Solid Power, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; filed May 8, 2024. Solid Power is a research-and-development-stage company developing solid-state battery technology for EV and other markets. Its intended model is to sell electrolyte and license cell designs and manufacturing processes; commercial products remain under development.
Financial results and liquidity
| Metric | Q1 2024 | Q1 2023 / comparison |
|---|---|---|
| Revenue | $5.953 million | $3.792 million; up 57% |
| Operating expenses | $31.734 million | $25.110 million; up 26% |
| Operating loss | $25.781 million | $21.318 million |
| Net loss | $21.207 million | $19.158 million |
| Loss per share, basic and diluted | $0.12 | $0.11 |
| Cash used in operating activities | $29.065 million | $19.631 million |
| Capital expenditures (PP&E purchases) | $4.054 million | $11.581 million |
Revenue less reported direct costs was $1.663 million, versus negative $2.482 million a year earlier; the filing does not present a gross-margin measure. R&D expense rose 62% to $18.873 million, primarily from higher labor and materials; SG&A rose 19% to $8.571 million. Direct costs fell 32% to $4.290 million, which management attributed primarily to accelerated completion of JDA milestones. Interest income was $5.117 million. A $0.501 million warrant-liability fair-value loss reduced nonoperating income, compared with a $2.662 million loss in Q1 2023.
At March 31, cash and cash equivalents were $14.019 million, marketable securities $132.619 million, and long-term investments $232.307 million; management reported total liquidity of $378.945 million, down from $415.608 million at December 31, 2023. Total assets were $516.170 million and stockholders’ equity $479.377 million. The filing reports no conventional borrowings; liabilities include lease obligations and $4.728 million of warrant liabilities. Current liabilities were $18.232 million. The company said cash on hand was sufficient for operating, working-capital and capital-expenditure needs for at least 12 months, and longer until adequate cash flows from licensing or electrolyte sales.
Cash declined $20.518 million during the quarter to $14.019 million. Investing activities provided $13.639 million, principally reflecting net sales of marketable securities; financing activities used $5.092 million, primarily for share repurchases. Operating cash use increased year over year, and management expects it to rise as development work accelerates.
Business developments, outlook and risks
- In January 2024, Solid Power entered into three agreements with SK On covering an R&D technology license, electrolyte supply and line installation. The agreements are treated as one collaborative arrangement and performance obligation, with revenue recognized over time using incurred labor hours relative to expected total hours.
- Management reported early execution on SK On technology transfer and line installation, expanded electrolyte sampling to potential customers, and said A-2 sample cells remained on track for delivery by year-end.
- BMW JDA revenue was $4.980 million in Q1 2024; related receivables were $4.152 million at quarter end. Management expects revenue to increase during the rest of 2024 as it performs JDA and other collaborative deliverables.
- Management expects increased R&D and SG&A spending, higher direct costs as collaboration deliverables are performed, and increased capital expenditures as electrolyte production is scaled. Planned near-term investment includes finishing an electrolyte research facility and enhancing the electrolyte production facility.
- The Board authorized repurchases of up to $50 million through December 31, 2025. The filing reports Q1 repurchases of approximately $4.96 million and additional April purchases of $3.393 million. Management says repurchases depend on market, share-price and other conditions.
- Key risks include technical and commercialization uncertainty, meeting partner performance and safety requirements, scaling electrolyte production, negotiating acceptable commercial agreements, EV adoption, competition, supply-chain and market changes, and the potential need for additional financing if business conditions or plans change. The company reported no material change to the risk factors in its 2023 Form 10-K and no litigation likely to have a material adverse effect.
Investor verification priorities
- Check the timing and feasibility of year-end A-2 sample delivery, SK On milestones, and customer qualification and commercialization progress.
- Assess the pace of cash consumption and planned R&D, facility and production spending against the reported $378.945 million of total liquidity and management’s runway statement.
- Reconcile repurchase disclosures: the filing gives differing Q1 share counts (3,183,638 in the notes and repurchase table versus 3,186,638 in MD&A) and differing costs ($4.914 million cash-flow/table amount versus $4.963 million in the equity note). Verify figures and remaining authorization.
- Monitor the concentration and collection of collaboration revenue, including the $4.152 million BMW-related receivable, and the assumptions underlying SK On revenue recognition.