Solid Power, Inc. Fair Value Disclosure
Note 5 – Fair Value Measurements
The carrying amounts of certain financial instruments, such as cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their relatively short maturities. The difference between the amortized cost and fair value of available-for-sale securities as of December 31, 2025 was not material.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
The following table summarizes the asset type, balance sheet classification, maturity, and value of the Company’s marketable securities and investments in the Consolidated Balance Sheets.
Assets | Balance Sheet Classification | Maturity | December 31, 2025 | December 31, 2024 | |||
Commercial Paper | Marketable securities | $ | 62,166 | $ | 47,046 | ||
Corporate Bonds | Marketable securities | 122,941 | 28,614 | ||||
Government Bonds | Marketable securities | 39,053 | — | ||||
U.S. Treasuries | Marketable securities | 5,017 | 17,124 | ||||
Total Marketable securities | $ | 229,177 | $ | 92,784 | |||
Corporate Bonds | Investments | $ | 63,187 | $ | 173,369 | ||
Government Bonds | Investments | 22,479 | 35,904 | ||||
Equity Method Investment | Investments | 1,331 | 1,127 | ||||
Total Investments | $ | 86,997 | $ | 210,400 | |||
As of December 31, 2025 and December 31, 2024, the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis were classified within the fair value hierarchy as follows:
December 31, 2025 | |||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | ||||||
Assets | Balance Sheet Classification | ||||||||||||
Commercial paper | Marketable securities | $ | 62,167 | $ | — | $ | — | $ | 62,167 | ||||
Corporate bonds | Marketable securities | $ | 122,941 | $ | — | $ | — | $ | 122,941 | ||||
Government bonds | Marketable securities | $ | 39,053 | $ | — | $ | — | $ | 39,053 | ||||
U.S. treasuries | Marketable securities | $ | 5,017 | $ | — | $ | — | $ | 5,017 | ||||
Corporate bonds | Investments | $ | 63,187 | $ | — | $ | — | $ | 63,187 | ||||
Government bonds | Investments | $ | 22,479 | $ | — | $ | — | $ | 22,479 | ||||
Bifurcated embedded derivative | Loan receivable from equity method investee | $ | — | $ | — | $ | 584 | $ | 584 | ||||
Liabilities | |||||||||||||
Public Warrants | Warrant liabilities | $ | 9,911 | $ | — | $ | — | $ | 9,911 | ||||
Private Placement Warrants | Warrant liabilities | $ | — | $ | 3,970 | $ | — | $ | 3,970 | ||||
December 31, 2024 | |||||||||||||
| Level 1 | | Level 2 | | Level 3 | | Total | ||||||
Assets | Balance Sheet Classification | ||||||||||||
Commercial paper | Marketable securities | $ | 47,046 | $ | — | $ | — | $ | 47,046 | ||||
Corporate bonds | Marketable securities | $ | 28,614 | $ | — | $ | — | $ | 28,614 | ||||
Corporate bonds | Investments | $ | 173,369 | $ | — | $ | — | $ | 173,369 | ||||
Government bonds | Investments | $ | 35,904 | $ | — | $ | — | $ | 35,904 | ||||
U.S. treasuries | Marketable securities | $ | 17,124 | $ | — | $ | — | $ | 17,124 | ||||
Bifurcated embedded derivative | Loan receivable from equity method investee |
| — | — | 584 |
| 584 | ||||||
Liabilities | |||||||||||||
Public Warrants | Warrant liabilities | $ | 5,537 | $ | — | $ | — | $ | 5,537 | ||||
Private Placement Warrants | Warrant liabilities | $ | — | $ | 3,198 | $ | — | $ | 3,198 | ||||
The change in fair value of the Company’s marketable securities and investments are included in Other Comprehensive Income (Loss) in the Company’s Consolidated Statements of Operations and Comprehensive Loss. There were no transfers in and out of Level 3 fair value hierarchy during the years ended December 31, 2025 and 2024.
The following table provides the available-for-sale securities purchased during the years ended December 31, 2025, and 2024.
For the Years Ended December 31, | ||||||
| 2025 | | 2024 | |||
Available-for-sale securities purchased | $ | 277,726 | $ | 216,193 | ||
Fair Value of Bifurcated Embedded Derivative
The fair value of the bifurcated embedded derivative (the “Derivative”) has been estimated using the with-and-without method as of December 31, 2025 and 2024 using Level 3 unobservable input; and Level 2 directly or indirectly observable inputs, including estimated credit rating, risk-free interest rates, discount rates utilized in expected future cash flows and expected future cash flows. The Company’s expectation of future cash flow is significant to the measurement of fair value. Material increases or decreases in any of those inputs may result in a significantly higher or lower estimated fair value measurement of the Derivative. See Note 11 – Related Party Transactions for more information.
Fair Value of Warrants
The fair value of the private placement warrants issued as part of the Company’s business combination in 2021 (the “Private Placement Warrants”) have been estimated using a Black-Scholes model as of December 31, 2025 and 2024. The estimated fair value of the Private Placement Warrants is determined using Level 2 directly or indirectly observable inputs. Inherent in a Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate, and dividend yield. Material increases (or decreases) in any of those inputs may result in a significantly higher (or lower) fair value measurement. The Company estimates the volatility of its Private Placement Warrants based on implied volatility from the Company’s publicly-traded warrants (the “Public Warrants” and, together with the Private Placement Warrants, the “Warrants”). The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve for a maturity similar to the expected remaining life of the Warrants. The dividend yield is based on the historical rate, which the Company anticipates remaining at zero. The fair value of the Public Warrants has been measured based on the quoted price of such warrants on the Nasdaq Stock Market, a Level 1 input.
The following table provides quantitative information regarding Level 2 inputs used in the recurring valuation of the Private Placement Warrants as of their measurement dates.
| December 31, | ||||||
2025 | | 2024 | |||||
Exercise price | $ | 11.50 | $ | 11.50 | |||
Stock price | $ | 4.25 | $ | 1.89 | |||
Volatility |
| 114.5 | % |
| 124.8 | % | |
Term (in years) |
| 0.94 |
| 1.94 | |||
Risk-free rate |
| 3.43 | % |
| 4.16 | % | |
The following table provides a rollforward (per Warrant) of the Public Warrants measured at fair value using Level 1 inputs and Private Placement Warrants measured at fair value using Level 2 inputs.
Public Warrants | Private Placement Warrants | |||||
| Level 1 Fair Value | | Level 2 Fair Value | |||
December 31, 2024 | $ | 0.42 | $ | 0.52 | ||
Change in fair value | $ | 0.29 | $ | 0.22 | ||
December 31, 2025 | $ | 0.71 | $ | 0.74 | ||
See Note 6 – Warrant Liabilities for more information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 23, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.