SES AI Corp Income Taxes Disclosure

Note 17.   Income Taxes

As discussed in “Note 1 – Nature of Business,” SES Holdings Pte. Ltd. is a Singapore private limited company and was formed in November 2018. As a result of the reorganization the Company undertook in 2018, SES Holdings Pte. Ltd. is also treated as a U.S. taxpayer for U.S. Federal income tax purposes in accordance with Internal Revenue Code Section 7874. SES Holdings Pte. Ltd. is the parent of the U.S. Federal consolidated income tax group.

The Company adopted ASU No. 2023-09, Improvements to Income Tax Disclosures, effective for the fiscal year ended December 31, 2025. In accordance with the transition guidance, the Company applied the amendments prospectively. As a result, the disclosures required by ASU 2023-09 are presented for fiscal year 2025 only and prior periods have not been restated.

The U.S. and foreign components of loss before income taxes were as follows:

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Income tax expense consists of the following:

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The following table provides a reconciliation of the U.S. statutory income tax rate to the Company’s provision for income taxes and respective effective tax rate disaggregated by required category for the year ended December 31, 2025 in accordance with ASU 2023-09:

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Reconciliations of the federal statutory income tax rate to the Company’s effective income tax rate are as follows:

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The Company is subject to income taxes in the U.S. federal, state, and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination within the U.S. and foreign authorities for all years, until such time as the net operating losses are initially utilized. The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018.

The components of the net deferred tax asset at the end of each year are as follows:

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The difference between the provision for income taxes and the income tax determined by applying the statutory federal income tax rate of 21% was due primarily to the research and development credit and change in valuation allowance. The Company's valuation allowance balance increased by $17.1 million and $18.1 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, the Company has Federal net operating loss (“NOLs”) carryforward of approximately $169.0 million, of which $9.2 million is for pre-2018 and $159.7 million is post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The

post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also has Massachusetts NOLs carryforwards of approximately $85.2 million, which begins to expire in 2033.

As of December 31, 2024, the Company had Federal NOLs carryforward of approximately $144.5 million, of which $9.2 million was for pre-2018 and $135.3 million was post 2017. The pre-2018 Federal NOLs carryforwards will begin to expire in 2033. The post-2017 Federal NOLs will carryforward indefinitely but can only offset 80% of annual taxable income. The Company also had Massachusetts NOLs carryforwards of approximately $81.2 million, which begins to expire in 2033.

The utilization of the Company’s NOLs and R&D credits and carryforwards may be subject to a limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code. The annual limitation may result in the expiration of the NOL carryforwards before their utilization. During 2025, management does not believe there were significant ownership changes that would trigger a Section 382 limitation.

As of December 31, 2025 and 2024, the Company had federal research credit carryforwards of approximately $7.2 million and $4.5 million, respectively, which begins to expire in 2033, and Massachusetts research credit carryforwards of approximately $3.5 million and $2.1 million, respectively, which begins to expire in 2030.

The Company records unrecognized tax benefits in accordance with ASC 740-10, Income Taxes. ASC 740-10 which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in the Company’s income tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

As of December 31, 2025 and 2024, the total amount of unrecognized tax benefits was $10.5 million and $7.6 million respectively, of which $10.1 million would affect 2025 income tax expense, if recognized, without considering any valuation allowance.

The Company includes interest and penalties related to unrecognized tax benefits within the benefit from (provision for) income taxes. As of the years ended December 31, 2025 and 2024 the total amount of gross interest accrued in each year was $0.1 million and less than $0.1 million, respectively.

A reconciliation of the beginning and ending balances of unrecognized tax benefits is as follows:

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The Company is subject to income taxes in the U.S. federal, state, and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. The Company’s tax years remain open for examination within the U.S. and foreign authorities for all years, until such time as the NOLs are initially utilized. The Company’s tax years remain open for examination by foreign authorities beginning with the tax year ended December 31, 2018.

The Company maintains full valuation allowance against its US and Viking Power System Pte. Ltd and UZ Energy, net deferred tax assets as it believes these deferred tax assets were not realizable on a more likely than not basis as of December 31, 2025.