Solidion Technology Inc.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
STI$4.24+2.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-16.
0001213900-25-032301
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001213900-26-044126
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 95 current paragraphs.
40 unchanged; 8 reworded; 46 added; 14 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
Business Combination
Current report
Recent Developments
Current report
Memorandum of Understanding
Current report
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.
Current report
Grants from the U.S. Government
Current report
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.
Current report
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.
Current report
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.
Current report
Reverse Stock Split
Current report
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.
Current report
Warrant Conversion
Current report
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.
Current report
Purchase Agreement Amendment
Current report
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.
Current report
Lock-up
Current report
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.
Current report
Unregistered Sales of Equity Securities
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
Change of Control
Current report
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.
Current report
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.”
Current report
Change to Board of Directors
Current report
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.
Current report
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.
Current report
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.
Current report
Other Income (Expense)
Current report
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.
Current report
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.
Current report
Other Income (Expense)
Current report
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.
Current report
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.
Current report
Off-Balance Sheet Arrangements
Current report
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.
Current report
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.
Current report
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) withinchange in fair value of derivative liabilities account on the Company’s consolidated and combined statements of operations.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (14)
Previous report
History
Previous report
Honeycomb Battery Company Merger
Previous report
Equity Financings
Previous report
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.
Previous report
As part of the March Private Placement, the Company issued an aggregate of 5,133,332 units and pre-funded units (collectively, the “Units”) at a purchase price of $0.75 per unit (less $0.0001 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.
Previous report
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 $0.3478. As a result, the Series A Warrants and Series B Warrants held by investors were reset to 22,141,701 shares and 5,749,598 shares, respectively. As of December 31, 2024, investors had exercised 13,742,879 Series A Warrants and 5,749,598 Series B Warrants, resulting in the issuance of 19,492,477 common shares. As of December 31, 2024, 8,398,822 Series A Warrants and no Series B Warrants remained outstanding.
Previous report
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.
Previous report
As part of the August Private Placement, the Company issued an aggregate of 12,217,468 units and pre-funded units (collectively, the “Units”) at a purchase price of $0.3274 per unit. Each Unit consists of (i) one share of common stock, par value $0.0001 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”).
Previous report
Other Income (Loss)
Previous report
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.
Previous report
Operating expenses increased by $7,969,914 for the year ended December 31, 2024. This increase was primarily driven by third party validation testing of our proprietary silicon anode, professional fees, stock-based compensation, insurance, and other administrative costs associated with the Company operating as a public entity as of February 2, 2024.
Previous report
Other Income (loss)
Previous report
Other loss increased by $12,627,521 for the year ended December 31, 2024. This increase was largely driven by a gain of $18,011,100 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. This was offset by a loss of $30,281,475 from the issuance of common stock and warrants related to the convertible note and private placement financing activity.
Previous report
For the year ended December 31, 2023, the Company generated cash of $3,823,657 from financing activities, consisting of capital contributions by G3.
Reworded paragraphs (8)
Previous wording
For the year ended December 31, 2024, cash used in operating activities was $7,377,807. This primarily resulted from a net loss of $25,929,003, which included non-cash gains and losses, driven by a gain of $18,011,100 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 $30,281,475 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 $17,266,959. 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.
Current wording
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.
Previous wording
For the year ended December 31, 2023, the Company used cash of $376,150 in investing activities consisting of capitalized patent costs.
Current wording
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.
Previous wording
As of December 31, 2024, we had an accumulated deficit of $115,880,509. 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. For the year ended December 31, 2024, we incurred losses from operations totaling $25,929,003 and net cash used in operating activities of $7,377,807. We expect to continue to incur such losses for at least the next twelve (12) months.
Current wording
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.
Previous wording
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. We have identified the following as our critical accounting estimate as of and for the year ended December 31, 2024:
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
The fair value of the FPA is Level 3. The determination of the fair value requires significant estimates and judgments. Please see Note 14 – Fair Value Measurements to the financial statements for the significant assumptions and estimates.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
For the year ended December 31, 2023, cash used in operating activities was $4,068,302. This primarily resulted from a net loss of $5,324,624, which included non-cash losses, depreciation and amortization, totaling $552,855 Additionally, changes in operating assets and liabilities provided $703,467 of cash from operating activities, driven primarily by a $872,485 increase amounts due to related parties.