Solid Power Inc.
08/05/2026 | Press release | Distributed by Public on 08/05/2026 04:05
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the condensed consolidated financial statements and related notes thereto included elsewhere in this Report. The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs, and expected performance. For additional discussion, see "Cautionary Note Regarding Forward-Looking Statements" above. The forward-looking statements are dependent upon events, risks, and uncertainties that may be outside of our control. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed elsewhere in this Report, and in "Part I, Item 1A. Risk Factors" of the 2025 Form 10-K, as such descriptions may be updated or amended in future filings we make with the SEC. Unless indicated otherwise, the following discussion and analysis of results of operations and financial condition and liquidity relates to our current continuing operations and should be read in conjunction with the consolidated financial statements and notes thereto of this Report and the 2025 Form 10-K. We do not undertake, and expressly disclaim, any obligation to publicly update any forward-looking statements, whether as a result of new information, new developments, or otherwise, except to the extent that such disclosure is required by applicable law.
Overview
Solid Power is a U.S.-based leader in solid-state battery technology and manufacturing processes. Our core technology is a sulfide-based solid electrolyte material, which replaces the liquid or gel electrolyte used in traditional lithium-ion battery cells. We believe our electrolyte technology has the potential to enable a step-change improvement in battery cell performance beyond what is currently achievable in conventional lithium-ion battery cells, including improved energy density, battery life, and safety performance. We are currently targeting the battery electric vehicle market due to the size and perceived demand for next generation battery technology but believe our technologies can have a broader application as the market matures.
2026 Development Objectives
We made progress on our 2026 development objectives as the solid-state battery landscape continues to evolve. Below is a summary of recent progress towards our goals.
| ● | Strengthen relationships with our partners through continued execution - We completed the line installation agreement with SK On Co., Ltd. ("SK On") in April 2026, and received the associated milestone payment in May 2026. We are currently negotiating with SK On regarding a new collaboration agreement, which would replace or amend the existing research and development technology license agreement with SK On (the "SK On R&D license"). |
| ● | Continue executing on our electrolyte development roadmap - We continued construction on our continuous manufacturing pilot line for sulfide electrolyte production. Installation of major equipment continues to advance in preparation for equipment acceptance testing, which remains on track for completion by the end of the third quarter of 2026. Plant validation and operational startup remain planned for the fourth quarter of 2026. Separately, we advanced discussions with industry leading partners regarding a potential joint venture for commercial-scale electrolyte production in the Republic of Korea. Finally, we completed the Stage 1 audit for ISO 9001 certification. |
| ● | Promote electrolyte product competitiveness - We improved our performance and provided shipments of electrolyte under our Joint Evaluation Agreement with Samsung SDI Co., Ltd. and BMW AG and continued sampling electrolyte to other customers. As the initial phase of our joint evaluation agreement expires September 30, 2026, we are optimistic, based on our electrolyte's performance and cost, about continuing to work with Samsung SDI for possible use in electric vehicles and other potential applications of ASSB technologies. |
| ● | Remain fiscally disciplined - We remained fiscally disciplined, balancing financial discipline with appropriate investments in technology developments and process improvements. We remain on track to deliver cash investments within our current year guidance range. See "-Results of Operations" and "-Liquidity and Capital Resources" for more information. |
Key Factors Affecting Operating Results
We are a research and development-stage company and have not generated cash flows through the sale of our electrolyte or licensing of our cell designs to adequately cover our costs. Our ability to commercialize our products depends on several factors that present significant opportunities but also pose material risks and challenges, including those discussed in the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" sections of this Report, which are incorporated by reference.
Prior to reaching commercialization, we must improve our products to ensure they meet the performance requirements of our customers. We also will have to negotiate commercial agreements with our customers on terms and conditions that are mutually acceptable. To satisfy anticipated demand, we will need to scale production of our electrolyte. All of these will take time, require capital, and affect our operating results. Since many factors are difficult to quantify, our actual operating results may be different than currently anticipated.
Revenue generated to date has primarily come from performance on research and development licensing agreements, line installation agreement, and government contracts. We will need to continue to deploy substantial capital to expand our production capabilities and engage in research and development programs. We also expect to continue to incur administrative expenses as a publicly traded company.
In addition to meeting our development goals, commercialization and future growth and demand for our products are highly dependent upon consumers adopting EVs. The market for new energy vehicles is still rapidly evolving due to emerging technologies, competitive pricing, government regulation and industry standards, and changing consumer demands and behaviors.
Basis of Presentation
We currently conduct our business through one operating segment and one reportable segment. As a research and development company with no commercial operations, our activities to date have been limited and were conducted primarily in the United States and the Republic of Korea. Our historical results are reported under U.S. generally accepted accounting principles and in U.S. dollars.
Results of Operations
Comparison of the Three and Six Months Ended June 30, 2026 to the Three and Six Months Ended June 30, 2025
During the three and six months ended June 30, 2026, our capital and operational investments supported our key 2026 development objectives.
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Three Months Ended June 30, |
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Change |
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Six Months Ended June 30, |
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Change |
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2026 |
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2025 |
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$ |
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% |
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2026 |
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2025 |
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$ |
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% |
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Revenues and Grant Income |
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Revenue |
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$ |
(1,017) |
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$ |
6,485 |
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$ |
(7,502) |
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(116)% |
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$ |
1,088 |
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$ |
11,609 |
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$ |
(10,521) |
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(91)% |
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Grant income |
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749 |
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1,055 |
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(306) |
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(29)% |
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1,717 |
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1,947 |
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(230) |
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(12)% |
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Total revenue and grant income |
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(268) |
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7,540 |
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(7,808) |
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(104)% |
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2,805 |
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13,556 |
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(10,751) |
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(79)% |
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Operating Expenses |
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Direct costs |
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2,119 |
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8,462 |
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(6,343) |
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(75)% |
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5,667 |
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11,158 |
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(5,491) |
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(49)% |
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Research and development |
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19,363 |
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18,342 |
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1,021 |
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6% |
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37,111 |
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37,363 |
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(252) |
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(1)% |
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Selling, general and administrative |
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8,539 |
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6,607 |
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1,932 |
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29% |
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16,661 |
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14,934 |
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1,727 |
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12% |
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Total operating expenses |
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30,021 |
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33,411 |
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(3,390) |
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(10)% |
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59,439 |
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63,455 |
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(4,016) |
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(6)% |
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Operating Loss |
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(30,289) |
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(25,871) |
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(4,418) |
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17% |
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(56,634) |
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(49,899) |
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(6,735) |
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13% |
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Nonoperating Income and Expense |
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Interest income |
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4,172 |
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3,237 |
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935 |
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29% |
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8,184 |
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6,836 |
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1,348 |
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20% |
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Change in fair value of warrant liabilities |
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2,250 |
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(3,216) |
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5,466 |
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(170)% |
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11,891 |
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2,663 |
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9,228 |
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347% |
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Interest expense |
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(9) |
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(7) |
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(2) |
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29% |
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(206) |
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(15) |
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(191) |
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1273% |
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Other expense |
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(93) |
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(151) |
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58 |
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(38)% |
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(75) |
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(673) |
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598 |
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(89)% |
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Total nonoperating income and expense |
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6,320 |
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(137) |
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6,457 |
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(4,713)% |
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19,794 |
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8,811 |
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10,983 |
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125% |
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Pretax Loss |
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$ |
(23,969) |
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$ |
(26,008) |
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$ |
2,039 |
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(8)% |
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$ |
(36,840) |
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$ |
(41,088) |
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$ |
4,248 |
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(10)% |
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Income tax expense (income) |
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(79) |
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6 |
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(85) |
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(1,417)% |
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5 |
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6 |
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(1) |
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(17)% |
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Share of net loss (income) of equity method investee |
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(69) |
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(676) |
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607 |
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(90)% |
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4 |
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(606) |
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610 |
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(101)% |
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Net Loss Attributable to Common Stockholders |
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$ |
(23,821) |
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$ |
(25,338) |
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$ |
1,517 |
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(6)% |
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$ |
(36,849) |
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$ |
(40,488) |
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$ |
3,639 |
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(9)% |
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Other Comprehensive Income (Loss) |
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(552) |
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13 |
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(565) |
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(4,346)% |
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(1,958) |
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185 |
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(2,143) |
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(1,158)% |
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Comprehensive Loss Attributable to Common Stockholders |
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$ |
(24,373) |
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$ |
(25,325) |
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$ |
952 |
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(4)% |
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$ |
(38,807) |
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$ |
(40,303) |
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$ |
1,496 |
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(4)% |
Revenue and Grant Income
Revenue recognized consists of performance on our non-government contracts as well as certain government contracts. Grant income recognized consisted of performance on our assistance agreement, dated January 1, 2025 (as amended effective May 15, 2025 and amended and restated effective January 1, 2026, the "Assistance Agreement"), with the U.S. Department of Energy ("DOE").
We recognized $(1.0) million and $1.1 million of revenue for the three and six months ended June 30, 2026, respectively. The revenue mostly consisted of performance on the SK On R&D license, line installation agreement, and electrolyte supply agreement with SK On (collectively, the "SK On Agreements"). During the second quarter of 2026, we completed the line installation agreement and received the associated final milestone payment. We recorded a $1.2 million reversal of previously recognized revenue through a cumulative catch-up adjustment. The adjustment was driven by a change in assumptions connected to our constraint on variable consideration within certain milestone payments under the SK On R&D license agreement.
We recognized $0.7 million and $1.7 million of government grant income for the three and six months ended June 30, 2026. Government grant income consists of grant income from the Assistance Agreement. The Assistance Agreement provides that the DOE will provide us with funding of up to $50 million for our installation of equipment necessary for the continuous production of sulfide-based solid electrolyte material. During the three and six months ended June 30, 2026, we continued construction of the continuous electrolyte production pilot line.
Total revenue and grant income decreased $7.8 million and $10.8 million for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 largely due to the timing of performance milestones achieved under our customer arrangements in the prior year and, to a lesser extent, the $1.2 million cumulative catch-up adjustment. For the remainder of 2026, we expect revenue recognition to continue to decrease relative to prior year periods as we focus on our construction of the continuous electrolyte production pilot line, and provide electrolyte to our partners and customers.
Operating Expenses
Operating expenses decreased $3.4 million and $4.0 million in the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 primarily due to the reduction in spend on the SK On Agreements as the milestone achievements were larger in the prior year.
Direct Costs
Direct costs, which include labor, subcontractor, and material costs incurred in support of revenue-generating projects, decreased $6.3 million and $5.5 million for the three and six months ended June 30, 2026 compared to the same periods in 2025. The decrease was mainly driven by the timing of milestone achievements under our collaborative agreements.
Research and Development
Research and development expenses consist of employee compensation and benefits for personnel engaged in research, engineering, manufacturing, chemistry, and technical operations. Research and development expenses also include costs related to our facilities and depreciation associated with plant and equipment used in our development activities.
Research and development expenses did not change materially for the three and six months ended June 30, 2026 compared to the same period in 2025.
Selling, General and Administrative
Selling, general and administrative expenses are largely comprised of employee compensation and personnel-related costs for our administrative functions as well as costs driven by insurance and regulatory requirements. Selling, general and administrative expenses increased $1.9 million and $1.7 million in the three and six months ended June 30, 2026 compared to the same periods in 2025. This increase was driven by higher tax and facilities-related costs and timing of spend on strategic consulting projects.
Nonoperating Income and Expense
Nonoperating income and expense includes interest income, the non-cash impact from the change in the fair value of our warrant liabilities, and other immaterial income and expense items. For the three and six months ended June 30, 2026, nonoperating income and expense increased $6.5 million and $11.0 million compared to the same periods in 2025 due to the change in fair value of warrant liabilities and the change in interest income earned.
The change in the fair value of warrant liabilities for the three months ended June 30, 2026 caused a $2.3 million gain compared to the three months ended June 30, 2025 where the change in the fair value caused a loss of $3.2 million. The change in the fair value of warrant liabilities for the six months ended June 30, 2026 caused a $11.9 million gain compared to the six months ended June 30, 2025 where the change in the fair value caused a gain of $2.7 million.
Interest income earned increased $0.9 million and $1.3 million for the three and six months ended June 30, 2026 compared to the same period in 2025 which was driven by the increase in the available-for-sale securities available to earn interest.
Liquidity and Capital Resources
Sources of Liquidity
The sale of equity has historically been our primary source of cash, with a smaller portion of cash coming from achievement of performance milestones under agreements with our partners and government contracts. We also receive cash from the interest earned on our available-for-sale securities.
As of June 30, 2026 and December 31, 2025, we had total liquidity, as set forth below:
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(in thousands) |
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June 30, 2026 |
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December 31, 2025 |
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Cash and cash equivalents |
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$ |
24,284 |
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$ |
21,607 |
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Available-for-sale securities |
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395,042 |
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314,843 |
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Total liquidity |
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$ |
419,326 |
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$ |
336,450 |
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As of June 30, 2026, total liquidity, which includes all cash and cash equivalents as well as our available-for-sale securities, was $419.3 million, an increase of $82.9 million compared to December 31, 2025. As of June 30, 2026, contract assets and accounts receivables were $3.2 million, total current liabilities were $17.2 million, and we continued to have no debt.
Short-Term Liquidity Requirements
Our short-term liquidity requirements include operating and capital expenses needed to further our research and development programs and to install our continuous electrolyte production pilot line. We anticipate that our most significant capital expenditures for the remainder of the year will relate to construction of our continuous electrolyte production pilot line as well as improvements to our cell development capabilities. We believe that our cash, cash equivalents, and available-for-sale securities are sufficient to meet our operating cash needs and working capital and capital expenditure requirements for a period of at least the next 12 months.
Long-Term Liquidity Requirements
Longer term, we may require additional liquidity prior to being able to generate adequate cash flows from electrolyte sales and/or licensing activities. We also may require funding if there are material changes to our business conditions or other developments, including changes to our operating plan; development progress or delays; negotiations with OEMs, cell manufacturers, or other customers; market adoption of EVs or other markets; supply chain challenges; competitive pressures; government regulations, including tariffs; and inflation. To the extent that our resources, including our ability to use the ATM to generate additional proceeds, are insufficient to satisfy our cash requirements, we may need to seek equity or debt financing. We also may opportunistically seek to enhance our liquidity through equity or debt financing, if such financing becomes available to us on terms that we consider favorable. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to take actions to reduce our capital or operating expenditures, which may adversely affect our development, business, operating results, financial condition and prospects.
At-the-Market Offering
On September 5, 2025, we entered into an Equity Distribution Agreement (the "Distribution Agreement") with Oppenheimer & Co. Inc., serving as agent ("Oppenheimer"), with respect to the ATM under which we may offer and sell, from time to time, shares of our common stock having an aggregate offering price of up to $150.0 million through Oppenheimer.
During the three and six months ended June 30, 2026, we did not sell any shares of common stock under the Distribution Agreement. As of June 30, 2026, approximately $58.8 million remained available for future sales under the Distribution Agreement.
Stock Repurchase Program
On January 23, 2024, we announced that our Board approved a stock repurchase program authorizing us to purchase up to $50 million of our outstanding common stock. During the six months ended June 30, 2025, we repurchased 3,361,396 shares of common stock at an average price of $1.05 per share for an aggregate cost of approximately $3.53 million. The stock repurchase program expired on December 31, 2025.
Registered Direct Offering
On January 28, 2026, we entered into a securities purchase agreement with a single sector-focused institutional investor for a registered direct offering of 17,000,000 shares of our common stock, pre-funded warrants to purchase an aggregate of 5,807,018 shares of common stock, and warrants to purchase up to an aggregate of 45,614,036 shares of common stock (the "registered direct offering"). Our proceeds, net of fees and expenses, totaled $121.3 million.
Cash Flows
The following table summarizes our cash flows from operating, investing, and financing activities for the periods presented:
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Six Months Ended June 30, |
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(in thousands) |
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2026 |
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2025 |
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Net cash and cash equivalents used in operating activities |
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$ |
(27,173) |
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$ |
(40,734) |
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Net cash and cash equivalents (used in) provided by investing activities |
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$ |
(89,619) |
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$ |
45,073 |
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Net cash and cash equivalents provided by (used in) financing activities |
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$ |
119,469 |
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$ |
(3,504) |
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Cash used in operating activities:
Cash used in operating activities for the six months ended June 30, 2026 decreased by $13.6 million compared to the six months ended June 30, 2025. This decrease was driven by the timing of our payments under annual contracts, which shifted from a beginning-of-year payment schedule to an end-of-year payment schedule, and higher collections from our partners, which increased by $4.5 million during the six months ended June 30, 2026 compared to the same period in the prior year.
The decrease was also attributable to cash used for employee compensation and related benefit costs, including the payment of annual performance-based incentive compensation. Cash used for employee compensation decreased by $1.7 million during the six months ended June 30, 2026 compared to the same period in the prior year.
Other cash used in operating activities during the six months ended June 30, 2026 related to facility operating costs, purchases of materials from suppliers, and hazardous waste removal. We expect cash used in operating activities for the remainder of the year to remain consistent on a quarterly basis as we continue to achieve our development objectives and focus on driving electrolyte product competitiveness.
Cash provided by (used in) investing activities:
Cash used in investing activities increased by $134.7 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to changes in our proceeds from and purchases of available-for-sale securities and changes in capital expenditures.
Purchases of available-for-sale security activity increased $143.8 million in the six months ending June 30, 2026 compared to the same period in prior year. This change was driven by deployment of $121.3 million of proceeds, net of fees and expenses, from the registered direct offering into our investment portfolio.
Cash used for capital expenditures and intangibles increased $2.2 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due to timing of milestone payments on our capital projects. We anticipate cash used in investing for capital expenditures for the remainder of the year to increase as we continue to construct the continuous electrolyte production pilot line.
Cash provided by (used in) financing activities:
Cash provided by financing activities increased $123.0 million in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the proceeds of $121.3 million, net of fees and expenses, from the registered direct offering.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements, as defined under SEC rules.
Critical Accounting Estimates
Except as set forth below, there have been no significant and material changes in our critical accounting policies and use of estimates during the six months ended June 30, 2026 as compared to those disclosed in "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates" in the 2025 Form 10-K.
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Collaborative Revenue |
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Description |
Judgments and Uncertainties |
Effect if Results Differ From Assumptions |
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We recognize revenue from our research and development collaboration agreements representing joint operating activities in accordance with ASC 808 - Collaborative Arrangements. These agreements include the following components: parties to the contract are active participants, both parties are exposed to significant risks and rewards, and both parties are dependent on the commercial success of the efforts under the contract. |
Our revenue recognition accounting methodology requires us to make significant estimates and assumptions, and to apply professional judgment. Our collaborative arrangements recognize revenue over time using the input measurement method utilizing the cost-to-cost method to satisfy the combined performance obligation. Contract costs include all direct labor, subcontract costs, costs for materials and indirect costs related to the contract performance that are allowable under the provisions of the contract. Collaborative revenues from fee-based contracts are recognized based on costs incurred to meet contractually defined milestones and deliverables along with our assessment of achievement of those measurable deliverables under the contract or based on appropriate over time methods. |
If we were to change our judgments or estimates, it could cause a material increase or decrease in the amount of revenue or deferred revenue that we report in a particular period. The difference would be recorded as a cumulative catch-up adjustment and could result in the reversal of previously recognized revenue. |
Recent Accounting Pronouncements
See Note 2 of our unaudited financial statements included in this Report as well as Note 2 of our audited financial statements included in the 2025 Form 10-K for more information.
Solid Power Inc. published this content on August 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 05, 2026 at 10:09 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]