What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-12 compared with 2023-03-17 · 216 added, 173 removed, 49 unchanged (89% of the section changed)

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial

condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto

which are included in “Item 8.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our

financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related

thereto which are included in “Item 8.

Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements.

Our actual results may

differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under

“Special Note Regarding Forward-Looking Statements” and elsewhere in this Annual Report on Form 10-K.

We are a blank check company incorporated as a

Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization

or similar business combination with one or more businesses (the “Initial Business Combination”).

We intend to effectuate an Initial Business Combination

using cash from the proceeds of our initial public offering (the “Public Offering”) that closed on March 15, 2022 (the “Closing

Date”) and the private placement warrants sold in a private placement (the “Private Placement Warrants”) that closed

on the Closing Date and from additional issuances, if any, of, our capital stock and our debt, or a combination of cash, stock and debt.

Our business activities from inception to December

31, 2022 consisted primarily of our preparation for our Public Offering that was completed on March 15, 2022 and, since the Closing Date,

identification and evaluation of prospective acquisition targets for an Initial Business Combination.

At December 31, 2022, we had cash of $545,655

and working capital deficit of $148,043.

Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans.

We cannot assure you that our plans to complete an Initial Business Combination will be successful.

Our actual results

may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth

under “Special Note Regarding Forward-Looking Statements” and elsewhere in this Annual Report on Form 10-K.

Solidion Technology, Inc, previously known as

“Honeycomb Battery Company”, formerly the energy solutions division of Global Graphene Group, 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 is recognized as a global leader in intellectual property in both the high-capacity anode and the

high-energy solid-state battery, as recognized by KnowMade, a French company that specializes in research and analysis of scientific

and patent information.

Solidion is uniquely positioned to offer advanced anode materials (delivering a specific capacity from 300 to

3,500+ milliampere-hours per gram mass (“mAh/g”)) as well as silicon-rich all-solid-state lithium-ion cells, anodeless lithium

metal cells, and lithium-sulfur cells, each featuring an advanced polymer or hybrid solid electrolyte that is most process-friendly.

Recent Developments

Business Combination

On February 2, 2024, Nubia Brand International

Corp., a Delaware corporation (“Nubia” and after the Transactions described herein, the “Solidion” or “Solidion

Technology, Inc.”), consummated the previously announced business combination (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 Business Combination

totaling $1.6 million, prior to deducting transaction and issuance costs.

The cash resulting from the Business Combination is expected

to be used toward our corporate growth strategy related to the commercialization of our battery technology and the scaling of our manufacturing

Equity Financing

On March 13, 2024, Solidion entered into a private

placement transaction (the “Private Placement”), pursuant to a Securities Purchase Agreement (the “Subscription Agreement”)

with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of approximately $3.85 million, before

deducting fees to the placement agent and other expenses payable by the Company in connection with the Private Placement.

intends to use the net proceeds from the Private Placement for working capital and general corporate purposes.

The Private Placement

closed on March 15, 2024.

As part of the 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 (or one pre-funded warrant to purchase

one share of Common Stock), (ii) two Series A warrants each to purchase one share of Common Stock, and (iii) one Series B warrant to

purchase such number of shares of Common Stock as determined on the reset date (as defined in the Subscription Agreement), and in accordance

with the terms therein.

Results of Operations

For the year ended December 31, 2022, we had net income of $593,905

which consisted of interest income earned in the amount of $1,818,565 on cash and funds held in the Trust Account, a gain on the over-allotment

liability of $19,432, partially offset by operating expenses totaling $904,193.

In addition, the Company recorded an income tax provision

For the period from June 14, 2021 (inception)

through December 31, 2021, we had a net loss of $1,430 which consisted solely of formation expenses.

As the closing of the Business Combination did

not occur until after the year ended December 31, 2023, the results of operations below are based on the fact that we have neither engaged

in any operations nor generated any revenues to the date of the financial statements.

Our only activities from June 14, 2021 (inception)

through December 31, 2023 were organizational activities, those necessary to prepare for our IPO, described below, searching for a business

combination target and the Business Combination.

We did not expect to generate any operating revenues until after the completion of our

Business Combination.

We generated non-operating income in the form of interest income on marketable securities held in the trust account.

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well

as for due diligence expenses.

For the year ended December 31, 2023, we had a net loss of $19,775,602

which consisted of operating expenses of $3,509,621 and change in fair value of derivative asset/liabilities of $18,483,096, partially

offset by interest income earned in the amount of $3,788,143 on cash and funds held in the Trust Account and interest income of $8,580

earned on cash held the operating bank account.

In addition, the Company recorded an income tax provision of $1,579,608.

For the year ended December 31, 2022, we had a

net income of $593,905 which consisted of interest income earned in the amount of $1,812,882 on cash and funds held in the Trust Account,

interest income of $5,683 earned on cash held the operating bank account, a gain on the over-allotment liability of $19,432, partially

offset by operating expenses totaling $904,193.

In addition, the Company recorded an income tax provision of $339,899.

Going Concern Considerations, Liquidity and Capital Resources

14 unchanged sentences

remaining over-allotment option of $19,432 as offering costs.

For the year ended December 31, 2022, cash used in operating activities

was $725,102 which consisted of net income of $593,905, interest earned on marketable securities held in the Trust Account of $1,812,882,

the gain on the change in fair value of the over-allotment liability of $19,432 and changes in operating assets and liabilities provided

$513,307 of cash from operating activities.

For the year ended December 31, 2023, cash used

in operating activities was $2,661,093 which consisted of a net loss of $19,775,602, interest earned on marketable securities held in

the Trust Account of $3,788,143, and changes in operating assets and liabilities provided $20,902,653 of cash from operating activities.

For the year ended December 31, 2022, cash used

in operating activities was $725,102 which consisted of net income of $593,905, interest earned on marketable securities held in the

Trust Account of $1,812,882, the gain on the change in fair value of the over-allotment liability of $19,432 and changes in operating

assets and liabilities provided $513,307 of cash from operating activities.

For the year ended December 31, 2023, the Company

used cash of $125,970,000 in investing activities for the purchase of investments in the Trust Account following

the Initial Public Offering, the exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement

generated cash of $88,576,752 in investing activities primarily from the withdrawal of investments in the Trust Account for redemptions.

For the year ended December 31, 2022, the Company

used cash of $125,970,000 in investing activities for the purchase of investments in the Trust Account following the Initial Public Offering,

the exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants.

For the year ended December 31, 2023, cash used

in financing activities was $86,441,335, primarily for repayment of redemptions.

For the year ended December 31, 2022, cash from

financing activities provided $127,240,757.

The Company received gross proceeds of $128,905,000 from the

Initial Public Offering, the exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants .

These increases were offset by payment of the underwriting fees and offering costs of $1,235,000 and $429,243, respectively.

For the period from June 14, 2021 (inception)

through December 31, 2021, cash used in operating activities was $0 which consisted of the net loss of $1,430 offset by advances from

related party of $939 and changes in operating assets and liabilities provided $491 of cash from operating activities.

As of December 31, 2022, we had investments held in the Trust Account

of $127,782,882 principally invested in U.S.

government securities.

Interest income on the balance in the Trust Account may be used by

us to pay taxes, and to pay up to $100,000 of any dissolution expenses.

In March 2023, $200,050 was withdrawn from the Trust to pay taxes.

At December 31, 2022, the Company had cash outside

of trust of $545,655 and working capital deficit of $148,043.

Further, the Company has incurred and expects to continue to incur significant

costs in pursuit of its financing and acquisition plans.

In connection with the Company’s assessment of going concern considerations

in accordance with Accounting Standards Update (“ASU”) 2014-15, “ Disclosures of Uncertainties about an Entity’s

Ability to Continue as a Going Concern ,” management has determined that the Company has funds that are sufficient to fund the

working capital needs of the Company until the consummation of an initial business combination or the winding up of the Company as stipulated

in the Company’s amended and restated memorandum of association.

However, management has determined that these liquidity risks,

as well as if the Company is unsuccessful in consummating an initial business combination within 15 months, or June 15, 2023 as the Company

deposited $1,235,000 into the trust account in March 2023 to fund the automatic 3-month extension, (or up to 18 months, by September 15,

2023, if the Company extends the period of time to consummate a business combination) from the closing of the IPO, the requirement that

the Company cease all operations, redeem the public shares and thereafter liquidate and dissolve raises substantial doubt about the ability

to continue as a going concern for the next twelve months from the issuance of this filing.

The balance sheets do not include any adjustments

that might result from the outcome of this uncertainty.

The accompanying financial statements have been prepared in conformity with

generally accepted accounting principles in the United States of America (“US GAAP”), which contemplate continuation of the

Company as a going concern.

We intend to use substantially all of the funds

held in the Trust Account, including any amounts representing interest earned on the Trust Account, excluding the deferred underwriting

commissions, to complete an initial business combination.

To the extent that capital stock or debt is used, in whole or in part, as consideration

to complete an initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance

the operations of the target business or businesses, make other acquisitions and pursue growth strategies.

If an initial business combination

agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price or requires us to have a minimum amount

of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements or arrange for third-party

The Company received gross proceeds of $128,905,000 from the Initial Public Offering, the

exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants.

These increases were

offset by payment of the underwriting fees and offering costs of $1,235,000 and $429,243, respectively.

As of December 31, 2023, we had cash held in the Trust

Account of $42,994,274.

Interest income on the balance in the Trust Account may be used by us to pay taxes, and to pay up to $100,000

of any dissolution expenses.

In 2023, $1,523,258 was withdrawn from the Trust to pay taxes.

The amount of cash withdrawn from the Trust

and remaining payable for taxes at the year-end totaled $170,387.

At December 31, 2023, the Company had cash outside of trust of $19,979

and working capital deficit of $6,544,950.

The accompanying financial statements have been prepared in conformity with generally accepted

accounting principles in the United States of America (“US GAAP”), which contemplate continuation of the Company as a going

Prior to the consummation of the Business Combination,

the Company used the funds not held in the Trust Account for identifying and evaluating target businesses, performing due diligence on

prospective target businesses, traveling to and from the offices, plants or similar location of prospective target businesses or their

representatives or owners, reviewing corporate documents and material agreements of prospective target businesses and structuring, negotiating

and completing a Business Combination, which was the Business Combination with Honeycomb Battery Company, which was completed on January

On February 2, 2024 (the “Closing Date”),

the Company consummated the business combination (the “Closing”) pursuant to a Merger Agreement, dated February 16, 2023

(as amended on August 25, 2023, the “Merger Agreement”) with HBC surviving such merger as a wholly owned subsidiary of Nubia,

which was renamed “Solidion Technology, Inc.” upon Closing.

Since Solidion’s inception, the Company has experienced recurring

net losses and has generated minimal sales.

For the year ended December 31, 2023, Solidion recorded net losses of approximately $5,300,000,

net cash used in operating activities of approximately $4,100,000 and, as of December 31, 2023, had cash and cash equivalents on hand

of approximately $1,000, which factors raise substantial doubt about the Company’s ability to continue as a going concern.

plans to finance its operations with proceeds from the sale of equity securities or debt;

however, there is no assurance that management’s

plans to obtain additional debt or equity financing will be successfully implemented or implemented on terms favorable to the Company.

On July 27, 2021, the Sponsor issued an unsecured

8 unchanged sentences

at a price of $1.00 per warrant, upon consummation of the Company’s initial business combination.

As of December 31, 2022 and 2021,

there was $125,341 outstanding under the Promissory Note.

On May 20, 2022, the Company and the Sponsor entered into the Amended Note (i)

to extend the Original Maturity Date to a new maturity date which shall be upon the earlier of the closing of the Company’s initial

business combination or the Company’s liquidation, and (ii) to permit the holder of the Amended Note, in its sole discretion, to

convert any or all of the unpaid principal under the Amended Note into Warrants, at a price of $1.00 per warrant, upon consummation of

the Company’s initial business combination.

On May 17, 2023, the Sponsor

issued an unsecured promissory note to the Company (the “Note”), pursuant to which the Company may borrow up to an aggregate

principal amount of $1,000,000.

The Promissory Note is non-interest bearing and payable on the earlier of the closing of the Company’s

initial business combination or the Company’s liquidation, and to permits the holder of the Note, in its sole discretion, to convert

any or all of the unpaid principal under the Amended Note into warrants, at a price of $1.00 per warrant, upon consummation of the Company’s

initial business combination.

As of December 31, 2023 and December 31, 2022, there was $1,297,500, and

$125,341, respectively, outstanding under the Promissory Note.

On January 29, 2024, the Promissory Notes with the Sponsor was amended

such that any or all of the unpaid principal upon consummation of the Company’s initial business combination was convertible into

common shares at a conversion price of $1.00 per share.

At various dates in the third and fourth quarters

of 2023, the Company issued Convertible Notes to related parties of $905,000 to meet our working capital requirements.

As of December

31, 2023 and December 31, 2022, there was $905,000 and $0 in Convertible Notes from Related Parties outstanding.

At various dates in the second and third quarters

of 2023, the Target advanced funds of $187,500 to extend the period of time to complete an initial business combination.

As of December

31, 2023 and December 31, 2022, there was $187,500 and $0 in Advances from Target outstanding.

various dates in the third and fourth quarters of 2023, related parties provided advances totaling $332,000 to meet our working capital

requirements.

As of December 31, 2023, and December 31, 2022, outstanding

balances due to related parties amounted to $332,500 and $0, respectively.

Preceding the consummation of the initial business combination,

we issued Convertible Notes corresponding to advances made by related parties throughout 2023.

On December 9, 2023, we instructed Continental Stock

& Trust to liquidate the investments held in the Trust Account and deposit the proceeds into a cash deposit account with Continental

serving as trustee.

These funds remained in the cash deposit account until the consummation of our initial Business Combination on February

As a result, following the liquidation of investments in the Trust Account, the remaining proceeds from the Initial Public Offering

and Private Placement are no longer invested in money market funds but held as cash deposits with Continental.

Off-Balance Sheet Arrangements

11 unchanged sentences

In connection with the Public Offering, we entered

into an administrative support agreement pursuant to which we agreed to pay an affiliate of the Sponsor a total of $10,000 per month for

office space, utilities and secretarial, and administrative support services.

Upon the earlier of the completion of the Initial Business

Combination and the Company’s liquidation, we will cease paying these monthly fees.

Pursuant to the Underwriting Agreement., upon

the consummation of our Initial Business Combination, we will pay the underwriters a cash fee in an amount equal to 3.5% of the gross

proceeds of the Public Offering (exclusive of any applicable finders’ fees which might become payable).

No fee will be due if we

do not complete an Initial Business Combination.

Critical Accounting Policies and Significant

The preparation of financial statements and related

disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of

the financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have identified the following as our critical accounting policies:

Net Income (Loss) per Common Share

The Company complies with accounting and disclosure

requirements of FASB ASC Topic 260, “ Earnings Per Share.

” Net income (loss) per share of common stock is computed by

dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period.

The Company applies the

two-class method in calculating earnings per share.

The remeasurement adjustment associated with the redeemable shares of Class A

Common Stock is excluded from income (loss) per share as the redemption value approximates fair value.

The calculation of diluted income (loss) per share

of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering and (ii) the Private

Placement since the exercise of the warrants is contingent upon the occurrence of future events.

As of December 31, 2022, the warrants are exercisable to purchase 11,580,000 shares of Class A common stock in the aggregate.

diluted income (loss) per share of common stock is the same as basic income (loss) per common stock for the periods presented.

10, 2022, the Company effectuated a 1.1-for-1 share split on the Class B common stock, resulting in an aggregate of 3,162,500 founder

shares outstanding (up to 412,500 shares of which were subject to forfeiture, of which 75,000 were forfeited, resulting in 337,500 common

stock shares outstanding subsequent to March 10, 2022).

Basic net income per share of common stock excludes the 337,500 shares subject

to forfeiture from weighted average shares outstanding between January 1, 2022 through March 10, 2022 due to the contingency with forfeiture.

Diluted net income per share of common stock weighted average shares outstanding considers the 337,500 shares subject to forfeiture as

outstanding during the entire year ended December 31, 2022.

For the period from June 14, 2021 (inception) through December 31, 2021, the

412,500 shares subject to forfeiture were excluded from the basic and diluted weighted average shares outstanding.

Class A common stock subject to possible redemption

The Company accounts for its shares of Class A

common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “Distinguishing Liabilities

from Equity”.

Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the

holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified

as temporary equity.

At all other times, common stock is classified as stockholders’ equity.

The shares of the Company’s Class

A common stock feature certain redemption rights that are considered by the Company to be outside of the Company’s control and subject

to the occurrence of uncertain future events.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received for sale

of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date.

establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest

priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority

to unobservable inputs (Level 3 measurements).

The determination of fair value of the Representative Shares to the underwriter represent

the most significant accounting estimate related to the fair value of financial instruments.

The 123,500 Representative Shares have a

grant date fair value of $6.29 per share or an aggregate of $776,815.

The Company measured the fair value of the Representative Shares

on the grant date of the award utilizing a valuation model which considers certain assumptions.

These assumptions include the offering

price, the marketability of the Company and the probability of initial business combination.

Upon the Initial Public Offering, such amounts

were allocated to offering costs within stockholders’ equity (deficit).

We account for warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in ASC 480, and FASB ASC 815, “Derivatives and Hedging” (“ASC 815”).

The assessment considers whether the warrants

are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants

meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s

own common shares and whether the warrant 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 warrant issuance

and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity

classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

or modified warrants that do not meet all of the criteria for equity classification, the warrants are required to be recorded at their

initial fair value on the date of issuance, and each balance sheet date thereafter.

We account for our outstanding warrants as equity-classified

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not yet effective,

accounting standards, if currently adopted, would have a material effect on the Company’s balance sheet.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

into an administrative support agreement pursuant to which we agreed to pay an affiliate of the Sponsor a total of $10,000 per month

for office space, utilities and secretarial, and administrative support services.

We began incurring these fees on March 14, 2022 and

continued to incur these fees monthly until the completion of our Business Combination.

The Underwriter in the initial public offering

was entitled to a deferred fee of 3.5% of the gross proceeds of the Public Offering (exclusive of any applicable finders’ fees

which might become payable) or $4,322,500 in the aggregate.

The deferred fee was paid in connection with the closing of the Business

At a special meeting of Nubia Brand stockholders

held on December 14, 2023, Nubia Brand’s stockholders approved the proposed business combination with HBC.

In addition, in a special

meeting on December 15, 2023, Nubia Brand stockholders approved an amendment to the certificate of incorporation that changed the date

by which Nubia Brand must consummate an initial business combination to March 15, 2024.

Critical Accounting Estimates

We prepare our consolidated

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.

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 for the year ended December

Forward Purchase Agreement and Non Redemption

The Company accounts for the forward purchase

agreement and non-redemption agreement as either equity-classified or liability-classified instruments based on an assessment of the FPA

and NRA specific terms and applicable authoritative guidance in ASC 480, and FASB ASC 815, “Derivatives and Hedging” (“ASC

The assessment considers whether the FPA and NRA are freestanding financial instruments pursuant to ASC 480, meet the definition

of a liability pursuant to ASC 480, and whether the FPA and NRA meet all of the requirements for equity classification under ASC 815,

including whether the FPA and NRA are indexed to the Company’s own common shares and whether the FPA and NRA 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 and NRA issuance and as of each subsequent quarterly period end date while

the FPA and NRA are outstanding.

For issued or modified FPA and NRAs that meet

all of the criteria for equity classification, the FPA and NRA are required to be recorded as a component of additional paid-in capital

at the time of issuance.

For issued or modified FPA and NRAs that do not meet all of the criteria for equity classification, the FPA

and NRAs are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Company accounts for outstanding FPA and NRA as liability-classified instruments.

The fair value of the FPA and NRA is Level

The determination of the fair value requires significant estimates and judgments.

Please see Note 9 – 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.

Recent Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income

Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosures of incremental income tax information

within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

ASU 2023-09 is effective

for the fiscal year beginning after December 15, 2024.

Early adoption is permitted.

The Company’s management does not believe the

adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

Management does not believe that any recently issued,

but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required

to make disclosures under this Item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY

STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and the notes thereto

begin on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH

ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis