Solidion Technology, Inc. Announces Pricing of $4 Million Private Placement

Rhea-AI Summary

Solidion Technology, Inc., an advanced battery technology solutions provider, has announced a $4 million private placement with institutional investors. The company will issue approximately 12,217,468 units and pre-funded units, each consisting of one share of common stock (or pre-funded warrant) and three common warrants. The common warrants will be exercisable for 5.5 years from the stockholder approval date.

The closing is expected on September 3, 2024, subject to customary conditions. Solidion plans to use the net proceeds for general working capital and administrative purposes. EF Hutton is acting as the exclusive placement agent. The securities offered have not been registered under the Securities Act of 1933 and are only available to accredited investors.

Positive

• Raised $4 million in additional capital
• Secured institutional investors for the private placement
• Warrants provide potential for additional future funding

Negative

• Potential dilution of existing shareholders due to new share issuance
• Warrants may lead to further dilution if exercised
• Funds primarily allocated for working capital, not specific growth initiatives

Insights

Financial Analyst

Solidion's $4 million private placement is a double-edged sword. While it provides much-needed capital for working capital and administrative purposes, the terms are highly dilutive. The issuance of 12,217,468 units at an effective price of $0.3274 per share represents a significant discount to the current market price. The additional warrants, especially the $0.0001 exercise price warrant, could lead to substantial future dilution.

The company's reliance on private placements suggests ongoing cash flow challenges. Investors should scrutinize Solidion's burn rate and path to profitability. The involvement of EF Hutton as placement agent lends some credibility, but the terms reflect the high-risk nature of Solidion's business. This financing may provide a short-term lifeline, but it comes at a high cost to existing shareholders.

Legal Expert

The private placement's structure raises several legal considerations. Firstly, the issuance to accredited investors under Rule 506 of Regulation D exempts Solidion from SEC registration requirements. However, the company must file a Form D within 15 days of the first sale.

The registration rights agreement obligates Solidion to file registration statements for the resale of the securities. This is important for investor liquidity but adds compliance costs and potential liabilities. The reset provision in the Series D warrant could trigger additional disclosure obligations.

Investors should note that these unregistered securities are restricted and subject to holding periods. The company's commitment to file registration statements doesn't guarantee immediate tradability. Overall, while legally structured, this deal significantly impacts Solidion's capital structure and future flexibility.

Tech Expert

As an advanced battery technology provider, Solidion's need for capital isn't surprising given the R&D-intensive nature of the industry. However, this financing doesn't appear to be earmarked for specific technological advancements or product development, which is concerning.

The use of proceeds for "general working capital and administrative purposes" suggests the company may be struggling to commercialize its technology effectively. In the fast-evolving battery tech sector, continuous innovation is crucial. Without clear allocation to R&D or scaling production, Solidion risks falling behind competitors.

Investors should seek clarity on Solidion's technology roadmap and how this capital will strengthen its market position. The company's ability to convert its tech solutions into revenue-generating products will be critical for long-term success and justifying this dilutive financing.

DALLAS, TEXAS, Aug. 30, 2024 (GLOBE NEWSWIRE) -- Solidion Technology, Inc., (the “Company,” "Solidion,” “we,” “our” or “us”), an advanced battery technology solutions provider, today announced that it has entered into a securities purchase agreement with institutional investors to raise approximately $4 million in aggregate cash proceeds, before deducting fees to the placement agent and other offering expenses payable by the Company. The closing of the private placement is expected to occur on September 3, 2024, subject to the satisfaction of certain customary closing conditions set forth in the securities purchase agreement.

In connection with the private placement, the Company will issue an aggregate of approximately 12,217,468 units and pre-funded units. The pre-funded units will be sold at the same purchase price as the units, less the pre-funded warrant exercise price of $0.0001. Each unit and pre-funded unit will consist of one share of common stock (or pre-funded warrant), two common warrants each exercisable for one share of common stock at an exercise price of $0.3274 per share and one common warrant at an exercise price of $0.0001 to purchase such amount of shares of common stock as will be determined on the Reset Date (as defined in the Series D common warrant). The common warrants will be exercisable upon issuance and will have a term of 5.5 years from the stockholder approval date. The number of securities issued under the units is subject to adjustment as described in more detail in the Current Report on Form 8-K to be filed in connection with the private placement.

The Company intends to use the net proceeds from the private placement primarily for general working capital and administrative purposes.

EF Hutton is acting as exclusive placement agent for the offering. Loeb & Loeb LLP is serving as counsel to the Company for the private placement. Sichenzia Ross Ference Carmel LLP is serving as counsel to the placement agent.

The shares of common stock and warrants described above have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the “SEC”) or an applicable exemption from such registration requirements. The securities were offered only to accredited investors. Pursuant to a registration rights agreement with the investors, the Company has agreed to file one or more registration statements with the SEC covering the resale of the shares of common stock and the shares issuable upon exercise of the pre-funded warrants and warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Solidion Technology, Inc.

Headquartered in Dallas, Texas with pilot production facilities in Dayton, Ohio, Solidion’s core business includes manufacturing of battery materials and components, as well as development and production of next-generation batteries for energy storage systems and electric vehicles for ground, air, and sea transportation. Solidion offers two lines of battery products: (i) advanced anode materials (ready for production expansion); and (ii) three classes of solid-state batteries, including Silicon-rich all-solid-state lithium-ion cells (Gen 1), anodeless 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. Solidion’s solid-state batteries can be manufactured at scale using current lithium-ion cell production facilities; this feature enables fastest time-to-market of safe solid-state batteries. Solidion batteries are designed to deliver significantly extended EV range, improved battery safety, lower cost per KWh, fastest time-to-market, and next-gen cathodes (potential to replace expensive nickel and cobalt with sulfur (S) and other more abundant elements).

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. The statements contained in this press release that are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: our ability to execute our business model, including scaling production and increasing the addressable market for our products and services; our ability to raise capital; the outcome of any legal proceedings that may be instituted against us; the ability to maintain the listing of our securities on the Nasdaq; the possibility that we may be adversely affected by other economic, business or competitive factors, including supply chain interruptions, and may not be able to manage other risks and uncertainties; changes in applicable laws or regulations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 12, 2024.

Solidion Technology Inc. Contacts

For Investors: ir@solidiontech.com

For Media: press@solidiontech.com

FAQ

What is the size of Solidion Technology's (STI) recent private placement?

Solidion Technology (STI) has announced a $4 million private placement with institutional investors.

How many units will Solidion Technology (STI) issue in the private placement?

Solidion Technology (STI) will issue approximately 12,217,468 units and pre-funded units in the private placement.

When is the expected closing date for Solidion Technology's (STI) private placement?

The closing of Solidion Technology's (STI) private placement is expected to occur on September 3, 2024, subject to customary closing conditions.

What is the exercise price of the common warrants in Solidion Technology's (STI) private placement?

In Solidion Technology's (STI) private placement, two common warrants have an exercise price of $0.3274 per share, and one warrant has an exercise price of $0.0001.

How does Solidion Technology (STI) plan to use the proceeds from the private placement?

Solidion Technology (STI) intends to use the net proceeds from the private placement primarily for general working capital and administrative purposes.