Participants

Jennifer Almquist; IR; Solid Power Inc

John Van Scoter; President, Chief Executive Officer, Director; Solid Power Inc

Kevin Paprzycki; Chief Financial Officer, Treasurer; Solid Power Inc

Mike Shlisky; Analyst; D.A. Davidson & Co.

Brian Dobson; Analyst; Chardan Capital Markets LLC

Jeffrey Campbell; Analyst; Seaport Global Securities LLC

Vincent Anderson; Analyst; Stifel, Nicolaus & Company, Incorporated

Presentation

Operator

Greetings, and welcome to the Solid Power Inc., first quarter 2024 financial results and business update call. Please note that this conference is being recorded.
I will now turn the conference over to your host, Jennifer Almquist, Investor Relations for Solid Power. Thank you. You may begin.

Jennifer Almquist

Thank you, operator, and welcome, everyone, and thank you for joining us today. I'm joined on today's call by solid powers President and Chief Executive Officer, John Van Scoter; and Chief Financial Officer, Kevin Paprzycki. A copy of today's earnings release is available on the Investor Relations section of solid Power's website, www.solidpowerbattery.com.
I'd like to remind you that parts of our discussion today will include forward looking statements as defined by the US Securities laws. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events, except as otherwise required by applicable law.
Solar Power disclaims any duty to update any forward-looking statements to reflect future events or circumstances. For a discussion of the risks and uncertainties that could cause actual results to differ materially from those expressed in today's forward-looking statements. Please see Solid Power's most recent filings with the Securities and Exchange Commission, which can be found on the Company's website at www.solarpowerbattery.com.
With that, let me turn it over to John Van Scoter.

John Van Scoter

Thank you, Jen. Good afternoon, everyone. And thank you for joining today's call. I'll begin today with a brief update on our progress. After that, I'll hand the call off to Kevin for the financial review. Then we'll open up the call for Q&A. When we last spoke, we outlined our 2024 goals. They are to expand our electrolyte capabilities and available market advance to aid to sample cell designs, execute for our partners and strengthen our presence in Korea.
2024 is off to a good start with continued strong execution on all four of these priorities during the first quarter. With respect to electrolyte, we expanded our sampling program with ongoing shipments to new potential customers made progress on our 82 cell design and are executing on a path that we believe will enable us to deliver higher performing cells by target dates.
We continued to execute for our partners, most notably through strong early execution on our SK. on R & D technology transfer and line installation agreements. And we further established our team and offices in Korea providing the basis for ongoing engagement in the region.
Looking a little more closely at each of these goals. Starting with electrolytes, we continue to see growing interest in our electrolyte powder. During the quarter, we made shipments to our existing partners. We also made repeat shipments to a potential customer after receiving positive feedback and shipped our electrolyte to a new potential OEM customer.
We are excited to work with our electrolyte has now been shipped to 10 potential customers outside of our existing joint development relationships. We've also continued to invest in our new electrolyte R&D lab, which we are targeting to complete sometime midyear. The goal of this lab will be to optimize continuous electrolyte production, reduce the cost of our powder and develop future generations of even higher-performing electrolytes. We continue to believe high proprietary electrolyte represents a great long-term opportunity for our industry and for our shareholders. And we remain committed to continuing to expand our capabilities and available market in this area.
Turning to cell development our team continues to refine our A. two cell design with the goal of delivering a two cells to our partners. By the end of this year, our A. two cells are designed to improve our sales performance, including energy and power. We believe these improvements also represent an incremental step towards commercial solid state technology.
With respect to sell performance, our team has also been working hard to better address the handful of A. one cells that went into thermal runaway earlier this year. The team is improving our internal testing capabilities, performing detailed analysis of our cell reactions and thoroughly evaluating the materials and processes used in production.
We've been able to identify minor changes in ourselves, chemistry and design as well as the improvements in our manufacturing process that we have factored into our plans for the A. two builds. Battery technology development is challenging, and our team is energized by the opportunity to overcome hurdles and demonstrate the potential of solid-state batteries. I am proud of our team's work and want to express my appreciation for their commitment to driving realistic, thoughtful solutions.
Turning to our partners. Since signing the expanded agreement with SK. on in January. We've begun collaboration in earnest in April. We hosted SK. on for three weeks here in Colorado to kick off the tech transfer process under our R & D license. During those three weeks, we conducted workshops, training and other hands-on learning with respect to our cell production processes.
This was valuable time spent and beneficial for both sides as we set a solid foundation for future collaboration. We also sent a team to Korea to begin work on the SK. on line installation I'm pleased to say that we're nearing design freeze on SKN.'s new EV cell line. All the lines major equipment is now on order keeping us well on track to complete the line in the first half of 2025.
Both the tech transfer and line installation efforts will ultimately increase collaboration and leveraged development efforts on our solid-state technology across the U.S., Europe and Asia in the years to come. We also continue our close collaboration with both BMW and Ford under our joint development agreements. We continue to value these relationships and look forward to continuing to work closely with our OEM partners throughout the year.
And lastly, Korea, we've made good progress in solidifying our Korean presence. We now have an entire team on the ground in Korea with a combination of expat, solid power employees and local expertise who onboarded in our SP. two facility a couple of weeks ago. This team is located in Seoul, where we are establishing a home base for driving further engagement across the Peninsula with potential customers, vendors, government agencies and others in the forefront of battery technology developments.
Before I wrap up, I also want to say we're making good progress on our planned investor event for later this year. We look forward to sharing more details with you in the coming months.
With that, I'll turn the call over to Kevin.

Kevin Paprzycki

Thanks, John. Good afternoon, everyone. I'll start off today with an overview of our financial results for Q1. Then I'll discuss our '24 outlook. Our first quarter financial results reflect continued technology development and initial execution on our new SK. agreements. First quarter revenue was just under $6 million. This primarily reflects solid performance on our BMW agreement.
Operating expenses for Q1 were $31.7 million, reflecting our planned investments in cell and electrolyte development. The scaling of our operations and execution under our development agreements. First quarter operating loss was $25.8 million and net loss was $21.2 million or $0.12 per share.
Turning to our balance sheet, we ended the quarter with total liquidity of $379 million in cash, marketable securities and long-term investments. We invested $29.1 million in operations during the quarter and $4.1 million in CapEx, mostly going towards our new electrolyte R&D lab. Our overall CapEx investments were lower than last year when we were investing heavily in our SP. two electrolyte plant, we did have an increase in working capital invested this quarter.
We had a couple of large partner receivables at the end of Q1 that will be collected in Q2 in line with contract milestones. We also placed down-payments during the quarter on equipment for the SK. line install. We expect our working capital to normalize over the remainder of the year, lowering our cash burn over coming quarters.
Lastly, during the quarter, we repurchased 5 million shares of our common stock for a total of just over $8 million. You will see $4.9 million on our statement of cash flows with the remaining amount sitting on the balance sheet as the cash settled in early April. Overall, our liquidity position remains strong, especially in light of our capital light business model with its lower CapEx requirements.
Turning to our outlook for the year, we are reiterating our guidance for '24, which revenue is still expected to be in the $20 million to $25 million range. This includes the remaining revenue from our BMW agreement and expected revenue from our new SK. agreements. We did have a small amount of SK. revenue in Q1 and expect more over the rest of the year as we execute on tech transfer and line installation.
With respect to the overall cash flow guidance, we are reiterating our expectation that total cash investment for '24 will be in the range of $100 million to $120 million, with operating cash investment expected to be $60 million to $70 million, and CapEx investments expected to be $40 million to $50 million in addition to the $100 million to $120 million, we will have $8 million of share repurchase investments show up in our financing cash flows from the repurchases we've done so far this year. We'll continue to evaluate the timing and amounts of future repurchases under our plan.
With that, I'll now turn the call back to John.

John Van Scoter

Thanks, Kevin. In closing 2024 is off to a solid start. The team here at Solid Power continues to execute well on our 2024 goals, whether the targets are technical strategic or financial in nature. I'm confident that this continued strong execution will drive shareholder value for the long term.
And with that, I'll turn it over to Q&A.

Question and Answer Session

Operator

(Operator Instructions)
Mike Shlisky, D.A. Davidson.

Mike Shlisky

Yes, hello. Good afternoon and thanks for taking my questions. You had mentioned you have shifts, naturalized to 10 potential partners beyond the three that you've already mentioned, you're working with those 10 partners beginning on kind of bracket for us. Are they auto OEMs or battery folks? And maybe just some sense as to the size, maybe combined of how what kind of market share those are those are barriers may have or just some sense as to how big they all signed up to perhaps sell a power of the long-term opportunity maybe there?

John Van Scoter

Good afternoon, Mike. Thanks for joining us. Yes, it's a combination of battery OEMs and EVOEM.s, I would say it's skewed more towards battery OEMs in this period of time. But again, it's both. I honestly don't have a good assessment of what the total available market that they address would be, but it is a combination of the there are any large known players in the market as well as some of the medium-sized players in the market.

Mike Shlisky

Got it. Thanks. I also appreciate your details on the team's efforts to fix those issues where thermal runaway, um, you share with us is the resulting sale going to look cost or perform differently than what was originally put in or other hand is very small to your knowledge why?

John Van Scoter

Yes, a great question again, Mike, I want to emphasize clearly that just a handful of cells that we have out of thousands that we've built. So just to keep the situation in scope on, but they're small tweaks that we're making, but I would like to once again reiterate that the battery system is really a complex interplay between the chemistries that mechanics and the overall system environment that it operates.
And so those all have to be tweaked to make a change in one area that it may affect the design and may affect the manufacturing flow. And so just bear that in mind when we talk about changes. It's small tweaks to all those because of the interplay between them for the battery system.

Mike Shlisky

I've got it. Thanks. And perhaps one last one for me. This is for Kevin is too early to ask about about 2025 at this point. And do you think that your cash burn or expense run rate as it tapers down some a little bit around the year premium rents similar to what you're seeing this year or others? Is there a major step up or down for 2025?

John Van Scoter

No, thanks, Mike, we're going to give longer-term guidance later this year at our investor event. But we I don't think our messaging has changed much from what we said originally, which is once we got through our ST. one mine install on our SP. two electrolyte facility that our CapEx needs would tweak down and overall spend will go down. So not we're not expecting any changes, but we'll give more detailed guidance here later this year.

Mike Shlisky

Okay. Appreciate those answers. Thanks so much.

Operator

Brian Dobson, Chardan Capital Markets.

Brian Dobson

Yes. Thanks very much for taking my question. I guess just one follow-up on those call it 10 clients and the two clients that you mentioned. I know you mentioned supplying pattern electrolyte, but on an ongoing basis to one potential client and one new potential client, what kind of feedback have you received from those companies? And can you give us an idea as to what industry they're in either automotive or battery.

John Van Scoter

There's one customer that's in the battery space providing to the EV market, a major player in Asia. And then a second on EVOEM. also in Asia. So those the description of the two that we referred to in the call, the feedback has been very encouraging.
Brian and the reason I say that is that we've been through multiple iterations, our record of sampling with both of them. Then looking at the initial materials saying I like this characteristic about the electrolyte, but to you change this characteristic and go ahead and we do our modification or screening or what have you to get to that desired Palm specification.
We re sample that they reevaluate it taking through their cell lines. And then it's a rinse and repeat from there. We've had as many as five cycles with one of those two OEMs at this point. So it should clearly shows engagement. It shows that there's interest, strong interest, I would say as a result of the engagement, we're not up through that process with either of them.
I would expect that would continue through the balance of this year. As I said, the battery system is a very complex interplay. They both have their own cell designs. And so we're really tuning the electrolyte to make it perform the best in their cell design. And I believe that will continue through the balance of this year.

Brian Dobson

Yes, excellent. Is there any update on work that you have been doing with BMW toward the development of one of their prototype coal cars?

John Van Scoter

Yes. So our collaboration with BMW continues to be very strong. If anything, it's gotten stronger in 2024. You may recall we actually have ex-pat engineers from BMW here on site in Colorado for extended periods of time. And they're working shoulder to shoulder with our engineers to come up to speed on our cell design so that they can duplicate that.
And then in Power Store in Germany, I understand that equipment for that facility is coming in this year and they have an objective to get that facility up and running in 2025 on there's we're still in discussions with them about the demo car when we really don't have any further updates for you at this point. But we will share that with you as soon as we do have clarity about their plans.
As you I'm sure know, they are going through a major platform change with the noise class coming out next year. And so they're doing a lot of internal planning. So there really is no further update at this point, other than that close collaboration and our support of there flying in parts of Germany as we go through this year.

Brian Dobson

Yes, excellent. And during the quarter, you retire nearly $5 million worth of worth of stock. And I think we're in agreement that shares are undervalued at this level, but as you're thinking about utilizing additional additional share repurchases? Or are you thinking about being programmatic? Or are you thinking about being opportunistic in nature? Or how are you in the Board going about that?

Kevin Paprzycki

Hey, Brian. We're thankful that we have such a strong balance sheet at this point, and we'll remain flexible here and consider all opportunities to buy our stock back going forward. We're at this point, we want to give too much detail because that could impact our ability to buy back, but we'll consider the opportunities here as they come up going forward.

Brian Dobson

Okay. And just one final one, if I could sneak it in. It's very exciting that you're building out Korea. Have you received any kind of early early feedback from from team members on the ground there regarding the reception of solid power by the local companies?

John Van Scoter

Yes, the reception has been just what we hoped it would be. I think once you plant the flag and start to invest in a country like that, Jan. So it's really our first global expansion by our people take notice. And so yes, we are getting a differential treatment from the various partners and providers suppliers over there and also very close collaboration with the National Labs.
They have clearly acknowledged that being there makes a difference and we have hired now three nationals already throughout program management, technical lead as well as HR over there to build out that core team. So the reception is exactly what we had hoped, maybe a little bit better than we had than I had expected on the government side, but it's really coming in nicely.

Brian Dobson

Thanks very much.

Operator

Jeffrey Campbell, Seaport Global Securities.

Jeffrey Campbell

Good afternoon and congratulations on all the success that you've laid out. I really only have one question at this point and that is from all these various some samplings of the electrolyte and where the electrolyte is going. It is, is this like a line being tested for any other kind of battery architecture besides the silicon PV cell or and or conversely, if not, can we see this as some sort of validation of the so we're kind of a B cell architecture?

John Van Scoter

Yes. Good question, Geoffrey. I we believe that it's being used in a variety of different anode cathode combinations at this point, how hot for obvious reasons, these OEMs generally keep those designs pretty close to their chest. So we don't have a lot of visibility, but we get some clues, if you will, based on what they're asking for in terms of the changes to electrolyte.
And I think it's fair to say that there's a number of different combinations of anode and cathode that are being utilized with our electrolyte at this point, again, it underscores the we're really indifferent to the anode technology and the cathode technology. It speaks to the versatility, I think, of our electrolyte and of our business model. We do again, work closely with the customers, but don't have ultimate visibility right now on those designs.

Jeffrey Campbell

Yes. Well, that their flexibility is kind of where I was going. So thanks for that answer.

Operator

(Operator Instructions)
Vincent Anderson, Stifel.

Vincent Anderson

Yes, thanks, Tom. So just two quick ones on the SK. partnership. Could you remind me, are you able to immediately start it or iterating off of your most recent A2 battery with SK? Or does the nature of the JDA mean that you kind of have to start a few steps back and develop forward from there?

John Van Scoter

We will start with the A. one design as a baseline because it's the most learn and then build from there on. But our intention would be to have ongoing collaboration for the various designs as we go forward. They've expressed a desire to do that same thing, but it will start off of our base, which we built largely last year.

Vincent Anderson

Okay. That makes sense. And are they going to be explicitly sourcing raw materials or you are having a direct, say, in raw material sourcing?

John Van Scoter

You mean for our precursors? Or do you mean for the other guys on everything in the battery in the battery, get the site.

Vincent Anderson

Apologies. Yes, for your precursors.

John Van Scoter

I no, we solely control our precursor vendors and selection.

Vincent Anderson

All righty. And I'm just shifting gears, I'm curious, are you planning on we are requiring or dedicating additional prototyping equipment or electrolyte manufacturing equipment to support the new electrolyte chemistry. And I'm only asking because I assume you've already started working on some of this R&D around the new chemistry and you feel the need to afforded it. So lab space, I'm just wondering that's going to eventually come with maybe entirely. Yes, segregated wind and things like that.

John Van Scoter

We have the DVPR. line that will be coming on midyear here while lab excuse me, not line that will advance on the state of the art there advance on our production capability in terms of continuous flow versus batch as well as driving on our cost vectors. But once that's done, it's designed so that whatever results can be seamlessly integrated into our SP. two existing powder line.
And one of the I think real highlights of this year has been the flexibility that that line has demonstrated already. I mean, it was designed for flexibility. But as we've gone through these customer sampling exercise, as I described previously, our ability to actually tune it very quickly to the customer requirements is really proven to be beyond even my expectations. So we don't envision a different line other than the DVPR. lab that then will become material and designs will migrate into the standard SD. two facility.

Vincent Anderson

Perfect. Right. That's that's all from me.

John Van Scoter

Thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to John Scotti for any closing remarks.

John Van Scoter

Thank you for joining the call today, everyone and for your interest in Solid Power. We look forward to updating you again next quarter.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.