SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated and combined financial statements (the “financial statements”) are presented in conformity with US GAAP -1 Throughout the period covered till the Closing date of the Merger, the Company operated as part of G3. Consequently, stand -alone -alone However, the financial statements included herein may not be indicative of the financial position, results of operations, and cash flows of the Company in the future or if the Company had been a separate, stand -alone In the opinion of management, the Company has made all adjustments necessary to present fairly its financial statements for the periods presented. Such adjustments are of a normal, recurring nature. The Company’s financial statements have been prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The financial statements include the Company entities. All intercompany transactions have been eliminated for consolidation purposes. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes -Oxley Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging Use of Estimates The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Segment Reporting The Company has determined that the Chief Executive Officer is its Chief Operating Decision Maker (the “CODM”). Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Cash and cash equivalents The Company considers all short -term Accounts Receivable, net of Allowance for Credit Losses Accounts receivables are stated at the amount the Company expects to collect. The Company recognizes an allowance for credit losses to ensure accounts receivables are not overstated due to un -collectability -time Other Receivable As of December 31, 2023, the Company held an other receivable balance of $187,500 from Nubia. This balance originated from cash advances made by G3 on behalf of The Battery Group of G3, in connection with Nubia’s funding requirements for extensions of time in closing the Merger. Pursuant to the Merger Agreement, G3’s Battery Group was responsible for funding 50% of this additional trust funding requirement. As of June 30, 2024, following the elimination of an intercompany amount upon the closing of the Merger, the Company no longer had a balance related to the trust funding requirement. During the first quarter, the Company advanced $302,500 to G3 for transaction costs incurred during the Merger. The outstanding balance of other receivables amounted to $302,500 as of June 30, 2024. Inventory Inventories are stated at the lower of first -in -out -down Property and Equipment, net Property and equipment are recorded at cost less accumulated depreciation and amortization. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred, and expenditures, which extend the economic life, are capitalized. When assets are retired, or otherwise disposed of, the costs and related accumulated depreciation or amortization are removed from the accounts and any gain or loss on disposal is recognized. The Company assesses the carrying value of its property and equipment for impairment each year and when indicators exist that there could be an impairment. Based on its assessments, the Company did not incur any impairment charges for the three and six months ended June 30, 2024 and 2023. The Company depreciates its property and equipment for financial reporting purposes using the straight -line Building 40 years Leasehold improvements 15 years Machinery & equipment 5 years Depreciation expense of property and equipment was $68,416, $125,510, $64,515 and $156,871 for the three and six months ended June 30, 2024 and 2023, respectively. Patents The Company capitalizes external costs, such as filing fees and associated attorney fees, incurred to obtain issued patents. The Company’s intangible assets consist of capitalized costs for unissued patents and issued patents. Issued patents are carried at cost less accumulated amortization. Successful patent efforts are amortized over the life of the patent, and unsuccessful efforts are expensed. The issued patents are being amortized over a useful life of 20 years. Amortization of the patent costs commences upon patent issuance. Net unissued and issued patents were $1,081,011 and $857,680 as of June 30, 2024, respectively; and $1,103,792 and $748,857 as of December 31, 2023, respectively. The Company assesses the carrying value of its intangible assets for impairment each year and when indicators exist that there could be an impairment. Based on its assessments, the Company did not incur any impairment charges for the three and six months ended June 30, 2024 and 2023. Amortization expense of patents was $34,495, $71,793, $11,992 and $25,308 for the three and six months ended June 30, 2024 and 2023, respectively. Translation of Foreign Currencies The functional currency of Solidion’s Taiwan subsidiary is the New Taiwan Dollar. In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 830, Foreign Currency Matters Revenue Recognition Revenue is recognized when a performance obligation has been satisfied by transferring control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products. Revenues are recognized at a point in time when control transfers to customers, which is generally determined when title, ownership and risk of loss pass to the customer. Research and Development All research and development costs are expensed as incurred. Selling, General and Administrative Expenses Selling, general and administrative expenses represent costs incurred by the Company in managing the business, including salary, benefits, stock -based -research Stock-Based Compensation The Company has an incentive equity plan, (“2023 Equity Incentive Plan”). Under the terms of the plan, Solidion’s employees, consultants and directors, and employees and consultants of its affiliates, may be eligible to receive awards in the form of incentive stock options (“ISOs”) to employees and for the grant of non -statutory The number of stocks of common stock initially reserved for issuance under the incentive plan will be 9,500,000. Stocks subject to stock awards granted under the incentive plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in stocks, will not reduce the number of stocks available for issuance under the incentive plan. The incentive plan also includes an evergreen provision that provides for an automatic annual increase to the number of stocks of common stock available for issuance under the incentive plan on the first day of each fiscal year beginning with the 2024 fiscal year, equal to the least of (i) 9,500,000 stocks of common stock, (ii) 5% of the total number of stocks of common stock outstanding as of the last day of our immediately preceding fiscal year, or (iii) such lesser amount determined by the plan administrator. The Company measures stock options and restricted stock unit awards granted to employees, non -employees Generally, the Company issues stock options and restricted stock units with only service -based -line -based -based The fair value of each stock option grant is estimated on the date of grant using the Black -Scholes -pricing -specific The expected term of all of the Company’s stock options has been determined utilizing the “simplified” method. The risk -free Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “ Earnings Per Share. The calculation of diluted income (loss) per share of common stock does not include potentially dilutive common stock equivalents if their include would be anti -dilutive The following table presents potentially dilutive common stock equivalents that have been excluded from the calculation of dilutive loss per share as their inclusion would be anti -dilutive June 30, 2024 December 31, 2023 HBC Holdback Shares 200,000 — Warrants – Public 6,175,000 — Warrants – Private 5,405,000 — Warrants – Series A 22,141,701 — Warrants – Series B 5,549,655 — Stock-based compensation – equity awards 300,000 — Forward Purchase Agreement – Additional Shares 8,038,537 — Convertible notes 3,396,261 — HBC Earnout Shares 22,500,000 — Total common stock equivalents excluded from dilutive loss per share 73,706,154 — The following table presents potentially dilutive common stock equivalents that have been included in the calculation of dilutive income per share for the three months ended June 30, 2024, as their inclusion would be dilutive. June 30, 2024 Warrants – Series B 5,549,655 Stock-based compensation – equity awards 300,000 Convertible notes 3,396,261 Total common stock equivalents included in dilutive income per share 9,245,916 Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts. 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. US GAAP establishes a three -tier Warrants The Company accounts for warrants as either equity -classified -classified 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 -classified -classified -to-fixed Forward Purchase Agreement The Company accounts for the forward purchase agreement (“FPA”) as either equity -classified -classified For issued or modified FPA that meets all of the criteria for equity classification, the FPA is required to be recorded as a component of additional paid -in -classified Other Current Assets The composition of other current assets was: June 30, 2024 December 31, 2023 Directors & Officers Insurance 777,135 — Total other assets 777,135 — Other Assets The composition of other assets was: June 30, 2024 December 31, 2023 Directors & Officers Insurance 778,167 — Total other assets 778,167 — Recent Accounting Standards In December 2023, the FASB issued ASU 2023 -09 -09 -09 -09 In November 2023, the FASB issued Accounting Standards Update (ASU) 2023 -07 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. | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes -Oxley Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non -emerging Use of Estimates The preparation of financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and cash equivalents The Company considers all short -term Cash and investments held in Trust Account The funds held in Trust are invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less or in any open -ended -7 -interest Offering Costs associated with an Initial Public Offering The Company complies with the requirements of the Financial Accounting Standards Board (“FASB”) ASC 340 -10-S99-1 Expenses of Offering.” -allotment Class A ordinary shares subject to possible redemption The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance enumerated in ASC 480 “ Distinguishing Liabilities from Equity The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable Class A common stock to equal the redemption value at the end of each reporting period. Immediately upon the closing of the Initial Public Offering, the Company recognized a measurement adjustment from initial book value to redemption amount value. The change in the carrying value of redeemable Class A ordinary shares resulted in charges against additional paid -in At December 31, 2023 and December 31, 2022, the Class A common stock subject to possible redemption reflected in the balance sheet is reconciled in the following table: Gross proceeds $ 123,500,000 Less: Proceeds allocated to Public Warrants (3,755,675 ) Class A common stock issuance costs (6,716,427 ) (10,472,102 ) Plus: Class A Common Stock Redeemable Remeasurement Adjustment at IPO 12,942,102 Remeasurement adjustment for the year ended December 31, 2022 1,272,983 Class A common stock subject to possible redemption as of December 31, 2022 127,242,983 Transfer to funds payable to redeemed Class A stockholders (17,834,235 ) Redemptions (89,038,494 ) Remeasurement adjustment for the year ended December 31, 2023 3,972,489 Class A common stock subject to possible redemption as of December 31, 2023 $ 24,342,743 Funds payable to redeemed Class A stockholders On December 14, 2023, the Company held a second special meeting of stockholders (the “Second Special Meeting”). In connection with the Second Special Meeting, stockholders elected to redeem an aggregate 1,625,876 Excise tax, if any, related to the redemption will be accrued on the date the funds are paid to the stockholders. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “ Income Taxes ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2023 and 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. The IR Act imposes a 1% excise tax on the fair market value of stock repurchases made by covered corporations after December 31, 2022. The total taxable value of shares repurchased is reduced by the fair market value of and newly issued shares during the taxable year. Redemption rights are ubiquitous to nearly all SPACs. Stockholders have the ability to require the SPAC to repurchase their shares prior to the merger in what is known as a redemption right, essentially getting their money back. There are two possible scenarios in which redemption rights come into play. First, they can be exercised by the stockholders themselves because they are exiting the transaction, or second, they can be triggered because the SPAC did not find a target with which to merge. In connection with shareholder redemptions in 2023, the Company recorded an excise tax liability and equity adjustment of $0.9 Net Income (Loss) per Common Stock The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “ Earnings Per Share. -class 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, 2023 and 2022, the warrants are exercisable to purchase 11,580,000 Stockholders elected to redeem an aggregate 1,625,876 The following tables reflects the calculation of basic and diluted net income (loss) per common share (in dollars, except per share amounts): For the Class A Redeemable Common Stock Numerator: Income allocable to Class A Redeemable Common Stock $ 448,713 Denominator: Diluted weighted average shares outstanding 9,846,164 Diluted net income per share, Class A Redeemable Common Stock $ 0.05 Class A and Class B Non-Redeemable Common Stock Numerator: Income allocable to Class A and Class B Non-Redeemable Common Stock $ 145,192 Denominator: Diluted weighted average shares outstanding 3,185,962 Diluted net income per share, Class A and Class B Non-Redeemable Common Stock $ 0.05 Year ended Class A Redeemable Common Stock Numerator: Loss allocable to Class A Redeemable Common Stock $ (13,931,674 ) Denominator: Basic and diluted weighted average shares outstanding 7,654,886 Basic and diluted net loss per share, Class A Redeemable Common Stock $ (1.82 ) Class A and Class B Non-redeemable Common Stock Numerator: Loss allocable to Class A and Class B Non-Redeemable Common Stock $ (5,843,928 ) Denominator: Basic and diluted weighted average shares outstanding 3,211,000 Basic and diluted net loss per share, Class A and Class B Non-Redeemable Common Stock $ (1.82 ) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account. 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. US GAAP establishes a three -tier Convertible Notes The Company accounts for convertible notes as either equity -classified -classified whether the convertible notes meet all of the requirements for equity classification under ASC 815, including whether the conversion feature are indexed to the Company’s own common shares. The Company has concluded that the convertible notes qualify for equity treatment. Warrants The Company accounts for warrants as either equity -classified -classified 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 -classified Forward Purchase Agreement and Non-Redemption Agreement The Company accounts for forward purchase agreement and non -redemption -classified -classified 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 -classified Recent Accounting Standards In December 2023, the FASB issued ASU 2023 -09 -09 -09 -09 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. |