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 March 31, 2023

☐

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

For the transition period from to

Commission File Number: 001-39845

SES AI Corporation

(Exact name of registrant as specified in its charter)


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

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

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

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


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

As of May 3, 2023, there were 306,124,263 shares of the registrant’s Class A common stock and 43,881,251 shares of the registrant’s Class B common stock outstanding.

Table of Contents

TABLE OF CONTENTS



Cautionary Note Regarding Forward-Looking Statements
Part I.	Financial Information
Item 1.	Financial Statements	4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	22

Part II.	Other Information
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	24
Signatures		25

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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risks related to the development and commercialization of SES’s battery technology and the timing and achievement of expected business milestones;

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risks relating to the uncertainty of achieving and maintaining profitability;

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risks relating to the uncertainty of meeting future capital requirements;

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the ability of SES to integrate its products into electric vehicles (“EVs”);

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the risk that delays in the pre-manufacturing development of the Company’s battery cells could adversely affect our business and prospects;

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potential supply chain difficulties;

●

the Company’s ability to engage target original equipment manufacturers (“OEMs”) customers successfully and integrate our products into EVs manufactured by OEM customers;

●

the ability to obtain raw materials, components or equipment through new or existing supply relationships;

●

the Company’s risks resulting from joint development agreements and other strategic alliances and investments; product liability and other potential litigation, regulation and legal compliance;

●

the Company’s ability to attract, train and retain highly skilled employees and key personnel;

●

the uncertainty in global economic conditions and risks relating to health epidemics, including the COVID-19 pandemic and any operational interruptions;

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developments in alternative technology or other fossil fuel alternatives;

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the Company’s risks related to intellectual property;

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business, regulatory, political, operational, financial and economic risks related to the Company’s business operations outside the United States;

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the Company has identified material weaknesses in its internal control over financial reporting and may identify material weaknesses in the future or otherwise fail to develop or maintain an effective system of internal controls;

●

the volatility of the Company’s common stock and value of our public warrants;

●

the other factors disclosed in this Quarterly Report on Form 10-Q and the Company’s other filings with the Securities and Exchange Commission (the “SEC”), in particular the risks described in “Part II, Item 1A” of this Quarterly Report and “Part I, Item 1A” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 16, 2023.

The forward-looking statements contained in this Quarterly Report on Form 10-Q 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 speak only as of the date of this Quarterly Report on Form 10-Q and should not be relied upon as representing the Company’s views as of any subsequent date. The Company does 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.

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SES AI Corporation

Condensed Consolidated Balance Sheets

(Unaudited)


(in thousands, except share and per share amounts)	March 31, 2023		December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	47,975	$	106,623
Short-term investments		305,145		283,460
Receivable from related party		2,805		2,383
Inventories		502		383
Prepaid expenses and other current assets		6,362		3,792
Total current assets		362,789		396,641
Property and equipment, net		27,914		27,756
Long-term investments		19,541		—
Intangible assets, net		1,441		1,473
Right-of-use assets, net		11,591		11,363
Other assets		4,597		3,206
Total assets	$	427,873	$	440,439
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Current Liabilities
Accounts payable	$	2,789	$	6,187
Operating lease liabilities, current		2,066		1,899
Accrued expenses and other current liabilities		11,402		11,271
Total current liabilities		16,257		19,357
Sponsor Earn-Out Liability		10,392		10,961
Operating lease liabilities, non-current		9,902		10,165
Unearned government grant		6,434		6,657
Other liabilities		2,561		1,760
Total liabilities		45,546		48,900
Commitments and contingencies (Note 9)
Stockholders’ Equity
Common stock: Class A shares, $0.0001 par value, 2,100,000,000 shares authorized; 305,930,731 and 305,833,589 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; Class B shares, $0.0001 par value, 200,000,000 shares authorized; 43,881,251 and 43,881,251 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		35		35
Additional paid-in capital		544,516		538,041
Accumulated deficit		(161,512)		(145,286)
Accumulated other comprehensive loss		(712)		(1,251)
Total stockholders' equity		382,327		391,539
Total liabilities, redeemable convertible preferred stock, and stockholders' equity	$	427,873	$	440,439

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

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SES AI Corporation

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)


	Three Months Ended March 31,
(in thousands, except share and per share amounts)	2023		2022
Operating expenses:
Research and development	$	8,489	$	4,067
General and administrative		13,123		15,130
Total operating expenses		21,612		19,197
Loss from operations		(21,612)		(19,197)
Other income (expense):
Interest income, net		4,140		23
Other income (expense), net		820		(160)
Gain (loss) on change of fair value of Sponsor Earn-Out Liability, net		569		(7,688)
Total other income (expense), net		5,529		(7,825)
Loss before income taxes		(16,083)		(27,022)
Provision for income taxes		(143)		(11)
Net loss		(16,226)		(27,033)
Other comprehensive income:
Unrealized gain on investments		467		—
Foreign currency translation adjustment		72		109
Total comprehensive loss	$	(15,687)	$	(26,924)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.05)	$	(0.12)

Weighted-average shares outstanding:
Basic and diluted		313,422,442		219,180,317

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

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SES AI Corporation

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity

(Unaudited)


Three Months Ended March 31, 2023

	Redeemable Convertible			Class A and Class B							Accumulated		Total
	Preferred Stock			Common Stock			Additional		Accumulated		Other Comprehensive		Stockholders’
(in thousands, except share and per share amounts)	Shares	Amount		Shares	Amount		Paid-in-Capital		Deficit		Income (Loss)		Equity
Balance – December 31, 2022	—	$	—	349,714,840	$	35	$	538,041	$	(145,286)	$	(1,251)	$	391,539
Issuance of common stock upon exercise of stock options	—		—	94,319		—		13		—		—		13
Restricted stock units vested	—		—	4,727		—		—		—		—		—
Forfeitures of Earn-Out restricted shares	—		—	(1,904)		—		—		—		—		—
Stock-based compensation	—		—	—		—		6,462

SEC Form 10-Q filed by SES AI Corporation