Solidion Technology Inc.: Form 10-Q for the period ended Jun 30, 2026

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Solidion Technology, Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

Overview

Solidion Technology, Inc. is an advanced battery technology company focused on the development and commercialization of next-generation battery materials, components, and energy storage solutions. Headquartered in Dallas, Texas, with research and development (R&D) and manufacturing operations in Dayton, Ohio, Solidion is dedicated to transforming the energy storage landscape by addressing key limitations in current lithium-ion and emerging battery technologies.

The Company specializes in high-performance silicon-rich anode materials, solid-state battery technology, and fire-retardant electrolytes, aiming to enhance the energy density, safety, and cost-effectiveness of lithium-ion batteries. Solidion’s proprietary innovations include graphene-enabled batteries, elastomer-protected electrodes, quasi-solid and solid-state electrolytes, and biochar-derived anode materials, providing sustainable and scalable solutions for the electric vehicle (EV), energy storage system (ESS), and consumer electronics markets.

Solidion holds an extensive intellectual property (IP) portfolio with over 345 active patents (pending and granted) globally, positioning the Company as a leader in silicon anode and solid-state battery technology. Its innovative silane-free production processes for silicon-based anode materials allow for lower manufacturing costs and improved scalability. Additionally, its fire-retardant and polymer-based electrolytes enable safer, high-energy-density batteries compatible with existing lithium-ion cell production infrastructure.

A key milestone in Solidion’s technological advancements is the successful development of a high-energy cylindrical cell, which achieves an exceptional energy density of 305 Wh/kg, significantly higher than conventional lithium-ion batteries, which typically range between 240-260 Wh/kg. This innovation not only enhances the range and performance of EVs but also underscores Solidion’s ability to deliver cutting-edge solutions for high-energy and high-power applications.

The Company has established strategic partnerships with leading industry players, including Giga Solar Materials Corp. and Bluestar Materials Company, to advance the production and commercialization of silicon oxide (SiOx) anode materials in the U.S. These collaborations, along with Solidion’s ongoing engagement with EV original equipment manufacturers (OEMs) and toll-manufacturing partners, position the Company to accelerate the adoption of its next-generation battery solutions.

Solidion is committed to advancing battery technology through continuous R&D efforts, expanding manufacturing capabilities, and optimizing supply chain sustainability. By integrating cutting-edge materials and scalable production methods, Solidion aims to deliver high-performance, cost-effective, and environmentally sustainable battery solutions that address the increasing demand for electrified mobility and renewable energy storage.

Our Products

Anode Materials Our product portfolio includes graphite-based anode materials, distinguished by our commitment to utilizing raw materials from sustainable sources. As part of our efforts to contribute to the goal of net-zero greenhouse gas emissions by 2050, we are scrutinizing our entire supply chain to identify opportunities for reducing environmental impacts. Graphite, a critical component in rechargeable batteries due to its longevity and cost-efficiency, is traditionally derived from petroleum coke and pitch. Solidion’s innovative approach introduces biochar produced from waste biomass as an alternative feedstock. This sustainable process not only sequesters carbon but may also result in carbon-negative production. By leveraging biochar, Solidion aims to produce anode-grade graphite with exceptional performance. By the end of 2024, Solidion’s anode materials containing biochar-derived materials have achieved a capacity of over 340 mAh/g and comparable cycle life to conventional graphite anodes, marking a significant step towards more environmentally responsible battery manufacturing. Solidion has also developed a series of silicon and SiOx anode materials that enable a significantly higher energy density (for example, an expected 20-30% increase in the EV driving range) likely at a reduction in the cell cost in terms of U.S. dollars per kilowatt hour (“kWh”) when production in scale occurs. The specific capacity of these products range from 1,300 to 2,800 mAh/g aiming to suit different applications including EV, energy storage stations, drones, and consumer electronics.

Battery Cells To rigorously validate the performance of its innovative anode materials, Solidion is actively engaged in the development and testing of a diverse portfolio of battery cells. By the close of 2024, Solidion, in collaboration with strategic partners, has successfully constructed and evaluated over three distinct types of cylindrical cells, each featuring either our advanced silicon (Si) or graphite-based anodes. These cells showcase a wide range of capabilities, with capacities spanning from 4.6 to an impressive 5.5Ah.

Notably, our high-energy 5.5Ah 21700 cylindrical cell represents a significant leap forward in battery technology. This cell not only achieves an exceptional energy density of 305 Wh/kg, surpassing the typical 240-260 Wh/kg offered by established Asian manufacturers in the same high-energy category, but also delivers superior power performance. It boasts a continuous charging and discharging capability exceeding 2C, a substantial improvement over the performance less than 1C typically seen in competitor products. This combination of high energy density and robust power handling makes our 5.5Ah cell ideally suited for applications demanding both sustained energy delivery and moderate to high power output, such as advanced electric vehicles and high-performance portable electronics.

Furthermore, Solidion is actively developing cell variants tailored for applications requiring even higher power capabilities. These cells have already demonstrated impressive fast-charging capabilities, exceeding 3C, enabling rapid replenishment of energy and minimizing downtime. This focus on high-power cells underscores our commitment to addressing the diverse needs of the evolving energy storage market.

Beyond anode advancements, Solidion is also pioneering the development of next-generation electrolytes. As previously mentioned, we have successfully formulated fire-retardant and quasi-solid electrolytes, demonstrating their performance through the construction of small prototype cells. These electrolytes represent a significant step towards enhancing battery safety, a critical consideration in today’s demanding applications. Looking ahead, Solidion intends to scale up production of these electrolyte-based cells, manufacturing larger format cells in common practical sizes. This initiative will not only validate the performance of our advanced electrolytes in real-world scenarios but also pave the way for the development of safer and more reliable energy storage solutions. By integrating our innovative anode materials with these advanced electrolytes, Solidion is poised to deliver a new generation of high-performance, safe, and sustainable batteries.

Recent Developments

2026 Private Placement

On June 7, 2026, we entered into a securities purchase agreement (the “2026 Purchase Agreement”) with a new institutional investor (the “2026 Investor”), pursuant to which we agreed to issue and sell, in a private placement (the “2026 Private Placement”), (i) 750,000 shares of Common Stock at a purchase price of $15.00 per share and (ii) pre-funded warrants to purchase up to 1,583,000 shares of Common Stock at a purchase price of $14.9999 per pre-funded warrant (the “Pre-Funded Warrants”). The Pre-Funded Warrants are exercisable at any time after issuance at an exercise price of $0.0001 per share and do not expire until exercised in full. Titan Partners Group LLC, a division of American Capital Partners, LLC, acted as sole placement agent for the 2026 Private Placement. The closing of the 2026 Private Placement occurred on June 9, 2026. We received aggregate gross proceeds of approximately $35.0 million and, after deducting the placement agent fee of 7% of gross proceeds and related offering expenses, net proceeds of approximately $32.2 million, which we intend to use to support the commercialization of our patented Extreme-Climate Battery technology, fulfill customer demand, expand inventory, advance the building and testing of prototypes, and for working capital and general corporate purposes.

Pursuant to the 2026 Purchase Agreement, we agreed to file a registration statement with the SEC registering the resale of the shares and the shares of Common Stock underlying the Pre-Funded Warrants. We filed the registration statement on Form S-1 on June 12, 2026, and it was declared effective by the SEC on June 22, 2026. In connection with the 2026 Private Placement, each of our directors, executive officers and holders of more than 10% of our Common Stock (on a fully diluted basis) entered into lock-up agreements restricting sales of our securities from June 7, 2026 until August 6, 2026, forty-five (45) days following the effective date of the registration statement (subject to certain exceptions and release with the prior written consent of the placement agent), and we agreed to certain restrictions on the issuance and sale of our Common Stock or Common Stock equivalents through the same date, subject to customary exceptions.

In connection with the 2026 Private Placement, we issued to the placement agent warrants (the “Placement Agent Warrants”) to purchase up to 116,650 shares of Common Stock, representing 5% of the total securities sold at the closing. The Placement Agent Warrants are immediately exercisable at an exercise price of $17.25 per share (equal to 115% of the purchase price per share in the 2026 Private Placement) and expire on the five-year anniversary of the date of the 2026 Purchase Agreement. The Placement Agent Warrants are subject to a 180-day lock-up from the date of the 2026 Purchase Agreement pursuant to FINRA Rule 5110(e)(1) and contain customary adjustments in the event of stock dividends, splits, reorganizations or similar events.

See Note 9 to the condensed consolidated financial statements for additional information regarding the 2026 Private Placement.

Treasury Strategies

On June 29, 2026, we announced our intention to opportunistically acquire shares of Space Exploration Technologies Corp. (“SpaceX”) to be held as a long-term strategic treasury asset. We expect the initial allocation, and any future additions, to represent a modest portion of our cash on hand and not to interfere with our operating priorities, planned capital expenditures, or ability to fund our core operations and strategic plan. As of June 30, 2026, and through the date of this Quarterly Report, we had not acquired any SpaceX shares under this strategy.

On November 14, 2024, we adopted a strategic Bitcoin allocation policy for our corporate treasury under which, subject to board approval, we may allocate excess cash from operations toward Bitcoin purchases, convert interest earnings from cash held in money market accounts into Bitcoin, and allocate a portion of future capital raises to Bitcoin acquisitions. To date, we have not purchased any Bitcoin under this policy. For fiscal year 2025, we did not identify excess cash from operations available for Bitcoin purchases, and the interest income of $19,094 generated in 2025, which had been designated for Bitcoin purchases, has not yet been converted. We did not allocate any portion of the net proceeds of the 2026 Private Placement to Bitcoin acquisitions, and the proceeds are intended to be used for the purposes described under “2026 Private Placement” above. Any future purchases of Bitcoin, including any conversion of designated interest earnings or allocation of proceeds from future capital raises, remain subject to board approval and will be evaluated in light of our operating priorities and liquidity needs.

Office Lease

In July 2026, we entered into a Commercial Sublease Agreement for approximately 3,766 rentable square feet of office space at 1900 N. Pearl Street, Suite 1750, Dallas, Texas, which serves as our corporate headquarters. The sublease has a 53-month term commencing July 13, 2026 and expiring November 30, 2030, with total undiscounted future minimum base rent payments of approximately $1,135,146, plus our proportionate share of operating expenses, real estate taxes, and landlord insurance. Upon execution we paid a security deposit of $21,906 and prepaid rent of $131,436. See Note 14 to the condensed consolidated financial statements.

Memorandum of Understanding

On February 10, 2026, we entered into a non-binding memorandum of understanding (“MOU”) with an entity that manufactures and distributes energy storage systems for the Company to supply pouch cells for use in energy storage systems. While the MOU is non-binding in nature and may result in no actual sales, a definitive agreement could potentially add an estimated $4 to $6 million in revenue over the next 12 months.

Grants from the U.S. Government

During the fourth quarter of 2025 and the first quarter of 2026, the Company was notified that it had received three grants from various departments of the U.S. government. The U.S. Department of Energy (“DOE”) provided the first grant (the “First Grant”), which was to advance research and development of Electrochemical Manufacturing of High-Performance Graphite based on Biomass-Derived Carbon. The Company had received the prestigious 2025 R&D 100 Award in partnership with Oak Ridge National Laboratory for innovation in Electrochemical Graphitization in Molten Salts, and the First Grant was for research to be conducted jointly with Oak Ridge National Laboratory to reduce imports of critical energy materials from foreign sources, improve American energy independence, and ensure that the U.S. maintains a technological lead in developing and deploying advanced energy technologies.

The DOE provided the second grant (the “Second Grant”) to scale up the synthesis of a carbon-nanosphere material that will be used as an anti-corrosive additive in molten-salts-based heat transfer fluids for advanced molten salt nuclear reactors. The Second Grant was also for research to be conducted jointly with Oak Ridge National Laboratory, this time to develop a nanofluids-based energy material, engineered colloidal suspension of hollow carbon nanoparticles in conventional molten salts, to enhance heat transfer and reduce corrosion in nuclear reactors, which is critical for reducing costs, increasing safety, and accelerating the commercialization of small modular nuclear reactors such as advanced molten salt reactors.

The U.S. Army provided the third grant (the “Third Grant”) to develop an advanced fiber-based electronic battery system built on a coaxial carbon nanotube (“CNT”) yarn architecture. The Third Grant was for research to be conducted jointly with The University of Texas at Dallas to develop a flexible, rechargeable lithium-ion battery in fiber form: a CNT yarn serves as both the structural core and current collector of the anode, integrated with Solidion’s silicon (Si) as the high-capacity anode material.

Unregistered Sales of Equity Securities

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.

Change to Board of Directors

On September 3, 2025 (the “Resignation Date”), Cynthia Ekberg Tsai notified the Board of Directors (the “Board”) of the Company of her resignation as a member of the Board, including all committees on which she serves, effective as of the Resignation Date. Ms. Ekberg Tsai’s resignation did not result from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

As a result of Ms. Ekberg Tsai’s resignation, the Company’s Audit Committee is composed of two members. On September 8, 2025, the Company notified The Nasdaq Stock Market, LLC of its non-compliance with Nasdaq Rule 5605(c)(2)(A), which requires that the Audit Committee be composed of three directors. Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company has a cure period to regain compliance by appointing a new independent director to the Audit Committee, which extends until the earlier of the Company’s next annual meeting of shareholders or September 3, 2026.

On March 24, 2026, the Company announced an annual meeting of shareholders scheduled for June 11, 2026. On June 29, 2026, the Company announced that the annual meeting has been rescheduled for September 15, 2026. Because the rescheduled annual meeting will occur after September 3, 2026, the Company’s cure period to regain compliance with Nasdaq Listing Rule 5605(c)(2)(A) expires on September 3, 2026. The Company is actively evaluating potential candidates to fill the vacancy on its Audit Committee and intends to appoint a new independent director to the Audit Committee on or before that date.

Components of Results of Operations

Revenue

The Company is focused on commercializing and manufacturing battery materials and next-generation battery cells. Historically, and during the periods presented, we have generated minimal revenue from product samples. We do not expect to begin generating significant revenue until we complete the commercialization process and build out manufacturing capacity. Future capacity may come from joint ventures with strategic partners, sourcing third-party manufacturing from our network, or pursuing mergers and acquisitions.

Operating Expenses

Research and Development

Research and development expenses consist primarily of personnel expenses, including salaries, benefits, third party technology validation testing, equipment, engineering, maintenance of facilities, data analysis, and materials.

Selling, General and Administrative

Selling, general and administrative expenses primarily consist of personnel expenses, including salaries, benefits, and stock-based compensation related to executive management, finance, legal, and human resource functions. Other costs include business development, contractor and professional services fees, audit and compliance expenses, insurance costs and general corporate expenses, such as rent, office supplies and information technology costs.

Other Income (Loss)

Change in fair value of Derivative Liabilities

Change in fair value of Derivative Liabilities consists of fluctuations in the fair value of an agreement between the Company and investors facilitating future purchases of the Company’s stock by the Investor based on a Monte Carlo simulation model.

Interest Income

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

Interest Expense

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

Results of Operations

This data should be read in conjunction with Solidion’s financial statements and accompanying notes. These results of operations are not necessarily indicative of future performance.

Summary of Statements of Operations for the Three Months Ended June 30, 2026 and 2025

Net Sales

Net sales increased by $120,914 for the three months ended June 30, 2026, to $124,914, compared to $4,000 for the three months ended June 30, 2025. The increase was primarily attributable to government grant revenue recognized during the period.

Operating Expenses

Operating expenses decreased by $296,546 for the three months ended June 30, 2026. This decrease was primarily driven by lower general and administrative costs, including reduced personnel and professional services expenses. Additionally, there were decreased research and development costs, including personnel expenses associated with the commercialization of our battery cell products and third-party validation testing of our proprietary silicon anode.

Other Income (Expense)

Other expense increased by $1,192,684 for the three months ended June 30, 2026. This increase was largely driven by a loss of $917,780 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement and warrants related to the March private placement financing, compared to a loss of $216,150 in the three months ended June 30, 2025. Other expense for the quarter also included a $549,915 non-cash write-off of deferred offering costs associated with a registration statement the Company withdrew in June 2026, and interest expense of $153,597 primarily related to the Company’s short-term notes.

Summary of Statements of Operations for the Six Months Ended June 30, 2026 and 2025

Net Sales

Net sales increased by $206,340 for the six months ended June 30, 2026, to $210,340, compared to $4,000 for the six months ended June 30, 2025. The increase was primarily attributable to government grant revenue recognized during the period.

Operating Expenses

Operating expenses decreased by $1,571,192 for the six months ended June 30, 2026. This decrease was primarily driven by lower general and administrative costs, including reduced personnel and professional services expenses. Additionally, there were decreased research and development costs, including personnel expenses associated with the commercialization of our battery cell products and third-party validation testing of our proprietary silicon anode.

Other Income (Expense)

Other expense increased by $13,176,358 for the six months ended June 30, 2026. This increase was largely driven by a loss of $356,430 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement, and warrants related to the Private Placement financing, compared to a gain of $12,201,300 in the six months ended June 30, 2025. Additionally, there was interest expense of $300,830 primarily related to the Company’s short-term notes.

Cash Flows

The following tables set forth a summary of our cash flows for the periods indicated:

Net Cash used in Operating Activities

For the six months ended June 30, 2026, cash used in operating activities was $4,115,341. This primarily resulted from net loss of $4,317,424, which included non-cash loss of $356,430 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement and March Private Placement warrants. These non-cash losses were added back to reconcile net income to net cash used in operating activities, as part of non-cash adjustments that also included depreciation and amortization, stock-based compensation amortization of debt discount and accrued interest related to short-term notes payable – related party, totaling $1,126,636. Additionally, changes in operating assets and liabilities used $911,680 of cash from operating activities, driven primarily by a $847,995 decrease in accounts payable and accrued expenses.

For the six months ended June 30, 2025, cash used in operating activities was $3,255,997. This primarily resulted from net income of $7,080,771, which included non-cash gain of $12,201,300 due to a change in the fair value of derivative liabilities related to the Forward Purchase Agreement and March and August Private Placement warrants. These non-cash gains were added back to reconcile net income to net cash used in operating activities, as part non-cash adjustments that also included depreciation and amortization, stock-based compensation non-cash interest expense, totaling $10,901,440. Additionally, changes in operating assets and liabilities used $564,672 of cash from operating activities, driven primarily by a $431,608 increase in other current assets. The increase in other current assets was due to the financing arrangement associated with the directors and officers insurance policy.

Net Cash used in Investing Activities

For the six months ended June 30, 2026, the Company used cash of $45,432 in investing activities consisting of capitalized patent costs.

For the six months ended June 30, 2025, the Company used cash of $181,498 in investing activities consisting of purchases of Silicon Oxide (SiOx) manufacturing equipment and capitalized patent costs.

Net Cash provided by Financing Activities

For the six months ended June 30, 2026, net cash provided by financing activities was $31,633,363. This consisted primarily of net proceeds of approximately $32.2 million from the 2026 Private Placement, after deducting the placement agent fee and offering expenses paid and partially offset by the repayments of short-term notes of $696,732.

For the six months ended June 30, 2025, the Company generated cash of $198,415 from financing activities. The Company received proceeds from warrant exercises of $241,546. These increases were offset by repayment of short-term notes of $42,671.

Liquidity and Capital Resources

Since Solidion’s inception, the Company has experienced recurring net losses and has generated minimal sales. These conditions, together with the Company’s limited cash resources in prior periods and its default under an outstanding promissory note, previously raised substantial doubt about the Company’s ability to continue as a going concern, as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

In June 2026, we completed a private placement of 750,000 shares of common stock and pre-funded warrants to purchase 1,583,000 shares of common stock, for aggregate gross proceeds of approximately $35.0 million (approximately $32.2 million net of placement agent fees and offering expenses).

As of June 30, 2026, we had cash and cash equivalents of $27,677,315. Management has evaluated our projected operating requirements — including our obligations under the promissory note currently in default and — against our existing cash and cash equivalents, and has concluded that we have sufficient liquidity to fund our operations and satisfy our obligations as they become due for at least one year following the date the financial statements included in this Quarterly Report are issued. Accordingly, the conditions that previously raised substantial doubt about our ability to continue as a going concern have been alleviated. See Note 1 to the condensed consolidated financial statements.

During the six months ended June 30, 2026, we incurred losses from operations totaling $4,317,424 and net cash used in operating activities of $4,115,341. As of June 30, 2026, we had an accumulated deficit of $167,689,963. We expect to continue to incur such losses for at least the next twelve months, and we expect our expenditures to increase as we advance our development and commercialization activities. Our longer-term capital requirements will depend on many factors, including the pace of our technology development, the buildout of manufacturing capabilities, and our ability to generate revenue. We may seek to raise additional capital through the sale of equity securities, government grants, or debt financing; however, there is no assurance that additional financing will be available on terms favorable to us, or at all.

Off-Balance Sheet Arrangements

At June 30, 2026, we have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or entered into any non-financial agreements involving assets.

Critical Accounting Estimates

We prepare our financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our financial statement that require estimation but are not deemed critical, as defined above. There were no changes to the Company’s critical accounting estimates from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025.

Forward Purchase Agreement

The Company accounts for the forward purchase agreement as either equity-classified or liability-classified instruments based on an assessment of the Forward Purchase Agreement (“FPA”) specific terms and applicable authoritative guidance under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the FPA meets all of the requirements for equity classification under ASC 815, including whether the FPA is indexed to the Company’s own common shares and whether the FPA holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment is conducted at the time of FPA issuance and as of each subsequent quarterly period end date while the FPA is outstanding.

The Company has determined that the FPA does not meet all of the criteria for equity classification under ASC 815, as the FPA fails the fixed-for-fixed test under ASC 815-40 due to the bi-weekly Reset Price mechanism, the Dilutive Offering Reset provision, and the VWAP Trigger Event, each of which creates variability in the settlement amount that is not purely a function of the Company’s own stock price. Accordingly, the FPA is classified as a liability-classified derivative instrument, recorded at fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. The Company utilizes a Monte Carlo simulation model to determine the fair value of the FPA. The resulting fair value is recorded as a derivative liability on the condensed consolidated balance sheets. The Company records changes in the fair value of the FPA as a non-cash other income (expense) within change in fair value of derivative liabilities account on the Company’s condensed consolidated statements of operations.

Upon the issuance of shares in connection with the FPA, the Company recognizes (i) an increase to APIC measured at the fair value of the FPA at the time of share issuance, (ii) a corresponding stock subscription receivable of equal amount as a contra-equity component within stockholders’ equity (deficit), representing the present value of the consideration receivable for the shares issued, and (iii) a loss on issuance of common stock within Other Income (Expense) representing the difference between the face value of the stock subscription receivable and its present value at the issuance date. The discount between the face value and present value of the stock subscription receivable is accreted using the effective interest method over the remaining term of the FPA, with each period’s accretion recorded as an increase to both the stock subscription receivable and APIC within stockholders’ equity (deficit). The stock subscription receivable is presented as a reduction to total stockholders’ equity (deficit) and is relieved as Optional Early Termination proceeds are received from the Forward Purchase Investor.

For issued or modified FPA that meet all of the criteria for equity classification, the FPA is required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified FPAs that do not meet all of the criteria for equity classification, the FPA are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. The Company accounts for outstanding FPA as liability-classified instrument.

The fair value of the FPA is Level 3. The determination of the fair value requires significant estimates and judgments. See Note 13 – Fair Value Measurements to the financial statements for the significant assumptions and estimates.

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

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” to improve disclosures by providing more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its condensed consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities,” which establishes comprehensive guidance under U.S. GAAP for the recognition, measurement, presentation, and disclosure of government grants received by business entities. The ASU is effective for public business entities for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the effect this standard may have on its condensed consolidated financial statements and related disclosures in light of its government contract revenue activity.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements,” which clarifies the applicability of the interim reporting guidance, improves the organization and navigability of the interim disclosure requirements, and introduces a disclosure principle requiring entities to disclose events occurring after the most recent annual reporting period that have a material effect on the entity. The ASU is effective for public business entities for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the amendments prospectively or retrospectively to any or all prior interim periods presented. The Company is currently evaluating the effect this standard may have on its condensed consolidated financial statements and related disclosures.

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2026, because of certain material weaknesses in our internal control over financial reporting, as further described below.

Notwithstanding these material weaknesses, our management concluded that our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

Management’s Report on Internal Control Over Financial Reporting

Material Weaknesses

A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Management identified deficiencies in the principles associated with the control environment, risk assessment, control activities, information & communication, and monitoring components of internal control, based on the criteria established by the COSO framework, that constitute material weaknesses, either individually or in the aggregate as described below.

Control Environment: Solidion does not maintain a sufficient complement of qualified technical accounting and financial reporting personnel to perform control activities, including those related to complex and/or non-routine transactions. Additionally, Solidion did not implement sufficient segregation of duties within its financial reporting function in order to demonstrate independence and proper oversight. This material weakness contributed to the additional material weaknesses further described below.

Risk Assessment: Solidion did not design and implement an effective risk assessment based on the criteria established in the COSO framework. A material weakness, either individually or in the aggregate, was identified pertaining to (i) identifying, assessing, and communicating appropriate objectives; (ii) identifying and analyzing risks to achieve these objectives; and (iii) implementing an effective risk assessment to identify and assess changes in the business if such changes were to occur.

Control Activities: Solidion did not effectively design and implement control activities to support the operating effectiveness of controls to prevent and detect potential material errors based on the criteria established in the COSO framework. As a result, the following control deficiencies constitute material weaknesses, individually or in the aggregate: (i) ineffective controls related to the review and approval of journal entries and reconciliations, and (ii) a lack of appropriate accounting policies and procedures.

Information and Communication: We identified control deficiencies that constitute material weaknesses, either individually or in the aggregate, related to (i) internal communication of information, including objectives and responsibilities for internal control, necessary to support the functioning of internal control; and (ii) communicating relevant information to external parties timely.

Monitoring: Solidion did not maintain effective monitoring activities to determine whether the components of internal control over financial reporting were present and functioning based on the criteria established in the COSO framework.

Remediation Plans and Status

We are committed to maintaining a strong internal control environment and implementing measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated as soon as practicable. We plan to engage a third party to assist in our remediation efforts. We will design and implement a risk assessment process and establish processes and controls to support an effective control environment. These actions are intended to enable Solidion to enhance our monitoring of our internal controls over financial reporting as well as enhance required communication. In addition, we will design and implement controls to address material weaknesses in control activities including the proper review and approval of journal entries and reconciliations.

As Solidion continues to evaluate its internal controls, it may take additional remediation actions. The material weaknesses will be considered remediated when Solidion’s management designs and implements effective controls that operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Solidion’s management will monitor the effectiveness of its remediation plans and will make changes management determines to be appropriate.

Changes in Internal Control over Financial Reporting

There were no changes during the quarter ended June 30, 2026, in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.