Solidion(STI) - 2022 Q1 - Quarterly Report

Part I - FINANCIAL INFORMATION This section presents Nubia Brand International Corp.'s unaudited condensed consolidated financial statements for the period ended March 31, 2022, detailing its financial position as a SPAC Item 1. Unaudited Condensed Consolidated Financial Statements This chapter provides Nubia Brand International Corp.'s unaudited condensed consolidated financial statements as of March 31, 2022, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with related notes Condensed Consolidated Balance Sheets | Indicator | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash | $1,268,183 | $— | | Other current assets | $197,276 | $— | | Investments held in Trust Account | $125,978,655 | $— | | Deferred offering costs | $— | $180,341 | | Total Assets | $127,621,334 | $180,341 | | Liabilities and Stockholders' (Deficit) Equity | | | | Accounts payable and accrued expenses | $510,468 | $491 | | Deferred underwriting commissions | $4,322,500 | $— | | Total Liabilities | $4,979,029 | $156,771 | | Class A common stock subject to possible redemption | $125,970,000 | $— | | Total Stockholders' (Deficit) Equity | $(3,327,695) | $23,570 | Condensed Consolidated Statement of Operations | Indicator | Three Months Ended March 31, 2022 (Unaudited) | | :--- | :--- | | Expenses | | | Management fees - related party | $5,000 | | General and administrative expenses | $119,366 | | Total Expenses | $124,366 | | Other Income | | | Income from investments held in Trust Account | $8,655 | | Change in fair value of over-allotment liability | $3,712 | | Total Other Income | $12,367 | | Net Loss | $(111,999) | | Basic and diluted net loss per share, Class A common stock subject to possible redemption | $(0.02) | | Basic and diluted net loss per share, Class A and Class B common stock not subject to redemption | $(0.02) | Condensed Consolidated Statement of Changes in Stockholders' (Deficit) Equity | Indicator | Balance December 31, 2021 | Balance March 31, 2022 | | :--- | :--- | :--- | | Class A Common Stock (shares) | — | 123,500 | | Class A Common Stock (amount) | $— | $12 | | Class B Common Stock (shares) | 3,162,500 | 3,162,500 | | Class B Common Stock (amount) | $316 | $316 | | Additional paid-in capital | $24,684 | $— | | Accumulated deficit | $(1,430) | $(3,328,023) | | Total Stockholders' (Deficit) Equity | $23,570 | $(3,327,695) | | Allocation of proceeds from public warrants | — | $3,755,675 | | Proceeds from private placement warrants | — | $5,405,000 | | Allocation of transaction costs | — | $(234,654) | | Issuance of Class A common stock to representative | — | $776,815 | | Revaluation adjustment for Class A common stock | — | $(12,942,102) | | Net Loss | — | $(111,999) | Condensed Consolidated Statement of Cash Flows | Cash Flow Activities | Three Months Ended March 31, 2022 | | :--- | :--- | | Cash flows from operating activities | | | Net loss | $(111,999) | | Adjustments to reconcile net loss to net cash used in operating activities: | | | Income from investments held in Trust Account | $(8,655) | | Change in fair value of over-allotment liability | $(3,712) | | Changes in operating assets and liabilities | $(121,792) | | Net cash used in operating activities | $(2,574) | | Cash flows from investing activities | | | Cash deposited in Trust Account | $(125,970,000) | | Net cash used in investing activities | $(125,970,000) | | Cash flows from financing activities | | | Net proceeds from sale of IPO units | $122,265,000 | | Proceeds from sale of private placement warrants to Sponsor | $5,405,000 | | Payment of offering costs | $(429,243) | | Net cash provided by financing activities | $127,240,757 | | Net change in cash | $1,268,183 | | Cash at beginning of period | $— | | Cash at end of period | $1,268,183 | Notes to the Condensed Financial Statements This section provides detailed notes to the condensed consolidated financial statements, explaining the company's organization, significant accounting policies, and specific financial transactions Note 1 — Description of Organization, Business Operations and Going Concern This note describes the company's formation as a SPAC, its business objective of completing a business combination, and the going concern considerations related to its operational timeline - The company, incorporated in Delaware on June 14, 2021, aims to effect a merger, capital stock exchange, asset acquisition, or similar business combination, with all activities to date related to its formation and initial public offering (IPO)[23][24] - The company completed its IPO on March 15, 2022, issuing 11,000,000 units for $110 million and privately selling 5,000,000 warrants to the sponsor for $5 million; the exercise of the over-allotment option resulted in an additional 1,350,000 units and 405,000 private placement warrants, totaling 12,350,000 units and 5,405,000 private placement warrants[25][26][27][28] - Net proceeds from the IPO and private placement warrants are primarily deposited into a Trust Account to fund a business combination, which must be completed within 12 months (or up to 18 months with extensions) to avoid liquidation and redemption of public shares[29][33] - As of March 31, 2022, the company had $1,268,183 in cash outside the trust and $808,930 in working capital; management believes failure to complete a business combination within the specified timeframe raises substantial doubt about the company's ability to continue as a going concern[37] Note 2 — Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including US GAAP compliance, cash equivalents, and equity classification - The company prepares its financial statements in accordance with US GAAP and SEC rules, qualifying as an "emerging growth company" and electing not to opt out of the extended transition period for new or revised accounting standards[40][42][43] - Short-term investments with original maturities of three months or less are considered cash equivalents; as of March 31, 2022, the company held $126 million in investments in the Trust Account, primarily in U.S. government securities or money market funds[46][47] - Offering costs are allocated to separable financial instruments issued in the IPO based on their relative fair values; Class A common stock subject to possible redemption is classified as temporary equity under ASC 480 and measured at redemption value, with its carrying value adjusted at each period end to reflect the redemption value[48][49][50] - The company accounts for income taxes using the balance sheet method and assesses uncertain tax positions under ASC 740; as of March 31, 2022, there were no unrecognized tax benefits[52][53][54] - Net loss per share is calculated using the two-class method, with diluted loss per share being the same as basic loss per share due to the anti-dilutive effect of warrants; a 1.1-for-1 stock split occurred on March 10, 2022[55][56] Note 3 — Initial Public Offering This note details the terms and proceeds of the company's initial public offering, including the units sold and the partial exercise of the over-allotment option - The company sold 11,000,000 units at $10.00 per unit, each consisting of one share of Class A common stock and one-half of one redeemable warrant; underwriters partially exercised their over-allotment option on March 15, 2022, purchasing an additional 1,350,000 units for $13.5 million in gross proceeds[63][64] Note 4 — Private Placements This note describes the private placement of warrants to the sponsor and the additional warrants purchased due to the over-allotment option - The sponsor purchased 5,495,000 private placement warrants at $1.00 per warrant, generating $5,495,000 in gross proceeds, which were deposited into the Trust Account and will expire if the company does not complete a business combination[65] - On March 15, 2022, the sponsor and underwriters purchased an additional 405,000 private placement warrants due to the over-allotment option exercise, generating $405,000 in additional gross proceeds[66] Note 5 — Related Parties This note outlines transactions and agreements with related parties, including founder shares, a promissory note, and administrative support fees - The sponsor acquired 2,875,000 shares of Class B common stock (founder shares) for $25,000 on August 17, 2021, which, after a 1.1-for-1 stock split, totaled 3,162,500 shares, with 75,000 shares subject to forfeiture if the over-allotment option is not fully exercised[67] - The sponsor issued an unsecured promissory note to the company for up to $300,000, non-interest bearing, originally due March 31, 2022, or upon IPO completion; on May 20, 2022, the note was amended to extend the maturity date to the earlier of a business combination or liquidation, allowing the holder to convert outstanding principal into warrants[69][97] - The company agreed to pay the sponsor $10,000 per month for office space, utilities, and administrative support for up to 18 months, with $5,000 recorded as of March 31, 2022[71] Note 6 — Commitments and Contingencies This note details the company's commitments and contingent liabilities, including registration rights, underwriting fees, and the expiration of the over-allotment option - Holders of founder shares and private placement warrants have registration rights, requiring the company to register these securities for resale, subject to lock-up restrictions[73] - Underwriters received a $1,235,000 cash underwriting discount and 123,500 shares of Class A common stock as compensation; they are also entitled to $4,322,500 in deferred fees, payable from the Trust Account upon completion of a business combination[75] - The underwriters' over-allotment option expired on April 29, 2022, resulting in the forfeiture of 300,000 units and 75,000 Class B shares[76][96] Note 7 — Stockholder's Equity This note provides details on the company's authorized and outstanding share capital, including preferred stock, Class A and Class B common stock, and warrants - Authorized and Outstanding Shares (March 31, 2022) | Stock Class | Authorized Shares | Issued and Outstanding Shares | | :--- | :--- | :--- | | Preferred Stock | 1,000,000 | 0 | | Class A Common Stock | 100,000,000 | 123,500 (excluding 12,350,000 redeemable shares) | | Class B Common Stock | 10,000,000 | 3,162,500 (of which 75,000 shares are subject to forfeiture) | - Holders of Class B common stock have the right to elect directors prior to a business combination and convert to Class A common stock on a one-for-one basis at the time of a business combination, subject to adjustment[81][82] - As of March 31, 2022, there were 11,580,000 warrants outstanding (5,405,000 private placement warrants and 6,175,000 public warrants); public warrants become exercisable 30 days after the completion of a business combination or 12 months after the IPO closing, whichever is later[83] - The company may redeem public warrants when the Class A common stock price reaches or exceeds $18.00[86] Note 8 — Fair Value Measurements This note explains the company's approach to fair value measurements for financial instruments, categorizing them into a three-level hierarchy - The company follows ASC 820 guidance for fair value measurements of financial assets and liabilities, employing a three-level fair value hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[89][90][91] - Fair Value Measurements (March 31, 2022) | Description | Level | March 31, 2022 | | :--- | :--- | :--- | | Assets: | | | | Investments held in Trust Account | 1 | $125,978,655 | | Liabilities: | | | | Over-allotment liability | 3 | $15,720 | - The over-allotment option is recognized as a liability and valued using a modified Black-Scholes model; as of March 31, 2022, fair value calculations for the over-allotment option assumed a risk-free rate of 0.17%, an expected life of 0.08 years, and an expected volatility of 4.6% for the underlying stock[93][94] Note 9 — Subsequent Events This note discloses significant events that occurred after the reporting period, including the expiration of the over-allotment option and an amendment to a promissory note - On April 29, 2022, the underwriters' over-allotment option expired, resulting in the forfeiture of 300,000 units of Class A shares and 75,000 shares of Class B shares[96] - On May 20, 2022, the company and the sponsor amended the promissory note, extending its maturity date and allowing the holder to convert outstanding principal into warrants upon completion of a business combination[97] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This chapter discusses Nubia Brand International Corp.'s financial condition and operating results for the three months ended March 31, 2022, focusing on its IPO completion and search for a business combination Overview This section provides an overview of the company's purpose as a blank check company and its strategy for completing an initial business combination - The company is a Delaware blank check company formed to effect a merger or similar business combination, planning to use IPO proceeds, private placement warrant proceeds, and potential equity or debt issuances to complete its initial business combination[99][100] - As of March 31, 2022, the company had not commenced operations, with its primary activities focused on preparing for and completing its IPO and identifying potential acquisition targets[101] Special Note Regarding Forward-Looking Statements This section cautions that the quarterly report contains forward-looking statements subject to risks and uncertainties, and the company disclaims any obligation to update them - This quarterly report contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from expectations, and the company undertakes no obligation to update or revise any forward-looking statements[103] Results of Operations This section presents the company's operating results for the three months ended March 31, 2022, highlighting its net loss and key revenue and expense items | Indicator | Three Months Ended March 31, 2022 | | :--- | :--- | | Net Loss | $(111,999) | | Interest income from Trust Account | $8,655 | | Gain on over-allotment liability | $3,712 | | Total operating expenses | $124,366 | Going Concern Considerations, Liquidity and Capital Resources This section addresses the company's liquidity, capital resources, and the significant going concern uncertainties related to its obligation to complete a business combination within a specified timeframe - The company completed its IPO on March 15, 2022, raising $123.5 million in gross proceeds and $5,405,000 from private placement warrants, with $125,970,000 deposited into the Trust Account post-IPO and private placement[105][106] - Financial Position (March 31, 2022) | Indicator | As of March 31, 2022 | | :--- | :--- | | Cash outside Trust Account | $1,268,183 | | Working capital | $808,930 | | Investments held in Trust Account | $125,978,655 | | Cash used in operating activities | $2,574 | - The company faces significant going concern uncertainty due to its SPAC nature, requiring a business combination within a specified period to avoid liquidation; management believes existing funds are sufficient for working capital needs[109] - Funds in the Trust Account are primarily for completing the initial business combination, with remaining funds serving as working capital for the target business's operations, other acquisitions, and growth strategies[110] Off-Balance Sheet Arrangements This section confirms that the company has no off-balance sheet arrangements, such as transactions with unconsolidated entities or non-financial agreements involving assets - The company has no off-balance sheet arrangements, has not engaged in transactions with unconsolidated entities or financial partnerships, nor entered into non-financial agreements involving assets[114][115] Contractual Obligations This section details the company's contractual obligations, including administrative support fees and deferred underwriting commissions - As of March 31, 2022, the company had no long-term debt, capital lease obligations, operating lease obligations, or long-term liabilities[116] - The company agreed to pay an affiliate of the sponsor $10,000 per month for administrative support services until a business combination is completed or the company liquidates[116] - Under the underwriting agreement, the company will pay underwriters a 3.5% cash fee of the gross proceeds from the IPO upon completion of its initial business combination[117] Critical Accounting Policies This section outlines the company's critical accounting policies, including net loss per share, redeemable Class A common stock, fair value measurements, and derivative financial instruments - Critical accounting policies include: net loss per share (using the two-class method, with diluted loss per share equal to basic), Class A common stock subject to possible redemption (classified as temporary equity and measured at redemption value), fair value measurements of financial instruments (using a three-level hierarchy), derivative financial instruments (measured at fair value with changes reported), and recent accounting pronouncements (management believes no significant impact)[119][120][121][123][124][125] Item 3. Quantitative and Qualitative Disclosures about Market Risk This chapter states that this item is not applicable to the company as it is a smaller reporting company - As a smaller reporting company, quantitative and qualitative disclosures about market risk are not applicable to the company[126] Item 4. Controls and Procedures This chapter discloses the results of the company's evaluation of disclosure controls and procedures as of March 31, 2022, concluding their effectiveness and noting no significant changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures This section presents the management's conclusion on the effectiveness of the company's disclosure controls and procedures as of March 31, 2022 - As of March 31, 2022, management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of disclosure controls and procedures and concluded they were effective[129] Changes in Internal Control over Financial Reporting This section states that there were no significant changes in the company's internal control over financial reporting during the fiscal quarter ended March 31, 2022 - There were no changes in the company's internal control over financial reporting during the fiscal quarter ended March 31, 2022, that materially affected or are reasonably likely to materially affect internal control over financial reporting[130] Part II - OTHER INFORMATION This section contains other required disclosures, including legal proceedings, risk factors, sales of unregistered equity securities, defaults, mine safety, and exhibits Item 1. Legal Proceedings This chapter states that the company has no legal proceedings - The company has no legal proceedings[132] Item 1A. Risk Factors This chapter notes that risk factors potentially causing actual results to differ from forecasts were disclosed in the IPO prospectus and remain unchanged as of the report date - Risk factors that could cause actual results to differ materially from forward-looking statements were disclosed in the company's final prospectus for its initial public offering, and no material changes to these risk factors have occurred as of the date of this quarterly report[133] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This chapter states that the company has no unregistered sales of equity securities and use of proceeds - The company has no unregistered sales of equity securities and use of proceeds[134] Item 3. Defaults Upon Senior Securities This chapter states that the company has no defaults upon senior securities - The company has no defaults upon senior securities[135] Item 4. Mine Safety Disclosures This chapter states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[136] Item 5. Other Information This chapter states that the company has no other information to disclose - The company has no other information to disclose[137] Item 6. Exhibits This chapter lists the exhibits filed with or incorporated by reference into this quarterly report, including certifications from the CEO and CFO and XBRL-related documents - Exhibits include certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15(d)-14(a) and Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL related documents[140] SIGNATURES This section contains the signatures of the company's authorized officers, certifying the filing of the report - This report was signed by Jaymes Winters, Chief Executive Officer, and Vlad Prantsevich, Chief Financial Officer, of Nubia Brand International Corp. on May 23, 2022[146][147]