- Total operating expenses were $19.1 million, an increase of
$12.5 million from a year ago, reflecting an increase in headcount
to support battery cell and AI software development and costs
associated with being a public company
- Financial guidance for 2022 is unchanged from our guidance
issued with our first quarter results, with cash used in operations
and capital expenditures expected to range between $95 million and
$115 million
- Construction of our second cell manufacturing facility, located
in SES Korea, is on track and expected to be ready to use by
October 2022
- Planning underway for second annual Battery World to be held
before 2022 year-end
SES AI Corporation (NYSE: SES) (the “Company,” “SES,” “we” or
“us”), a global leader in the development and manufacturing of
high-performance lithium-metal (Li-Metal) rechargeable batteries
for electric vehicles (EVs) and other applications announced today
financial results for the second quarter ended June 30, 2022.
SES reported an operating loss for the quarter of $19.1 million,
an increase of $12.5 million from last year, reflecting general and
administrative expenses of $11.9 million and research and
development expenses of $7.2 million. This higher level of spending
reflects an increase in headcount and related personnel cost to
support battery cell and AI software development as well as an
increase in spending related to being a public company.
SES recognized a non-cash gain on the change in fair value of
its Sponsor Earn-out liability of $29.0 million during the three
months ended June 30, 2022. Certain tranches of SES’s Sponsor
Earn-out shares are accounted for as a derivative liability
measured at fair value based on the price of SES’s common stock at
the end of the quarter. The Company ended the quarter with cash and
cash equivalents of $405 million, which it expects to use to
support the continued development of all aspects of its Li-Metal
battery technology and AI-powered safety software platform
Avatar.
“We believe that the need for more energy dense batteries that
can improve range and reduce cost has never been greater and
supports our belief that Li-Metal is the next big thing in
batteries,” said Founder and CEO, Qichao Hu. “We continue to work
closely with our automotive partners to improve the performance of
our cells and to bring down manufacturing costs. We intend to
provide more details on these and other initiatives at our second
annual Battery World later this year.”
Outlook
SES is targeting the following milestones by mid-2023, which are
unchanged from the Company’s guidance issued with its first quarter
results:
- Deliver and optimize “A-sample” batteries for our three JDA
partners
- Begin to transition from “A-sample” batteries to “B-sample”
batteries
- Continue to establish supply chains for key materials
All aspects of the Company’s 2022 financial guidance issued with
its first quarter results are also unchanged. To execute on its
plan, SES estimates that in 2022, capital expenditures will range
from $25 million to $35 million, and cash used in operations will
be between $70 million and $80 million. As a result, use of cash
for the year is expected to range between $95 million and $115
million.
SES Korea
Construction of the Company’s second cell manufacturing
facility, located in SES Korea, is on track and expected to be
ready to use by October 2022. The structure of the building is
complete and manufacturing lines are being installed. This facility
will support at least one of the Company’s JDA partners and will
have the capability to produce its large-format 50Ah and 100Ah
cells.
Second Annual Battery World to Be Held Before
Year-End
Following on the high-level of investor interest at SES’s first
Battery World Event in November of last year, planning is underway
for the second annual Battery World which is expected to be held
before 2022 year-end. At the event, SES plans to provide updates on
the performance of its large-format (50Ah to 100Ah) Apollo cells,
and Avatar, its AI-powered safety software for monitoring battery
health and intends to demonstrate Apollo cells being used in a
non-automotive application. Additional information on the timing of
this event is expected to be provided in the next few months.
Webcast and Conference Call
SES will host a conference call at 5:00 p.m. EDT today, August
9, 2022. Participating on the call will be Qichao Hu, Chief
Executive Officer, and Jing Nealis, Chief Financial Officer.
Interested investors and other parties can listen to a webcast
of the live conference call through SES’s Investor Relations
website by clicking here.
The conference call can also be accessed live over the phone by
dialing the following numbers:
United States (Toll Free):
1 (844) 200 6205
International:
1 (929) 526 1599
Access Code:
483310
A recording of the conference call will be available shortly
after the completion of the call at investors.ses.ai.
About SES
SES is a global leader in development and production of
high-performance Li-Metal rechargeable batteries for electric
vehicles (EVs) and other applications. Founded in 2012, SES is an
integrated Li-Metal battery manufacturer with strong capabilities
in material, cell, module, AI-powered safety algorithms and
recycling. Formerly known as Solid Energy Systems, SES is
headquartered in Boston and has operations in Singapore, Shanghai,
and Seoul. To learn more about SES, please visit:
ses.ai/investors/
SES may use its website as a distribution channel of material
company information. Financial and other important information
regarding SES is routinely posted on and accessible through the
Company’s website at www.ses.ai. Accordingly, investors should
monitor this channel, in addition to following SES’s press
releases, Securities and Exchange Commission filings and public
conference calls and webcasts.
Forward-looking statements
All statements other than statements of historical facts
contained in this press release 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 SES. Although SES believes that its plans,
intentions and expectations reflected in or suggested by these
forward-looking statements are reasonable, it cannot provide
insurance 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 press release, 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, our actual results or performance may
be materially different from those expressed or implied by these
forward-looking statements. Some factors that could cause actual
results to differ include, but are not limited to the following
risks: changes in domestic and foreign business, market, financial,
political and legal conditions, including but not limited to the
ongoing conflict between Russia and Ukraine; risks relating to the
uncertainty of the projected financial information with respect to
SES; risks related to the development and commercialization of
SES’s battery technology and the timing and achievement of expected
business milestones; the effects of competition on SES’s business;
the ability of SES to issue equity or equity-linked securities or
obtain debt financing in the future; the ability of SES to
integrate its products into electric vehicles (“EVs”); the risk
that delays in the pre-manufacturing development of SES’s battery
cells could adversely affect SES’s business and prospects;
potential supply chain difficulties; risks resulting from SES’s
joint development agreements and other strategic alliances, if such
alliances are unsuccessful; the quickly evolving battery market;
SES’s ability to accurately estimate future supply and demand for
its batteries; SES’s ability to develop new products on an ongoing
basis in a timely manner; product liability and other potential
litigation, regulation and legal compliance; SES’s ability to
effectively manage its growth; SES’s ability to attract, train and
retain highly skilled employees and key personnel; the willingness
of vehicle operators and consumers to adopt EVs; developments in
alternative technology or other fossil fuel alternatives; SES’s
ability to meet certain motor vehicle standards; a potential
shortage of metals required for manufacturing batteries; risks
related to SES’s intellectual property; risks related to SES’s
business operations outside the United States, including in China
and South Korea; the uncertainty in global economic conditions and
risks relating to health epidemics, including the COVID-19 pandemic
and any operational interruptions; SES has identified material
weaknesses in its internal control over financial reporting and may
identify material weaknesses in the future or otherwise fail to
maintain an effective system of internal controls; compliance with
certain health and safety laws; changes in U.S. and foreign tax
laws; and the other risks described in “Part I, Item 1A. Risk
Factors” in our annual report on Form 10-K for the fiscal year
ended December 31, 2021 filed with the Securities and Exchange
Commission (“SEC”) on March 31, 2022 and other documents filed from
time to time with the SEC. There may be additional risks that SES
presently knows and/or believes are immaterial that could also
cause actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect SES’s expectations, plans or forecasts of future events and
views only as of the date of this press release. SES anticipates
that subsequent events and developments will cause its assessments
to change. However, while SES may elect to update these
forward-looking statements at some point in the future, SES
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing SES’s assessments as of any date subsequent to the
date of this press release.
SES AI Corporation
Condensed Consolidated Balance
Sheet(1)
(Unaudited)
(in thousands, except share and per
share amounts)
June 30, 2022
December 31, 2021
Assets
Current Assets
Cash and cash equivalents
$
404,607
$
160,497
Receivable from related party
5,388
7,910
Prepaid expenses and other current
assets
5,872
1,563
Total current assets
415,867
169,970
Property and equipment, net
20,917
12,494
Intangible assets, net
1,536
1,626
Right-of-use assets, net
10,829
—
Other assets
4,452
9,263
Total assets
$
453,601
$
193,353
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders’ Equity
Current Liabilities
Accounts payable
$
7,357
$
4,712
Operating lease liabilities, current
1,633
—
Accrued expenses and other current
liabilities
6,122
6,273
Total current liabilities
15,112
10,985
Sponsor Earn-Out liability
15,123
—
Operating lease liabilities,
non-current
9,831
—
Other liabilities
1,732
749
Total liabilities
41,798
11,734
Commitments and contingencies (Note 8)
Redeemable Convertible Preferred Stock,
$0.000001 par value – none authorized, issued and outstanding as of
June 30, 2022; 213,960,286 shares authorized, issued and
outstanding as of December 31, 2021 (aggregate liquidation
preference of $271,148 as of December 31, 2021)
—
269,941
Stockholders’ Equity
Preferred stock, $0.0001 par value;
20,000,000 shares authorized, none issued and outstanding as of
June 30, 2022; none authorized, issued and outstanding as of
December 31, 2021
—
—
Common stock: Class A shares, $0.0001 par
value, 2,100,000,000 shares authorized as of June 30, 2022;
304,349,384 shares and 22,261,480 shares issued and outstanding as
of June 30, 2022 and December 31, 2021, respectively; Class B
shares, $0.0001 par value, 200,000,000 authorized as of June 30,
2022; 43,881,251 shares and 39,881,455 shares issued and
outstanding as of June 30, 2022 and December 31, 2021,
respectively
34
6
Additional paid-in capital
524,981
5,598
Accumulated other comprehensive (loss)
income
(901
)
367
Accumulated deficit
(112,311
)
(94,293
)
Total stockholders' equity
411,803
(88,322
)
Total liabilities, redeemable convertible
preferred stock, and stockholders' equity
$
453,601
$
193,353
SES AI Corporation
Condensed Consolidated
Statements of Operations and Comprehensive Loss(1)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
(in thousands, except share and per
share amounts)
2022
2021
2022
2021
Operating expenses:
Research and development
$
7,192
$
3,508
$
11,259
$
6,491
General and administrative
11,867
3,049
26,997
4,505
Total operating expenses
19,059
6,557
38,256
10,996
Loss from operations
(19,059
)
(6,557
)
(38,256
)
(10,996
)
Other income (expense):
Gain on change of fair value of Sponsor
Earn-Out liability, net
28,958
—
21,270
—
Interest income
465
1
488
3
Other income (expense), net
(1,171
)
(54
)
(1,331
)
788
Total other income (expense), net
28,252
(53
)
20,427
791
Income (loss) before income taxes
9,193
(6,610
)
(17,829
)
(10,205
)
Provision for income taxes
(178
)
(19
)
(189
)
(19
)
Net income (loss)
9,015
(6,629
)
(18,018
)
(10,224
)
Other comprehensive income (loss):
Foreign currency translation
adjustment
(1,377
)
85
(1,268
)
71
Total comprehensive income
(loss)
$
7,638
$
(6,544
)
$
(19,286
)
$
(10,153
)
Net income (loss) per share
attributable to common stockholders:
Basic
$
0.03
$
(0.11
)
$
(0.07
)
$
(0.17
)
Diluted
(0.03
)
(0.11
)
(0.07
)
(0.17
)
Weighted-average shares
outstanding:
Basic and diluted
310,255,853
60,781,975
264,969,675
60,781,975
SES AI Corporation
Condensed Consolidated
Statements of Cash Flows(1)
(Unaudited)
Six Months Ended
June 30,
(in thousands)
2022
2021
Cash Flows From Operating
Activities
Net loss
$
(18,018)
$
(10,224)
Adjustments to reconcile net loss to net
cash used in operating activities:
Gain on change of fair value of Sponsor
Earn-Out liability
(21,270)
—
Stock-based compensation
8,733
186
Depreciation and amortization
986
882
Other
(584)
—
PPP note forgiveness
—
(840)
Changes in operating assets and
liabilities:
Receivable from related party
2,522
(5,041)
Prepaid expenses and other assets
(4,119)
16
Accounts payable
2,317
26
Accrued expenses and other liabilities
1,278
(146)
Net cash used in operating activities
(28,155)
(15,141)
Cash Flows From Investing
Activities
Purchases of property and equipment
(10,041)
(3,038)
Purchase of short-term investments
—
(150,810)
Maturities of short-term investments
—
13,101
Net cash used in investing activities
(10,041)
(140,747)
Cash Flows From Financing
Activities
Proceeds from Business Combination and
PIPE Financing, net of issuance costs
282,940
—
Proceeds from stock option exercises
42
—
Proceeds from issuance of Series D and D
plus redeemable convertible preferred stock, net of issuance
costs
—
187,897
Net cash provided by financing
activities
282,982
187,897
Effect of exchange rates on cash
(676)
72
Net increase in cash, cash equivalents and
restricted cash
244,110
32,081
Cash, cash equivalents and restricted
cash at beginning of period (Note 4)
161,044
2,728
Cash, cash equivalents and restricted
cash at end of period (Note 4)
$
405,154
$
34,809
Supplemental Non-Cash
Information:
Conversion of Redeemable Convertible
Preferred Stock to shares of Class A Common Stock
$
(269,941)
$
—
Release of accrued transaction costs
related to Business Combination and PIPE Financing
$
6,174
$
—
Accounts payable and accrued expenses
related to purchases of property and equipment
$
964
$
110
Liabilities of Ivanhoe acquired in the
Business Combination
$
(387)
$
—
Deferred offering costs included in
accounts payable and accrued expenses and other liabilities
$
—
$
1,366
(1) The business combination between SES AI Corporation’s
(“SES”) predecessor, SES Holdings Pte. Ltd. (“Old SES”), and
Ivanhoe Capital Acquisition Corp. (“Ivanhoe”), which closed on
February 3, 2022 (the “Closing”), is accounted for as a reverse
recapitalization under U.S. GAAP. Under this method of accounting,
Ivanhoe has been treated as the “acquired” company for financial
reporting purposes. Accordingly, for accounting purposes, the
financial statements of SES represent a continuation of the
financial statements of Old SES with the business combination being
treated as the equivalent of Old SES issuing shares for the net
assets of Ivanhoe, accompanied by a recapitalization. The net
assets of Ivanhoe are stated at historical cost, with no goodwill
or other intangible assets recorded. Operations prior to the
Closing are those of Old SES. As a result, the unaudited condensed
consolidated financial statements reflect (i) the historical
operating results of Old SES prior to the Closing; (ii) the
combined results of SES and Old SES following the Closing; (iii)
the assets and liabilities of Old SES at their historical cost; and
(iv) share and per share amounts prior to the Closing have been
retroactively converted using the exchange ratio for the business
combination. See our Form 10-Q for the three and six months ended
June 30, 2022 for additional information.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005858/en/
Investors: Eric Goldstein ericgoldstein@ses.ai Media:
Irene Lam ilam@ses.ai
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