UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from __________ to __________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including
area code:
Not applicable
(Former name or former address, if changed since last report)
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Date File required to be submitted and pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| The |
As of May 20, 2025, there were
SOLIDION TECHNOLOGY, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025
TABLE OF CONTENTS
| Part I - FINANCIAL INFORMATION | 1 | ||
| Item 1. | Unaudited Condensed Consolidated and Combined Financial Statements | 1 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 37 | |
| Item 4. | Controls and Procedures | 37 | |
| Part II - OTHER INFORMATION | 39 | ||
| Item 1. | Legal Proceedings | 39 | |
| Item 1A. | Risk Factors | 39 | |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39 | |
| Item 3. | Defaults Upon Senior Securities | 39 | |
| Item 4. | Mine Safety Disclosures | 39 | |
| Item 5. | Other Information | 39 | |
| Item 6. | Exhibits | 40 | |
| SIGNATURES | 41 | ||
i
EXPLANATORY NOTE
On February 2, 2024 (the “Closing Date”), Nubia Brand International Corp., a Delaware corporation (“Nubia” and after the Transactions described herein, the “Combined Company” or “Solidion Technology, Inc.”), consummated the previously announced business combination (the “Closing”) pursuant to a Merger Agreement (as amended on August 25, 2023, the “Merger Agreement”), by and among Nubia, Honeycomb Battery Company, an Ohio corporation (“HBC”), and Nubia Merger Sub, Inc., an Ohio corporation and wholly-owned subsidiary of Nubia (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into HBC (the “Merger,” and the transactions contemplated by the Merger Agreement, the “Transactions”), with HBC surviving such merger as a wholly owned subsidiary of Nubia, which was renamed “Solidion Technology, Inc.” upon Closing.
Unless the context otherwise requires, the “registrant” and the “Company” refer to Nubia prior to the Closing and to the Combined Company and its subsidiaries following the Closing and “HBC” and “Honeycomb” refers to Honeycomb Battery Company and its subsidiaries prior to the Closing and the business of the Combined Company and its subsidiaries following the Closing.
The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is now listed on The Nasdaq Stock Market LLC (“NASDAQ Global”) under the symbol “STI”. The Company’s Public Warrants to purchase Common Stock at an exercise price of $575.00 per share, previously listed under ticker “NUBIW”, were delisted from the Nasdaq and pending listing on The OTC Markets under the symbol “STIWW”. Until the Merger, Nubia neither engaged in any operations nor generated any revenue, and based on its business activities, Nubia was a “shell company” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
ii
PART I
PART I - FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated and Combined Financial Statements
SOLIDION TECHNOLOGY, INC.
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS
(unAUDITED)
| March 31, 2025 | December 31, 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Other receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and Equipment, net of depreciation | ||||||||
| Patents, net of amortization | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Income taxes payable | ||||||||
| Excise tax payable | ||||||||
| Derivative liabilities | ||||||||
| Due to related party | ||||||||
| Convertible notes | ||||||||
| Short-term notes payable | ||||||||
| Total Liabilities | ||||||||
| Commitments and contingencies (Note 5) | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Stock subscription receivable | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated and combined financial statements.
1
SOLIDION TECHNOLOGY, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(unAUDITED)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 (Restated) | |||||||
| Net sales | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating Expenses | ||||||||
| Research and development | ||||||||
| Selling, general and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other Income (Expense) | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Issuance of common stock and warrants | ( | ) | ||||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Other income (expense) | ( | ) | ||||||
| Total other income (expense) | ( | ) | ||||||
| Net income (loss) before provision for income taxes | ( | ) | ||||||
| Provision for income taxes | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Weighted average number of shares of common stock outstanding, basic | ||||||||
| Basic net income (loss) per share of common stock | $ | $ | ( | ) | ||||
| Weighted average number of shares of common stock outstanding, diluted | ||||||||
| Diluted net income (loss) per share of common stock | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated and combined financial statements.
2
SOLIDION TECHNOLOGY, INC.
CONDENSED Consolidated AND COMBINED STATEMENTS OF CHANGES IN STOCKHOLDERs’ (DEFICIT) EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND MARCH 31, 2024
(UNAUDITED)
| Additional | Stock | Stockholders’ | ||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Subscription | Equity | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Receivable | (Deficit) | |||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Shares issued from exercise of Series A Warrants | ||||||||||||||||||||||||
| Conversion of convertible notes into common stock | ||||||||||||||||||||||||
| Shares issued to consultants | ||||||||||||||||||||||||
| Reverse stock split | — | ( | ) | |||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||
| Net income (loss) | — | |||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2024
(RESTATED)
| Additional | Stock | Stockholders’ | ||||||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Subscription | Equity | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Receivable | (Deficit) | |||||||||||||||||||
| Balance at December 31, 2023 | — | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||
| Retroactive application of recapitalization to December 31, 2023 | ( | ) | ||||||||||||||||||||||
| Adjusted beginning balance | ( | ) | ||||||||||||||||||||||
| Balance at January 1, 2024, after retroactive application of recapitalization | ( | ) | ||||||||||||||||||||||
| Capital contributions from related party | — | |||||||||||||||||||||||
| Issuance of common stock upon consummation of the Merger | ( | ) | ( | ) | ||||||||||||||||||||
| Conversion of convertible notes into common stock upon consummation of the Merger | ||||||||||||||||||||||||
| Stock subscription receivable | — | ( | ) | ( | ) | |||||||||||||||||||
| Earnout Arrangement | — | ( | ) | |||||||||||||||||||||
| Contingent consideration | — | ( | ) | |||||||||||||||||||||
| Convertible note – stock issuance loss | — | |||||||||||||||||||||||
| Private Placement | ||||||||||||||||||||||||
| Issuance costs in connection with the Private Placement | — | ( | ) | ( | ) | |||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated and combined financial statements.
3
SOLIDION TECHNOLOGY, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(UNAUdITED)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 (Restated) | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock based compensation | ||||||||
| Equity compensation expense | ||||||||
| Non-cash interest expense | ||||||||
| Change in fair value of derivative liabilities | ( | ) | ||||||
| Issuance of common stock and warrants | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Other receivable | ( | ) | ||||||
| Prepaid expenses | ( | ) | ( | ) | ||||
| Other current assets | ( | ) | ( | ) | ||||
| Other non-current assets | ( | ) | ||||||
| Accounts payable and accrued expenses | ||||||||
| Income taxes payable | ( | ) | ||||||
| Excise taxes | ||||||||
| Net Cash Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows From Investing Activities: | ||||||||
| Capitalized patent costs | ( | ) | ( | ) | ||||
| Net Cash Used In Investing Activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities: | ||||||||
| Capital contributions from Global Graphene Group | ||||||||
| Cash received from NUBI Trust | ||||||||
| Discount payment related to Non Redemption Agreement | ( | ) | ||||||
| Reimbursement of consideration shares related to the Forward Purchase Agreement | ( | ) | ||||||
| Reimbursement of Recycled Shares related to Forward Purchase Agreement | ( | ) | ||||||
| Transaction expenses in connection with the Merger | ( | ) | ||||||
| Inflow from Merger | ||||||||
| Proceeds from convertible notes | ||||||||
| Repayment of short-term notes | ( | ) | ( | ) | ||||
| Proceeds from issuance of common stock and warrants in connection with the Private Placement | ||||||||
| Proceeds from issuance of common stock from exercise of warrants | ||||||||
| Issuance costs in connection with the Private Placement | ( | ) | ||||||
| Repayment of related party payable | ( | ) | ||||||
| Net Cash Provided By Financing Activities | ||||||||
| Net change in cash | ( | ) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental disclosure | ||||||||
| Cash paid for interest expense | $ | $ | ||||||
| Cash paid for federal income taxes | $ | $ | ||||||
| Supplemental disclosure of non-cash financing activities: | ||||||||
| Issuance of Common Stock upon the closing of the Merger | $ | $ | ||||||
| Convertible notes converted to common shares | $ | $ | ||||||
| Capitalized interest to principal balance of short-term note payable | $ | $ | ||||||
| Reverse stock split — reclassification from common stock to additional paid-in capital | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated and combined financial statements.
4
SOLIDION TECHNOLOGY, INC.
NOTES TO CONDENSED CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN
Solidion Technology, Inc (the “Company”, “Solidion”
or “Solidion Technology”), formerly known as Nubia Brand International Corp. prior to February 2, 2024, was incorporated in
Delaware on
On February 2, 2024, Nubia Brand International Corp., a Delaware corporation (“Nubia” and after the Transactions described herein, the “Company”, “Solidion” or “Solidion Technology, Inc.”), consummated the merger (the “Closing”) pursuant to a Merger Agreement, dated February 16, 2023 (as amended on August 25, 2023, the “Merger Agreement”), by and among Nubia, Honeycomb Battery Company, an Ohio corporation (“HBC”), and Nubia Merger Sub, Inc., an Ohio corporation and wholly-owned subsidiary of Nubia (“Merger Sub”). HBC was formerly the energy solutions division of Global Graphene Group, Inc. (“G3”). Pursuant to the Merger Agreement, Merger Sub merged with and into HBC (the “Merger,” and the transactions contemplated by the Merger Agreement, the “Transactions”), with HBC surviving such merger as a wholly owned subsidiary of Nubia, which was renamed “Solidion Technology, Inc.” upon Closing.
In accordance with the Merger Agreement the Company issued to the HBC
stockholders aggregate consideration of
| (ii) | 150,000 Earnout Shares if, over any ten (10) trading days within any thirty (30) trading day period from and after the date that is one hundred eighty (180) days following the Closing Date until the date that is forty-two (42) months following the Closing Date, the VWAP of the shares of Solidion’s Class A common stock is greater than or equal to $15.00 per share (subject to any adjustment pursuant to the Merger Agreement); and |
| (iii) | 200,000 Earnout Shares if over any ten (10) trading days within any thirty (30) trading day period from and after the date that is one hundred eighty (180) days following the Closing Date until the fourth anniversary of the Closing Date, the VWAP of the shares of Solidion’s Class A common stock is greater than or equal to $25.00 per share (subject to any adjustment pursuant to the Merger Agreement). |
If, prior to the expiration of the earn out periods set forth in (i)-(iii) above, there occurs any transaction resulting in a change in control, and the corresponding valuation of Solidion’s Class A common stock, calculated inclusive of the Earnout Shares to be issued under the Earnout Arrangement, is greater than or equal to the amount set forth in (i)-(iii), as applicable, then, immediately prior to the consummation of such change in control, the event set forth in (i)-(iii), as applicable, if not previously satisfied, shall be deemed to have occurred, subject to the terms provided in the Merger Agreement.
As of March 31, 2025, none of the Earnout Shares had been earned by G3.
5
The Merger was accounted for as a common control transaction with respect to HBC which is akin to a reverse recapitalization. This conclusion was based on the fact that G3 had a controlling financial interest in HBC prior to the Merger and has a controlling financial interest in Solidion (which includes HBC as a wholly owned subsidiary). Net assets of Nubia were stated at their historical carrying amounts with no goodwill or intangible assets recognized in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Merger with respect to HBC was not treated as a change in control due primarily to G3 receiving the controlling voting stake in Solidion and G3’s ability to nominate a majority of the board of directors of Solidion. Under the guidance in ASC 805 for transactions between entities under common control, the assets and liabilities of HBC and Nubia are recognized at their carrying amounts on the date of the Merger.
Under a reverse recapitalization, Nubia was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Merger was treated as the equivalent of HBC issuing stock for the net liabilities of Nubia, accompanied by a recapitalization.
Going Concern
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the foreseeable future.
Since the Company’s inception, it has experienced recurring net
losses and net cash used in operating activities and has generated minimal sales. For the three months ended March 31, 2025, the Company
recorded a net income of $
The Company expects to continue to incur net losses and net cash used
in operating activities in accordance with its operating plan and expects that expenditures will increase significantly in connection
with its ongoing activities. As of the balance sheet date and up to the date that the financial statements were issued, the Company does
not have availability under any debt agreements. Given the Company’s projected operating requirements and its existing cash and
cash equivalents, the Company is projecting insufficient liquidity to sustain its operations and meet its obligations through one year
following the date that the financial statements were issued. In addition, the Company has received a notice from the Nasdaq related to
their failure to maintain the minimum bid price requirement of $
If the Company’s common stock is delisted, it may affect the Company’s ability to obtain financing, trade or sell shares of their common stock, and/or forecasted operations could be negatively impacted in an amount that the Company cannot currently quantify. These events and conditions raise substantial doubt about the Company’s ability to continue as a going concern.
As an early-stage growth company, the Company’s ability to access capital is critical. The Company plans to finance its operations with proceeds from the sale of equity securities or debt; however, there is no assurance that management’s plans to obtain additional debt or equity financing will be successfully implemented or implemented on terms favorable to the Company.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Risks and Uncertainties
The Company’s current business activities consist of development and commercialization of battery materials, components, cells, and selected module/pack technologies. The Company faces inherent risks associated with its operations, such as the ongoing development of its technology, marketing, and distribution channels, as well as the enhancement of its supply chain and manufacturing capabilities. Additionally, the need to recruit additional management and key personnel is vital. The success of the Company’s development initiatives and the achievement of profitability hinge on various factors, including its ability to enter potential markets and secure sustainable financing in the future.
The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, competition from substitute products and larger companies, protection of proprietary technology, ability to maintain distributor relationships and dependence on key individuals.
6
NOTE 2 — CORRECTION OF ERRORS IN PREVIOUSLY REPORTED CONSOLIDATED FINANCIAL STATEMENTS
Subsequent
to the issuance of the interim financial information as of and for the period ended September 30, 2024, the Company identified an error
related to the accounting for issuance costs associated with convertible notes. Specifically, approximately $
As a result, the Company has revised its previously issued financial statements to reflect the correction of this material error, recording the issuance cost in issuance of common stock and warrants within non-operating losses. The revision had no impact on total stockholders’ equity or cash flows, but it did increase net loss and increase additional paid-in capital in the affected periods.
The revised quarterly financial information is included in this Quarterly Report on Form 10-Q in the tables that follow. The restatements will also be reflected in the comparative financial statements included in future filings of our 2024 unaudited condensed consolidated and combined financial statements within our 2025 Quarterly Reports on Form 10-Q.
All references to common stock, warrants, and restricted stock units,
as well as related per-share amounts in these condensed consolidated and combined financial statements, have been retrospectively adjusted
to reflect the
The impact of the restatement on the condensed consolidated and combined statement of operations for the three months ended March 31, 2024 is as follows:
| March 31, 2024 (Unaudited) | ||||||||||||
| As Reported | Adjustments | As Restated | ||||||||||
| Other Income (Expense) | ||||||||||||
| Change in fair value of derivative liabilities | $ | ( | ) | $ | $ | ( | ) | |||||
| Issuance of common stock and warrants | ( | ) | ( | ) | ( | ) | ||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ||||||||
| Other income (expense) | ( | ) | ( | ) | ||||||||
| Total other income (expense) | ( | ) | ( | ) | ( | ) | ||||||
| Net income (loss) before provision for income taxes | ( | ) | ( | ) | ( | ) | ||||||
| Provision for income taxes | ||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Weighted average number of shares of common stock outstanding, basic | ||||||||||||
| Basic net income (loss) per share of common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Weighted average number of shares of common stock outstanding, diluted | ||||||||||||
| Diluted net income (loss) per share of common stock | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
7
The impact of the restatement on the condensed consolidated and combined statement of changes in stockholders’ (deficit) equity for the three months ended March 31, 2024 is as follows:
| Three Months Ended March 31, 2024 | ||||||||||||
| Additional | Stockholders’ | |||||||||||
| Paid-in | Accumulated | Equity | ||||||||||
| Capital | Deficit | (Deficit) | ||||||||||
| As Reported | ||||||||||||
| Balance at January 1, 2024, after retroactive application of recapitalization | $ | $ | ( | ) | $ | |||||||
| Convertible note – stock issuance loss | ||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2024 | $ | $ | ( | ) | $ | ( | ) | |||||
| Adjustments | ||||||||||||
| Balance at January 1, 2024, after retroactive application of recapitalization | ||||||||||||
| Convertible note – stock issuance loss | ||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2024 | ( | ) | ||||||||||
| As Restated | ||||||||||||
| Balance at January 1, 2024, after retroactive application of recapitalization | ( | ) | ||||||||||
| Convertible note – stock issuance loss | ||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2024 | $ | $ | ( | ) | $ | ( | ) | |||||
The impact of the restatement on the condensed consolidated and combined statement of cash flows for the three months ended March 31, 2024 is as follows:
March 31, 2024 (Unaudited) | ||||||||||||
| As Reported | Adjustments | As Restated | ||||||||||
| Cash Flows From Operating Activities: | ||||||||||||
| Net income (loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | ||||||||||||
| Stock based compensation | ||||||||||||
| Equity compensation expense | ||||||||||||
| Non-cash interest expense | ||||||||||||
| Change in fair value of derivative liabilities | ||||||||||||
| Issuance of common stock and warrants | ||||||||||||
There was no impact on net cash used in operating activities or within any line items within investing and financing activities.
8
NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated and combined financial statements (the “financial statements”) are presented in conformity with US GAAP and pursuant to the rules and regulations of the SEC.
During the periods prior to the Closing date of the Merger, the Company operated as part of G3. Consequently, stand-alone financial statements have not historically been prepared for the Company. The accompanying financial statements have been prepared from G3’s historical accounting records and are presented on a stand-alone basis as if the Company’s operations had been conducted independently from G3. Therefore, the financial statements included herein may not be indicative of the financial position, results of operations, and cash flows of the Company in the future or if the Company had been a separate, stand-alone entity during the periods presented.
The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future.
The financial statements include the Company entities. All intercompany transactions have been eliminated for consolidation purposes.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
9
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Segment Reporting
The Company has determined that the Chief Executive
Officer is its Chief Operating Decision Maker (the “CODM”). Operating segments are defined as components of an entity for
which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate resources to
an individual segment and in assessing performance. The Company has determined that it operates in
The CODM uses consolidated net income (loss) as the measure of segment profit or loss. Expense information is also reviewed only at the consolidated level, as presented in the Company’s consolidated statement of operations. Research and development expense has been identified as a significant segment expense, with all other expense lines being considered part of ‘Other segment items.’ Additionally, the CODM evaluates assets on a consolidated basis. As such, the Company reports segment profit or loss, segment expenses, and segment assets on a consolidated and combined basis.
Cash and cash equivalents
The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2025 and December 31, 2024.
Accounts Receivable, net of Allowance for Credit Losses
Accounts receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for credit losses to ensure accounts receivables are not overstated due to un-collectability. Bad debt reserves are maintained as warranted for various customers based on a variety of factors, including the length of time the receivables are past due, significant one-time events and historical experience. An additional reserve for individual accounts is recorded when the Company becomes aware of a customer’s inability to meet its financial obligation, such as in the case of bankruptcy filings, or deterioration in such customer’s operating results or financial position. If circumstances related to a customer change, estimates of the recoverability of receivables would be further adjusted. As of March 31, 2025 and December 31, 2024, the Company determined that no allowance was required.
Other Receivable
During the first quarter of 2024, the Company
advanced $
Inventory
Inventories are stated at the lower of first-in, first-out cost or net realizable value. The Company writes-down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The Company writes off obsolete inventories when the Company deems the value to be impaired. As of March 31, 2025 and December 31, 2024, the Company determined that no write off was required.
10
Property and Equipment, net
Property and equipment are recorded at cost less accumulated depreciation. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life, are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. The Company assesses the carrying value of its property and equipment for impairment each year and when indicators exist that there could be an impairment.
Based on its assessments, the Company did not incur any impairment charges for the three months ended March 31, 2025 and for the year ended December 31, 2024.
The Company depreciates its property and equipment
for financial reporting purposes using the straight-line method over the estimated useful lives of the assets.
| Building | ||
| Building improvements | ||
| Machinery & equipment |
Depreciation expense of property and equipment
was $
Patents
The Company capitalizes external costs, such as
filing fees and associated attorney fees, incurred to obtain issued patents. The Company’s intangible assets consist of capitalized
costs for unissued patents and issued patents. Issued patents are carried at cost less accumulated amortization. Successful patent efforts
are amortized over the life of the patent, and unsuccessful efforts are expensed. The issued patents are being amortized over a useful
life of
Net unissued and issued patents were $
Amortization expense of patents was $
Leases
The Company determines whether an arrangement is a lease at inception. For leases where the Company is the lessee, right-of-use assets are recognized as the lease liability, adjusted for lease incentives received and prepayments made. Lease liabilities are recognized based on the present value of remaining lease payments over the lease term. When the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term. Leases with an initial lease term of 12 months or less are not recorded on the condensed consolidated and combined balance sheet.
The Company has elected the short-term lease practical expedient under ASC 842, applying it consistently to all leases with an initial term of 12 months or less, which are excluded from the condensed consolidated and combined balance sheet. Lease expense for these leases is recognized on a straight-line basis over the lease term. The Company had no right-of-use assets or lease liabilities recorded on its condensed consolidated and combined balance sheets as of March 31, 2025 and 2024, respectively.
11
Foreign Operations
The functional currency of Solidion’s Taiwan subsidiary is the New Taiwan Dollar. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 830, Foreign Currency Matters, the financial statements of the Company’s Taiwan subsidiary are translated to U.S. dollars using the exchange rates at the balance sheet dates for assets and liabilities, the historical exchange rate for stockholders’ equity accounts and a weighted average exchange rate for revenue, expenses and gains or losses. Foreign currency translation adjustments are accumulated in a separate component of stockholders’ deficit until the foreign business is sold or substantially liquidated. Foreign currency translation adjustments for the periods presented in these financial statements were not material.
During prior reporting periods, the Company’s
research and development facility in Taiwan — operating as an extension of the Dayton, Ohio R&D team and focused on silicon
anode technology advancement — represented $
During the three months ended March 31, 2025, the Company ceased research and development operations at its Taiwan location. The results of operations for this location were immaterial to the Company’s condensed consolidated and combined financial statements for all periods presented. No material exit or disposal costs were incurred in connection with the shutdown.
Revenue Recognition
Revenue is recognized when a performance obligation has been satisfied by transferring control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. Revenues are recognized at a point in time when control transfers to customers, which is generally determined when title, ownership and risk of loss pass to the customer.
Research and Development
All research and development costs are expensed as incurred.
Selling, General and Administrative Expenses
Selling, general and administrative expenses represent costs incurred by the Company in managing the business, including salary, benefits, stock-based compensation, sales, insurance, professional fees and other operating costs associated with the Company’s non-research and development activities.
Stock-Based Compensation
The Company has an incentive equity plan, (“2023 Equity Incentive Plan”). Under the terms of the plan, Solidion’s employees, consultants and directors, and employees and consultants of its affiliates, may be eligible to receive awards in the form of incentive stock options (“ISOs”) to employees and for the grant of non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants.
The number of shares of common stock initially reserved for issuance
under the incentive plan will be [
12
The Company measures stock options and restricted stock unit awards granted to employees, non-employees, and directors based on the fair value on the date of the grant and recognizes compensation expense of those awards, over the requisite service period, which is generally the vesting period of the respective award. Options granted under the 2023 Equity Incentive Plan vest at the rate specified in the stock option agreement as determined by the plan administrator. The plan administrator determines the term of stock options granted under the incentive plan, up to a maximum of ten years. Forfeitures are accounted for as they occur.
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Stock-based compensation expense for restricted stock units is measured based on the grant-date fair value of the awards and recognized as expense over the requisite service period, which is generally the vesting period. The Company has elected to use the accelerated attribution method, under which each vesting tranche of an award is treated as a separate award and expensed over its respective vesting period. Compensation expense is recognized only for those awards expected to vest, with forfeitures estimated at the grant date and adjusted prospectively, if necessary.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company lacks a sufficient history of company-specific historical and implied volatility information for its common stock. The Company therefore estimates its expected stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.
The expected term of all of the Company’s stock options has been determined utilizing the “simplified” method. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends on its common stock and does not expect to pay any cash dividends in the foreseeable future.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
13
Net Income (Loss) per Common Stock
The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period.
The calculation of diluted income (loss) per share of common stock does not include potentially dilutive common stock equivalents if their include would be anti-dilutive as of March 31, 2025 and 2024. As such, net loss per common stock is the same for basic and diluted loss per share for the three months ended March 31, 2024.
The following table presents potentially dilutive common stock equivalents that have been excluded from the calculation of dilutive loss per share as their inclusion would be anti-dilutive:
| March 31, 2024 | ||||
| Holdback Shares | ||||
| Warrants - Public | ||||
| Warrants - Private | ||||
| Warrants - Series A | ||||
| Warrants - Series B | ||||
| Stock-based compensation - equity awards | ||||
| Forward Purchase Agreement - Additional Shares | ||||
| HBC Earnout Shares | ||||
| Total common stock equivalents excluded from dilutive loss per share | ||||
The following table presents potentially dilutive common stock equivalents that have been included in the calculation of dilutive income per share for the three months ended March 31, 2025, as their inclusion would be dilutive.
| March 31, 2025 | ||||
| Stock-based compensation - equity awards | ||||
| Total common stock equivalents included in dilutive income per share | ||||
Concentration of Credit Risk
Financial instruments that potentially subject
the Company to concentrations of credit risk consist of cash accounts in financial institutions, which, at times, may exceed the Federal
Depository Insurance Coverage of $
Fair Value of Financial Instruments
Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date. US GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). See Note 13.
Equity-Linked Instruments
The Company evaluates all equity-linked contracts, including warrants and the Forward Purchase Agreement (“FPA”), to determine classification as either equity or liability in accordance with FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and FASB ASC 815, Derivatives and Hedging (“ASC 815”). This assessment considers whether the instruments meet the fixed-for-fixed equity classification criteria and whether any provisions require liability treatment, including potential “net cash settlement” outside of the Company’s control. Instruments that qualify for equity classification are recorded as a component of additional paid-in capital, while those requiring liability classification are measured at fair value, with subsequent changes recorded in earnings. This assessment is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the FPA and warrants are outstanding.
14
Warrants
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for the outstanding public warrants and private placement warrants (“Private Warrants”) issued in connection with Nubia’s initial public offering in 2022 as equity-classified instruments under ASC 815-40 since they qualify as being indexed to the company’s own stock for equity classification criteria and do not contain provisions that would require liability classification.
The Company accounts for the outstanding Series A, Series B, Series C, and Series D warrants issued in connection with the March and August 2024 private placement financings (the “PIPE Warrants”) as liability-classified instruments because certain settlement adjustments prevent them from meeting the fixed-for-fixed equity classification criteria under ASC 815-40. The Company utilizes a Monte Carlo simulation model to determine the fair value of the PIPE Warrants. The resulting fair value is recorded as a derivative liability on the condensed consolidated and combined balance sheets, and with changes in the fair value of the PIPE Warrants recorded as a non-cash other income (expense) within change in fair value of derivative liabilities account on the Company’s condensed consolidated and combined statements of operations.
Forward Purchase Agreement
The Company accounts for the FPA as either equity-classified or liability-classified instruments based on an assessment of the FPA specific terms and applicable authoritative guidance in ASC 480, and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the FPA is a freestanding financial instrument pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the FPA meets all of the requirements for equity classification under ASC 815, including whether the FPA is indexed to the Company’s own common shares and whether the FPA holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of FPA issuance and as of each subsequent quarterly period end date while the FPA is outstanding.
For issued or modified FPA that meets all of the criteria for equity classification, the FPA is required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified FPA that does not meet all of the criteria for equity classification, the FPA is required to be recorded at fair value on the date of issuance and revalued at each balance sheet date thereafter. The Company accounts for the FPA as a liability-classified instrument due to the settlement provisions. The Company utilizes a Monte Carlo simulation model to determine the fair value of the FPA. The resulting fair value is recorded as a derivative liability on the condensed consolidated and combined balance sheets. The Company records changes in the fair value of the FPA as a non-cash other income (expense) within change in fair value of derivative liabilities account on the Company’s condensed consolidated and combined statements of operations.
Other Current Assets
The composition of other current assets was:
| March 31, 2025 | December 31, 2024 | |||||||
| Directors & officers insurance | ||||||||
| Total other assets | ||||||||
Reverse Stock Split
On May 12, 2025, the Company
effected a 1-for-50 reverse stock split of its common stock. As a result, each
In accordance with SEC Staff Accounting Bulletin Topic 4C, all share and per-share amounts in the accompanying condensed consolidated financial statements and notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.
Recently Adopted Accounting Standards
In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. The standard did not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into reportable segments. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective adoption is required for all prior periods presented in the financial statements. The Company adopted the amendment effective January 1, 2024 for annual reporting purposes. The adoption did not have a material impact to the Company’s financial statements or disclosures.
15
Recently Issued Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosures of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for the fiscal year beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.
NOTE 4 — RECAPITALIZATION
As discussed in Note 1, the Merger was accounted for as a common control transaction with respect to HBC which is akin to a reverse recapitalization.
Transaction Proceeds
Upon the Closing, the
Company received net proceeds of $
| Cash received from NUBI Trust | ||||
| Less: discount payment related to Non Redemption Agreement | ( | ) | ||
| Less: reimbursement for consideration shares related to the FPA | ( | ) | ||
| Less: reimbursement for Recycled Shares related to the FPA | ( | ) | ||
| Less: transaction expenses paid in connection with the Merger | ( | ) | ||
| Net cash received from NUBI Trust | ||||
| Add: cash from NUBI operating account | ||||
| Add: prepaid expenses | ||||
| Less: derivative liabilities | ( | ) | ||
| Less: other liabilities | ( | ) | ||
| Reverse recapitalization, net | ( | ) |
The number of shares of common stock issued immediately following the consummation of the Merger were:
| Nubia common stock, outstanding prior to the closing of the Merger | ||||
| Shares issued to Nubia convertible noteholders | ||||
| Predecessor HBC Shares | ||||
| Common stock immediately after the closing of the Merger |
The number of Predecessor HBC shares was determined as follows:
| Predecessor HBC Shares | Shares issued to shareholders of Predecessor HBC | |||||||
| Common stock | ||||||||
16
IPO warrants
In connection with Nubia’s
initial public offering in 2022,
HBC Holdback Shares
The Company and G3 included
a provision in the Merger Agreement that adjusts the aggregate share consideration to be paid to the shareholders of HBC if the G3 Tax
Lien is not released prior to closing. Specifically,
HBC Earnout Arrangement
As noted in Note 1, in
connection with the Merger, HBC shareholders are entitled to up to
As of March 31, 2025, of the Earnout Shares had been earned by G3.
NOTE 5 — RELATED PARTIES
Capital Contributions from Global Graphene Group (“G3”)
G3, a significant shareholder of the Company,
infused capital resources into the business to cover operating expenses incurred prior to the close of the merger. The capital contributions
from G3 included allocations for payroll, rent and facility costs, and professional services. The total capital contributions from G3
amounted $
Other Receivable
During the three months ended March 31, 2024,
the Company advanced $
Shared Services Agreement
Effective February 2, 2024, the Company entered into a shared services
agreement (the “SSA”) with G3, under which G3 agreed to provide certain services, including employees, office space and use
of equipment, and the Company agreed to pay for such services on a monthly basis. The SSA is subject to typical conditions and may be
terminated by either party upon written notice. The management and board continues to monitor the SSA and all other related party transactions
to uphold transparency and protect shareholder interests. Expenses incurred related to the SSA services and employees were $
17
Due to Related Party
During the merger closing process, G3 incurred
certain transaction expenses that were due to be reimbursed by the Company after the Closing Date, as per the Business Combination Agreement.
These expenses included legal, advisory and audit fees directly associated with facilitating the merger. The total amount due to G3 was
$
Additionally, at the time of the merger close,
the Company had an outstanding payable related to the monthly administrative services support fees due to Mach FM Corp, an affiliate of
Mach FM Acquisitions LLC, the sponsor of Nubia. This fee covered office space, utilities, and secretarial and administrative support provided
by Mach FM to support Nubia’s operating activities. The outstanding balance payable to Mach FM amounted to $
As of March 31, 2025 and December 31, 2024, amounts outstanding to
G3 were $
Contingent Consideration
At Closing, the G3 Tax Lien has not been settled
by G3 and as of March 31, 2025, the
As of the Closing Date, the Company recorded a
fair value of $
NOTE 6 — COMMITMENTS AND CONTINGENCIES
Litigation
From time to time, the Company may be involved in lawsuits, claims or legal proceedings that arise in the ordinary course of business. The Company accrue a contingent liability when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Management believes that there are no claims against us for which the outcome is expected to have a material effect on our financial position, results of operations or cash flows.
18
G3 Tax Lien
The Internal Revenue Service has placed a federal
tax lien on all the property and rights to property belonging to G3 which would include any proceeds from sale of property assets included
in the financial statements of the Company. The lien relates to unpaid federal income taxes for 2017. Inclusive of interest, the balance
owed is approximately $
As disclosed in Note 3, the Company and G3 included
a provision in the Merger Agreement that adjusts the aggregate share consideration to be paid to the shareholders of HBC if the G3 Tax
Lien is not released prior to closing. Specifically,
The G3 Tax Lien represents a potential obligation that would become payable only upon the sale of the building. As the timing and likelihood of such a sale are uncertain and there are no immediate plans to sell, the Company has not recorded a liability on the balance sheet for this contingent obligation. Should the Company decide to sell the building in the future, this lien may need to be settled from the proceeds of the sale, which could impact the net cash inflow from such a transaction. The Company will continue to monitor the situation and will recognize a liability in the financial statements if and when it becomes probable that the building will be sold and the lien will need to be satisfied.
Registration Rights Agreement
Pursuant to the Registration Rights Agreement, dated August 30, 2024
(the “Agreement”), between the Company and the purchasers of privately placed securities (the “Purchasers”), the
Company was obligated, among other things, to file a registration statement to register the resale of such securities and to have the
Securities and Exchange Commission declare the registration statement effective by certain deadlines specified in the Agreement. As of
March 31, 2025, the Company had not met these deadlines. As a result, the Company recorded an expense within Selling, General, and
Administrative Expenses on its consolidated and combined statements of operations of $
19
NOTE 7 — STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred Stock
The Company is authorized to issue
Common Stock
The Company is authorized to issue
Equity Financing
On March 13, 2024, Solidion entered into a private
placement transaction (the “March Private Placement”), pursuant to a Securities Purchase Agreement (the “March Subscription
Agreement”) with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of $
As part of the March Private Placement, the Company
issued an aggregate of
On August 30, 2024, the Company entered into a
private placement transaction (the “August Private Placement”), pursuant to a Securities Purchase Agreement (the “August
Subscription Agreement”) with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of $
As part of the August Private Placement, the Company
issued an aggregate of
The Company accounts for the outstanding PIPE Warrants as liability-classified instruments because certain settlement adjustments prevent them from meeting the fixed-for-fixed equity classification criteria under ASC 815-40. The Company utilizes a Monte Carlo simulation model to determine the fair value of the PIPE Warrants. The resulting fair value is recorded as a Derivative liability on the condensed consolidated and combined balance sheets, and records changes in the fair value of the PIPE Warrants as a non-cash other income (expense) within Change in fair value of derivatives account on the Company’s condensed consolidated and combined statements of operations.
20
NOTE 8 — WARRANTS
IPO Warrants – Public Warrants
In connection with Nubia’s initial public
offering in 2022,
The Company is not obligated to issue shares upon
warrant exercise unless a registration statement covering the underlying shares is effective. If a registration statement is not effective,
holders may exercise warrants on a cashless basis under certain conditions. The Company may redeem the warrants at $
The Company evaluated the public warrants and determined that it is a freestanding equity-linked contract within the scope of ASC 815-40. Based on this guidance, the Company concluded that the IPO warrants qualify for equity classification.
IPO Warrants – Private Warrants
In connection with Nubia’s initial public
offering in 2022,
Except as described below, the Private Warrants have terms and provisions that are identical to those of the public warrants, including as to exercise price, exercisability and exercise period. The Private Warrants will be exercisable on a cashless basis and will not be redeemable by us so long as they are held by the holders of the private warrants or their permitted transferees. The holders of the Private Warrants or their permitted transferees have the option to exercise the private warrants on a cashless basis. If the Private Warrants are held by holders other than the holders of the Private Warrants and their permitted transferees, the Private warrants will be redeemable by us and exercisable by the holders on the same basis as the warrants included in the units being sold in the Company’s initial public offering.
If exercised on a cashless basis, holders will
receive shares of common stock based on the difference between the warrant exercise price and the fair market value of the stock. Fair
market value is determined as the average last sale price of the common stock over the
In addition, holders of the Company’s Private Warrants are entitled to certain registration rights.
The Company evaluated the Private Warrants and determined that it is a freestanding equity-linked contract within the scope of ASC 815-40. Based on this guidance, the Company concluded that the Private Warrants qualify for equity classification.
Series A and Series B Warrants
The Series A and Series B Warrants issued in conjunction with the March Private Placement were determined to be liability classified in accordance with ASC 815 and have been recognized at fair value upon issuance, with remeasurement in each subsequent period. As such, on the date of issuance the Company allocated the proceeds between the common stock, Series A Warrants and Series B Warrants first to the fair value of the Series A Warrants and Series B Warrants, which were recorded as a liability.
The Company used a Monte Carlo analysis to determine
the fair value of the warrants at the date of issuance on March 15, 2024 and as of the reporting date. The total fair value of the Series
A Warrants and Series B Warrants measured at issuance was $
21
The fair value of the
Series A and Series B Warrants as of March 31, 2025, was $
Series C and Series D Warrants
The Series C and Series D Warrants issued in conjunction with the August Private Placement were determined to be liability classified in accordance with ASC 815 and have been recognized at fair value upon issuance, with remeasurement in each subsequent period. As such, on the date of issuance the Company allocated the proceeds between the common stock, Series C Warrants and Series D Warrants first to the fair value of the Series C Warrants and Series D Warrants, which were recorded as a liability.
The Company used a Monte Carlo analysis to determine
the fair value of the warrants at the date of issuance on August 30, 2024 and as of the reporting date. The total fair value of the Series
C Warrants and Series D Warrants measured at issuance was $
The fair value of the Series C Warrants and Series D Warrants as of
March 31, 2025 was $
NOTE 9 — FORWARD PURCHASE AGREEMENT, NON REDEMPTION AGREEMENT AND PRIVATE PLACEMENT FINANCING
Forward Purchase Agreement
On December 13, 2023, Nubia entered into the FPA with Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP, and Meteora Strategic Capital, LLC (collectively, the “Seller” or “Forward Purchase Investors”). For purposes of the FPA, Nubia is referred to as the “Counterparty” prior to the consummation of the Merger, while Solidion Technology, Inc. (“Pubco”) is referred to as the “Counterparty” after the consummation of the Merger. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the FPA previously filed with the SEC.
Pursuant to the terms
of the Forward Purchase Agreement, Seller intends, but is not obligated, to, concurrently with the Closing pursuant to Seller’s
FPA Funding Amount PIPE Subscription Agreement, purchase up to
The FPA provides for
a prepayment shortfall equal to
Following the Closing, the reset price (the “Reset Price”) was initially the Initial Price. The Reset Price will be subject to reset on a bi-weekly basis commencing the first week following the thirtieth day after the closing of the Merger to be the lowest of (a) the then current Reset Price, (b) the Initial Price and (c) the VWAP Price of the Shares of the prior two weeks; provided the Reset Price shall be subject to reduction upon a Dilutive Offering Reset immediately upon the occurrence of such Dilutive Offering. The Seller also retains the right to terminate part or all of the transaction through Optional Early Termination (OET) by providing notice, with corresponding payment obligations based on the Reset Price.
22
The Valuation Date for settlement occurs at the earlier of three years post-Merger, specified adverse events (e.g., delisting or registration failure), or at the Seller’s discretion. Upon settlement, adjustments may be made in cash or shares, depending on the circumstances.
The Seller has waived redemption rights for Recycled Shares, which may impact the overall redemption levels and market perception of the Merger. The FPA complies with tender offer regulations, including Rule 14e-5 under the Securities Exchange Act of 1934.
On February 2, 2024, upon consummation of the
Merger, NUBI made a payment to each Forward Purchase Investor in respect of their respective Recycled Shares. This payment totaled
On January 17, 2024, the Company received a Pricing
Date Notice from the Forward Purchase Investors specifying
The Company accounts for the FPA as a liability-classified instrument due to the settlement provisions. The resulting fair value is recorded as a derivative liability on the consolidated balance sheets. The Company records changes in the fair value of the FPA as a non-cash other income (expense) within change in fair value of derivatives account on the Company’s consolidated and combined statements of operations.
The Company utilized a Monte Carlo simulation
model to determine the fair value of the FPA, comprising Recycled Shares of
FPA amendment and resolution of lawsuit
On July 16, 2024, the Forward Purchase Investors brought a lawsuit against Solidion in Delaware Chancery Court seeking specific performance and monetary damages related to the FPA.
On August 29, 2024, the Company and the Seller entered into an amendment (the “Amendment”) to the FPA. The Amendment includes modifications to several terms, including:
| ● | Prepayment Shortfall: Expanded to allow the Company to request additional funds in increments of $ |
| ● | Prepayment Shortfall Consideration: Seller may now sell Additional Shares and Recycled Shares at any price, without an Early Termination Obligation, until sale proceeds reach |
| ● | Shortfall Sales: The Company agrees not to issue or sell additional shares or convertible securities without Seller’s consent until specific conditions are met. |
| ● | Shortfall Variance: If a shortfall occurs, the Company must either pay the Shortfall Variance in cash or issue additional shares to the Seller. |
| ● | Share Consideration: Seller is entitled to designate |
| ● | VWAP Trigger Event: Defined as occurring if the VWAP Price falls below $ |
In addition, upon execution of the Amendment, the Seller agreed to temporarily forbear from exercising any rights under the Forward Purchase Agreement related to certain valuation events, including a Shortfall Variance Registration Failure, VWAP Trigger Event, or Registration Failure (collectively, “Valuation Date Events”), during the period from the Pricing Date through December 31, 2024 (the “Standstill Period”). After the Standstill Period, if any Valuation Date Events have occurred, the Seller’s rights under the agreement will be reinstated.
Additionally, the Company agreed to file a registration statement within 20 business days of the Amendment to register the resale of the Additional Shares and Share Consideration (collectively, the “Meteora Shares”). The Company will use commercially reasonable efforts to have the registration statement declared effective within 60 calendar days of the Amendment. No other shares may be registered before the Meteora Shares, though they may be registered concurrently in the same resale registration statement.
23
Further, the Amendment restricts the Seller from
selling more than
Finally, concurrently with the execution of the
Amendment, the Company and the Seller agreed to sign and cause to be filed a joint stipulation for dismissal with prejudice of the Action
(as defined below) (the “Stipulation”). The Stipulation provides that the Company issue
On August 29, 2024, the Company issued
The Company recorded an expense within Selling, General, and Administrative
expenses on the Company’s condensed consolidated and combined statements of operations of $
Non-Redemption Agreement
On December 13, 2023, NUBI entered into a non-redemption agreement
(the “Non-Redemption Agreement”) with certain investors named therein (each, a “Backstop Investor”), each acting
on behalf of certain funds, investors, entities or accounts that are managed, sponsored or advised by each such Backstop Investor or its
affiliates. Pursuant to each Non-Redemption Agreement, each Backstop Investor agreed that, on or prior to Closing, it will beneficially
own not greater than the lesser of (i) that number of Backstop Shares set forth in the Non-Redemption Agreement and (ii) the total number
of NUBI Shares beneficially owned by Backstop Investor and its affiliates and any other persons whose beneficial ownership of NUBI Shares
would be aggregated with those of Backstop Investor for purposes of Section 13(d) of the Securities Exchange Act of 1934 not exceeding
On February 2, 2024, upon the consummation of the Merger, NUBI paid
each Backstop Investor a cash discount payment from the proceeds remaining in trust account for their respective Backstop Shares as part
of the Non-Redemption Agreement. The discount payment amount was calculated as the product of (x) the number of Backstop Shares and (y)
the Redemption Price, less $
NOTE 10 — DEBT
Convertible Notes
At various dates during the first quarter of 2024,
the Company issued convertible notes of $
During the three months ended March 31, 2025, holders converted an
aggregate of $
24
Short-term Notes Payable
EF Hutton LLC
On February 1, 2024, the Company executed a Promissory
Note with EF Hutton, totaling $
Benesch Friedlander Coplan & Aronoff LLP
On April 29, 2024, the
Company executed a Promissory Note with Benesch Friedlander Coplan & Aronoff in the amount of $
On November 12, 2024,
the Company amended the terms of its Promissory Note with Benesch Friedlander Coplan & Aronoff. The amended terms include an updated
principal balance of $
The outstanding balance of Short-term Notes Payable
amounted to $
NOTE 11 — INCOME TAXES
The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of March 31, 2025, and December 31, 2024, the Company had a full valuation allowance against its deferred tax assets.
For the three months ended March 31, 2025, the Company utilized the annualized effective tax rate method and recorded income tax expense based on a effective tax rate. tax benefit or expense has been recorded in relation to the pre-tax income for the three months ended March 31, 2025, and pre-tax losses for the three months ended March 31, 2024 due to a full valuation allowance to offset any deferred tax assets.
25
NOTE 12 — STOCK-BASED COMPENSATION
Unrestricted Common Stock Awards
During the period ended March 31, 2025, the Company
granted unrestricted common shares to certain in connection with the terms of their individual employment agreements. As these awards
were fully-vested, unrestricted shares, the Company recognized the full amount of $
During the period ended March 31, 2024, the Company granted unrestricted
common shares to certain executives in connection with the terms of their individual employment agreements. As these awards were fully-vested,
unrestricted shares, the Company recognized the full amount of $
Restricted Stock Units and Stock Options
During the three months ended March 31, 2025, the Company granted restricted
stock units to certain executives and management in connection with the terms of their individual employment agreements. The Company recognized
the amount of $
There were restricted stock units or stock options granted during the period ended March 31, 2024. Additionally, there were restricted stock units or stock options outstanding at either the beginning or the end of the periods ended March 31, 2024.
Warrants
During the three months ended March 31, 2025,
the Company granted
Awards with Market-Based Conditions
In connection with the aforementioned executive
employment agreements, certain executives are eligible to receive unrestricted shares of common stock if certain stock price targets are
met during the term of the respective employment agreements. A stock price target will be satisfied if the 120-day trailing average closing
price (based on trading days) of a share of the Company’s common stock equals or exceeds the applicable stock price target, which
range from $
The following table summarizes our awards with market-based conditions:
| Number of Shares | Weighted Average Grant-Date Fair Value | |||||||
| Beginning of period | ||||||||
| Granted | $ | |||||||
| Vested | ||||||||
| Cancelled | ||||||||
| End of period | $ | |||||||
Awards with Performance Conditions
In connection with the aforementioned executive
employment agreements, certain executives are eligible to receive cash incentive payments in connection with the Company achieving certain
capital raise targets. In addition, these executives can also receive a cash bonus equal to
26
NOTE 13 — FAIR VALUE MEASUREMENTS
The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1—quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2—observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3—unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.
The following table presents information about the Company’s liabilities that are measured at fair value as of March 31, 2025 and December 31, 2024 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
| March 31, | December 31, | |||||||||
| Description: | Level | 2025 | 2024 | |||||||
| Derivative Liabilities: | ||||||||||
| Forward purchase agreement | 3 | $ | $ | |||||||
| Warrants – Series A | 3 | $ | $ | |||||||
| Warrants – Series C and D | 3 | $ | $ | |||||||
Forward purchase agreement
The Company used a Monte Carlo analysis to determine
the fair value of the FPA, assuming
27
The fair value measurement of the FPA at March 31, 2025 and December 31, 2024 was calculated using the following range of weighted average assumptions:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Risk-free interest rate | % | % | ||||||
| Stock price | $ | $ | ||||||
| Expected life | ||||||||
| Expected volatility of underlying stock | % | % | ||||||
| Dividends | % | % | ||||||
The model measured the total present value of
the Company’s proceeds at approximately $
Warrants – Series A and B
The Company utilized a Monte Carlo simulation analysis to determine the fair value of the Series A Warrants and Series B Warrants at the date of issuance (March 15, 2024), which included the following assumptions:
| Series A Warrants |
Series B Warrants |
|||||||
| Expected term (in years) | ||||||||
| Stock price | $ | $ | ||||||
| Risk free rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend rate | $ | $ | ||||||
| Exercise Price | $ | $ | ||||||
The total fair value of the Series A Warrants
and Series B Warrants measured at issuance was $
The Company utilized a Monte Carlo simulation analysis to determine the fair value of the Series A Warrants at March 31, 2025, which included the following assumptions:
| Series A Warrants | ||||
| Expected term | ||||
| Stock price | $ | |||
| Risk free rate | % | |||
| Expected volatility | % | |||
| Expected dividend rate | $ | |||
| Exercise Price | $ | |||
28
The fair value of the
Series A and Series B Warrants as of March 31, 2025, was $
Warrants – Series C and D
The Company utilized a Monte Carlo simulation analysis to determine the fair value of the Series C Warrants and Series D Warrants at the date of issuance on August 30, 2024, which included the following assumptions:
| Series C Warrants |
Series D Warrants |
|||||||
| Expected term | ||||||||
| Stock price | $ | $ | ||||||
| Risk free rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend rate | $ | $ | ||||||
| Exercise Price | $ | $ | ||||||
The total fair value of the Series C Warrants
and Series D Warrants measured at issuance was $
The Company utilized a Monte Carlo simulation analysis to determine the fair value of the Series C Warrants and Series D Warrants at March 31, 2025, which included the following assumptions:
| Series C Warrants |
Series D Warrants |
|||||||
| Expected term (in years) | ||||||||
| Stock price | $ | $ | ||||||
| Risk free rate | % | % | ||||||
| Expected volatility | % | % | ||||||
| Expected dividend rate | $ | $ | ||||||
| Exercise Price | $ | $ | ||||||
The fair value of the Series C Warrants and Series D Warrants as of
March 31, 2025, was $
29
The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2025.
| Fair Value | ||||
| Measurement | ||||
| Using Level 3 | ||||
| Forward Purchase Agreement | Inputs Total | |||
| Balance, December 31, 2024 | $ | |||
| Change in fair value | ( | ) | ||
| Balance, March 31, 2025 | ||||
| Fair Value | ||||
| Measurement | ||||
| Using Level 3 | ||||
| Warrants – Series A | Inputs Total | |||
| Balance, December 31, 2024 | $ | |||
| Change in fair value | ( | ) | ||
| Balance, March 31, 2025 | ||||
| Fair Value | ||||
| Measurement | ||||
| Using Level 3 | ||||
| Warrants – Series C and D | Inputs Total | |||
| Balance, December 31, 2024 | $ | |||
| Change in fair value | ( | ) | ||
| Balance, March 31, 2025 | ||||
HBC earnout shares
The Company utilized
a Monte Carlo simulation analysis to determine the fair value of the Earnout Shares at the date of the Merger, which included the following
assumptions: stock price of $
Stock-based compensation – Awards with Market-Based Conditions
The Company utilized a Monte Carlo simulation
analysis to determine the fair value of the awards with market-based conditions at the date of the Merger, which included the following
assumptions: stock price of $
NOTE 14 — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. The Company did not identify any subsequent events, except as noted below, that would have required adjustment or disclosure in the financial statements.
Reverse Stock Split
On May 12, 2025, the Company effected a
Pursuant to SAB Topic 4C, the reverse stock split has been reflected on a retroactive basis in the financial statements as of and for the periods ended March 31, 2025 and 2024, and December 31, 2024.
30
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Solidion Technology, Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.
Overview
Solidion Technology, Inc. is an advanced battery technology company focused on the development and commercialization of next-generation battery materials, components, and energy storage solutions. Headquartered in Dallas, Texas, with research and development (R&D) and manufacturing operations in Dayton, Ohio, Solidion is dedicated to transforming the energy storage landscape by addressing key limitations in current lithium-ion and emerging battery technologies.
The Company specializes in high-performance silicon-rich anode materials, solid-state battery technology, and fire-retardant electrolytes, aiming to enhance the energy density, safety, and cost-effectiveness of lithium-ion batteries. Solidion’s proprietary innovations include graphene-enabled batteries, elastomer-protected electrodes, quasi-solid and solid-state electrolytes, and biochar-derived anode materials, providing sustainable and scalable solutions for the electric vehicle (EV), energy storage system (ESS), and consumer electronics markets.
Solidion holds an extensive intellectual property (IP) portfolio with over 525 active patents (pending and granted) globally, positioning the Company as a leader in silicon anode and solid-state battery technology. Its innovative silane-free production processes for silicon-based anode materials allow for lower manufacturing costs and improved scalability. Additionally, its fire-retardant and polymer-based electrolytes enable safer, high-energy-density batteries compatible with existing lithium-ion cell production infrastructure.
A key milestone in Solidion’s technological advancements is the successful development of a high-energy cylindrical cell, which achieves an exceptional energy density of 305 Wh/kg, significantly higher than conventional lithium-ion batteries, which typically range between 240-260 Wh/kg. This innovation not only enhances the range and performance of EVs but also underscores Solidion’s ability to deliver cutting-edge solutions for high-energy and high-power applications.
The Company has established strategic partnerships with leading industry players, including Giga Solar Materials Corp. and Bluestar Materials Company, to advance the production and commercialization of silicon oxide (SiOx) anode materials in the U.S. These collaborations, along with Solidion’s ongoing engagement with EV original equipment manufacturers (OEMs) and toll-manufacturing partners, position the Company to accelerate the adoption of its next-generation battery solutions.
On November 14, 2024, we adopted a strategic Bitcoin allocation policy for our Corporate Treasury. As part of this strategy, Solidion is committed to leveraging Bitcoin as a long-term store of value. The Company will allocate excess cash from operations toward Bitcoin purchases, subject to board approval. Additionally, interest earnings from cash held in money market accounts will be converted into Bitcoin. The Company also plans to allocate a portion of future capital raises to Bitcoin acquisitions, demonstrating a sustained commitment to integrating Bitcoin into its financial strategy. For fiscal year 2024, the Company did not identify excess cash from operations for Bitcoin purchases. Additionally, $13,806 generated in interest income earnings during fiscal year 2024 have been designated for Bitcoin purchases in fiscal year 2025 as part of the ongoing treasury strategy. The Company did not conduct any capital raise activities between the date of its announcement and the end of the reporting period and, as a result, did not allocate any proceeds toward Bitcoin purchases. Looking ahead, during fiscal year 2025, Solidion anticipates capital raises that will include allocation of a portion of proceeds to Bitcoin acquisitions.
Solidion is committed to advancing battery technology through continuous R&D efforts, expanding manufacturing capabilities, and optimizing supply chain sustainability. By integrating cutting-edge materials and scalable production methods, Solidion aims to deliver high-performance, cost-effective, and environmentally sustainable battery solutions that address the increasing demand for electrified mobility and renewable energy storage.
31
Our Products
Anode Materials Our product portfolio includes graphite-based anode materials, distinguished by our commitment to utilizing raw materials from sustainable sources. As part of our efforts to contribute to the goal of net-zero greenhouse gas emissions by 2050, we are scrutinizing our entire supply chain to identify opportunities for reducing environmental impacts. Graphite, a critical component in rechargeable batteries due to its longevity and cost-efficiency, is traditionally derived from petroleum coke and pitch. Solidion’s innovative approach introduces biochar produced from waste biomass as an alternative feedstock. This sustainable process not only sequesters carbon but may also result in carbon-negative production. By leveraging biochar, Solidion aims to produce anode-grade graphite with exceptional performance. By the end of 2024, Solidion’s anode materials containing biochar-derived materials have achieved a capacity of over 340 mAh/g and comparable cycle life to conventional graphite anodes, marking a significant step towards more environmentally responsible battery manufacturing. Solidion has also developed a series of silicon and SiOx anode materials that enable a significantly higher energy density (for example, an expected 20-30% increase in the EV driving range) likely at a reduction in the cell cost in terms of U.S. dollars per kilowatt hour (“kWh”) when production in scale occurs. The specific capacity of these products range from 1,300 to 2,800 mAh/g aiming to suit different applications including EV, energy storage stations, drones, and consumer electronics.
Battery Cells To rigorously validate the performance of its innovative anode materials, Solidion is actively engaged in the development and testing of a diverse portfolio of battery cells. By the close of 2024, Solidion, in collaboration with strategic partners, has successfully constructed and evaluated over three distinct types of cylindrical cells, each featuring either our advanced silicon (Si) or graphite-based anodes. These cells showcase a wide range of capabilities, with capacities spanning from 4.6 to an impressive 5.5Ah.
Notably, our high-energy 5.5Ah 21700 cylindrical cell represents a significant leap forward in battery technology. This cell not only achieves an exceptional energy density of 305 Wh/kg, surpassing the typical 240-260 Wh/kg offered by established Asian manufacturers in the same high-energy category, but also delivers superior power performance. It boasts a continuous charging and discharging capability exceeding 2C, a substantial improvement over the performance less than 1C typically seen in competitor products. This combination of high energy density and robust power handling makes our 5.5Ah cell ideally suited for applications demanding both sustained energy delivery and moderate to high power output, such as advanced electric vehicles and high-performance portable electronics.
Furthermore, Solidion is actively developing cell variants tailored for applications requiring even higher power capabilities. These cells have already demonstrated impressive fast-charging capabilities, exceeding 3C, enabling rapid replenishment of energy and minimizing downtime. This focus on high-power cells underscores our commitment to addressing the diverse needs of the evolving energy storage market.
Beyond anode advancements, Solidion is also pioneering the development of next-generation electrolytes. As previously mentioned, we have successfully formulated fire-retardant and quasi-solid electrolytes, demonstrating their performance through the construction of small prototype cells. These electrolytes represent a significant step towards enhancing battery safety, a critical consideration in today’s demanding applications. Looking ahead, Solidion intends to scale up production of these electrolyte-based cells, manufacturing larger format cells in common practical sizes. This initiative will not only validate the performance of our advanced electrolytes in real-world scenarios but also pave the way for the development of safer and more reliable energy storage solutions. By integrating our innovative anode materials with these advanced electrolytes, Solidion is poised to deliver a new generation of high-performance, safe, and sustainable batteries. The development of larger cells with advanced electrolytes is scheduled to conclude in 2025.
Recent Developments
Honeycomb Battery Company Merger
On February 2, 2024, Nubia Brand International Corp., a Delaware corporation (“Nubia” and after the Transactions described herein, “Solidion” or “Solidion Technology, Inc.”), consummated a merger (the “Closing”) pursuant to a Merger Agreement, dated February 16, 2023 (as amended on August 25, 2023, the “Merger Agreement”), by and among Nubia, Honeycomb Battery Company, an Ohio corporation (“HBC”), and Nubia Merger Sub, Inc., an Ohio corporation and wholly-owned subsidiary of Nubia (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into HBC (the “Merger,” and the transactions contemplated by the Merger Agreement, the “Transactions”), with HBC surviving such merger as a wholly owned subsidiary of Nubia, which was renamed “Solidion Technology, Inc.” upon Closing.
We received net proceeds from the Merger totaling $17,555. The Company is applying the proceeds from the Merger toward its corporate growth strategy related to the commercialization of our battery technology and the scaling of its manufacturing operations.
Equity Financing
On March 13, 2024, Solidion entered into a private placement transaction (the “March Private Placement”), pursuant to a Securities Purchase Agreement (the “March Subscription Agreement”) with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of $3,850,000, before deducting fees to the placement agent and other expenses payable by the Company in connection with the March Private Placement. The net proceeds from the March Private Placement were used for working capital and general corporate purposes. The March Private Placement closed on March 15, 2024.
32
As part of the March Private Placement, the Company issued an aggregate of 102,667 units and pre-funded units (collectively, the “Units”) at a purchase price of $37.50 per unit (less $0.0050 per pre-funded unit). Each Unit consists of (i) one share of Solidion Common Stock, (ii) two Series A warrants (“Series A Warrants”) each to purchase one share of Common Stock, and (iii) one Series B warrant (“Series B Warrants”) to purchase such number of shares of Common Stock as determined on the reset date, and in accordance with the terms therein.
The reset period ended on July 2, 2024 (the “Reset Date”), with the lowest 10-day VWAP on June 28, 2024, being $0.4347. Consequently, the reset price was established at $17.39. As a result, the Series A Warrants and Series B Warrants held by investors were reset to 442,834 shares and 114,992 shares, respectively. As of March 31, 2025, investors had exercised 289,613 Series A Warrants and 114,992 Series B Warrants, resulting in the issuance of 404,605 common shares. As of March 31, 2025, 153,221 Series A Warrants and no Series B Warrants remained outstanding.
On August 30, 2024, the Company entered into a private placement transaction (the “August Private Placement”), pursuant to a Securities Purchase Agreement (the “August Subscription Agreement”) with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of $4,000,000, before deducting fees to the placement agent and other expenses payable by the Company in connection with the August Private Placement. The Company intends to use the net proceeds from the August Private Placement for working capital and general corporate purposes.
As part of the August Private Placement, the Company issued an aggregate of 244,349 units and pre-funded units (collectively, the “Units”) at a purchase price of $16.37 per unit. Each Unit consists of (i) one share of common stock, par value $0.0050 per share of the Company (the “Common Stock”) (or one pre-funded warrant to purchase one share of Common Stock (the “Pre-Funded Warrant”)), (ii) two Series C warrants each to purchase one share of Common Stock (the “Series C Warrant”) and (iii) one Series D warrant to purchase such number of shares of Common Stock as determined on the Reset Date (as defined in Note 10) and in accordance with the terms therein (the “Series D Warrant” and together with the Pre-Funded Warrant and the Series C Warrant, the “Warrants”).
As of March 31, 2025, investors have not exercised any Series C and Series D warrants.
The Company accounts for the outstanding Series A, Series B, Series C, and Series D warrants issued in connection with the March and August 2024 private placement financings (the “PIPE Warrants”) as liability-classified instruments because certain settlement adjustments prevent them from meeting the fixed-for-fixed equity classification criteria under ASC 815-40.
Components of Results of Operations
Revenue
The Company is focused on commercializing and manufacturing battery materials and next-generation battery cells. Historically, and during the periods presented, we have generated minimal revenue from product samples. We do not expect to begin generating significant revenue until we complete the commercialization process and build out manufacturing capacity. Future capacity may come from joint ventures with strategic partners, sourcing third-party manufacturing from our network, or pursuing mergers and acquisitions.
Operating Expenses
Research and Development
Research and development expenses consist primarily of personnel expenses, including salaries, benefits, third party technology validation testing, equipment, engineering, maintenance of facilities, data analysis, and materials.
Selling, general and, administrative
Selling, general and administrative expenses primarily consist of personnel expenses, including salaries, benefits, and stock-based compensation related to executive management, finance, legal, and human resource functions. Other costs include business development, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, such rent, office supplies and information technology costs.
Other Income (Loss)
Change in fair value of Derivative Liabilities
Change in fair value of Derivative Liabilities consists of fluctuations in the fair value of an agreement between the Company and investors facilitating future purchases of the Company’s stock by the Investor based on a Monte Carlo simulation model.
Interest Income
Interest income is derived from the Company’s operating cash account, which is periodically invested in short-term money market funds.
33
Interest Expense
Interest expense consists primarily of the interest on the Company’s short-term notes and D&O insurance premium financing arrangement.
Results of Operations
This data should be read in conjunction with Solidion’s financial statements and accompanying notes. These results of operations are not necessarily indicative of future performance.
Summary of Statements of Operations for the Three Months Ended March 31, 2025 and 2024
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net sales | $ | - | $ | - | ||||
| Cost of goods sold | - | - | ||||||
| Operating expenses | 3,132,669 | 3,759,336 | ||||||
| Total other income (expense) | 12,327,299 | (28,776,646 | ) | |||||
| Net income (loss) | $ | 9,194,630 | $ | (32,535,982 | ) | |||
Operating Expenses
Operating expenses decreased by $626,667 for the three months ended March 31, 2025. This decrease was primarily driven by lower Selling, General and Administrative expenses, including reductions in professional fees, stock-based compensation, insurance costs, and other administrative expenses associated with the Company’s operations as a public entity beginning February 2, 2024.
Other Income (expense)
Other income increased by $41,103,945 for the three months ended March 31, 2025. This increase was largely driven by a gain of $12,417,450 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement, and warrants related to the March and August private placement financing. Additionally, there was interest expense of $106,422 primarily related to the Company’s short-term notes.
34
Cash Flows
The following tables set forth a summary of our cash flows for the periods indicated
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating Activities | (2,342,278 | ) | (2,040,712 | ) | ||||
| Investing Activities | (40,156 | ) | (91,348 | ) | ||||
| Financing Activities | 198,875 | 3,954,881 | ||||||
| Net increase (decrease) in cash | (2,183,559 | ) | 1,822,821 | |||||
Net Cash used in Operating Activities
For the three months ended March 31, 2025, cash used in operating activities was $2,342,278. This primarily resulted from net income of $9,194,630, which included non-cash gain of $12,417,450 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement and March and August Private Placement warrants. These non-cash gains were added back to reconcile net income to net cash used in operating activities, as part non-cash adjustments that also included depreciation and amortization, stock-based compensation non-cash interest expense, totaling $11,502,027. Additionally, changes in operating assets and liabilities used $34,881 of cash from operating activities, driven primarily by a $607,376 increase in other current assets. The increase in other current assets was due to the financing arraignment associated with the directors and officers insurance policy.
For the three months ended March 31, 2024, cash used in operating activities was $2,040,712. This primarily resulted from a net loss of $32,535,982, which included significant non-cash losses, driven by a loss of $8,182,500 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement and Private Placement warrants, and a loss of $20,590,717 from the issuance of common stock and warrants related to the convertible note and private placement financing activity. These non-cash losses were added back to reconcile net loss to net cash used in operating activities, as part non-cash adjustments that also included depreciation and amortization and stock-based compensation, totaling $30,226,609. Additionally, changes in operating assets and liabilities provided $268,661 of cash from operating activities.
Net Cash used in Investing Activities
For the three months ended March 31, 2025, the Company used cash of $40,156 in investing activities consisting of capitalized patent costs.
For the three months ended March 31, 2024, the Company used cash of $91,348 in investing activities consisting of capitalized patent costs.
Net Cash provided by Financing Activities
For the three months ended March 31, 2025, the Company generated cash of $198,875 from financing activities. The Company received proceeds from warrant exercises of $241,546. These increases were offset by repayment of short-term notes of $42,671.
For the three months ended March 31, 2024, the Company generated cash of $3,954,881 from financing activities. The Company received proceeds from Private Placement financing and convertible notes of $3,850,000 and 527,500, respectively. These increases were offset by repayment of short-term notes and repayment of related party advances of $424,277 and $241,106, respectively.
35
Going Concern Considerations, Liquidity and Capital Resources
Since Solidion’s inception, the Company has experienced recurring net losses and has generated minimal sales. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s ability to fund our operations and capital expenditures depends on our ability to raise additional external capital. This is subject to our future operating performance and general economic, financial, competitive, legislative, regulatory, and other conditions, some of which are beyond our control. We are currently engaged in discussions with various financing counterparties to secure sufficient capital to meet our business needs for the foreseeable future. The Company plans to finance its operations with proceeds from the sale of equity securities, government grants and loans, or debt; however, there is no assurance that management’s plans to obtain additional debt, grants or equity financing will be successfully implemented or implemented on terms favorable to the Company.
As of March 31, 2025, we had an accumulated deficit of $106,685,879. Additionally, $1,400,717 in NUBI transaction costs incurred at the Closing Date in connection with the Merger remain outstanding and are due within the next twelve months. During the three months ended March 31, 2025, we incurred losses from operations totaling $3,132,669 and net cash used in operating activities of $2,342,278. We expect to continue to incur such losses for at least the next twelve (12) months.
Off-Balance Sheet Arrangements
At March 31, 2025, we have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.
We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.
Critical Accounting Estimates
We prepare our financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statement that require estimation but are not deemed critical, as defined above. There were no changes to the Company’s critical accounting estimates from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024.
Forward Purchase Agreement
The Company accounts for the forward purchase agreement as either equity-classified or liability-classified instruments based on an assessment of the Forward Purchase Agreement (“FPA”) specific terms and applicable authoritative guidance in FASB ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”), and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the FPA is a freestanding financial instrument pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the FPA meets all of the requirements for equity classification under ASC 815, including whether the FPA is indexed to the Company’s own common shares and whether the FPA holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of FPA issuance and as of each subsequent quarterly period end date while the FPA is outstanding.
For issued or modified FPA that meet all of the criteria for equity classification, the FPA is required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified FPAs that do not meet all of the criteria for equity classification, the FPA are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for outstanding FPA as liability-classified instrument.
The fair value of the FPA is Level 3. The determination of the fair value requires significant estimates and judgments. Please see Note 13 Fair Value Measurements to the financial statements for the significant assumptions and estimates.
Changes in the significant assumptions and estimates could materially impact the valuation and the amounts recorded in the financial statements.
36
Recently Adopted Accounting Standards
In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. The standard did not change the definition of a segment, the method for determining segments or the criteria for aggregating operating segments into reportable segments. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Retrospective adoption is required for all prior periods presented in the financial statements. The Company adopted the amendment effective January 1, 2024 for annual reporting purposes. The adoption did not have a material impact to the Company’s financial statements or disclosures.
Recently Issued Accounting Standards
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosures of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for the fiscal year beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
This item is not applicable as we are a smaller reporting company.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2025, because of certain material weaknesses in our internal control over financial reporting, as further described below.
Notwithstanding these material weaknesses, our management concluded that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).
37
Management’s Report on Internal Control Over Financial Reporting
Material Weaknesses
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Management identified deficiencies in the principles associated with the control environment, risk assessment, control activities, information & communication, and monitoring components of internal control, based on the criteria established by the COSO framework, that constitute material weaknesses, either individually or in the aggregate as described below.
Control Environment: Solidion does not maintain a sufficient complement of qualified technical accounting and financial reporting personnel to perform control activities, including those related to complex and/or non-routine transactions. Additionally, Solidion did not implement sufficient segregation of duties within its financial reporting function in order to demonstrate independence and proper oversight. This material weakness contributed to the additional material weaknesses further described below.
Risk Assessment: Solidion did not design and implement an effective risk assessment based on the criteria established in the COSO framework. A material weakness, either individually or in the aggregate, was identified pertaining to (i) identifying, assessing, and communicating appropriate objectives; (ii) identifying and analyzing risks to achieve these objectives; and (iii) implementing an effective risk assessment to identify and assess changes in the business if such changes were to occur.
Control Activities: Solidion did not effectively design and implement control activities to support the operating effectiveness of controls to prevent and detect potential material errors based on the criteria established in the COSO framework. As a result, the following control deficiencies constitute material weaknesses, individually or in the aggregate: (i) ineffective controls related to the review and approval of journal entries and reconciliations, and (ii) a lack of appropriate accounting policies and procedures.
Information and Communication: We identified control deficiencies that constitute material weaknesses, either individually or in the aggregate, related to (i) internal communication of information, including objectives and responsibilities for internal control, necessary to support the functioning of internal control; and (ii) communicating relevant information to external parties timely.
Monitoring: Solidion did not maintain effective monitoring activities to determine whether the components of internal control over financial reporting were present and functioning based on the criteria established in the COSO framework.
Remediation Plans and Status
We are committed to maintaining a strong internal control environment and implementing measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated as soon as practicable. We plan to engage a third party to assist in our remediation efforts. We will design and implement a risk assessment process and establish processes and controls to support an effective control environment. These actions are intended to enable Solidion to enhance our monitoring of our internal controls over financial reporting as well as enhance required communication. In addition, we will design and implement controls to address material weaknesses in control activities including the proper review and approval of journal entries and reconciliations.
As Solidion continues to evaluate its internal controls, it may take additional remediation actions. The material weaknesses will be considered remediated when Solidion’s management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Solidion’s management will monitor the effectiveness of its remediation plans and will make changes management determines to be appropriate.
Changes in Internal Control over Financial Reporting
There were no changes during the quarter ended March 31, 2025, in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
38
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the quarter ended
March 31, 2025, no director or officer of the Company
39
ITEM 6. [EXHIBITS]
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith |
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Solidion Technology, Inc. | ||
| Dated: May 20, 2025 | By: | /s/ Jaymes Winters |
| Name: | Jaymes Winters | |
| Title: | Chief Executive Officer (Principal Executive Officer) | |
| Solidion Technology, Inc. | ||
| Dated: May 20, 2025 | By: | /s/ Vlad Prantsevich |
| Name: | Vlad Prantsevich | |
| Title: | Chief Financial Officer (Principal Accounting and Financial Officer) | |
41