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Item 7. Management’s Discussion and Analysis

2025-04-16 compared with 2024-04-12 · 261 added, 254 removed, 11 unchanged (98% of the section changed)

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.

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

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,

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.

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.

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);

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.

Battery Company Merger

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

4 unchanged sentences

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

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.

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

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

On March 15, 2022, we consummated the Initial

Public Offering of 11,000,000 Units at a price of $10.00 per Unit, which includes the exercise by the underwriters of the over-allotment

option to purchase an additional 1,350,000 Units, generating gross proceeds of $123,500,000.

Simultaneously with the closing of the Initial

Public Offering and exercise of the over-allotment option, we consummated the sale of 5,405,000 Private Placement Warrants at a price

of $1.00 per Private Placement Warrant in a private placement to our Sponsor, generating gross proceeds of $5,405,000.

Following the Initial Public Offering, the exercise

of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants, a total of $125,970,000 was placed

in the Trust Account and as of December 31, 2022, we had $545,655 of cash held outside of the Trust Account, after payment of costs related

to the Initial Public Offering, and available for working capital purposes.

Transaction costs amounted to $6,951,081 consisting of $1,235,000

of underwriting fees, $4,322,500 of deferred underwriting fees payable and $597,334 of other offering costs.

In addition, the Company

recorded the fair value of $776,815 for representative shares issued upon close of the Public Offering as well as the fair value of the

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

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.

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.

proceeds from the March Private Placement were used for working capital and general corporate purposes.

The March Private Placement closed

on March 15, 2024.

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.

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.

On August 30, 2024, the Company entered into a

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

Subscription Agreement”) with certain institutional investors (the “Purchasers”) for aggregate gross proceeds of $4,000,000,

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

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

As part of the August Private Placement, the

Company issued an aggregate of 12,217,468 units and pre-funded units (collectively, the “Units”) at a purchase price of $0.3274

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”).

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.

of Results of Operations

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.

and Development

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.

general and, administrative

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.

Income (Loss)

in fair value of Derivative Liabilities

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.

income is derived from the Company’s operating cash account, which is periodically invested in short-term money market funds.

expense consists primarily of the interest on the Company’s short-term notes and D&O insurance premium financing arrangement.

of Operations

should be read in conjunction with Solidion’s financial statements and accompanying notes.

These results of operations are not necessarily

indicative of future performance.

Summary of Statements of Operations for

the Years Ended December 31, 2024 and 2023

Cost of goods sold

Operating expenses

Total other income (loss)

(12,629,466 )

$ (25,929,003 )

$ (5,324,624 )

Operating Expenses

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.

Other Income (loss)

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.

Summary of Cash Flows for the Years Ended

December 31, 2024 and 2023

Net cash provided by (used in):

Operating Activities

$ (7,377,807 )

$ (4,068,302 )

Investing Activities

Financing Activities

Net increase (decrease) in cash

used in Operating Activities

For the year ended December 31, 2024, 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

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

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.

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.

Cash used in Investing Activities

For the year ended December 31, 2024, the Company used cash of $246,074

in investing activities consisting of capitalized patent costs.

For the year ended December 31, 2023, the Company used cash of $376,150

in investing activities consisting of capitalized patent costs.

provided by Financing Activities

For the year ended December 31, 2024, 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.

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

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

amount of $300,000.

The Promissory Note is non-interest bearing and payable on the earlier of (i) March 31, 2022 or (ii) the consummation

of the Initial Public Offering (the “Original Maturity Date”).

On May 20, 2022, the Company and the Sponsor amended and restated

the Promissory Note (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

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.

Contractual Obligations

At December 31, 2023, we did not have any long-term

debt, capital lease obligations, operating lease obligations or long-term liabilities.

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.

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.

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.

For the year ended December 31, 2023, the Company generated cash of

$3,823,657 from financing activities, consisting of capital contributions by G3.

Concern Considerations, Liquidity and Capital Resources

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

The Company plans to finance its operations with proceeds from the sale of equity securities, government grants and loans, or

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, 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.

Accounting Estimates

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.

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.

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

We have identified the following as our critical accounting estimate as of and for the year ended December 31, 2024:

Purchase Agreement

The Company accounts for the forward purchase agreement as either equity-classified

or liability-classified instruments based on an assessment of the Forward Purchase Agreement (“FPA”) specific terms and applicable

authoritative guidance in FASB ASC 480 “Distinguishing Liabilities from Equity” (“ASC 480”), and FASB ASC 815,

“Derivatives and Hedging” (“ASC 815”).

The assessment considers whether the FPA is a freestanding financial instrument

pursuant to ASC 480, meets the definition of a liability pursuant to ASC 480, and whether the FPA meets all of the requirements for equity

classification under ASC 815, including whether the FPA is indexed to the Company’s own common shares and whether the FPA holders

could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions

for equity classification.

This assessment is conducted at the time of FPA issuance and as of each subsequent quarterly period end date

while the FPA is outstanding.

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

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

For issued or

modified FPAs that do not meet all of the criteria for equity classification, the FPA are required to be recorded at their initial fair

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

The Company accounts for outstanding FPA as liability-classified

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.

in the significant assumptions and estimates could materially impact the valuation and the amounts recorded in the financial statements.

Recently Adopted Accounting Standards

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.

adoption did not have a material impact to the Company’s financial statements or disclosures.

Issued Accounting Standards

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

Income Taxes (Topic 740):

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

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

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.

STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and the notes thereto

begin on page F-1 of this Annual Report.

AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company’s management does

not believe the adoption of ASU 2023-09 will have a material impact on its financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03,

“Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Expenses” to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense

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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company, we are not required to make disclosures under this Item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

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