Financial Analysis

Note 10. Commitments and Contingencies Commitments Under the terms of one of the JDAs entered into in 2021, and amended in March 2024, the Company is committed to undertake certain research and development activities to the benefit of both itself and its OEM Partner which involves expenditures related to engineering efforts and purchases of related equipment. The JDA has an agreed-upon commitment value of up to $35 million. As of March 31, 2026, the Company has a remaining commitment to spend up to $7.3 million. Legal Contingencies From time-to-time, the Company may be subject to claims arising in the ordinary course of business or become involved in litigation or other legal proceedings. While the outcome of such claims or other proceedings cannot be predicted with certainty, the Companys management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Companys financial condition, results of operations or cash flows. Indemnifications The Company enters into indemnification provisions under agreements with other companies in the ordinary course of business, including, but not limited to, partnerships, landlords, vendors, and contractors. Pursuant to these arrangements, the Company agrees to indemnify, defend, and hold harmless the indemnified party for certain losses suffered or incurred by the indemnified party as a result of the Companys activities. The maximum potential amount of future payment …

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Three Months Ended March 31, (in thousands) 2026 2025 Revenue from customers: Product revenue $ 6,445 $ 8 Service revenue 266 5,785 Total $ 6,711 $ 5,793 …

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Note 11. Income Taxes The Companys effective tax rate for the three months ended March 31, 2026 was (2.6)% compared with 0.0% for the three months ended March 31, 2025. The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% principally results from income taxes on earnings from its foreign tax jurisdictions offset by losses generated in the U.S. where no benefit was recorded because the Company had fully reserved its deferred tax assets as of March 31, 2026 and December 31, 2025 and the recording of uncertain tax positions and interest expense. …

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Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses , which requires more detailed information about the types of expenses included in certain expense captions presented on the consolidated statements of operations. Additionally, this amendment requires the disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively and the disclosure of the total amount of selling expenses. The new standard is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the impact of adoption on our consolidated financial statements . In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows for a practical expedient election to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset in the development of a reasonable and supportable forecast as part of estimating expected credit losses. The new standard is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The Company noted no material impact from the adoption of this standard on our consolidated financial statements. In September 2025, the FASB issued A …

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Note 4. Revenue We disaggregate our revenue from customers by the type of arrangement, primarily from the sale of battery products and from providing research and development services, as this depicts how the nature, amount, timing, and cash flows are affected by economic factors. The following table summarizes the Companys disaggregated revenue: Three Months Ended March 31, (in thousands) 2026 2025 Revenue from customers: Product revenue $ 6,445 $ 8 Service revenue 266 5,785 Total $ 6,711 $ 5,793 Remaining Performance Obligations We have performance obligations associated with commitments in customer contracts for future services that have not yet been recognized as revenue. As of March 31, 2026, the aggregate amount of the transaction price allocated to the remaining performance obligations related to customer contracts that were unsatisfied or partially unsatisfied, was not material. This amount does not include contracts to which the customer is not committed. The estimated timing of the recognition of remaining unsatisfied performance obligations is subject to change and is affected by changes to scope, changes in timing of delivery of products and services, or contract modifications. Contract Assets The Company records accounts receivable when the right to consideration is unconditional, subject only to the passage of time. Contract assets primarily relate to unbilled service revenue. The Company does not have the right to bill and collect revenue for certain performanc …

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Note 13. Segment and Geographic Information Operating Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. The Companys CODM is its Chief Executive Officer . The Company has determined that it operates in one operating and reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The CODM uses net income (loss) as the measure of financial performance and for resource allocation decisions. When evaluating the Companys performance and making key decisions regarding resource allocation, the CODM reviews revenue and significant expenses included in the net income (loss). In addition, the CODM reviews and monitors operating expenses and cash forecasts to ensure that enough capital is available for operations. Significant Expenses The Company concluded it operates as one operating and reportable segment based on the information regularly reviewed by the CODM for decision making, resource allocation, and evaluating financial performance. The information included is categorized into different significant expense lines such as compensation and benefits, lab and equipment, professional services, general and admini …

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Note 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements include the accounts of the Company and have been prepared in accordance with accounting principles generally accepted in the U.S. (U.S. GAAP) and regulations of the U.S. Securities and Exchange Commission (SEC) for interim financial reporting . Management believes that all adjustments necessary for the fair presentation of results, consisting of normally recurring items, have been included in the unaudited condensed consolidated financial statements for the interim periods presented. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the full year or any other future interim or annual periods. All intercompany balances and transactions have been eliminated in consolidation. The Companys fiscal year ends on December 31. The year-end balance sheet data was derived from audited consolidated financial statements. These unaudited interim condensed consolidated financial statements do not include all of the annual disclosures required by U.S. GAAP; accordingly, they should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2025 included in the Companys Annual Report on Form 10-K filed with the SEC on March 4, 2026. Use of estimates T …

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