10-Q 1 sldp-20240331x10q.htm 10-Q
0001844862--12-312024Q1falseP3Y0001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputSharePriceMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputPriceVolatilityMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputExpectedTermMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputExercisePriceMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputSharePriceMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputRiskFreeInterestRateMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputPriceVolatilityMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputExpectedTermMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MeasurementInputExercisePriceMember2023-12-3100018448622024-01-2300018448622024-04-012024-04-300001844862us-gaap:CommonStockMember2023-01-012023-03-310001844862us-gaap:CommonStockMember2024-01-012024-03-310001844862us-gaap:RetainedEarningsMember2024-03-310001844862us-gaap:AdditionalPaidInCapitalMember2024-03-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001844862us-gaap:RetainedEarningsMember2023-12-310001844862us-gaap:AdditionalPaidInCapitalMember2023-12-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001844862us-gaap:RetainedEarningsMember2023-03-310001844862us-gaap:AdditionalPaidInCapitalMember2023-03-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001844862us-gaap:RetainedEarningsMember2022-12-310001844862us-gaap:AdditionalPaidInCapitalMember2022-12-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001844862us-gaap:CommonStockMember2024-03-310001844862us-gaap:CommonStockMember2023-12-310001844862us-gaap:CommonStockMember2023-03-310001844862us-gaap:CommonStockMember2022-12-310001844862us-gaap:EmployeeStockOptionMember2024-03-310001844862us-gaap:EmployeeStockOptionMember2023-12-310001844862us-gaap:RestrictedStockUnitsRSUMember2024-03-310001844862us-gaap:RestrictedStockUnitsRSUMember2023-12-310001844862sldp:BmwOfNorthAmericaLlcMemberus-gaap:RelatedPartyMember2024-01-012024-03-310001844862sldp:BmwOfNorthAmericaLlcMemberus-gaap:RelatedPartyMember2023-01-012023-03-310001844862us-gaap:LeaseholdImprovementsMember2024-03-310001844862us-gaap:EquipmentMember2024-03-310001844862us-gaap:ConstructionInProgressMember2024-03-310001844862sldp:LaboratoryEquipmentMember2024-03-310001844862sldp:FurnitureAndComputerEquipmentMember2024-03-310001844862us-gaap:LeaseholdImprovementsMember2023-12-310001844862us-gaap:EquipmentMember2023-12-310001844862us-gaap:ConstructionInProgressMember2023-12-310001844862sldp:LaboratoryEquipmentMember2023-12-310001844862sldp:FurnitureAndComputerEquipmentMember2023-12-310001844862sldp:BmwOfNorthAmericaLlcMemberus-gaap:RelatedPartyMember2024-03-310001844862us-gaap:RetainedEarningsMember2024-01-012024-03-310001844862us-gaap:RetainedEarningsMember2023-01-012023-03-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001844862us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001844862sldp:PublicWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001844862sldp:PublicWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-3100018448622021-09-010001844862srt:MinimumMember2024-03-310001844862srt:MaximumMember2024-03-310001844862us-gaap:TrademarksMember2024-03-310001844862sldp:TrademarksPendingMember2024-03-310001844862sldp:PatentsPendingMember2024-03-310001844862us-gaap:TrademarksMember2023-12-310001844862sldp:TrademarksPendingMember2023-12-310001844862sldp:PatentsPendingMember2023-12-310001844862us-gaap:PatentsMember2024-03-310001844862us-gaap:LicensingAgreementsMember2024-03-310001844862us-gaap:PatentsMember2023-12-310001844862us-gaap:LicensingAgreementsMember2023-12-310001844862us-gaap:FairValueMeasurementsRecurringMember2023-12-310001844862us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2024-01-012024-03-310001844862us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2023-01-012023-12-310001844862us-gaap:FairValueMeasurementsRecurringMember2024-01-012024-03-310001844862us-gaap:PropertyPlantAndEquipmentMember2024-01-012024-03-310001844862us-gaap:PropertyPlantAndEquipmentMember2023-01-012023-03-310001844862sldp:BmwOfNorthAmericaLlcMemberus-gaap:RelatedPartyMember2023-12-310001844862sldp:Sp2IncreasedScaleElectrolyteProductionMember2024-03-310001844862sldp:Sp1CapitalProjectsMember2024-03-310001844862sldp:Sp2IncreasedScaleElectrolyteProductionMember2023-12-310001844862sldp:Sp1CapitalProjectsMember2023-12-310001844862us-gaap:FairValueMeasurementsRecurringMember2024-03-310001844862sldp:PublicWarrantsMember2024-03-310001844862sldp:PrivatePlacementWarrantsMember2024-03-310001844862sldp:PublicWarrantsMember2023-12-310001844862sldp:PrivatePlacementWarrantsMember2023-12-310001844862us-gaap:WarrantMember2024-03-3100018448622023-03-3100018448622022-12-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2024-03-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2024-03-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2024-03-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2024-03-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2024-03-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2023-12-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-12-310001844862us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MunicipalBondsMember2023-12-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateBondSecuritiesMember2023-12-310001844862us-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2023-12-310001844862us-gaap:WarrantMember2024-01-012024-03-310001844862sldp:EquityIncentive2021PlanMember2024-01-012024-03-310001844862sldp:EquityIncentive2014And2021PlanMember2024-01-012024-03-310001844862sldp:EmployeeStockPurchasePlan2021Member2024-01-012024-03-310001844862us-gaap:WarrantMember2023-01-012023-03-310001844862sldp:EquityIncentive2021PlanMember2023-01-012023-03-310001844862sldp:EquityIncentive2014And2021PlanMember2023-01-012023-03-310001844862sldp:EmployeeStockPurchasePlan2021Member2023-01-012023-03-310001844862sldp:ContingentlyIssuableCommonStockMember2023-01-012023-03-310001844862us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-03-310001844862us-gaap:EmployeeStockOptionMember2024-01-012024-03-310001844862sldp:EmployeeStockPurchasePlanMember2024-01-012024-03-310001844862us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-03-310001844862us-gaap:EmployeeStockOptionMember2023-01-012023-03-310001844862us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001844862us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001844862sldp:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-03-310001844862sldp:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001844862sldp:PublicWarrantsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-01-012024-03-310001844862sldp:PrivatePlacementWarrantsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-01-012024-03-3100018448622023-12-3100018448622024-03-3100018448622023-01-012023-03-310001844862us-gaap:CommonStockMember2024-01-012024-03-310001844862sldp:WarrantsMember2024-01-012024-03-3100018448622024-05-0600018448622024-01-012024-03-31xbrli:sharesiso4217:USDiso4217:USDxbrli:sharesxbrli:puresldp:Y

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2024

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: 001-40284

Graphic

SOLID POWER, INC.

(Exact name of registrant as specified in its charter)

Delaware

   

86-1888095

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

486 S. Pierce Ave., Suite E

Louisville, Colorado

80027

(Address of principal executive offices)

(Zip Code)

(303) 219-0720

(Registrant’s telephone number, including area code)

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

Title of each class

   

Trading symbol(s)

   

Name of each exchange on which registered

Common stock, par value $0.0001 per share

SLDP

The Nasdaq Stock Market LLC

Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50

SLDPW

The Nasdaq Stock Market LLC

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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

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

177,045,891 shares of common stock were issued and outstanding as of May 6, 2024.

GLOSSARY OF DEFINED TERMS

Term

Definition

2014 Plan

Solid Power, Inc. 2014 Equity Incentive Plan

2021 Plan

Solid Power, Inc. 2021 Equity Incentive Plan

2023 Form 10-K

Our Annual Report on Form 10-K for the year ended December 31, 2023

Ah

Ampere hour

BMW

BMW of North America LLC

Board

The Board of Directors of Solid Power, Inc.

Electrolyte Supply Agreement

Electrolyte Supply Agreement, dated January 10, 2024, between Solid Power Operating, Inc. and SK On

ESPP

Solid Power, Inc. 2021 Employee Stock Purchase Plan

EV

Battery electric vehicle

EV cells

Prototype cell formats between 60 and 100 Ah

Exchange Act

Securities Exchange Act of 1934, as amended

GAAP

U.S. generally accepted accounting principles

JDA

Joint development agreement

Line Installation Agreement

Line Installation Agreement, dated January 10, 2024, among Solid Power Korea Co., Ltd., SK On, and, for the limited purposes of Section 12.16 of the Line Installation Agreement, Solid Power

OEM

Automotive original equipment manufacturers

Private Placement Warrants

Warrants sold in a private placement as part of our initial public offering or acquired through a conversion of a working capital loan

Public Warrants

Our publicly-traded warrants

R&D License Agreement

Research and Development Technology License Agreement, dated January 10, 2024, between Solid Power Operating, Inc. and SK On

Report

This Quarterly Report on Form 10-Q

RSU

Restricted stock unit

SEC

Securities and Exchange Commission

SK On

SK On Co., Ltd.

SK On Agreements

Electrolyte Supply Agreement, Line Installation Agreement, and R&D License Agreement, collectively

Solid Power / the Company / we / us / our

Solid Power, Inc., a Delaware corporation (f/k/a Decarbonization Plus Acquisition Corporation III)

SP1

Our Louisville, Colorado facility, which we primarily use for cell production, research and development, and quality control

SP2

Our Thornton, Colorado facility, which we primarily use for pilot production of electrolyte, research and development, quality control, and general office space

Warrants

Private Placement Warrants and Public Warrants

2

Cautionary Note Regarding Forward-Looking Statements

This Report contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this Report, regarding our future financial performance and our strategy, expansion plans, market opportunity, future operations, future operating results, estimated revenues or losses, projected costs, prospects, plans, and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “will,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project,” or the negative of such terms or other similar expressions. These forward-looking statements are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Report. We caution you that the forward-looking statements contained herein are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control.

In addition, we caution you that the forward-looking statements regarding the Company contained in this Report are subject to the following factors:

risks relating to the uncertainty of the success of our research and development efforts, including our ability to achieve the technological objectives or results that our partners require, and our ability to commercialize our technology in advance of competing technologies;
rollout of our business plan and the timing of expected business milestones;
risks relating to the non-exclusive nature of our OEM and other partner relationships and our ability to manage these business relationships;
our ability to negotiate and execute commercial agreements with our partners on commercially reasonable terms;
our ability to protect and maintain our intellectual property, including in jurisdictions outside of the United States;
broad market adoption of EVs and other technologies where we are able to deploy our technology, if developed successfully;
our success attracting and retaining our executive officers, key employees, and other qualified personnel;
changes in applicable laws or regulations;
risks relating to our information technology infrastructure and data security breaches;
risks relating to our status as a research and development stage company with a history of financial losses with an expectation of incurring significant expenses and continuing losses for the foreseeable future;
our ability to secure government contracts and grants and the availability of government subsidies and economic incentives;
delays in the construction and operation of additional facilities;
risks relating to other economic, business, or competitive factors in the United States and other jurisdictions, including supply chain interruptions and changes in market conditions, and our ability to manage these risks and uncertainties; and
those factors discussed in “Part I, Item 1A. Risk Factors” in our 2023 Form 10-K, as such description may be updated or amended in future filings we make with the SEC.

3

We caution you that the foregoing list does not contain all of the risks or uncertainties that could affect the Company.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, operating results, financial condition and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in “Part I, Item 1A. Risk Factors” in our 2023 Form 10-K, as such description may be updated or amended in future filings we make with the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Report to reflect events or circumstances after the date of this Report or to reflect new information or the occurrence of unanticipated events, except as required by law. You should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

TRADEMARKS

Our logo and trademark appearing in this Report and the documents incorporated by reference herein are our property. This document and the documents incorporated by reference herein contains references to trademarks and service marks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Report may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of it by, any other companies.

MARKET AND INDUSTRY DATA

We obtained the industry and market data used throughout this Report or any documents incorporated herein by reference from our own internal estimates and research, as well as from independent market research, industry and general publications and surveys, governmental agencies, publicly available information, and research, surveys, and studies conducted by third parties. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research, and our industry experience and are based on assumptions made by us based on such data and our knowledge of our industry and market, which we believe to be reasonable. In some cases, we do not expressly refer to the sources from which this data is derived. In addition, while we believe the industry and market data included in this Report or any documents incorporated herein by reference is reliable and based on reasonable assumptions, such data involve material risks and other uncertainties and is subject to change based on various factors, including those discussed in the section entitled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties or by us.

INFORMATION ABOUT SOLID POWER

We use our website (www.solidpowerbattery.com) and various social media channels (e.g., Solid Power, Inc. on LinkedIn) as a means of disclosing information about Solid Power and our products to our customers, investors, and the public. The information posted on our website and social media channels is not incorporated by reference in this Report or in any other report or document we file with the SEC. Further, references to our website URLs are intended to be inactive textual references only. The information we post through these channels may be deemed material. Accordingly, investors should monitor these channels, in addition to following our press releases, SEC filings, and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about Solid Power when you enroll your e-mail address by visiting the “Investor Email Alerts” section of our website at https://ir.solidpowerbattery.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are filed with the SEC. These reports and other information we file with the SEC are available free of charge at https://www.solidpowerbattery.com/investor-relations/financials/sec-filings when such reports are available on the SEC’s website.

4

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Solid Power, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value and number of shares)

March 31, 2024

    

(Unaudited)

    

December 31, 2023

Assets

Current Assets

 

  

 

  

Cash and cash equivalents

$

14,019

$

34,537

Marketable securities

132,619

141,505

Contract receivables

 

10,106

 

1,553

Contract receivables from related parties

4,152

Prepaid expenses and other current assets

 

9,656

 

5,523

Total current assets

 

170,552

 

183,118

Long-Term Assets

Property, plant and equipment, net

 

99,593

 

99,156

Right-of-use operating lease assets, net

7,004

7,154

Right-of-use finance lease assets, net

1,030

1,088

Investments

232,307

239,566

Intangible assets, net

 

1,800

 

1,650

Prepaid expenses and other assets

3,884

1,060

Total long-term assets

345,618

349,674

Total assets

$

516,170

$

532,792

Liabilities and Stockholders’ Equity

 

 

Current Liabilities

 

 

Accounts payable and other accrued liabilities

7,866

6,455

Deferred revenue

 

3,078

 

1

Deferred revenue from related parties

828

Accrued compensation

 

6,267

 

7,590

Operating lease liabilities

647

626

Finance lease liabilities

374

379

Total current liabilities

 

18,232

 

15,879

Long-Term Liabilities

Warrant liabilities

4,728

4,227

Operating lease liabilities

7,824

7,996

Finance lease liabilities

 

464

 

552

Deferred revenue

4,716

Other liabilities

 

829

 

803

Total long-term liabilities

18,561

13,578

Total liabilities

36,793

29,457

Stockholders’ Equity

 

  

 

  

Common Stock, $0.0001 par value; 2,000,000,000 shares authorized; 178,349,557 and 179,010,884 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

18

 

18

Additional paid-in capital

 

586,343

588,515

Accumulated deficit

 

(105,846)

 

(84,639)

Accumulated other comprehensive loss

(1,138)

(559)

Total stockholders’ equity

 

479,377

 

503,335

Total liabilities and stockholders’ equity

$

516,170

$

532,792

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

5

Solid Power, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

(in thousands, except number of shares and per share amounts)

Three Months Ended March 31, 

2024

    

2023

Revenue

$

5,953

$

3,792

Operating Expenses

 

Direct costs

4,290

6,274

Research and development

18,873

 

11,648

Selling, general and administrative

8,571

 

7,188

Total operating expenses

31,734

 

25,110

Operating Loss

(25,781)

 

(21,318)

Nonoperating Income and Expense

 

Interest income

5,117

4,835

Change in fair value of warrant liabilities

(501)

(2,662)

Interest expense

(42)

 

(13)

Total nonoperating income and expense

4,574

 

2,160

Net Loss Attributable to Common Stockholders

$

(21,207)

$

(19,158)

Other Comprehensive Income (Loss)

(579)

885

Comprehensive Loss Attributable to Common Stockholders

$

(21,786)

$

(18,273)

Basic and diluted loss per share

$

(0.12)

$

(0.11)

Weighted average shares outstanding – basic and diluted

180,784,020

176,934,261

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

6

Solid Power, Inc.

Condensed Consolidated Statement of Stockholders’ Equity (Unaudited)

(in thousands, except number of shares)

Common Stock

Additional

Accumulated

Accumulated Other

Total Stockholders’

    

Shares

    

Amount

    

paid-in capital

    

deficit

    

Comprehensive Loss

    

Equity

Balance as of December 31, 2023

179,010,884

$

18

$

588,515

$

(84,639)

$

(559)

$

503,335

Net loss

 

 

 

(21,207)

 

(21,207)

Withholding of employee taxes related to stock-based compensation

(169)

(169)

Shares of common stock issued for vested RSUs

161,995

Stock options exercised

 

2,360,316

 

97

 

 

97

Repurchase and retirement of shares of common stock

(3,183,638)

(4,963)

(4,963)

Stock-based compensation expense

 

 

2,863

 

 

2,863

Unrealized loss on marketable securities

(579)

(579)

Balance as of March 31, 2024

178,349,557

$

18

$

586,343

$

(105,846)

$

(1,138)

$

479,377

Common Stock

Additional

Accumulated

Accumulated Other

Total Stockholders’

    

Shares

    

Amount

    

paid-in capital

    

deficit

    

Comprehensive Loss

    

Equity

Balance as of December 31, 2022

176,007,184

$

18

$

577,603

$

(19,090)

$

(3,159)

$

555,372

Net loss

 

 

 

(19,158)

 

(19,158)

Stock options exercised

 

1,679,954

 

150

 

 

150

Stock-based compensation expense

 

 

2,222

 

 

2,222

Unrealized gain on marketable securities

885

885

Balance as of March 31, 2023

177,687,138

$

18

$

579,975

$

(38,248)

$

(2,274)

$

539,471

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

7

Solid Power, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Three Months Ended March 31, 

    

2024

    

2023

Cash Flows from Operating Activities

 

Net loss

$

(21,207)

$

(19,158)

Adjustments to reconcile net loss to net cash and cash equivalents from operating activities:

 

Depreciation and amortization

3,909

 

2,264

Amortization of right-of-use assets

207

183

Stock-based compensation expense

2,863

 

2,222

Change in fair value of warrant liabilities

501

2,662

Accretion of discounts on other long-term liabilities

(4)

Amortization of premiums and accretion of discounts on marketable securities

(2,428)

(2,716)

Change in operating assets and liabilities that provided (used) cash and cash equivalents:

 

Contract receivables

(8,553)

 

(179)

Contract receivables from related parties

(4,152)

319

Prepaid expenses and other assets

(6,983)

 

(1,129)

Accounts payable and other accrued liabilities

1,290

 

1,699

Deferred revenue

7,794

 

(14)

Deferred revenue from related parties

(828)

(3,000)

Accrued compensation

(1,323)

 

(2,652)

Operating and finance lease liabilities, short-term

(151)

(132)

Net cash and cash equivalents used in operating activities

(29,065)

 

(19,631)

Cash Flows from Investing Activities

 

Purchases of property, plant and equipment

(4,054)

 

(11,581)

Purchases of marketable securities and investments

(61,287)

 

(110,636)

Proceeds from sales of marketable securities

79,134

101,665

Purchases of intangible assets

(154)

 

(125)

Net cash and cash equivalents provided by (used in) investing activities

13,639

 

(20,677)

Cash Flows from Financing Activities

 

Payments of debt

 

(7)

Proceeds from exercise of stock options

97

 

150

Cash paid for withholding of employee taxes related to stock-based compensation

(169)

Repurchase of shares of common stock

(4,914)

Payments on finance lease liabilities

(106)

(70)

Net cash and cash equivalents provided by (used in) financing activities

(5,092)

73

Net decrease in cash and cash equivalents

(20,518)

(40,235)

Cash and cash equivalents at beginning of period

34,537

50,123

Cash and cash equivalents at end of period

14,019

9,888

Cash paid for interest

$

42

$

13

Accrued capital expenditures

$

954

$

3,370

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

Note 1 – Nature of Business

Solid Power is developing solid-state battery technology for the EV and other markets. The Company’s planned business model is to sell its electrolyte and to license its cell designs and manufacturing processes.

Note 2 – Significant Accounting Policies

The significant accounting policies followed by the Company are set forth in Note 2 – Significant Accounting Policies to the Company’s financial statements included in the 2023 Form 10-K and are supplemented by the Notes to the Condensed Consolidated Financial Statements (Unaudited) (the “Notes”) included in this Report. The financial statements included in this Report (including the Notes) should be read in conjunction with the 2023 Form 10-K.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on the basis of GAAP. The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect amounts reported in the unaudited condensed consolidated financial statements. Actual results could differ from those estimates. All dollar amounts presented herein are in U.S. dollars and are in thousands, except par value and share and per share amounts.

The accompanying unaudited condensed consolidated financial statements include accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Additionally, certain prior period amounts have been reclassified to conform to current period presentation in the accompanying unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

Income taxes

In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid. ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is evaluating the disclosure impact of ASU 2023-09.

Segment Reporting

In November 2023, the FASB issued ASU No. 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. Among other new disclosure requirements, ASU 2023-07 requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker, or CODM. ASU 2023-07 will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025. ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements. The Company is evaluating the disclosure impact of ASU 2023-07.

9

Note 3 – Property, Plant and Equipment

Property, plant and equipment are summarized as follows:

    

March 31, 2024

    

December 31, 2023

Commercial production equipment

$

36,223

$

36,086

Laboratory equipment

10,748

9,910

Leasehold improvements

 

59,361

 

59,109

Furniture and computer equipment

 

4,042

 

3,915

Construction in progress

 

16,638

 

13,650

Total cost

 

127,012

 

122,670

Accumulated depreciation

 

(27,419)

 

(23,514)

Net property and equipment

$

99,593

$

99,156

Depreciation expenses for dedicated laboratory equipment and commercial production equipment are charged to research and development. The other depreciation expenses are included in the Company’s overhead and are allocated across Operating Expenses based on Company personnel costs incurred.

Depreciation expense related to property, plant and equipment are summarized as follows:

Three Months Ended March 31, 

2024

    

2023

Depreciation expense

$

3,905

$

2,259

The Company expanded its electrolyte production to produce larger quantities of electrolyte material required to feed cell-production lines and continue research and development efforts at SP2. The Company began producing electrolyte at SP2 in 2023.

March 31, 2024

December 31, 2023

Construction in progress

SP1 - Capital projects

$

3,404

$

2,298

SP2 - Increased scale electrolyte production

13,234

11,352

Note 4 – Intangible Assets

Intangible assets of the Company are summarized as follows:

    

March 31, 2024

    

December 31, 2023

Gross Carrying

Accumulated

Gross Carrying

Accumulated

    

Amount

    

Amortization

    

Amount

    

Amortization

Intangible assets:

Licenses

$

149

$

(63)

$

149

$

(61)

Patents

124

(7)

92

(5)

Patents pending

 

1,561

 

 

1,444

 

Trademarks

13

13

Trademarks pending

 

22

 

 

18

 

Total amortized intangible assets

$

1,869

$

(70)

$

1,716

$

(66)

10

Amortization expense for intangible assets is summarized as follows:

Three Months Ended March 31, 

 

2024

    

2023

 

Amortization expense

$

4

$

5

Useful lives of intangible assets range from three to 20 years. Amortization expenses are allocated ratably across Operating Expenses based on Company personnel costs incurred.

Note 5 – Collaborative Arrangement

On January 10, 2024, the Company entered into the SK On Agreements.

The Company determined the R&D License Agreement, Electrolyte Supply Agreement, and the Line Installation Agreement should be combined and evaluated as a single contract, the SK On Agreements. The SK On Agreements were determined to be a collaborative arrangement in accordance with ASC Topic 808, Collaborative Arrangements, and revenue recognition is recorded by analogy to ASC Topic 606, Revenue from Contracts with Customers. The Company determined the SK On Agreements represent a single, combined performance obligation. Collaborative revenue will be recognized over time using the input measurement method utilizing incurred labor hours in relation to total labor hours anticipated to satisfy the combined performance obligation. The Company will expense contract fulfillment costs as incurred.

Note 6 – Fair Value Measurements

The Company considers all highly liquid instruments with original maturities of less than 90 days to be cash equivalents. The carrying amounts of certain financial instruments, such as cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their relatively short maturities.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis

As of March 31, 2024 and December 31, 2023, the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis were classified within the fair value hierarchy as follows:

March 31, 2024

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

Commercial Paper

$

95,059

$

$

$

95,059

Corporate Bonds

$

223,649

$

$

$

223,649

Government Bonds

$

46,218

$

$

$

46,218

Liabilities

Public Warrants

$

2,637

$

$

$

2,637

Private Placement Warrants

$

$

2,091

$

$

2,091

December 31, 2023

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets

Commercial Paper

$

84,909

$

$

$

84,909

Corporate Bonds

$

239,473

$

$

$

239,473

Government Bonds

$

56,689

$

$

$

56,689

Liabilities

Public Warrants

$

2,505

$

$

$

2,505

Private Placement Warrants

$

$

1,722

$

$

1,722

The change in fair value of the Company’s marketable securities and long-term investments are included in other comprehensive income (loss). There were no transfers in and out of Level 3 fair value hierarchy during the three months ended March

11

31, 2024 or year ended December 31, 2023. During the three months ended March 31, 2024 and 2023, the Company purchased $61,287 and $110,636 of marketable securities and long-term investments, respectively.

Fair Value of Warrants

The fair value of the Private Placement Warrants have been estimated using a Black-Scholes model as of March 31, 2024 and December 31, 2023 Consolidated Balance Sheet dates. The estimated fair value of the Private Placement Warrants is determined using Level 2 directly or indirectly observable inputs. Inherent in a Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate, and dividend yield. Material increases (or decreases) in any of those inputs may result in a significantly higher (or lower) fair value measurement. The Company estimates the volatility of its Private Placement Warrants based on implied volatility from the Company’s Public Warrants and from historical volatility of select peer companies’ common stock. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the Warrants. The dividend yield is based on the historical rate, which the Company anticipates remaining at zero. The fair value of the Public Warrants has been measured based on the quoted price of such warrants on the Nasdaq Stock Market, a Level 1 input.

The following table provides quantitative information regarding Level 2 inputs used in the recurring valuation of the Private Placement Warrants as of their measurement dates:

    

March 31, 2024

    

December 31, 2023

 

Exercise price

$

11.50

$

11.50

Stock price

$

2.03

$

1.45

Volatility

 

85.8

%  

 

95.0

%

Term (in years)

 

2.69

 

2.94

Risk-free rate

 

4.36

%  

 

3.94

%

The following table provides a rollforward of the Public Warrants measured at fair value per Public Warrant using Level 1 inputs and Private Placement Warrants measured at fair value per Private Placement Warrant using Level 2 inputs:

Public Warrants

Private Placement Warrants

    

Level 1 Fair Value

    

Level 2 Fair Value

December 31, 2023

$

0.19

$

0.28

Change in fair value

$

0.01

$

0.06

March 31, 2024

$

0.20

$

0.34

The following tables provides a reconciliation of the change in fair value for the Public Warrants and Private Placement Warrants at March 31.

Three Months Change in

Warrant Class

    

Level

    

Warrants

    

December 31, 2023

    

Fair Value

    

March 31, 2024

Public Warrants

 

1

 

13,182,501

$

2,505

$

132

$

2,637

Private Placement Warrants

 

2

 

6,150,802

$

1,722

$

369

$

2,091

Total

 

  

 

19,333,303

$

4,227

$

501

$

4,728

Note 7 – Warrant Liabilities

The table below provides a summary of the outstanding Public and Private Placement Warrants at:

    

March 31, 2024

    

December 31, 2023

Public Warrants

13,182,501

13,182,501

Private Placement Warrants

6,150,802

6,150,802

Each whole Warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per share, subject to customary adjustments. Only whole Warrants are exercisable. The Warrants became exercisable on January 7, 2022 and will expire on December 8, 2026.

12

None of the Private Placement Warrants are redeemable by the Company so long as they are held by the initial purchasers of the Private Placement Warrants or their permitted transferees. The table below provides the fair value of warrant liabilities at:

    

March 31, 2024

    

December 31, 2023

Fair value of warrant liabilities

$

4,728

$

4,227

The table below provides the Company’s loss recognized in connection with changes in fair value of warrant liabilities:

Three Months Ended March 31, 

    

2024

    

2023

Loss recognized associated with warrant liabilities

$

(501)

$

(2,662)

There have been no changes to our Public or Private Placement Warrants, including redemption terms disclosed in our 2023 Form 10-K.

Note 8 – Stockholders’ Equity

Common Stock

Stock options exercised for common stock, shares of common stock repurchased under the stock repurchase program, and shares of common stock issued upon vesting of RSUs for the three months ended March 31, 2024 and 2023 are summarized in the table below:

Three Months Ended March 31, 

2024

    

2023

Stock options exercised

2,360,316

1,679,954

Shares of common stock repurchased

(3,183,638)

Shares of common stock issued for vested RSUs

161,995

The table below presents the cash received or paid associated with common stock related activities for the three months ended March 31, 2024 and 2023:

Three Months Ended March 31, 

    

2024

    

2023

Cash received from stock options exercised

$

97

$

150

Cash paid for shares of common stock repurchased

(4,914)

Stock Repurchase Program

On January 23, 2024, the Company announced that its Board approved a stock repurchase program authorizing the Company to purchase up to $50,000 of the Company’s outstanding common stock. Under the repurchase program, the Company may purchase shares of its common stock from time to time until the repurchase program expires on December 31, 2025.  

The table below presents the number of shares repurchased and retired, the aggregate cost, and the average purchase price per share for the three months ended March 31, 2024:

    

Shares

Aggregate cost

    

Avg. Price Paid Per Share

Repurchased and retired shares of common stock

3,183,638

$

4,963

$

1.52

In April 2024, the Company purchased 1,816,362 shares of common stock for $3,393 with an average price of $1.85 per share, under the stock repurchase program.

13

Note 9 – Stock-Based Compensation

There have been no changes to our equity incentive plans, the ESPP, or our accounting methodology for stock-based compensation, as disclosed in our 2023 Form 10-K.

The fair value of stock options and RSUs issued to employees and directors is recognized as compensation expense over the period of service that generally coincides with the vesting period of the award. The Company allocated compensation ratably across Operating Expenses based on Company personnel costs incurred. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur.

For the three months ended March 31, 2024 and 2023, the Company recognized compensation costs totaling:

Three Months Ended March 31, 

2024

    

2023

Equity-based compensation costs related to RSUs

$

1,212

$

635

Equity-based compensation costs related to stock options

 

1,614

 

1,587

Equity-based compensation costs related to ESPP

37

Total equity-based compensation costs

$

2,863

$

2,222

Unrecognized future compensation cost as of:

20,837

59,945

The following table summarizes our award activity for RSUs and stock options for the three months ended March 31, 2024:

    

RSUs

Stock Options

Balance at December 31, 2023

4,473,016

 

24,264,016

Granted

3,159,872

4,566,167

Vested or Exercised

(264,754)

(2,360,316)

Forfeited

(72,619)

(842,395)

Balance at March 31, 2024

7,295,515

25,627,472

Stock Options

The fair value of each stock option grant during the three months ended March 31, 2024 and 2023 was estimated on the grant date using the Black-Scholes option pricing model with the following weighted-average assumptions used:

    

Three Months Ended March 31, 

 

    

2024

 

2023

 

Approximate riskfree rate