Solidion Technology Inc. (NASDAQ:STI), a Delaware-based company specializing in electrical machinery and equipment, has amended a key agreement and updated its financial obligations, according to a recent 8-K filing with the U.S. Securities and Exchange Commission.
The company announced an amendment to its Forward Purchase Agreement, initially entered on December 13, 2023, with Meteora Capital Partners and associated entities. The amendment, dated August 29, 2024, introduces several changes including an alteration to the "Prepayment Shortfall" terms, allowing Solidion Technology to request additional funds in increments of $500,000, subject to certain conditions.
The amendment also modifies the "Prepayment Shortfall Consideration," granting the seller discretion to sell additional shares at any time post-Trade Date without incurring an Early Termination Obligation until sale proceeds reach 120% of the Prepayment Shortfall.
Furthermore, the company has agreed to issue 2,850,000 additional shares as Share Consideration and defined a "VWAP Trigger Event" as a scenario where the volume-weighted average price (VWAP) falls below $2.00 per share for a specific period.
During the Standstill Period, which ends on December 31, 2024, the seller has agreed to forbear from exercising certain rights under the Forward Purchase Agreement. Post this period, the seller will regain full rights as if the forbearance had not occurred.
Solidion Technology has also committed to filing a registration statement for the resale of the Meteora Shares within 20 business days and to have it declared effective within 60 calendar days following the amendment execution. The company has further agreed to restrict the sale of Meteora Shares to no more than 10% of the daily trading volume for a set period following the registration statement's effectiveness.
In addition to the Forward Purchase Agreement amendment, Solidion Technology has revised its Strategic Cooperation Consulting Agreement with Arbor Lake Capital Inc., effective September 11, 2024. Under the revised agreement, Arbor Lake will provide non-exclusive consulting services to Solidion Technology in various business development areas and will receive compensation in the form of company stock and a percentage of certain revenues.
The filing also notes the dismissal of a legal action between Solidion Technology and Meteora Capital Partners, with the company agreeing to issue over 12 million shares of common stock to the seller and cover up to $65,000 of the seller's legal fees.
Solidion Technology Inc. has been navigating some significant developments. The company recently appointed John Davis as an independent board member following the resignation of Yang Shao-Horn. This boardroom reshuffling was executed swiftly, indicating Solidion's commitment to maintaining strong leadership.
Solidion is facing potential delisting from Nasdaq due to non-compliance with specific listing requirements, including the failure to maintain the minimum market value of publicly held shares and listed securities. The company has until February 24, 2025, to regain compliance with these requirements.
On the financial front, Solidion has secured $4 million through a private placement agreement with institutional investors, facilitated by EF Hutton. This funding is intended to bolster the company's general working capital and administrative needs. The agreement involves the issuance of around 12.2 million units, comprising both standard and pre-funded units.
Lastly, the company is also grappling with its common stock's failure to maintain the minimum closing bid price of $1.00 per share for 30 consecutive business days. Solidion has a 180-day period, until January 28, 2025, to meet this requirement. Amid these developments, the company is actively exploring available options to regain compliance.
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