
We have begun selection of sites for a GWh-scale manufacturing facility, and we plan to procure manufacturing equipment that allows for cathode fabrication, battery assembly, and battery testing from equipment suppliers. To achieve capacity at commercial scale, we need to establish supply relationships for necessary materials, components and equipment to mass produce the silicon nanowire technology for our prospective markets, which will allow us to develop an automated, high-volume manufacturing line to increase production volume. The capacity and timing of our future manufacturing requirements, and related capital expenditures, remain uncertain and will depend on a variety of factors, including our ability to design and construct new manufacturing sites and develop an automated, high-volume manufacturing line for our silicon nanowire anode, to mitigate supply chain constraints and manage a new labor force, to utilize planned capacity in our existing facilities, and to operate in new geographic areas apart from our current headquarters. Our potential suppliers and other equipment vendors may also encounter delays, additional costs, and other obstacles in building our manufacturing line, which are currently unknown. To the extent we are unable to develop an automated, high-volume manufacturing line for our silicon nanowire anode, our ability to grow will be adversely affected. Additionally, although we have tested and validated the performance of our products on one supplier’s platform, there is uncertainty as to whether our planned manufacturing line will be successful. We expect our capital expenditures to increase each as we ramp up our manufacturing capacity and expand operations.
Reducing Costs of Manufacturing
We believe the focus on reducing the manufacturing costs of our batteries on a $/kWh basis is an important factor to accelerate the demand for our batteries and the expansion of our customer base. As a result, we will continue to work to develop further and validate our manufacturing processes to enable high volume manufacturing and reduce manufacturing costs. The production of our silicon nanowire anode requires different equipment than traditional graphite anode manufacturing. Therefore, our capital equipment costs are likely to be initially higher than equipment used for the production of graphite anodes. As we scale, we believe we will benefit from reduced per-unit fixed costs, such as overhead, labor and capital expenditures, tool utilization improvements and volume pricing for equipment and materials. We will also seek to reduce costs by optimizing material utilization, throughput and yield. This is complemented by further intentions to continue to invest in research and development to improve both battery performance and manufacturing processes. However, until we are able to successfully design and implement an automated, high-volume manufacturing line for our silicon nanowire anode and manufacture our batteries at scale, we cannot accurately forecast our manufacturing costs, which may adversely affect our ability to achieve reduced costs in our manufacturing processes.
27

Highly Competitive Market
Our competition includes both established manufacturers and new entrants that are developing new battery technologies and chemistries to address the growing market for electrified transportation solutions. We believe the manufacturers of these batteries will continue to invest funds, time and effort to improve the capabilities of their batteries with the recent developments of silicon batteries as a potential alternative to conventional graphite batteries. Currently, we are the only known manufacturer using a 100% silicon anode that is free of any inactive additives. We believe we are the leading company in the market that has a high-performance battery that can meet the requirements of aviation applications. The electric vehicle (“EV”) battery industry has a limited number of commercially available batteries that meet the minimum performance specifications. This creates a fast-growing and highly competitive industry for many battery manufacturers to claim market share for commercially acceptable batteries. We believe that there is significant room for improvement in the EV industry in driving range and fast charging capabilities that our silicon nanowire technology can address. To compete in the EV industry, the reduction of manufacturing costs is a significant objective in addition to improving cycle life, increasing form factors and improving production quantity. A primary concern is that many of our competitors and potential future entrants may be better capitalized to expand production capacities, have greater resources to commercialize and have greater access to customers. As such, we may be at a competitive disadvantage and be unable to retain or grow our market share.
Product Development
We expect to continue investing in the development of battery technology with the goal of enabling commercial production after the completion of our new GWh-scale manufacturing facility. We continue to develop customized battery solutions and deliver standardized samples (i.e., prototypes) of batteries to industry leading manufacturers as well as the federal government. We plan to focus our research and development on the following key areas:
Improving battery life: To continue to meet the specific needs of our customers and drive adoption of our batteries in new areas of electrified transportation, including the EV space. We are working with chemical compounds as potential additives to the silane gas we use to produce our silicon nanowire anodes, which have demonstrated the potential to improve cycle life without negatively impacting other performance characteristics such as energy density.
Further improvements to energy density: We are engaged in ongoing development activities to explore different cathode materials, including a conversion cathode, to further improve the energy density of our batteries.
Larger cell form factors: The batteries we have developed and are developing for our customers are typically approximately 2-15Ah for small-sized aircraft. As we expand our customer base, we expect to develop larger form factor batteries for broader electrified transportation applications.
As a result of these efforts, our goal is to fully realize the benefits of our silicon nanowire anode technology and develop the highest performing products in the market.
Regulatory Landscape
We operate in an industry that is subject to many established environmental regulations, which have generally become more stringent over time. As we process, store, dispose of, transport, and use large amounts of hazardous materials, we are subject to laws and regulations surrounding battery safety and transportation, as well as health and production safety laws and regulations governing hazardous materials. We expect that environmental regulations under the Biden administration could, if adopted, facilitate market demand and revenue growth, while other potential regulations, if adopted, could result in additional operating costs. If we fail to comply with existing and future laws and regulations, our business and results of operations could be adversely affected, such as the imposition of fines, litigation, criminal charges, sanctions by regulators, or other liabilities. As future regulatory changes are uncertain, we are unable to measure the impact of such changes on our business and our results of operations.
Global Risks
The rapid global spread of the COVID-19 coronavirus since December 2019 has caused business disruption affecting production and sales across a range of industries. While the disruption is currently expected to be temporary, the extent of the impact of COVID-19 on our operational and financial performance will depend on certain developments, including the duration and spread of the virus, and the impact on our customers, employees and vendors. Our customers may experience significant adverse effects on their cash flow and operations, leading to potential difficulty with purchasing and paying for
28

our products, and therefore, a reduction in our revenues. We also experienced a 10% reduction in workforce as a result of the COVID-19 pandemic and the related temporary closure during the year ended December 31, 2020. However, during the year ended December 31, 2021 and continuing into 2022, our workforce numbers were restored, showing signs of recovery and growth of production activities and the continued flow of supply chains. From December 31, 2021 to September 30, 2022, we grew our workforce by 41%. The ultimate outcome of the pandemic is uncertain and, accordingly, the impact on our financial condition or results of operations is also uncertain. To date, and as a result of us not commencing full-scale commercial production activities, COVID-19 has not had a material impact on our interim unaudited condensed financial statements or our liquidity. We have not materially altered any terms with contractors, suppliers, customers, other business partners or our financing sources as a result of COVID-19.
Additionally, the military conflict between Russia and Ukraine, which began in February 2022, has had an adverse impact on the global economy and financial markets. Although our business has not been directly impacted by this ongoing military conflict, as we have no assets or operations, and we have not purchased materials from, Russia, Belarus or Ukraine, it is impossible to predict the extent to which our operations, or those of our customers, suppliers and manufacturers, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions and inflationary pressures, and the impact of such changes on our business and our results of operations are impossible to predict, but could be material.
Comparability of Financial Information
Our future results of operations and financial position may not be comparable to historical results as a result of the Business Combination. Since the Business Combination close, we have incurred, and expect to continue to incur, higher capital expenditures related to both the design and build out of our new GWh-scale manufacturing facility and the development of an automated, high-volume manufacturing line for our silicon nanowire anode, as well as higher costs for continued research and development efforts, compliance with regulatory matters and other general and administrative expenses, including those related to being a public company.
Basis of Presentation
Our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). We carry on our business through one operating segment. Given that Amprius Holdings, which held approximately 99.6% of the Legacy Amprius common stock prior to the Business Combination, has not historically prepared financial statements for Legacy Amprius, the historical results for Legacy Amprius have been prepared from the financial records of Amprius Holdings on a carve-out basis derived from the accounting records of Amprius Holdings using the historical results of operations and the historical basis of assets and liabilities of our business, adjusted as necessary to conform to U.S. GAAP.
Components of Our Results of Operations
We currently operate a kWh-scale manufacturing line at our headquarters in Fremont, California. To meet the demand for our batteries, we are in the process of designing and then building a GWh-scale manufacturing facility, designing our automated, high-volume manufacturing line, and scaling up production. As a result, we expect our capital expenditures and working capital requirements to increase materially in the near future. Our ability in the future to generate revenue sufficient to achieve profitability will depend largely on our ability to scale production to meet the expected market demand for our products. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical results of operations.
Revenues
We have historically generated revenues from providing both design services for the development of customized silicon-anode lithium-ion battery technology and selling our batteries to our customers. Our contracts typically contain a single performance obligation. Revenue is recognized at the point in time when final milestones are met (i.e., a final working prototype is delivered and meets all required specifications) or when the customer obtains control of the product, which is generally upon shipment.
Cost of Revenues
Cost of revenues includes materials, direct labor, allocated depreciation expense, and other direct and indirect costs related to revenue contracts. Labor consists of personnel-related expenses such as salaries and benefits, and stock-based compensation. Stock-based compensation expense included within cost of revenues is allocated based on the proportion of
29

time spent by personnel in relation to manufacturing batteries and fulfilling customer contracts. Cost of revenues are expected to continue to increase as we incur expenses related to the design and build-out of our GWh-scale manufacturing facility.
We expense costs in the period incurred unless the costs meet three criteria to be capitalized as an asset: when the costs relate directly to a customer contract; we expect to generate or enhance resources of the business from performing the contract that will be used in satisfying future performance obligations; and we expect to recover such benefits. We recognize deferred costs as cost of revenues in the period when the related revenue is recognized. Cost of revenues also includes costs incurred that was in excess of the recoverable amount.
Research and Development (“R&D”) Expense
R&D expenses mainly consist of salaries and benefits, including stock-based compensation expense and other related personnel costs, depreciation, contract services, materials and supplies, other expenses from outside contractors and suppliers plus an allocation of indirect costs. These costs relate to the conceptual formulation and design of preproduction experimental prototypes and models, including the cost of equipment and material for which there is no alternative future use. R&D expenses are expensed as incurred. Stock-based compensation expense included within R&D expense is allocated based on the proportion of time spent by personnel in relation to innovating and introducing new batteries to our product line.
We anticipate that R&D expenses will increase for the foreseeable future as we continue to invest in activities to enhance product capabilities, build battery prototypes that meet our customers’ specifications, and test batteries.
Selling, General and Administrative Expense
Selling, general and administrative expenses consist primarily of costs incurred for salaries and personnel-related expenses, including stock-based compensation expense, outside contractor and professional service fees, audit and compliance expenses, legal, accounting and other advisory services, as well as allocated facilities and information technology costs including depreciation. Stock-based compensation expense included within selling, general and administrative expense is allocated based on the proportion of time spent by personnel in relation to marketing, administrative and corporate services.
We expect that our selling, general and administrative expenses will increase due to our operations as a public company, including expenses related to compliance with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as increased expenses for insurance (including director and officer insurance), investor relations activities and other administrative and professional services such as accounting, legal, regulatory and tax.
Other Income (Expense), Net
Other income (expense), net consists primarily of interest income and the gain on the forgiveness of a PPP loan.
Provision for Income Taxes
Our provision for income tax consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. We maintain a valuation allowance against the full value of our U.S. and state net deferred tax assets because it is not more likely that our deferred tax assets will be recoverable.
Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2022 and 2021
The following table summarizes our results of operations during the three and nine months ended September 30, 2022 and 2021 (in thousands):
Three Months Ended
September 30,
ChangeNine Months Ended
September 30,
Change
20222021$%20222021$%
Revenue$816 $330 $486 147 %$3,617 $1,556 $2,061 132 %
Cost of revenue2,284 1,986 298 15 %7,448 4,990 2,458 49 %
30

Gross loss(1,468)(1,656)188 (11)%(3,831)(3,434)(397)12 %
Operating expenses:
Research and development488 327 161 49 %1,340 978 362 37 %
Selling, general and administrative2,367 1,154 1,213 105 %6,223 2,508 3,715 148 %
Total operating expenses2,855 1,481 1,374 93 %7,563 3,486 4,077 117 %
Loss from operations(4,323)(3,137)(1,186)38 %(11,394)(6,920)(4,474)65 %
Other income (expense), net79 (4)83 (2075)%118 726 (608)(84)%
Net Loss$(4,244)$(3,141)$(1,103)35 %$(11,276)$(6,194)$(5,082)82 %
Cost and operating expenses reported above include stock-based compensation as follows:
Three Months Ended
September 30,
ChangeNine Months Ended
September 30,
Change
20222021$%20222021$%
Cost of revenue$125 $86 $39 45 %$357 $250 $107 43 %
Research and development expense(1)(14)%20 11 82 %
Selling, general and administrative
   expense
646 230 416 181 %1,746 441 1,305 296 %
Total stock-based compensation$777 $323 $454 141 %$2,123 $702 $1,421 202 %
Revenue
Revenue increased by $0.5 million, or 147%, and $2.1 million, or 132%, to $0.8 and $3.6 million during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. The increase was primarily due to the completion of customization design services of $0.3 million and $1.3 million during the three and nine months ended September 30, 2022, respectively. In addition, sales of standard battery cells increased by $0.2 million and $0.8 million during the three and nine months ended September 30, 2022, respectively.
Cost of Revenues
Cost of revenues increased by $0.3 million, or 15%, and $2.5 million, or 49%, during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. The increase during the three months ended September 30, 2022 was primarily due to a $0.3 million increase in costs to fulfill design service contracts. The increase during the nine months ended September 30, 2022 was primarily due to a $1.6 million increase in costs to fulfill design service contracts and a $0.9 million net increase in production costs, which was mostly attributed to the expansion of our production capacity and increase in personnel involved in production.
Research and Development Expense
Research and development expenses increased by $0.2 million, or 49%, and $0.4 million, or 37%, during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. The increase was primarily due to the increase in headcount and related increases in payroll and employee benefit costs, including stock-based compensation.
Selling, General and Administrative Expense
Selling, general and administrative expense increased by $1.2 million, or 105%, and $3.7 million, or 148%, during the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021. The increase was primarily due to an increase in headcount as we prepared to become a public entity including increases of $0.3 million and $1.0 million during the three and nine months ended September 30, 2022, respectively, in personnel-related costs and increases of $0.4 million and $1.3 million, during the same periods respectively, in stock-based compensation expense. Additionally, our professional fees, which primarily include legal and accounting support, increased by $0.4 million and $1.2 million during the three and nine months ended September 30, 2022, respectively, as we prepared to operate as a public company.
31

Liquidity and Capital Resources
Sources and Uses of Liquidity
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. To meet our contractual obligations, we must continually have sufficient highly liquid assets.
Prior to the Business Combination, we have financed our operations primarily through capital contributions from Amprius Holdings and revenue generated from operations. We do not expect to receive additional capital contributions from Amprius Holdings as we expect to rely on the cash on hand from the Business Combination,