ITEM 7. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References in this
report (the “Annual 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 Annual 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 Annual Report on Form 10-K 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 a Dallas, TX, USA-based
advanced battery technology company focused on the development and commercialization of battery materials, components, cells, and selected
module/pack technologies. Solidion holds a portfolio of over 550 patents, covering innovations such as high-capacity, non-silane gas
and graphene-enabled silicon anodes, biomass-based graphite, advanced lithium-sulfur and lithium-metal technologies. Solidion offers
two lines of battery products: (i) advanced anode materials (ready for production expansion); and (ii) three classes of solid-state batteries,
including Silicon-rich all-solid-state lithium-ion cells (Gen 1), anode less lithium metal cells (Gen 2), and lithium-sulfur cells (Gen
3), all featuring an advanced polymer- or polymer/inorganic composite-based solid electrolyte that is process-friendly.
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Business Combination
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.
Recent Developments
Memorandum of Understanding
On February 10, 2026, we entered into a non-binding
memorandum of understanding (“MOU”) with an entity that manufactures and distributes energy storage systems for the Company
to supply pouch cells for use in energy storage systems. While the MOU is non-binding in nature and may result in no actual sales, a definitive
agreement could potentially add an estimated $4 to $6 million in revenue over the next 12 months.
Grants from the U.S. Government
During the fourth quarter of 2025 and the first
quarter of 2026, the Company was notified that it had received three grants from various departments of the U.S. government. The
U.S. Department of Energy (“DOE”) provided the first grant (the “First Grant”), which was to advance research
and development of Electrochemical Manufacturing of High-Performance Graphite based on Biomass-Derived Carbon. The Company had received
the prestigious 2025 R&D 100 Award in partnership with Oak Ridge National Laboratory for innovation in Electrochemical Graphitization
in Molten Salts, and the First Grant was for research to be conducted jointly with Oak Ridge National Laboratory to reduce imports of
critical energy materials from foreign sources, improve American energy independence, and ensure that the U.S. maintains a technological
lead in developing and deploying advanced energy technologies.
The DOE provided the second grant (the “Second
Grant”) to scale up the synthesis of a carbon-nanosphere material that will be used as an anti-corrosive additive in molten-salts-based
heat transfer fluids for advanced molten salt nuclear reactors. The Second Grant was also for research to be conducted jointly with Oak
Ridge National Laboratory, this time to develop a nanofluids-based energy material, engineered colloidal suspension of hollow carbon nanoparticles
in conventional molten salts, to enhance heat transfer and reduce corrosion in nuclear reactors, which is critical for reducing costs,
increasing safety, and accelerating the commercialization of small modular nuclear reactors such as advanced molten salt reactors.
The U.S. Army provided the third grant (the
“Third Grant”) to develop an advanced fiber-based electronic battery system built on a coaxial carbon nanotube (“CNT”)
yarn architecture. The Third Grant was for research to be conducted jointly with The University of Texas at Dallas to develop a flexible,
rechargeable lithium-ion battery in fiber form: a CNT yarn serves as both the structural core and current collector of the anode, integrated
with Solidion’s silicon (Si) as the high-capacity anode material.
Reverse Stock Split
On May 12, 2025, the Company effected a 1-for-50
reverse stock split of its common stock (the “Reverse Stock Split”). As a result, each 50 shares of common stock issued and
outstanding immediately prior to the reverse split were converted into one share of common stock. Additionally, this transaction resulted
in a reclassification of $13,311 from common stock to additional paid-in capital during the period ended March 31, 2025. The reverse
stock split did not change the total number of authorized shares or the par value of the common stock. During the three-month period ended
June 30, 2025, the Company paid cash of approximately $460 to shareholders in lieu of issuing fractional shares.
Warrant Conversion
On October 8, 2025 (the “Purchase Date”),
Madison Bond LLC and Bayside Project LLC (together, the “Purchasers”) announced the purchase of all of the outstanding Series C
and Series D Warrants (together, the “Warrants”) previously issued by the Company pursuant to the Securities Purchase
Agreement, dated as of August 30, 2024 (the “Original Purchase Agreement”). Immediately thereafter, the Company determined
to invoke certain provisions in the Warrants and the Original Purchase Agreement in order to convert (the “Conversion”) all
remaining unexercised portions of the Series C and Series D Warrants into shares of the Company’s common stock, at a ratio
of 1 to 1, such that each outstanding Series C and Series D warrant was converted into one share of common stock. The Purchasers
received 3,447,957 shares (the “Conversion Shares”) of the Company’s common stock in the Conversion and the Company
cancelled all outstanding Series C and Series D Warrants.
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Purchase Agreement Amendment
In connection with the Conversion, the Purchasers
and the Company amended the Original Purchase Agreement to remove or modify certain financing restrictions, including limitations on future
equity issuances and participation rights, subject to agreed-upon dilution protections.
Lock-up
In connection with the Conversion, the Purchasers
have agreed, subject to certain customary exceptions, not to (i) sell, offer to sell, agree to offer or sell, solicit offers to purchase,
convert, contract or agree to sell, pledge, encumber, assign, borrow, or otherwise dispose of, directly or indirectly, any shares of common
stock held by them (such shares, together with any securities convertible into or exchangeable for or representing the rights to receive
shares of common stock if any, acquired during the Lock-Up Period (as defined below), the “Lock-Up Shares”), (ii) enter
into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise, or engage in any short sales or
other arrangement with respect to the Lock-Up Shares or (iv) publicly announce any intention to effect any transaction specified
in clause (i) or (ii) until the date that is 12 months after the October 21, 2025 (the “Lock-up Date,”
and the period from the Lock-up Date until such date, the “Lock-Up Period”). The exceptions also generally include transfers
(A) of no more than five percent (5%) of the total Lock-Up Shares in the aggregate taking into account all transfers during the Lock-Up
Period (provided that total transfers during any period of five consecutive trading days shall not exceed five percent (5%) of the
daily average trading volume of the common stock over the immediately preceding five trading days and (B) in connection with
the pledge, hypothecation or other grant of a security interest in any Lock-Up Shares to one or more lending institutions as collateral
or security for any loan, advance or extension of credit and any transfer upon foreclosure upon such Lock-Up Shares.
Unregistered Sales of Equity Securities
On the Purchase Date, the Company issued the Conversion
Shares pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts
or commissions were paid with respect to such sales.
On October 9, 2025, the Company issued 40,000
bonus shares of common stock to each of its non-executive directors, John Davis and Karin-Joyce Tjon, and its former non-executive director
Cynthia Ekberg Tsai. The issuances were in consideration of their prior board service from the closing of the Company’s business
combination on February 2, 2024 until one year thereafter. The issuances were pursuant to the exemption from registration contained
in Section 4(a)(2) of the Securities Act. No underwriting discounts or commissions were paid with respect to such issuances.
On October 9, 2025, the Company issued 120,000
bonus shares of common stock to certain of its employees that are not executive officers. The issuances were in consideration of their
prior service to the Company from the closing of the Company’s business combination on February 2, 2024 until one year thereafter.
The issuances were pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting
discounts or commissions were paid with respect to such issuances.
On October 9, 2025, the Company issued 450,000
shares of common stock to G3, pursuant to an “earn-out” provision in the Merger Agreement following the approval by the board
of directors of the Company to deem the earn-out conditions satisfied in full in light of, among other things, the Company’s capital
structure and the ongoing Shared Services Agreement, dated as of February 2, 2024 (the “SSA”), between the Company and
G3. Dr. Bor Jang is the Chairman of the Board of Directors and Chief Science Officer of the Company, as well as the Chairman of the
Board of Directors and Chief Executive Officer of G3. The issuance was pursuant to the exemption from registration contained in Section 4(a)(2) of
the Securities Act. No underwriting discounts or commissions were paid with respect to such issuance.
On October 29, 2025, the Company entered
into a Promissory Note with Great Point Capital, LLC in the principal amount of $1,000,000. The Note bears interest at 8.0% per annum,
payable quarterly, and matures on October 25, 2026. The proceeds will be used for general corporate purposes, including working capital
needs. See Note 10 to the consolidated and combined financial statements for more details. In addition, the Company entered in to
the Investor Agreement, which provided for the issuance of 345,000 shares of common stock to Great Point Capital, LLC. The issuances
were pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. No underwriting discounts or
commissions were paid with respect to such issuances.
On December 8, 2025, the Company entered
into an agreement with Anson Investments Master Fund LP (“Anson”), pursuant to which it issued 240,400 shares of common stock
to Anson in exchange for the termination of all warrants and other obligations of the Company under the Securities Purchase Agreement,
dated as of August 30, 2024. Further, Anson agreed to limit sales of common stock to no more than 10% of the daily trading volume
on the Nasdaq Stock Market of all of the Company’s common stock. On February 5, 2026, the Company issued the 240,400 shares of its
common stock to Anson pursuant to this agreement. The issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of
the Securities Act. No underwriting discounts or commissions were paid with respect to the issuance. See Note 14 – Subsequent Events
for additional information.
Change of Control
As of the Purchase Date, the Conversion was effected,
which resulted in a change in control of the Company by virtue of the Purchasers holding approximately 47.5% of the Company’s issued
and outstanding common stock and being the largest stockholder of the Company.
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To the Company’s knowledge, there are no arrangements or understandings
among members of both the former and new control persons and their respective associates with respect to the election of directors or
other matters. Additionally, there are no arrangements, known to the Company, including any pledge by any person of securities of the
Company, the operation of which may at a subsequent date result in a change in control of the Company. See “Beneficial Ownership
of Securities.”
Change to Board of Directors
On September 3, 2025 (the “Resignation Date”), Cynthia
Ekberg Tsai notified the Board of Directors (the “Board”) of the Company of her resignation as a member of the Board, including
all committees on which she serves, effective as of the Resignation Date. Ms. Ekberg Tsai’s resignation did not result from any
disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
As a result of Ms. Ekberg Tsai’s resignation,
the Company’s Audit Committee is composed of two members. On September 8, 2025, the Company notified The Nasdaq Stock Market,
LLC of its non-compliance with Nasdaq Rule 5605(c)(2)(A), which requires that the Audit Committee be composed of three directors.
Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company has a cure period to regain compliance by appointing a new independent director
to the Audit Committee. The cure period extends until the earlier of the Company’s next annual shareholders’ meeting or September 3,
2026; provided, however, that if the annual shareholders’ meeting occurs no later than March 2, 2026, the Company has until
March 2, 2026, to regain compliance. The Company intends to appoint a new independent director to the Audit Committee as soon as
practicable within the cure period.
On March 24, 2026, the company announced an annual meeting scheduled
for June 11, 2026. As a result, the Company’s cure period to regain compliance with Nasdaq Listing Rule 5605(c)(2)(A) extends until
the date of the annual meeting. The Company is actively evaluating potential candidates to fill the vacancy on its Audit Committee and
intends to regain compliance within the applicable cure period.
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 (Expense)
Change in fair value of Derivative Liabilities
Change in fair value of derivative liabilities
consists of fluctuations in the fair value of the Company’s Forward Purchase Agreement and warrant liabilities. The fair value of
these instruments is estimated using valuation models, including Monte Carlo simulation for the Forward Purchase Agreement and certain
warrant liabilities, and the Black-Scholes option pricing model for other warrant liabilities.
Interest Income
Interest income is derived from the Company’s
operating cash account, which is periodically invested in short-term money market funds.
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.
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Summary of Statements of Operations for the
Years Ended December 31, 2025 and 2024
Years Ended December 31,
Cost of goods sold 6,648 -
Operating Expenses
Operating expenses decreased
by $371,929 for the year ended December 31, 2025. This decrease was primarily driven by lower general and administrative costs, including
reduced personnel and professional services expenses. The decrease was partially offset by higher research and development costs, including
increased personnel expenses associated with the commercialization of our battery cell products and third-party validation testing of
our proprietary silicon anode.
Other Income (Expense)
Other expense increased by $8,965,598 for the
year ended December 31, 2025. This increase was largely driven by a non-cash loss of $28,250,727 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, during 2025, the Company significantly reduced its derivative liabilities, primarily through the conversion and cancellation
of the Series C and Series D warrants in connection with the Madison Bond and Bayside Project transaction. As a result of this transaction,
all remaining unexercised warrants were converted into shares of the Company’s common stock, eliminating the associated derivative
liabilities. The reduction of these liabilities, together with the required fair value remeasurement prior to settlement, contributed
to the non-cash loss recognized during the period.
Summary of Cash Flows for the Years Ended December
31, 2025 and 2024
Years Ended December 31,
Net cash provided by (used in):
Net Cash
used in Operating Activities
For the year ended December 31, 2025, cash used in operating activities
was $4,536,702. This primarily resulted from a net loss of $41,004,000, driven by a non-cash loss of $28,250,727 due to a change in the
fair value of derivative liabilities related to the Forward Purchase Agreement and private placement warrants. 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, stock-based compensation and equity compensation expense for services, totaling $35,058,699. Additionally, changes in
operating assets and liabilities provided $1,408,599 of cash from operating activities, driven primarily by a $1,404,127 increase in accounts
payable and accrued expenses. The increase in accounts payable and accrued expenses was mainly due to higher accrued expenses.
For the year ended December 31, 2024, cash used
in operating activities was $7,377,807. This primarily resulted from a net loss of $32,417,033, which included non-cash gains and losses,
driven by a gain of $12,275,217 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 $31,033,622 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, stock-based compensation and equity compensation expense
for services, totaling $23,754,989. Additionally, changes in operating assets and liabilities provided $1,284,237 of cash from operating
activities, driven primarily by a $1,344,669 increase in accounts payable and accrued expenses. The increase in accounts payable and accrued
expenses was mainly due to higher accrual expense associated with the Company operating as a public entity as of February 2, 2024.
Net Cash
used in Investing Activities
For the year ended December 31, 2025, the Company
used cash of $240,742 in investing activities consisting of purchases of Silicon Oxide (SiOx) manufacturing equipment and capitalized
patent costs.
For the year ended December 31, 2024, the Company
used cash of $246,074 in investing activities consisting of capitalized patent costs.
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Net Cash
provided by Financing Activities
For the year ended December 31, 2025, the Company
generated cash of $1,628,437 from financing activities. The Company received proceeds from short term notes of $1,000,000. These increases
were offset by repayment of short-term notes of $42,671. In addition, during the year ended December 31, 2025, the Company converted
$527,500 of convertible notes into shares of its common stock. This transaction was a non-cash financing activity and is reflected in
the supplemental schedule of non-cash financing activities in the consolidated and combined statements of cash flows.
For the year ended December 31, 2024, the Company
generated cash of $10,976,833 from financing activities. This primarily resulted from proceeds from private placement financing, and warrant
exercises of $7,850,000 and $4,259,241, respectively. These increases were offset by repayment of short-term notes and related party advances
of $1,389,146 and $1,026,091, respectively.
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 December 31, 2025, we had an accumulated
deficit of $163,372,539. Additionally, $1,114,594 in NUBI transaction costs incurred at the Closing Date in connection with the Merger
remain outstanding and are due within the next twelve months. For the year ended December 31, 2025, we
incurred losses from operations totaling $41,004,000 and net cash used in operating activities of $4,536,702. During 2025, the
Company significantly reduced its derivative liabilities, primarily through the conversion and cancellation of the Series C and Series
D warrants associated with the Madison Bond and Bayside Project warrant conversion transaction. As part of this transaction, all remaining
unexercised warrants were converted into shares of the Company’s common stock, eliminating the related derivative liabilities. Management
does not currently expect to utilize financing arrangements that would require derivative accounting, which is expected to reduce non-cash
volatility in future results. However, these improvements do not eliminate the need for additional capital to fund operations.
Off-Balance Sheet Arrangements
At December 31, 2025 and 2024, 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 under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers 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.
The Company has determined that the FPA does not
meet all of the criteria for equity classification under ASC 815, as the FPA fails the fixed-for-fixed test under ASC 815-40 due to the
bi-weekly Reset Price mechanism, the Dilutive Offering Reset provision, and the VWAP Trigger Event, each of which creates variability
in the settlement amount that is not purely a function of the Company’s own stock price. Accordingly, the FPA is classified as a liability-classified
derivative instrument, recorded at fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter.
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 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 consolidated and combined
statements of operations.
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Upon the issuance of shares in connection with the FPA, the Company
recognizes (i) an increase to APIC measured at the fair value of the FPA at the time of share issuance, (ii) a corresponding stock subscription
receivable of equal amount as a contra-equity component within stockholders’ equity (deficit), representing the present value of the consideration
receivable for the shares issued, and (iii) a loss on issuance of common stock within Other Income (Expense) representing the difference
between the face value of the stock subscription receivable and its present value at the issuance date. The discount between the face
value and present value of the stock subscription receivable is accreted using the effective interest method over the remaining term of
the FPA, with each period’s accretion recorded as an increase to both the stock subscription receivable and APIC within stockholders’
equity (deficit). The stock subscription receivable is presented as a reduction to total stockholders’ equity (deficit) and is relieved
as Optional Early Termination proceeds are received from the Forward Purchase Investor.
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. 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.
Warrants
The Company evaluates warrants issued in connection
with financing transactions to determine whether the instruments should be classified as equity or liabilities in accordance with the
applicable guidance in ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. This assessment considers
whether the warrants meet the criteria for equity classification, including whether the warrants are indexed to the Company’s own
common stock and whether the settlement provisions could require net cash settlement or contain adjustment features that would preclude
equity classification. This assessment is performed at the time of issuance and reassessed at each reporting date while the warrants remain
outstanding.
For issued or modified warrants that meet all
of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance.
For warrants that do not meet the criteria for equity classification, the warrants are recorded at fair value as derivative liabilities
on the consolidated and combined balance sheets at the date of issuance and remeasured at fair value at each subsequent reporting date.
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. The fair value of the Series A and Series B warrants is determined using the Black-Scholes option
pricing model, while the fair value of the Series C and Series D warrants is determined using a Monte Carlo simulation model due to their
more complex features. These valuation models require significant estimates and judgments, including assumptions related to the Company’s
stock price volatility, expected term, risk-free interest rates, and other market-based inputs. As these warrants are classified as derivative
liabilities, changes in their fair value are recognized as non-cash gains or losses within change in fair value of derivative liabilities
in the consolidated and combined statements of operations.
The fair value of the PIPE Warrants is classified
as Level 3 within the fair value hierarchy. The determination of the fair value requires significant estimates and judgments. See Note
13 – Fair Value Measurements to the financial statements for the significant assumptions and estimates used in the valuation. Changes
in these assumptions could materially impact the valuation and the amounts recorded in the Company’s financial statements.
Because the valuation of these instruments requires significant estimates
and assumptions, changes in these assumptions could materially affect the reported fair value of the derivative liabilities and the resulting
non-cash gains or losses recorded in the Company’s results of operations.
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.
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. Effective January 1, 2025, the Company adopted ASU 2023-09. The adoption of ASU
2023-09 did not have a material impact on the Company’s consolidated and combined financial statements. The adoption affected disclosures,
such as expanded income tax disclosures, and did not impact the Company’s financial position, results of operations, or cash flows.
See Note 11 – Income Taxes to the consolidated and combined financial statements for additional information.
Recently Issued Accounting Standards
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.
37
ITEM 7A. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required
to make disclosures under this Item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
Our financial statements and the notes thereto
begin on page F-1 of this Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Change of Auditor
On November 26, 2025, following the approval
of its Audit Committee, the Company engaged CBIZ CPAs P.C. (“CBIZ CPAs”) as the Company’s independent registered public
accounting firm for the fiscal year ending December 31, 2025, effective immediately.
During the Company’s two most recent fiscal years
ended December 31, 2024 and 2023 and the subsequent interim period through November 26, 2025, neither the Company nor anyone
on its behalf consulted with CBIZ CPAs regarding: (i) the application of accounting principles to a specific transaction, either
completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and
neither a written report or oral advice was provided to the Company that CBIZ CPAs concluded was an important factor considered by the
Company in reaching a decision as to any accounting, auditing, or financial reporting issue, (ii) any matter that was the subject
of a “disagreement” within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the related instructions,
or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K and the related instructions.
On October 21, 2025, the Audit Committee
of the Company approved the dismissal of Deloitte & Touche LLP (“Deloitte”) as its independent registered public
accounting firm, effective immediately following the filing of the Company’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2025 (the “2025Q3 Quarterly Report”). On November 20, 2025, the Company filed its 2025Q3 Quarterly
Report. Accordingly, the dismissal was effective November 20, 2025 (the “Effective Date”).
The audit report of Deloitte on the Company’s
consolidated financial statements as of and for the fiscal year ended December 31, 2024, did not contain an adverse opinion or disclaimer
of opinion, and was not qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Company’s most recent fiscal
year ended December 31, 2024 and during the subsequent interim period from January 1, 2025 through the Effective Date, (i) there
were no disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure or auditing scope
or procedures that, if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter
of the disagreement in connection with its report, and (ii) there were no “reportable events” as defined in Item 304(a)(1)(v) of
Regulation S-K, other than the previously disclosed material weaknesses in the Company’s internal control over financial reporting
related to our control environment, risk assessment, control activities, information and communication and monitoring.
The Company provided Deloitte with a copy of the
disclosures above prior to filing with the SEC. A copy of Deloitte’s letter, dated November 25, 2025, to the SEC, stating
whether it agrees with the statements made above, is filed as Exhibit 16.1 to this Annual Report on Form 10-K.
ITEM 9A. 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 December
31, 2025, because of certain material weaknesses in our internal control over financial reporting, as further described below. These material
weaknesses relate primarily to controls over the accounting for complex financial instruments, including the valuation and remeasurement
of derivative warrant liabilities.
Notwithstanding these material weaknesses, management concluded that
the consolidated financial statements included in this Annual Report on Form 10-K 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”). This conclusion is based on additional procedures performed by management to
ensure that the financial statements are free of material misstatement.
38
Management’s Report on Internal Control Over Financial Reporting
The management of Solidion Technology, Inc.is
responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, we
conducted an evaluation of the effectiveness of Solidion’s internal control over financial reporting as of December 31, 2025. In
making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on our evaluation under these criteria,
management determined, based upon the existence of the material weaknesses described below, that we did not maintain effective internal
control over financial reporting as of December 31, 2025.
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 fourth quarter of the year ended December
31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS
None.
39
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
Information about our Executive Officers and
Directors
The following table sets forth information concerning
our executive officers and directors, including their ages, as of February 12, 2026:
Name Age Title
Dr. Bor Jang 73 Executive Chairman and Chief Science Officer
Jaymes Winters 62 Chief Executive Officer and Director
Vlad Prantsevich 35 Chief Financial Officer
Dr. Songhai Chai 48 Chief Technology Officer
John Davis 66 Director
Karin-Joyce (KJ) Tjon 61 Director
Information about our Executive Officers
and Directors
Executive Officers
Dr. Bor Jang — Executive
Chairman and Chief Science Officer
Dr. Bor Jang serves as Executive Chairman of our
Board of Directors and Chief Science Officer. Dr. Jang co-founded Honeycomb Battery Company (HBC) in 2015 and has since served as its
President. Dr. Jang co-founded AEC in 2012 and has since served as its President. AEC is engaged in the development and commercialization
of anode active materials for lithium-ion batteries. Dr. Jang co-founded Angstron Materials, Inc. (“AMI”) in 2007 and has
since served as its Chairman. AMI is engaged in the development and commercialization of graphene processes and application technologies.
Dr. Jang cofounded G3 in 2016 and has since served as its Chief Executive Officer and Chairman of the Board of Directors, and G3 is the
parent of several subsidiaries engaged in the development and commercialization of graphene and battery technologies, including HBC, AEC
and AMI. Dr. Jang received his Master’s & Ph.D degrees in Materials Science from MIT. Dr. Jang was the former Dean of the College
of Engineering and Computer Science at Wright State University. He was a Fulbright Scholar and Visiting Professor (and an Overseas Fellow
of the Churchill College) with the University of Cambridge (1991 – 1992) in the UK. Dr. Jang was elected as a member of the U.S.
National Academy of Inventors (NAI) in 2019. Dr. Jang has more than 800 patents to his credit. Most notably, Dr. Jang filed the world’s
first patent application on graphene in 2002. This patent was later recognized by Popular Mechanics magazine as one of the “15 Patents
That Changed The World”.
We believe Dr. Jang is qualified to serve
on Solidion Board because of his extensive executive experience with Honeycomb and his background in sciences and academia. Following
the closing of the business combination, Dr. Jang continues in his roles as Chief Executive Officer and Chairman of the Board of
Directors of G3. Dr. Jang will have a dual employment arrangement with Honeycomb and G3, with his time and attention split between
the entities approximately 70% and 30%, respectively, and the parties will ensure an overall coordinated approach between Dr. Jang,
Honeycomb and G3. In addition, 70% of his compensation and related costs at G3 will be reimbursed to G3 by Honeycomb under the SSA.
Jaymes Winters — Chief Executive
Officer and Director
With over 15 years’ experience as a Chief
Executive Officer in the oil and gas, telecommunications and retail spaces with extensive M&A experience, Jaymes Winters has been
Chief Executive Officer at Solidion Technology since 2022, which includes its predecessor, Nubia Brand International Inc., a Special Purpose
Acquisition Company traded on NASDAQ under the ticker symbol NUBI. Previously, Mr. Winters was CEO of Mach FM Corp. beginning in 2015
and oversaw 600 MHz spectrum acquisition via an auction conducted by the Federal Communications Commission, or FCC. He designed a Simultaneous
Multiple Round (SMR) analysis using historical data from previous FCC auctions to predict the total amount bid by other participants within
5%. Prior to that, he was founder and Chief Executive Officer of United Energy Inc., which for seven consecutive years was one of the
largest African American owned businesses on the West Coast with annual revenues of nearly $100 million and 1,000 employees. Mr. Winters
has directed and negotiated four M&A transactions utilizing private equity firms. For over nine years, he was an adjunct professor
in the School of Business at Portland State University teaching business strategy, mergers and acquisitions, venture capital and is the
author of a college textbook titled “Chronicles of an Urban CEO” (Kendall Hunt Publishing Company, August 2021). Mr. Winters
holds a B.S. in Business Administration with a minor in Economics from Oregon State University.
40
We believe Mr. Winters is qualified to serve
on Solidion Board because of his extensive executive experience with Nubia and as a Chief Executive Officer in the oil and gas, telecommunications
and retail spaces with extensive mergers and acquisitions experience.
Vlad Prantsevich — Chief
Financial Officer
Vlad Prantsevich has served as Solidion’s Chief Financial Officer
since February 2024. Mr. Prantsevich brings experience across public company finance, capital markets, and technically complex product
companies. Previously, Mr. Prantsevich served as Chief Financial Officer and Board Member of Nubia Brand International Corp. (NASDAQ:
NUBI), a special purpose acquisition company, where he directed the business combination with Honeycomb Battery Company that resulted
in Solidion’s listing on NASDAQ. In that role, he oversaw SEC reporting, and financial diligence across more than 100 acquisition targets
spanning 20 industries prior to executing the Honeycomb transaction. Additionally, Mr. Prantsevich served as Executive Vice President
of Operations at Mach FM Corp. a wireless technology and spectrum investment company, where he supported transaction strategy, acquisition
evaluation, and financial modeling for spectrum investments and strategic partnerships. Mr. Prantsevich has more than 8 years of executive
management level experience in charge of corporate finance at 64 Audio, a global pro audio and consumer electronics brand, where he built
and led the corporate finance function through a period of significant growth. Mr. Prantsevich holds a B.S. in Business Administration
from Portland State University.
Dr. Songhai Chai — Chief
Technology Officer
Dr. Songhai Chai serves as our Chief Technology
Officer. Since September 2021, Dr. Chai has served as the Deputy Chief Technology Officer of G3, where he leads a group of scientists
and engineers to develop high-capacity silicon anode and renewable biochar anode materials, provides scientific and technical guidance
to research and development activities, supervises the pilot-scale production of silicon-anode materials and oversees a group of battery
engineers and technicians to improve electrode formulation and preparation. From 2015 through September 2021, Dr. Chai served as Senior
Battery Scientist of G3, where he developed a variety of novel energy-storage materials for different applications, such as lithium-ion
batteries, electrochemical and hybrid capacitors. From 2010 to 2015, Dr. Chai was a Research Associate, working on carbon and energy storage
materials, at Oak Ridge National Lab. Dr. Chai has co-authored seven issued U.S. patents, one book chapter, and 45 peer-reviewed research
articles and has published in 30 internationally renowned scientific journals, including Nature Communications and the Journal of the
American Chemical Society. Dr. Chai received a Ph.D in Chemistry from Tsinghua University and completed his post-doctoral training at
the University of California at Berkeley.
Following the closing of the business combination,
Dr. Chai left his role at G3 and entered into a formal employment arrangement with Solidion on February 10, 2025.
Non-Executive Directors
John Davis — Director
John Davis serves as our director. Since 2022,
Mr. Davis has served as President of BTECH, Inc., a battery monitoring technology company. Prior to that role, from 2021 to 2022, Mr.
Davis served as Chief Operating Officer of Primet Precision Materials, a nanoscission technology company producing lithium battery cathode.
Prior to that role, from 2019 to 2020, Mr. Davis served as Chief Operating Officer of G3, which is the parent of HBC and the holder of
approximately 97.5% of the issued and outstanding shares of HBC common stock prior to the Effective Time. Prior to that role, from 2015
to 2018, Mr. Davis served as Senior Vice President of Operations for BrightVolt, a solid state lithium battery technology company. Mr.
Davis received a B.S. in Chemical Engineering and M.B.A. from the Illinois Institute of Technology.