Solid Power (SLDPW) risk factors, FY2024 10-K

Other

1. 01Our business is subject to numerous risks and uncertainties that you should be aware of in evaluating our business. If any such risks and uncertainties materialize, our business, prospects, results of operations, and financial condition could be materially and adversely affected
2. 02Summary of the Material Risks Associated with Our Business
3. 03Solid Power, Inc. | 2024 Form 10-K | 12
4. 04Solid Power, Inc. | 2024 Form 10-K | 13

Risks Related to Development and Commercialization

1. 05Solid Power, Inc. | 2024 Form 10-K | 14
2. 06It will be challenging to develop sulfide-based solid electrolyte capable of production at volume and with acceptable performance, yields, and costs
3. 07We have not reached agreement with our partners on economic terms for the commercial sale of electrolyte or licensing of our cell technology. As a result, our projections of revenue and other financial results are uncertain
4. 08We may not successfully complete development of our cell designs, commercially license our cell technology to OEMs or cell manufacturers, or generate material revenue from our cell technology
5. 09Solid Power, Inc. | 2024 Form 10-K | 16
6. 10We have only conducted preliminary safety testing on our cells. Any cells using our technology will require additional and extensive safety testing prior to being installed in EVs
7. 11If we are unable to attract and retain key employees and qualified personnel, our ability to compete could be harmed
8. 12The non-exclusive nature of our agreements exposes us to the risk that our partners may elect to pursue other battery cell technologies or partners
9. 13We are seeking additional partners with which to collaborate in the development of our technology. Our inability to enter into development relationships with additional partners may impair our ability to control the timing of our development activities, sell our electrolyte, or generate licensing revenue
10. 14Solid Power, Inc. | 2024 Form 10-K | 17
11. 15If we fail to develop solid-state battery cells for commercialization or meet certain milestones under certain of our agreements within the required time frames, our partners may terminate the agreements
12. 16Our business depends on our ability to manage our relationships with existing and future partners, customers, suppliers, and contractors, and we may not successfully manage these business relationships
13. 17We are subject to risks relating to the construction and development of facilities for our short-term research and development and long-term electrolyte production requirements
14. 18Solid Power, Inc. | 2024 Form 10-K | 18
15. 19Even if we successfully license our cell technology, we are subject to risks relating to production scale manufacturing of our cells through partners in the long term
16. 20We rely heavily on complex equipment for our operations, and the production of our technology involves a significant degree of risk and uncertainty in terms of operational performance and costs
17. 21Solid Power, Inc. | 2024 Form 10-K | 19
18. 22We rely on government contracts and grants for a portion of our revenue and to partially fund our research and development activities, and such contracts and grants are subject to a number of uncertainties, challenges, and risks
19. 23Substantial increases in the prices for our raw materials and components, some of which are obtained from a limited number of sources where demand may exceed supply, could materially and adversely affect our business
20. 24Solid Power, Inc. | 2024 Form 10-K | 20
21. 25Accidents and severe weather conditions, natural disasters, or other catastrophic events could adversely impact our facilities and operations
22. 26A global pandemic (e.g., COVID-19) and associated responses could disrupt our business and operations
23. 27Solid Power, Inc. | 2024 Form 10-K | 21

Risks Related to Industry and Market Trends

1. 28The battery market continues to evolve and is highly competitive, and we may not be successful in competing in this market or establishing and maintaining confidence in our long-term prospects among current and future partners and customers
2. 29Solid Power, Inc. | 2024 Form 10-K | 22
3. 30Our future growth and success are dependent upon consumers’ willingness to adopt EVs
4. 31We may not be able to accurately estimate future demand for our technology, which could result in a variety of inefficiencies in our business, hinder our ability to generate revenue, and cause us to incur additional costs or experience delays

Risks Related to Intellectual Property

1. 32We rely heavily on owned and exclusively-licensed intellectual property, including patent rights, trade secrets, copyrights, trademarks, and know-how, and we may be unable to protect and maintain access to these intellectual property rights
2. 33competitors using our intellectual property to offer products, loss of our competitive advantage, and harm to our reputation and could have a material adverse effect on our business, prospects, results of operations, and financial condition
3. 34redesign our products at significant expense
4. 35There are risks to our intellectual property based on our international business operations
5. 36Our patent applications may not result in issued patents, and our patent rights may be contested, circumvented, invalidated, or limited in scope

Risks Related to Our Limited Operating History

1. 37Our business plan has yet to be tested, and we may not succeed in executing on our strategic plans, including commercialization
2. 38We are a research and development stage company with a history of financial losses and expect to incur significant expenses and continuing losses for the foreseeable future
3. 39We may require additional capital to support business growth, and this capital might not be available on commercially reasonable terms or at all
4. 40Solid Power, Inc. | 2024 Form 10-K | 25
5. 41We may be unable to adequately control the costs associated with our operations and the components necessary to develop our technology
6. 42If we fail to effectively manage our future growth, we may not be able to market and license the technology and know-how to sell our electrolyte or manufacture our cells
7. 43We may not succeed in establishing, maintaining, and strengthening our brand, which could adversely impact customer acceptance of our technology

Risks Related to Finance and Accounting

1. 44Incorrect estimates or assumptions by management in the preparation of our consolidated financial statements could adversely impact our reported assets, liabilities, income, revenue, or expenses
2. 45Solid Power, Inc. | 2024 Form 10-K | 26
3. 46We incur significant expenses and administrative burdens as a public company
4. 47Our business could also be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting as required by SOX
5. 48We may not realize the anticipated benefits of our transactions with a strategic partner in the Republic of Korea and issuance of stock to two individuals who provide services to this partner
6. 49We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely impact our liquidity and financial performance
7. 50Our ability to utilize any net operating losses or tax credit carryforwards to offset taxable income may be subject to certain limitations

Risks Related to Legal and Regulatory Compliance

1. 51We have been, and may in the future be, subject to lawsuits, regulatory actions, or government investigations and inquiries which could lead us to incur significant costs or harm our reputation
2. 52We are subject to substantial regulation, and changes to, or failure by us to comply with, these regulations could have a material adverse effect on our business, prospects, results of operations, and financial condition
3. 53suppliers, or customers are subject, or any changes in enforcement, administration, or interpretation of such laws or regulations, could interfere have a material adverse effect on our business, prospects, results of operations, and financial condition
4. 54We may be adversely impacted by a disruption or failure of our information technology infrastructure, data security breach, or failure to comply with privacy laws
5. 55Solid Power, Inc. | 2024 Form 10-K | 29
6. 56Changes in relevant tax laws or regulations, an adverse interpretation of these items by tax authorities, or changes to our obligations as a result of expanded business operations could adversely impact our effective tax rate and tax liability

Risks Related to our Common Stock and the Warrants

1. 57The price of our common stock and Warrants could be adversely impacted by sales of substantial amounts of our common stock or Warrants in the public market or the perception that such sales could occur
2. 58Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the price of our common stock and Warrants
3. 59We may not realize the anticipated benefits of our stock repurchase program, and any failure to repurchase shares of our common stock may adversely impact the price of our common stock
4. 60Solid Power, Inc. | 2024 Form 10-K | 30
5. 61If securities or industry analysts do not publish, or publish inaccurate or unfavorable, research about us, our business, or our market, or if they adversely change their recommendations regarding our common stock, the price and trading volume of our common stock and Warrants could decline
6. 62The issuance of additional shares of common stock under our equity incentive compensation plans or employee stock purchase plan or shares of preferred stock would dilute the interest of our stockholders and may present other risks
7. 63Solid Power, Inc. | 2024 Form 10-K | 31
8. 64The exercise price for the Warrants is $11.50 per share of common stock. There can be no assurance that the Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless
9. 65Solid Power, Inc. | 2024 Form 10-K | 32