Factorial Energy Inc.

Current report (Form 8-K) · Jun 10, 2026 · Multiple disclosures including leadership change and acquisition or asset sale

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Leadership change

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Jun 10, 2026

Filing summary Workforce analysis SEC documents(33)Filing text Exhibits(4)

EX-99.1 · tm2617149d1_ex99-1.htm

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EX-99.1

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tm2617149d1_ex99-1.htm

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EX-99.1 · tm2617149d1_ex99-1.htm EX-99.1 23 tm2617149d1_ex99-1.htm EXHIBIT 99.1 Exhibit 99.1 Factorial Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) As of March 31, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 25,449 $ 28,891 Receivables under collaboration agreements (includes $0 and $1,000 as related party as of March 31, 2026, and December 31, 2025, respectively) 3,360 1,152 Deferred transaction costs 3,468 1,423 Prepaid expenses and other current assets (includes $910 and $1,110 as related party as of March 31, 2026, and December 31, 2025, respectively) 1,718 1,425 Total current assets 33,995 32,891 Restricted cash 884 881 Property and equipment, net 20,206 21,276 Operating lease right-of-use assets, net 7,266 7,576 Other non-current assets (related party) 40 160 TOTAL ASSETS $ 62,391 $ 62,784 LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable (includes $30 and $190 as related party, as of March 31, 2026, and December 31, 2025, respectively) $ 656 $ 741 Accrued expenses 4,128 2,981 Operating lease liabilities, current portion 1,401 1,357 Total current liabilities 6,185 5,079 Operating lease liabilities, net of current portion 6,817 7,180 Convertible promissory notes - related parties, at fair value 20,296 18,889 Convertible promissory notes, at fair value 4,600 - Warrant liabilities for Series B-1 and Series D redeemable convertible preferred stock (includes $2,803 and $2,770 to related parties as of March 31, 2026, and December 31, 2025, respectively) 3,484 3,378 Total liabilities 41,382 34,526 Commitments and contingencies (Note 8) Redeemable convertible preferred stock (Note 9): Series A-1 redeemable convertible preferred stock, $0.0001 par value; 1,234,568 shares authorized, issued and outstanding as March 31, 2026, and December 31, 2025. Liquidation preference of $3,000 as of March 31, 2026, and December 31, 2025. 327 327 Series A-2 redeemable convertible preferred stock, $0.0001 par value; 2,362,204 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $6,000 as March 31, 2026, and December 31, 2025. 655 655 Series B-1 redeemable convertible preferred stock, $0.0001 par value; 2,738,469 shares authorized; 2,718,539 shares issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $22,166 as of March 31, 2026, and December 31, 2025. 2,169 2,169 Series C-1 redeemable convertible preferred stock, $0.0001 par value; 3,570,724 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $28,423 as of March 31, 2026, and December 31, 2025. 28,303 28,303 Series C-2 redeemable convertible preferred stock, $0.0001 par value; 2,513,698 shares authorized, issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $26,857 as of March 31, 2026, and December 31, 2025. 26,013 26,013 Series D redeemable convertible preferred stock, $0.0001 par value; 7,625,734 shares authorized; 5,950,204 shares issued and outstanding as of March 31, 2026, and December 31, 2025. Liquidation preference of $202,385 as of March 31, 2026, and December 31, 2025. 192,185 192,185 Total redeemable convertible preferred stock 249,652 249,652 Stockholders’ deficit: Common stock, $0.0001 par value; 32,000,000 shares authorized as of March 31, 2026, and December 31, 2025. 5,068,690 and 5,039,438 shares issued and outstanding as of March 31, 2026, and December 31, 2025, respectively. - - Additional paid-in capital 36,285 34,661 Accumulated deficit (264,151 ) (255,576 ) Accumulated other comprehensive loss (743 ) (445 ) Treasury stock, at cost; 108,466 shares as of March 31, 2026, and December 31, 2025 (34 ) (34 ) Total stockholders' deficit (228,643 ) (221,394 ) TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS' DEFICIT $ 62,391 $ 62,784 See accompanying notes to unaudited condensed consolidated financial statements. 1 Factorial Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) Three Months Ended March 31, 2026 2025 Operating expenses: Research and development, net (includes $0 and $24 of related party research and development reimbursement, net, during the three months ended March 31, 2026, and 2025, respectively) $ (1,942 ) $ (6,754 ) Selling, general and administrative (includes $88 and $44 of related party expenses, during the three months ended March 31, 2026, and 2025, respectively) (4,549 ) (6,368 ) Loss from operations (6,491 ) (13,122 ) Other (expense) income, net: Financing costs related to issuance of convertible promissory notes (37 ) - Change in fair value of convertible promissory notes – related parties (1,407 ) - Change in fair value of convertible promissory notes (300 ) - Change in fair value of warrant liabilities (includes related party loss of $33 and $0 during the three months ended March 31, 2026, and 2025, respectively) (106 ) - Other (expenses) income, net (234 ) 252 Total other (expenses) income, net (2,084 ) 252 Loss before provision for income taxes (8,575 ) (12,870 ) Provision for income taxes - - Net loss $ (8,575 ) $ (12,870 ) Net loss attributable to common stockholders - basic and diluted (Note 12) $ (8,575 ) $ (12,870 ) Net loss per share attributable to common stockholders - basic and diluted (Note 12) $ (1.70 ) $ (2.57 ) Weighted-average common stock outstanding - basic and diluted (Note 12) 5,056,994 5,016,149 See accompanying notes to unaudited condensed consolidated financial statements. 2 Factorial Inc. Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (In thousands, except share and per share data) Three Months Ended March 31, 2026 2025 Net loss $ (8,575 ) $ (12,870 ) Other comprehensive income (loss), net of tax Foreign currency translation adjustments (298 ) 8 Other comprehensive income (loss), net of tax $ (298 ) $ 8 Comprehensive loss $ (8,873 ) $ (12,862 ) Comprehensive loss attributable to stockholders $ (8,873 ) $ (12,862 ) See accompanying notes to unaudited condensed consolidated financial statements. 3 Factorial Inc. Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Deficit (Unaudited) (In thousands, except share data) REDEEMABLE CONVERTIBLE ACCUMULATED PREFERRED STOCK COMMON STOCK ADDITIONAL OTHER TREASURY TOTAL Three Months Ended $0.0001 PAR VALUE $0.0001 PAR VALUE PAID-IN ACCUMULATED COMPREHENSIVE STOCK STOCKHOLDERS’ March 31, 2026 SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT INCOME (LOSS) AT COST DEFICIT Balance as of December 31, 2025 18,349,937 $ 249,652 5,039,438 $ - $ 34,661 $ (255,576 ) $ (445 ) $ (34 ) $ (221,394 ) Issuance from stock option exercises - - 29,252 - 90 - - - 90 Stock based compensation - - - - 1,534 - - - 1,534 Foreign currency translation adjustments - - - - - - (298 ) - (298 ) Net loss - - - - - (8,575 ) - - (8,575 ) Balance as of March 31, 2026 18,349,937 $ 249,652 5,068,690 $ - $ 36,285 $ (264,151 ) $ (743 ) $ (34 ) $ (228,643 ) REDEEMABLE CONVERTIBLE ACCUMULATED PREFERRED STOCK COMMON STOCK ADDITIONAL OTHER TREASURY TOTAL Three Months Ended $0.0001 PAR VALUE $0.0001 PAR VALUE PAID-IN ACCUMULATED COMPREHENSIVE STOCK STOCKHOLDERS’ March 31, 2025 SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT INCOME (LOSS) AT COST DEFICIT Balance as of December 31, 2024 18,349,937 $ 249,652 5,016,051 $ - $ 25,193 $ (181,731 ) $ 76 $ (34 ) $ (156,496 ) Issuance from stock option exercises - - 300 - 2 - - - 2 Stock based compensation - - - - 3,857 - - - 3,857 Foreign currency translation adjustments - - - - - - 8 - 8 Net loss - - - - - (12,870 ) - - (12,870 ) Balance as of March 31, 2025 18,349,937 $ 249,652 5,016,351 $ - $ 29,052 $ (194,601 ) $ 84 $ (34 ) $ (165,499 ) See accompanying notes to unaudited condensed consolidated financial statements. 4 Factorial Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands, except share and per share data ) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net loss $ (8,575 ) $ (12,870 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 882 2,191 Non-cash lease expenses and amortization 310 302 Stock-based compensation 1,534 3,857 Change in fair value and financing cost of convertible promissory notes 337 - Change in fair value of convertible promissory notes – related parties 1,407 - Change in fair value of warrant liability 106 - Loss on disposal of property and equipment 9 7 Unrealized foreign exchange loss 487 51 Non-cash interest - 39 Changes in operating assets and liabilities: Receivables under collaboration agreements (2,208 ) 545 Prepaid expenses and other current assets (306 ) 70 Other non-current assets 120 - Accounts payable (174 ) 5 Accrued expenses 271 (2 ) Operating lease liabilities (320 ) (298 ) Net cash used in operating activities (6,120 ) (6,103 ) Cash flows from investing activities: Property and equipment expenditures (482 ) (172 ) Advances on property and equipment (5 ) - Net cash used in investing activities (487 ) (172 ) Cash flows from financing activities: Proceeds from stock option exercises 90 2 Principal paid on finance lease liability - (207 ) Deferred transaction costs paid (1,051 ) - Financing costs related to issuance of convertible promissory notes (37 ) - Proceeds from convertible promissory notes 4,300 - Net cash provided (used) in financing activities 3,302 (205 ) Effects of exchange rate change on cash, cash equivalents and restricted cash (134 ) (36 ) Net change in cash, cash equivalents and restricted cash (3,439 ) (6,516 ) Beginning cash, cash equivalents and restricted cash 29,772 51,421 Ending cash, cash equivalents and restricted cash $ 26,333 $ 44,905 Supplemental disclosures: Cash paid for interest $ - $ 146 Non-cash investing and financing activities: Deferred transaction costs included in accounts payable and accrued expenses $ 1,723 $ - The following table presents the Company’s cash, cash equivalents and restricted cash by category in the Company’s Condensed Consolidated Balance Sheets: Cash and cash equivalents $ 25,449 $ 41,719 Restricted cash 884 3,186 Total cash, cash equivalents and restricted cash $ 26,333 $ 44,905 See accompanying notes to unaudited condensed consolidated financial statements. 5 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 1 - The Company Nature of Operations Factorial Inc. (“Factorial”, the “Company”, or “we”) is a developer and manufacturer of advanced battery energy storage technologies and solid-state battery (“SSB”) technology. The technologies developed are expected to create a more sustainable future with high-performance batteries for electric vehicles, homes, and critical applications. de-SPAC Transaction On December 17, 2025, Cartesian Growth Corporation III, a Cayman Islands exempted company (“CGC”), Fenway MS, Inc., a Delaware corporation (“Merger Sub”), and Factorial Inc., a Delaware corporation (“Factorial”), entered into a Business Combination Agreement (“BCA”). CGC, a publicly traded special purpose acquisition company (“SPAC”) was listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “CGCT”. On June 5, 2026, the Merger Sub, a wholly-owned subsidiary of CGC, merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of CGC (the “Merger”). In connection with the Merger, CGC was renamed Factorial Energy, Inc. (“PubCo”). PubCo became listed on the Nasdaq under the new ticker symbol “FAC” (“de-SPAC Transaction”). PubCo received gross proceeds of approximately $112,100 in connection with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment of transaction expenses (“de-SPAC and PIPE Proceeds”). These unaudited condensed consolidated financial statements do not reflect the impact of the de-SPAC Transaction, since it was closed subsequent to March 31, 2026. Basis of Presentation The accompanying interim condensed consolidated financial statements and notes to the condensed consolidated financial statements have been prepared in accordance with accounting standards generally accepted in the United States of America (“U.S. GAAP”) for interim financial information as organized in the Accounting Standards Codification (“ASC”) administrated by the Financial Accounting Standards Board (“FASB”). The accompanying interim Condensed Consolidated Balance Sheet as of March 31, 2026, the interim Condensed Consolidated Statements of Operations, Comprehensive Loss, Redeemable Convertible Preferred Stock and Stockholders’ Deficit, and the interim Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025, are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in management’s opinion, include adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of March 31, 2026 and its result of operations for the three months ended March 31, 2026 and 2025 are not necessarily indicative of the results to be expected for the full fiscal year or any other period. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s audited annual consolidated financial statements for the year ended December 31, 2025, included in the proxy statement/prospectus filed by CGC on May 6, 2026. The accounting policies applied in the preparation of these interim condensed consolidated financial statements are consistent with those disclosed in the Company’s audited consolidated financial statements and accompanying notes. The disclosures provided herein include only those policies that have been newly adopted or updated during the interim period, if any. Prior to the receipt of the de-SPAC and PIPE Proceeds, the Company determined that its existing liquidity was not sufficient to fund operations for at least twelve months from the date of issuance of its audited annual consolidated financial statements, which raised substantial doubt about the Company’s ability to continue as a going concern. The Company has experienced net losses and negative cash flows from operations since its inception. The Company expects it will continue to incur significant costs including research and development expenses related to its ongoing operations until it successfully develops a commercial product and achieves revenues adequately to support the Company’s operations. However, Factorial believes that its cash on hand, including the net proceeds from the de-SPAC and PIPE Proceeds will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing. Accordingly, management has concluded that the substantial doubt about the Company’s ability to continue as a going concern has been alleviated. Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with Original Equipment Manufacturers (“OEMs“) and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, and regulatory developments, among other developments. To the extent that Factorial’s current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level of investment in product development or scale back its operations. 6 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its four wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the preparation of the consolidated financial statements in accordance with the provisions under ASC Topic 810 Consolidation . Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires 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 consolidated financial statements, and the amounts of expenses during the reporting period. On an ongoing basis, the Company’s management evaluates its estimates, judgments, and methodologies. Significant estimates and assumptions in the consolidated financial statements include those related to warrant liabilities, convertible promissory notes and stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known. Collaboration Arrangements and Partnership Agreements The Company enters into collaborative arrangements with various parties individually through joint development agreements (“JDAs”) to evaluate and test its technology. The agreements are executed in anticipation of entering into either a purchasing agreement for the Company’s sellable products or jointly developing a commercialized product. As part of the JDAs, the counterparty may either reimburse the Company for certain costs incurred through a fixed fee payment or per unit payment or share certain costs with the Company. The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 808, Collaborative Arrangements (“ASC 808”). In making the determination, the Company considers whether the arrangement involves joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities. All of the JDAs entered into by the Company have been concluded to be arrangements within the scope of ASC 808. As a result, payments received/paid from/to the counterparties have been netted against the research and development expenses incurred by the Company. The Company assesses each collaborative arrangement to determine whether it is in scope for ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). In making the determination, the Company considers if some or all aspects of the arrangement represent a transaction with a customer. All of the JDAs entered into by the Company to date have been concluded to be arrangements outside the scope of ASC 606. As a result, no revenue has been recognized by the Company. For the three months ended March 31, 2026, and 2025, the Company recognized approximately $3,410 and $34, respectively in expense reimbursements from arrangements, which are recorded net within research and development expenses on the condensed consolidated statements of operations. The Company had one partner that accounted for $3,360 in expense reimbursements for the three months ended March 31, 2026. In February 2026, the Company entered into a new development agreement with PowerCo SE (“PowerCo”). The development agreement has various terms and conditions and has a term of fifteen months; however, PowerCo has the right to terminate under certain conditions. The Company entered into this development agreement for purposes of assessing its technology through evaluation and testing of its batteries. In January 2026, the Company entered into a partnership agreement with a note holder as further described in Note 7. The partnership agreement includes up to $900 of consideration for the performance of research and development services to the note holder. 7 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Deferred Transaction Costs The Company complies with the requirements of ASC 340, Other Assets and Deferred Costs , with regards to transaction costs. Prior to the completion of the transaction (potential business combination with Cartesian Growth Corporation III) as mentioned in Note 1 of the audited annual consolidated financial statements for the year ended December 31, 2025, direct transaction costs are capitalized as deferred transaction costs. If the transaction is completed, the deferred transaction costs are charged to additional paid-in capital and offset the proceeds received from the potential business combination. As of March 31, 2026, and December 31, 2025, the Company had $3,468 and $1,423 of deferred transaction costs incurred, respectively. Convertible Promissory Notes, Fair Value During January 2026, the Company entered into Note Purchase Agreements and a Convertible Promissory Note Agreement pursuant to which it could receive proceeds up to $5,340 (the “January 2026 Notes”) from new investors. The Company determined that it is eligible for the fair value option election in connection with the Convertible Promissory Notes. The Convertible Promissory Notes meet the definition of a “recognized financial liability” which is an acceptable financial instrument eligible for the fair value option under ASC Topic 825 Financial Instruments (“ASC 825”). At the date of issuance, the fair value of the Convertible Promissory Notes were derived using the scenario-based method (“SBM”) as further described in Note 3. The fair value option election was made to enhance the relevance and transparency of information presented related to the features embedded in the Convertible Promissory Notes. Changes in the fair value of the Convertible Promissory Notes are recorded as gains or losses in the Company’s consolidated statements of operations in each reporting period. For the three months ended March 31, 2026, the Company recorded a loss on the change in fair value of convertible promissory notes of $300. Recently Adopted Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. After completion of the business combination described in Note 15, the Company expects it will be considered an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the “Jobs Act”). The Jobs Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this extended transition period and, as a result, the Company will not be required to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. In July 2025, the FASB issued ASU 2025- 05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025 - 05”). ASU 2025 - 05 provides optional practical expedients intended to simplify the application of the current expected credit loss model to current trade accounts receivable and current contract assets arising from revenue transactions under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. The Company adopted the guidance effective January 1, 2026. The adoption did not have a material impact on its accounting policies, financial position, results of operations, or cash flows, given the short - term nature and historically no loss experience of its trade receivables and contract assets. New Accounting Pronouncements – Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE) (“ASU 2024-03”), requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendment in this update applies to all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures. 8 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 3 - Fair Value Measures The Company’s financial assets subject to fair value measurements on a recurring basis. The following table presents information about the Company’s financial assets and liabilities measured at fair value and the level of input utilized to determine such fair values (in thousands): Fair value measurements as of March 31, 2026 Total Level 1 Level 2 Level 3 Assets: Money market (included in cash and cash equivalents) $ 10,245 $ 10,245 $ - $ - Money market (included in restricted cash) 884 884 - - Total Assets $ 11,129 $ 11,129 $ - $ - Liabilities: Warrant liability Series B-1 $ 681 $ - $ - $ 681 Warrant liability Series D 2,803 - - 2,803 Convertible promissory notes – related parties 20,296 - - 20,296 Convertible promissory notes 4,600 - - 4,600 Total Liabilities $ 28,380 $ - $ - $ 28,380 Fair value measurements as of December 31, 2025 Total Level 1 Level 2 Level 3 Assets: Money market (included in cash and cash equivalents) $ 14,152 $ 14,152 $ - $ - Money market (included in restricted cash) 881 881 - - Total Assets $ 15,033 $ 15,033 $ - $ - Liabilities: Warrant liability Series B-1 $ 608 $ - $ - $ 608 Warrant liability Series D 2,770 - - 2,770 Convertible promissory notes – related parties 18,889 - - 18,889 Convertible promissory notes - - - - Total Liabilities $ 22,267 $ - $ - $ 22,267 9 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) The following table presents a roll-forward of the aggregate fair values of the Company’s Warrant liabilities and the Company’s Convertible promissory notes for which fair value is determined by Level 3 inputs (in thousands): Convertible Promissory Warrant Warrant Notes Convertible Liability Liability Related Promissory Total Series B - 1 Series D Parties Notes December 31, 2024 $ 1,148 $ 114 $ 1,034 $ - $ - Issuance of convertible promissory notes - - - - - Loss on issuance - - - - - Change in fair value - - - - - March 31, 2025 $ 1,148 $ 114 $ 1,034 $ - $ - Issuance of convertible promissory notes 10,000 - - 10,000 - Loss on issuance 4,500 - - 4,500 - Change in fair value 6,619 494 1,736 4,389 - December 31, 2025 $ 22,267 $ 608 $ 2,770 $ 18,889 $ - Issuance of convertible promissory notes 4,300 - - - 4,300 Loss on issuance - - - - - Change in fair value 1,813 73 33 1,407 300 March 31, 2026 $ 28,380 $ 681 $ 2,803 $ 20,296 $ 4,600 Certain of the Company’s financial instruments are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid or short-term nature, such as accounts payable, accrued expenses, and other current liabilities. Warrant Liability Series B-1 In connection with the issuance of Series B-1 redeemable convertible preferred stock of the Company (“Series B-1”) on October 28, 2019, the Company entered into a warrant agreement with Massachusetts Development Finance Agency, or its registered assignees to purchase 19,930 Series B-1 redeemable convertible preferred stock (“Series B-1 Warrant Agreements”). The warrant was issued at a purchase price of $0.81 per share, with a maturity date of February 1, 2029, or the closing of the Company’s Initial Public Offering. Warrant Liability Series D In connection with the issuance of Series D redeemable convertible preferred stock of the Company (“Series D”) on November 30, 2021, the Company entered into a warrant for preferred stock with each of Mercedes-Benz Investment Company LLC and Stellantis(each a “Holder”) (“Series D Agreement”). Upon closing of the Series D Agreement, Mercedes-Benz Investment Company LLC and its affiliates (“Mercedes-Benz”) and Stellantis became related parties to the Company. During 2022, the Warrant Agreements were amended and restated with both Stellantis and Mercedes-Benz to eliminate certain milestone-based provisions. The Amended Warrants modified the original agreements by setting the number of shares issuable upon exercise at a fixed 137,814 shares per Holder at a fixed price of $27.2105 per share. The warrants have a maturity date of February 1, 2029, or the closing of the Company’s Initial Public Offering. The Amended Warrants remain consistent with the Warrant Agreements to require settlement through the issuance of the then most senior redeemable convertible preferred stock of the Company to the Holder. At inception, the monetary value of the obligation is based on a fixed monetary amount known at inception. To estimate the fair value of the Series B-1 and D Warrant Agreements, the Company applied the Probability Weighted Equity Return Method (“PWERM”). Under this approach, the Company develops multiple scenarios and ascribes a probability weighting to each scenario and related estimated fair value. Key inputs and assumptions in the PWERM include the probability and the estimated value of the security in each liquidity scenario, in addition to scenario specific assumptions. The two scenarios used in the valuation of the Series B-1 and D Warrant Agreements are a SPAC Exit scenario and Option Pricing Method scenario. The Company applied a 90% weighting to the SPAC Exit Scenario and 10% to the Option Pricing Method (“OPM”) scenario as of March 31, 2026. The Company applied a 75% weighting to the SPAC Exit Scenario and 25% to the OPM scenario as of December 31, 2025. 10 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of March 31, 2026: Series B-1 Series D Discount rate 25 % 25 % Expected life (in years) 0.20 0.20 Future projected price per share $ 37.76 $ 37.76 Strike price $ 0.08 $ 27.21 The following are assumptions used in valuing the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of December 31, 2025: Series B-1 Series D Discount rate 25 % 25 % Expected life (in years) 0.38 0.38 Future projected price per share $ 37.76 $ 37.76 Strike price $ 0.08 $ 27.21 The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the SPAC Exit scenario are the discount rate and the expected life. The future projected price per share is estimated based on the SPAC purchase price as outlined in the Company’s Business Combination Agreement. The discount rate reflects current market assessments of the time of value of money and the risks specific to the Company given its stage of development. The expected life is based upon the fact that the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management’s estimated holding period to an exit/liquidity event. The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of March 31, 2026: Series B-1 Series D Share value $ 18.16 $ 33.61 Assumed volatility 90 % 37 % Assumed risk-free interest rate 3.8 % 3.8 % Expected life (in years) 2 2 Expected dividends - - The following are the assumptions used in valuing the Series B-1 and D Warrant Agreements in the OPM scenario, as of December 31, 2025: Series B-1 Series D Share value $ 18.14 $ 33.71 Assumed volatility 90 % 37 % Assumed risk-free interest rate 3.5 % 3.5 % Expected life (in years) 2 2 Expected dividends - - The significant unobservable inputs used in the fair value measurement of the Series B-1 and D warrant liability in the OPM scenario are the equity value of the Company, the expected life and assumed volatility. The equity value of the Company is derived from a discounted cash flow analysis based on the Company’s best estimates of future cash flows. The assumptions underlying these valuations include projected future revenue and cash flows, discount rates, market adjustments and multiples, selection of comparable companies, the lack of marketability of our equity, and probability of possible future events, including the expected time to liquidity. These underlying assumptions represent our best estimates at the time they were made, which involves inherent uncertainty and the application of judgment. Changes to the key assumptions and estimates used in the valuations could result in materially different fair values of our common and preferred stock at each valuation date. 11 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) The expected life is based upon the fact that the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management’s estimated holding period to an exit/liquidity event. The expected volatility is based upon observed historical volatilities of a cohort of guideline public companies. Equity allocation mechanics are based upon the distribution waterfall as outlined in the Company’s operating agreement. Significant increases (decreases) in the equity value, the expected life, or the assumed volatility, could result in significantly higher (lower) fair value measurements. As of March 31, 2026, the Company had reserved 295,558 shares of common stock for potential conversion of Series B-1 and D Warrants. Convertible Promissory Notes – Related Parties To estimate the fair value of the August 2025 Notes, the Company applied the SBM method. The fair value of the August 2025 Notes includes an estimate of the value of accrued interest. The significant unobservable inputs used in the fair value measurement of the August 2025 Notes are the underlying share value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios. The assumptions used in determining the fair value of the August 2025 Notes under the SBM during the three months ended March 31, 2026, were as follows: Series D Three Months Ended March 31, 2026 SPAC Exit Scenario 85 % Qualified Financing Scenario 7.5 % Dissolution Scenario 7.5 % Assumed volatility 40 % Assumed risk-free interest rate 3.7 % Expected life (in years) .50 Assumed discount rate 20 % Share value $ 37.35 The assumptions used in determining the fair value of the August 2025 Notes under the SBM as of December 31, 2025, were as follows: Series D December 31, 2025 SPAC Exit Scenario 75 % Qualified Financing Scenario 15 % Dissolution Scenario 10 % Assumed volatility 40 % Assumed risk-free interest rate 3.50 % Expected life (in years) .75 Assumed discount rate 20 % Share value $ 34.47 To estimate the share value of the Series D redeemable convertible preferred stock we used a PWERM. The two scenarios used in the estimation of the Series D redeemable convertible preferred stock are a SPAC Exit scenario and Option Pricing Method scenario. As of March 31, 2026, we applied a 85% weighting to the SPAC Exit scenario and 15% weighting to the Option Pricing Method scenario. 12 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Convertible Promissory Notes To estimate the fair value of the January 2026 Notes, the Company applied the SBM method. The fair value of the January 2026 Notes includes an estimate of the value of accrued interest. The significant unobservable inputs used in the fair value measurement of the January 2026 Notes are the underlying share value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios. The assumptions used in determining the fair value of the January 2026 Notes under the SBM during the three months ended March 31, 2026, were as follows: Three Months Ended March 31, 2026 January 26, 2026 SPAC Exit Scenario 85 % 80 % Qualified Financing Scenario 7.5 % 10 % Dissolution Scenario 7.5 % 10 % Expected life (in years) .50 .68 Assumed discount rate 20 % 20 % Note 4 - Property and Equipment Property and equipment, net consists of the following (in thousands): As of March 31, 2026 December 31, 2025 Leasehold improvements $ 10,680 $ 10,680 Machinery and equipment 16,081 16,315 Furniture and fixtures 414 419 Computer and software 211 216 Buildings 1,160 1,227 Building Fixtures 1,256 1,206 Land 3,196 3,382 Advances on purchases of property and equipment 617 632 Total $ 33,615 $ 34,077 Accumulated depreciation (13,409 ) (12,801 ) Total $ 20,206 $ 21,276 Advances on purchases of property and equipment are payments made before the related asset (such as machinery and equipment) are delivered and are not depreciated until the asset is placed in service. Depreciation expense totaled $882 and $1,984 for the three months ended March 31, 2026, and 2025, respectively, and was recorded as operating expenses in the condensed consolidated statements of operations. Depreciation expense was allocated as $850 and $1,775 to research and development expense, net and $32 and $209 to selling, general and administrative expenses for the three months ended, March 31, 2026, and 2025, respectively. 13 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 5 - Accrued Expenses Accrued expenses consisted of the following (in thousands): As of March 31, 2026 December 31, 2025 Accrued compensation and benefits $ 838 $ 760 Accrued audit and tax services 166 67 Accrued legal and professional 320 172 Accrued transaction costs 2,327 1,423 Accrued other 477 559 Total accrued expenses $ 4,128 $ 2,981 NOTE 6 – CONVERTIBLE PROMISSORY NOTES – RELATED PARTIES The following table shows the components of the Company’s indebtedness (in thousands): Three Months Ended March 31, 2026 Total convertible promissory notes - related parties, at fair value as of December 31, 2025 $ 18,889 Change in fair value 1,407 Total convertible promissory notes - related parties, at fair value $ 20,296 14 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) NOTE 7 – CONVERTIBLE PROMISSORY NOTES During January 2026, the Company issued the January 2026 Notes pursuant to which it could receive proceeds up to $5,340. The January 2026 Notes bear interest of 5% per annum and mature on either August 1, 2028 or January 1, 2029. The January 2026 Notes provide the holders with certain conversion features including: a mandatory conversion upon a qualified financing event, an optional conversion upon a non-qualified financing event and an optional conversion upon an acquisition of the Company. Concurrently with the issuance of the January 2026 Notes, the Company entered into a partnership agreement with a note holder. Pursuant to the partnership agreement, the Company may receive up to $2,240 in total consideration. The deliverables of the partnership agreement coincide with payments to the Company on the convertible note. Deliverables under the partnership agreement are aligned with, and contingent upon, funding milestones under the convertible note, which provide for up to $1,340 in aggregate principal funding to the Company of which $300 in proceeds have been received as of March 31, 2026, with an issuance cost of $37. The note holder had the option to request funding in part or in full. Subsequently, on May 18, 2026, the Company received the remaining proceeds of $1,040. In addition, the partnership agreement includes up to $900 of consideration for the performance of research and development services to the note holder. The following table shows the components of the Company’s indebtedness (in thousands): Three Months Ended March 31, 2026 Convertible promissory notes principal balance $ 4,300 Change in fair value 300 Total convertible promissory notes, at fair value $ 4,600 15 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 8 - Commitments and Contingencies Leases The Company’s leases include various operating leases for offices, laboratory space, and storage space, expiring at various dates through November 2032. Many leases include one or more options to renew. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably certain. The Company’s finance lease for the facility in Methuen, Massachusetts was terminated in October 2025. Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords’ operating expenses such as property tax, insurance, and common area maintenance. The components of lease expenses recorded within the condensed consolidated statements of operations for the three months ended March 31, 2026, and 2025 are as follows (in thousands): Three Months Ended March 31, 2026 2025 Finance lease costs: Amortization of right-of-use assets $ - $ 207 Interest on financing lease liabilities - 185 Total finance lease costs - 392 Operating lease costs: Operating lease expenses 480 497 Variable lease expenses 217 199 Short-term lease expenses - 18 Total operating lease costs 697 714 Total lease expenses $ 697 $ 1,106 Other information related to agreements treated as finance and operating leases was as follows: Three Months Ended March 31, 2026 2025 Operating cash flows from operating leases $ (489 ) $ (493 ) Financing cash flows from finance lease $ - $ (353 ) As of March 31, 2026 December 31, 2025 Weighted-average remaining lease term – operating leases (years) 5.5 5.9 Weighted-average discount rate – operating leases 8.04 % 8.05 % Remaining lease term – finance lease (years) - - Discount rate – finance lease N/A N/A The remaining lease obligations are substantially unchanged from year end. Legal Proceedings From time to time, the Company may be subject to legal claims or be party to legal proceedings arising in the normal course of business. While the outcome of such claims or proceedings cannot be predicted with certainty, the Company’s management expects that any such liabilities, to the extent not provided for by insurance or otherwise, would not have a material effect on the Company’s financial condition, results of operations or cash flows. The Company is party to an arbitration, initiated on March 14, 2025, before the International Centre for Dispute Resolution. A hearing was conducted in June 2026, and post-hearing submission are due in July 2026. The hearing is regarding a contractual dispute in which a vendor is seeking $4,900 in damages, interest, and other relief. The Company does not believe that such payment is owed, is defending against such claims, and it has asserted counterclaims. The Company believes that a loss is neither probable nor remote and is unable to reasonably estimate the amount or range of possible loss due to the stage of the proceedings and the uncertainty regarding the resolution of the competing claims. 16 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Note 9 - Redeemable Convertible Preferred Stock No redeemable convertible preferred stock was issued, converted, or redeemed during the three months ended March 31, 2026. Total carrying value remains $249,652. Terms and rights are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025. Note 10 - Common Stock The Company was authorized to issue 32,000,000 shares of its common stock as of March 31, 2026, and December 31, 2025. The voting, dividend, and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preference of the Preferred Stockholders set forth in Note 9 - Redeemable Convertible Preferred Stock. Each share of common stock entitles the holder to one vote, together with the Preferred Stockholders, on all matters submitted to a vote of the Company’s stockholders. Terms and rights are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025. Total common shares issued and outstanding were 5,068,690 as of March 31, 2026. Note 11 - Stock Based Compensation Equity Compensation Plans The 2019 Stock Incentive Plan (the “2019 Plan”), was adopted by the Board of Directors to reserve a sufficient number of shares to facilitate the grants of stock options and restricted stock to employees, officers and directors, non-employee advisors and consultants in exchange for certain services. Awards granted under the 2019 Plan are issued at the discretion of the Board of Directors. Awards generally vest over four years; however, vesting terms are subject to terms set forth by the Board of Directors when the award is granted. Stock options granted under the 2019 Plan expire 10 years from the date of grant, which was subsequently amended. Share-Based Compensation Awards The Company estimates the fair value of stock options with service conditions and performance conditions using the Black-Scholes valuation model. The resulting fair value is recorded as compensation cost on a straight-line basis over the requisite service period. The key inputs and assumptions used to estimate the fair value of stock options include the value of the underlying stock at grant date, expected term, stock price volatility, the appropriate annual risk-free rate, and expected annual dividend yield. Given the Company’s lack of historical data, the Company’s estimate of the expected term was calculated in accordance with the simplified method. Additionally, the Company has identified publicly traded comparable companies with similar characteristics (e.g., lithium battery manufacturing) whose historical stock price volatilities were used in the estimation of expected volatility. The risk-free interest rate is based on the U.S. Treasury zero coupon instrument with a duration/term that equals the expected term calculated by the Company. For stock options with performance conditions, vesting is also subject to service conditions; however, the number of options that ultimately vest also depends on the attainment of certain predefined performance criteria. Note that stock options with performance conditions were issued to two strategic consultants of the Company and the performance criteria are related to the achievement of certain third-party purchase orders and contracts. No stock options with performance conditions were granted during the three months ended March 31, 2026. 17 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) The assumptions made for purposes of estimating the fair value under the Black Scholes valuation model for stock options granted during the three months ended March 31, 2026 and 2025 were as follows: Three Months Ended March 31, 2026 2025 Expected term of options (years) 5.00 - 6.07 5.00 - 6.06 Risk free interest rate 3.83% - 3.98% 4.02% – 4.43% Volatility 60.92% 65.79% 64.37% 65.81% Expected dividend yield - - Common stock grant date fair value per share $25.18 - $27.78 $3.23 Option grant date fair value per share $13.89 - $17.42 $1.87 - $2.03 For the three months ended March 31, 2026, and 2025, the Company recorded stock-based compensation expense of $1,534 and $3,857, respectively. The following table provides stock-based compensation expense by class reflected in the Company’s condensed consolidated statements of operations related to stock options (including stock options with performance conditions) for the three months ended March 31, 2026, and 2025 (in thousands): Three Months Ended March 31, 2026 2025 Research and development $ 240 $ 347 Selling, general and administrative 1,294 3,510 Total $ 1,534 $ 3,857 Stock Options The following table summarizes stock option activity for the three months ended March 31, 2026, and 2025: Number of Options Weighted -Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2024 (1) 5,085,269 $ 6.78 7.28 $ 1,172 Granted 594,691 3.23 Exercised (300 ) 8.21 - Cancelled or forfeited (555,215 ) 3.86 Outstanding as of March 31, 2025 5,124,445 $ 3.00 7.11 $ 1,172 Options vested and expected to vest as of March 31, 2025 (2) 5,004,445 $ 3.00 7.08 Exercisable as of March 31, 2025 3,696,298 $ 2.91 6.68 $ 1,172 18 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Number of Options Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2025 (3) 5,546,772 $ 3.83 6.94 $ 31,996 Granted 33,580 25.45 Exercised (29,252 ) 3.10 667 Cancelled or forfeited (12,179 ) 5.08 Outstanding as of March 31, 2026 5,538,921 $ 4.03 6.72 $ 131,528 Options vested and expected to vest as of March 31, 2026 (4) 5,448,921 $ 4.05 6.71 Exercisable as of March 31, 2026 4,436,262 $ 3.06 6.18 $ 109,673 (1) Includes 245,628 of stock options subject to performance conditions (2) Does not include 120,000 stock options subject to performance conditions which are improbable as of March 31, 2025. (3) Includes 215,628 of stock options subject to performance conditions (4) Does not include 90,000 stock options subject to performance conditions which are improbable as of March 31, 2026. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of March 31, 2026 there was $6,803 of total unrecognized stock-based compensation expense to be recognized over a weighted-average period of 4 years, respectively. As of March 31, 2026, the Company had $656 of total unrecognized stock-based compensation expense included in the total above for stock options with performance conditions currently considered not probable of achievement. Note 12 - Net Loss Per Common Share Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Basic and diluted losses per share are calculated as follows (in thousands, except share and per share data): Three Months Ended March 31, 2026 2025 Numerator: Net loss $ (8,575 ) $ (12,870 ) Net loss attributable to common stockholders—basic and diluted $ (8,575 ) $ (12,870 ) Denominator: Weighted average number of common shares outstanding 5,056,994 5,016,149 Net loss per share attributable to common stockholders—basic and diluted $ (1.70 ) $ (2.57 ) 19 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) The following common stock equivalents were excluded from the calculation of diluted loss per share attributable to common stockholders because their inclusion would have been anti-dilutive: Three Months Ended March 31, 2026 2025 Series A-1 redeemable convertible preferred stock 1,234,568 1,234,568 Series A-2 redeemable convertible preferred stock 2,362,204 2,362,204 Series B-1 redeemable convertible preferred stock 2,718,539 2,718,539 Series C-1 redeemable convertible preferred stock 3,570,724 3,570,724 Series C-2 redeemable convertible preferred stock 2,513,698 2,513,698 Series D redeemable convertible preferred stock 5,950,204 5,950,204 Preferred stock warrants 295,558 295,558 Preferred stock issued upon conversion of convertible promissory notes (1) 560,024 - Options to purchase common stock 5,538,921 5,124,445 Restricted stock units 1,394,670 1,414,922 (1) Due to the multiple conversion options provided for within the Company's convertible promissory notes, the Company applied the if-converted method to the calculation of the anti-dilutive shares underlying such notes to determine the estimated shares that the notes would convert into as of March 31, 2026. This assumption included consideration of the multiple conversion features and applying probability weightings to an assumed price of approximately $38 per share ($19 per share after applying the 50% discount). NOTE 13 – SEGMENT INFORMATION The Company conducts business as a single operating segment. In reaching this conclusion, management considers the definition of the (“CODM”), how the business is defined by the CODM, the nature of the information provided to the CODM, and how that information is used to make operating decisions, allocate resources, and assess performance. The Company’s CODM is the chief executive officer. The results of operations provided to and analyzed by the CODM are at the consolidated level which is the level that the CODM manages the business, allocates resources, makes key resource decisions, and assesses performance. The key measure of segment profit and loss that the CODM uses to allocate resources and assess performance is the Company’s net loss. The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP to the Company’s total net loss in the condensed consolidated statements of operations: Three Months Ended March 31, 2026 2025 Operating expenses Reimbursement from JDAs and others $ 3,410 $ 34 Payroll expense (5,860 ) (8,133 ) Occupancy expense (859 ) (1,497 ) Professional service expense (916 ) (606 ) Research and development expense (933 ) (537 ) Depreciation expense (882 ) (1,984 ) Other operating expense (451 ) (399 ) Loss from operations $ (6,491 ) $ (13,122 ) Total other income (expense), net (2,084 ) 252 Net loss $ (8,575 ) $ (12,870 ) Assets provided to CODM are consistent with those reported on the condensed consolidated balance sheet with particular emphasis on the company’s available liquidity, including its cash and cash equivalents reduced by current liabilities. All long-lived assets are maintained in, and all losses are attributable to the United States of America and South Korea. 20 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) NOTE 14 - Related Party Transactions Collaboration Arrangements The Company has established JDAs with various partners with some of the partners also making investments in the Company through the purchase of preferred shares. In connection with the Series D Agreements, the Company entered into both Warrant and JDA agreements with Mercedes-Benz and Stellantis. Uwe Keller, a member of the Company’s Board of Directors, represents Mercedes-Benz who is an investor in the Company’s Preferred Stock and holder of Series D Warrants. For the three months ended March 31, 2026, the Company recognized no expense reimbursements for the services provided under the JDA with Mercedes-Benz. For the three months ended March 31, 2025, the Company recognized $24 in expense reimbursements for the services provided under the JDA with Mercedes-Benz, which are recorded net within research and development expenses on the condensed consolidated statement of operations. There were no amounts due from Mercedes-Benz as of March 31, 2026, and December 31, 2025. Michael Bly, a member of the Company’s Board of Directors, represents Stellantis who is an investor in the Company’s Preferred Stock and holder of Series D Warrants. For the three months ended March 31, 2026, and 2025, the Company recognized no expense reimbursements for the services provided under the JDA with Stellantis. There were no amounts due from Stellantis as of March 31, 2026. Amounts due from Stellantis totaled $1,000 which are included in receivables under collaboration agreements on the condensed consolidated balance sheets as of December 31, 2025. In August 2025, the Company modified its existing JDA with Stellantis. The modified JDA required the Company to make a $2,000 payment to Stellantis for services related to the production and testing of a demo fleet. The Company and Stellantis jointly developed a production timeline as outlined in the agreement, which includes deliverables of Stellantis to the Company through June 2027 such as, module and pack safety reports, battery management system results, installation and retrofitting of test cells, and validation results of the demo fleet. In December 2025, the Company prepaid $2,000 to Stellantis for these services. As of March 31, 2026, and December 31, 2025, $40 and $160 are included in other non-current assets, respectively on the condensed consolidated balance sheets. As of March 31, 2026, and December 31, 2025, $910 and $950 are included in prepaid expenses and other current assets, respectively on the condensed consolidated balance sheets. During the three months ended March 31, 2026, $160 of expense was recognized as part of the agreement and is included in research and development expenses on the condensed consolidated statements of operations. Consulting Arrangements In March of 2020, the Company entered into a consulting services agreement with Joseph Taylor who also serves as Executive Chairman of the Company’s Board of Directors. For the three months ended March 31, 2026 and 2025, the Company incurred $88 and $44, respectively in expenses for consulting services provided by Joesph Taylor recorded within selling, general and administrative expenses on the condensed consolidated statements of operations. Amounts due to Joseph Taylor totaled $30 and $190 as of March 31, 2026, and December 31, 2025, respectively and are included in accounts payable. Note 15 - Subsequent Events The Company has evaluated subsequent events through June 10, 2026. As discussed in Note 1, on June 5, 2026, upon the closing of the de-SPAC Transaction, the Company became a wholly-owned subsidiary of CGC. Under the BCA, each outstanding Class A ordinary share of CGC (each, a “CGC Class A Share”), each outstanding Class B ordinary share of CGC and each outstanding preference share of CGC was converted into one share of Series A Common Stock, par value $0.00001 per share, (the “PubCo Series A Common Stock”). Each share of Factorial Common Stock (excluding treasury shares, dissenting shares and shares held by the Factorial founders) issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged for a number of shares of PubCo Series A Common Stock equal to the consideration ratio of approximately 3.67 (the “Consideration Ratio”), which was based on an implied Factorial equity value of $1,100,000. Each share of Factorial Common Stock held by the Factorial Founders issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged for a number of shares of Series B Common Stock, par value $0.00001 per share (the “PubCo Series B Common Stock”) equal to the Consideration Ratio. Each share of Factorial Preferred Stock issued and outstanding as of immediately prior to the Effective Time was automatically canceled and extinguished and converted into the right to receive a number of shares of PubCo Series A Common Stock, par value $0.00001 per share, equal to the Consideration Ratio. PubCo received gross proceeds of approximately $112,100 in connection with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment of transaction expenses. 21 Factorial Inc. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands, except share and per share data) Additionally, and in congruence with the consummation of the de-SPAC transaction, each option to purchase Factorial Common Stock (each, a “Factorial Option”), whether vested or unvested, ceased to represent the right to purchase Factorial Common Shares and was canceled in exchange for options to purchase PubCo Series A Common Stock under the equity incentive plan adopted by CGC in advance of the Closing (the “PubCo Equity Incentive Plan”), in an amount equal to the product of (x) the number shares of Factorial Common Stock subject to such Factorial Option immediately prior to the Effective Time, multiplied by (y) the Consideration Ratio, at an exercise price per share equal to the quotient of (i) the exercise price per share of such Factorial Option immediately prior to the Effective Time, divided by (ii) the Consideration Ratio, and generally subject to the same terms and conditions that applied to the corresponding Factorial Option immediately prior to the Effective Time. Each restricted stock unit award that was outstanding with respect to Factorial Common Stock (each, a “Factorial RSU Award”), whether vested or unvested, ceased to have any rights in respect of the Factorial Common Stock and was canceled in exchange for a restricted stock unit award under the PubCo Equity Incentive Plan that settled in a number of shares of PubCo Series A Common Stock in an amount and subject to such terms and conditions, in each case, as set forth on the allocation schedule, that was generally subject to the same terms and conditions that applied to the corresponding Factorial RSU Award immediately prior to the Effective Time. On April 1, 2026, the Company modified an outstanding equity award granted to a consultant that included performance based vesting conditions. As a result of the modification, 90,000 previously granted stock options were forfeited. Pursuant to the modification, and contingent upon the closing of the Company ’s pending business combination, the Company is required to grant the consultant RSUs with an aggregate grant date fair value of $250. Additionally, the modification provides for the issuance of 100,000 RSUs subject to performance conditions as defined in the amended agreement. On April 27, 2026, the Company entered into a definitive agreement to sell its wholly-owned subsidiary Factorial Germany GmbH for a total consideration of $6. The transaction will close at a later date, subject to the satisfaction of customary closing conditions in accordance with German law and registration with the German Commercial Register. On May 18, 2026, the Company received $1,040 of proceeds related to the January 2026 Notes. On June 5, 2026, the Company entered into an agreement with Clear Street LLC (“Clear Street”), pursuant to which Clear Street agreed to act as capital markets advisor to the Company for a term of twelve months. As consideration for these services, the agreement provides for the issuance to Clear Street of 100,000 shares of PubCo Series A Common Stock. 22

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EX-99.1 · tm2617149d1_ex99-1.htm

EX-99.1
 23
 tm2617149d1_ex99-1.htm
 EXHIBIT 99.1

 Exhibit 99.1

 Factorial Inc.

 Condensed Consolidated Balance Sheets (Unaudited)

 (In thousands, except share and per share data)

 As of

 March 31,
 2026
 December 31,
 2025

 ASSETS

 Current assets:

 Cash and
 cash equivalents
 $ 25,449
 $ 28,891

 Receivables under collaboration agreements
 (includes $0 and $1,000 as related party as of March 31, 2026, and December 31, 2025, respectively)
 3,360
 1,152

 Deferred transaction
 costs
 3,468
 1,423

 Prepaid expenses and
 other current assets (includes $910 and $1,110 as related party as of March 31, 2026, and December 31, 2025, respectively)
 1,718
 1,425

 Total current
 assets
 33,995
 32,891

 Restricted cash
 884
 881

 Property and equipment,
 net
 20,206
 21,276

 Operating lease right-of-use
 assets, net
 7,266
 7,576

 Other
 non-current assets (related party)
 40
 160

 TOTAL
 ASSETS
 $ 62,391
 $ 62,784

 LIABILITIES, REDEEMABLE CONVERTIBLE
 PREFERRED STOCK & STOCKHOLDERS&rsquo; DEFICIT

 Current liabilities:

 Accounts payable (includes $30 and
 $190 as related party, as of March 31, 2026, and December 31, 2025, respectively)
 $ 656
 $ 741

 Accrued expenses
 4,128
 2,981

 Operating
 lease liabilities, current portion
 1,401
 1,357

 Total current
 liabilities
 6,185
 5,079

 Operating lease
 liabilities, net of current portion
 6,817
 7,180

 Convertible promissory
 notes - related parties, at fair value
 20,296
 18,889

 Convertible promissory
 notes, at fair value
 4,600
 -

 Warrant liabilities
 for Series B-1 and Series D redeemable convertible preferred stock (includes $2,803 and $2,770 to related parties as of
 March 31, 2026, and December 31, 2025, respectively)
 3,484
 3,378

 Total liabilities
 41,382
 34,526

 Commitments and
 contingencies (Note 8)

 Redeemable convertible
 preferred stock (Note 9):

 Series A-1
 redeemable convertible preferred stock, $0.0001 par value; 1,234,568 shares authorized, issued and outstanding as March 31,
 2026, and December 31, 2025. Liquidation preference of $3,000 as of March 31, 2026, and December 31, 2025.
 327
 327

 Series A-2
 redeemable convertible preferred stock, $0.0001 par value; 2,362,204 shares authorized, issued and outstanding as of March 31,
 2026, and December 31, 2025. Liquidation preference of $6,000 as March 31, 2026, and December 31, 2025.
 655
 655

 Series B-1 redeemable convertible
 preferred stock, $0.0001 par value; 2,738,469 shares authorized; 2,718,539 shares issued and outstanding as of March 31, 2026,
 and December 31, 2025. Liquidation preference of $22,166 as of March 31, 2026, and December 31, 2025.
 2,169
 2,169

 Series C-1 redeemable convertible
 preferred stock, $0.0001 par value; 3,570,724 shares authorized, issued and outstanding as of March 31, 2026, and December 31,
 2025. Liquidation preference of $28,423 as of March 31, 2026, and December 31, 2025.
 28,303
 28,303

 Series C-2 redeemable convertible
 preferred stock, $0.0001 par value; 2,513,698 shares authorized, issued and outstanding as of March 31, 2026, and
 December 31, 2025. Liquidation preference of $26,857 as of March 31, 2026, and December 31, 2025.
 26,013
 26,013

 Series D
 redeemable convertible preferred stock, $0.0001 par value; 7,625,734 shares authorized; 5,950,204 shares issued and outstanding as
 of March 31, 2026, and December 31, 2025. Liquidation preference of $202,385 as of March 31, 2026, and December 31,
 2025.
 192,185
 192,185

 Total
 redeemable convertible preferred stock
 249,652
 249,652

 Stockholders&rsquo;
 deficit:

 Common stock, $0.0001 par value; 32,000,000
 shares authorized as of March 31, 2026, and December 31, 2025. 5,068,690 and 5,039,438 shares issued and outstanding as
 of March 31, 2026, and December 31, 2025, respectively.
 -
 -

 Additional paid-in
 capital
 36,285
 34,661

 Accumulated deficit
 (264,151 )
 (255,576 )

 Accumulated other comprehensive
 loss
 (743 )
 (445 )

 Treasury stock,
 at cost; 108,466 shares as of March 31, 2026, and December 31, 2025
 (34 )
 (34 )

 Total
 stockholders' deficit
 (228,643 )
 (221,394 )

 TOTAL LIABILITIES,
 REDEEMABLE CONVERTIBLE PREFERRED STOCK & STOCKHOLDERS' DEFICIT
 $ 62,391
 $ 62,784

 See accompanying notes to unaudited condensed
consolidated financial statements.

 1

 Factorial Inc.

 Condensed Consolidated Statements of Operations
(Unaudited)

 (In thousands, except share and per share data)

 Three Months
 Ended March 31,

 2026
 2025

 Operating expenses:

 Research and development,
 net (includes $0 and $24 of related party research and
development reimbursement, net, during the three months ended March 31,
 2026, and 2025, respectively)
 $ (1,942 )
 $ (6,754 )

 Selling, general
 and administrative (includes $88 and $44 of related party expenses, during the three months ended March 31, 2026, and 2025,
 respectively)
 (4,549 )
 (6,368 )

 Loss from operations
 (6,491 )
 (13,122 )

 Other (expense) income, net:

 Financing costs related to issuance of
 convertible promissory notes
 (37 )
 -

 Change in fair value of convertible promissory
 notes &ndash; related parties
 (1,407 )
 -

 Change in fair value
 of convertible promissory notes
 (300 )
 -

 Change in fair value of warrant liabilities
 (includes related party loss of $33 and $0 during the
three months ended March 31, 2026, and 2025, respectively)
 (106 )
 -

 Other
 (expenses) income, net
 (234 )
 252

 Total
 other (expenses) income, net
 (2,084 )
 252

 Loss before provision for income taxes
 (8,575 )
 (12,870 )

 Provision for income
 taxes
 -
 -

 Net loss
 $ (8,575 )
 $ (12,870 )

 Net loss attributable
 to common stockholders - basic and diluted (Note 12)
 $ (8,575 )
 $ (12,870 )

 Net loss per share
 attributable to common stockholders - basic and diluted (Note 12)
 $ (1.70 )
 $ (2.57 )

 Weighted-average
 common stock outstanding - basic and diluted (Note 12)
 5,056,994
 5,016,149

 See accompanying notes to unaudited condensed
consolidated financial statements.

 2

 Factorial Inc.

 Condensed Consolidated Statements of Comprehensive
Loss (Unaudited)

 (In thousands, except share and per share data)

 Three Months
 Ended March 31,

 2026
 2025

 Net loss
 $ (8,575 )
 $ (12,870 )

 Other comprehensive income (loss), net
 of tax

 Foreign
 currency translation adjustments
 (298 )
 8

 Other
 comprehensive income (loss), net of tax
 $ (298 )
 $ 8

 Comprehensive
 loss
 $ (8,873 )
 $ (12,862 )

 Comprehensive loss
 attributable to stockholders
 $ (8,873 )
 $ (12,862 )

 See accompanying notes to unaudited condensed
consolidated financial statements.

 3

 Factorial Inc.

 Condensed Consolidated Statements of Redeemable
Convertible Preferred Stock and Stockholders&rsquo; Deficit (Unaudited)

 (In thousands, except share data)

 REDEEMABLE

 CONVERTIBLE

 ACCUMULATED

 PREFERRED STOCK
 COMMON STOCK
 ADDITIONAL

 OTHER
 TREASURY
 TOTAL

 Three Months Ended
 $0.0001
 PAR VALUE
 $0.0001
 PAR VALUE
 PAID-IN
 ACCUMULATED
 COMPREHENSIVE
 STOCK
 STOCKHOLDERS&rsquo;

 March 31,
 2026

 SHARES
 AMOUNT
 SHARES
 AMOUNT
 CAPITAL
 DEFICIT
 INCOME
 (LOSS)
 AT
 COST
 DEFICIT

 Balance
 as of December 31, 2025

 18,349,937
 $ 249,652
 5,039,438
 $ -
 $ 34,661
 $ (255,576 )
 $ (445 )
 $ (34 )
 $ (221,394 )

 Issuance from
 stock option exercises
 -
 -
 29,252
 -
 90
 -
 -
 -
 90

 Stock based compensation
 -
 -
 -
 -
 1,534
 -
 -
 -
 1,534

 Foreign currency
 translation adjustments
 -
 -
 -
 -
 -
 -
 (298 )
 -
 (298 )

 Net
 loss
 -
 -
 -
 -
 -
 (8,575 )
 -
 -
 (8,575 )

 Balance
 as of March 31, 2026

 18,349,937
 $ 249,652
 5,068,690
 $ -
 $ 36,285
 $ (264,151 )
 $ (743 )
 $ (34 )
 $ (228,643 )

 REDEEMABLE

 CONVERTIBLE

 ACCUMULATED

 PREFERRED STOCK
 COMMON STOCK
 ADDITIONAL

 OTHER
 TREASURY
 TOTAL

 Three Months Ended
 $0.0001
 PAR VALUE
 $0.0001
 PAR VALUE
 PAID-IN
 ACCUMULATED
 COMPREHENSIVE
 STOCK
 STOCKHOLDERS&rsquo;

 March 31,
 2025

 SHARES
 AMOUNT
 SHARES
 AMOUNT
 CAPITAL
 DEFICIT
 INCOME
 (LOSS)
 AT
 COST
 DEFICIT

 Balance
 as of December 31, 2024

 18,349,937
 $ 249,652
 5,016,051
 $ -
 $ 25,193
 $ (181,731 )
 $ 76
 $ (34 )
 $ (156,496 )

 Issuance from
 stock option exercises
 -
 -
 300
 -
 2
 -
 -
 -
 2

 Stock based compensation
 -
 -
 -
 -
 3,857
 -
 -
 -
 3,857

 Foreign currency
 translation adjustments
 -
 -
 -
 -
 -
 -
 8
 -
 8

 Net
 loss
 -
 -
 -
 -
 -
 (12,870 )
 -
 -
 (12,870 )

 Balance
 as of March 31, 2025

 18,349,937
 $ 249,652
 5,016,351
 $ -
 $ 29,052
 $ (194,601 )
 $ 84
 $ (34 )
 $ (165,499 )

 See accompanying notes to unaudited condensed
consolidated financial statements.

 4

 Factorial Inc.

 Condensed Consolidated Statements of Cash Flows
(Unaudited)

 (In
thousands, except share and per share data )

 Three Months
 Ended March 31,

 2026
 2025

 Cash flows from operating activities:

 Net loss
 $ (8,575 )
 $ (12,870 )

 Adjustments to reconcile
 net loss to net cash used in operating activities:

 Depreciation and amortization
 882
 2,191

 Non-cash lease expenses
 and amortization
 310
 302

 Stock-based compensation
 1,534
 3,857

 Change in fair value
 and financing cost of convertible promissory notes
 337
 -

 Change in fair value
 of convertible promissory notes &ndash; related parties
 1,407
 -

 Change in fair value
 of warrant liability
 106
 -

 Loss on disposal of
 property and equipment
 9
 7

 Unrealized foreign exchange
 loss
 487
 51

 Non-cash interest
 -
 39

 Changes in operating
 assets and liabilities:

 Receivables under collaboration
 agreements
 (2,208 )
 545

 Prepaid expenses and
 other current assets
 (306 )
 70

 Other non-current assets
 120
 -

 Accounts payable
 (174 )
 5

 Accrued expenses
 271
 (2 )

 Operating
 lease liabilities
 (320 )
 (298 )

 Net cash used
 in operating activities
 (6,120 )
 (6,103 )

 Cash flows from investing activities:

 Property and equipment
 expenditures
 (482 )
 (172 )

 Advances
 on property and equipment
 (5 )
 -

 Net cash used
 in investing activities
 (487 )
 (172 )

 Cash flows from financing activities:

 Proceeds from stock
 option exercises
 90
 2

 Principal paid on finance
 lease liability
 -
 (207 )

 Deferred transaction
 costs paid
 (1,051 )
 -

 Financing costs related
 to issuance of convertible promissory notes
 (37 )
 -

 Proceeds
 from convertible promissory notes
 4,300
 -

 Net
 cash provided (used) in financing activities
 3,302
 (205 )

 Effects
 of exchange rate change on cash, cash equivalents and restricted cash
 (134 )
 (36 )

 Net change in cash, cash equivalents
 and restricted cash
 (3,439 )
 (6,516 )

 Beginning cash, cash
 equivalents and restricted cash
 29,772
 51,421

 Ending cash,
 cash equivalents and restricted cash
 $ 26,333
 $ 44,905

 Supplemental disclosures:

 Cash paid for interest
 $ -
 $ 146

 Non-cash investing and
 financing activities:

 Deferred transaction costs included
 in accounts payable and accrued expenses
 $ 1,723
 $ -

 The following table presents the Company&rsquo;s
 cash, cash equivalents and restricted cash by category in the Company&rsquo;s Condensed Consolidated Balance Sheets:

 Cash and cash equivalents
 $ 25,449
 $ 41,719

 Restricted
 cash
 884
 3,186

 Total
 cash, cash equivalents and restricted cash
 $ 26,333
 $ 44,905

 See accompanying notes to unaudited condensed
consolidated financial statements.

 5

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 1 - The Company

 Nature of Operations

 Factorial Inc. (&ldquo;Factorial&rdquo;, the
 &ldquo;Company&rdquo;, or &ldquo;we&rdquo;) is a developer and manufacturer of advanced battery energy storage technologies and solid-state
battery (&ldquo;SSB&rdquo;) technology. The technologies developed are expected to create a more sustainable future with high-performance
batteries for electric vehicles, homes, and critical applications.

 de-SPAC Transaction

 On December 17, 2025, Cartesian Growth Corporation
III, a Cayman Islands exempted company (&ldquo;CGC&rdquo;), Fenway MS, Inc., a Delaware corporation (&ldquo;Merger Sub&rdquo;),
and Factorial Inc., a Delaware corporation (&ldquo;Factorial&rdquo;), entered into a Business Combination Agreement (&ldquo;BCA&rdquo;).
CGC, a publicly traded special purpose acquisition company (&ldquo;SPAC&rdquo;) was listed on the Nasdaq Capital Market (&ldquo;Nasdaq&rdquo;)
under the ticker symbol &ldquo;CGCT&rdquo;.

 On June 5, 2026, the Merger Sub, a wholly-owned
subsidiary of CGC, merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of CGC (the &ldquo;Merger&rdquo;).
In connection with the Merger, CGC was renamed Factorial Energy, Inc. (&ldquo;PubCo&rdquo;). PubCo became listed on the Nasdaq under
the new ticker symbol &ldquo;FAC&rdquo; (&ldquo;de-SPAC Transaction&rdquo;). PubCo received gross proceeds of approximately $112,100
in connection with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment
of transaction expenses (&ldquo;de-SPAC and PIPE Proceeds&rdquo;). These unaudited condensed consolidated financial statements do not
reflect the impact of the de-SPAC Transaction, since it was closed subsequent to March 31, 2026.

 Basis of Presentation

 The accompanying interim condensed consolidated
financial statements and notes to the condensed consolidated financial statements have been prepared in accordance with accounting standards
generally accepted in the United States of America (&ldquo;U.S. GAAP&rdquo;) for interim financial information as organized in the Accounting
Standards Codification (&ldquo;ASC&rdquo;) administrated by the Financial Accounting Standards Board (&ldquo;FASB&rdquo;). The accompanying
interim Condensed Consolidated Balance Sheet as of March 31, 2026, the interim Condensed Consolidated Statements of Operations,
Comprehensive Loss, Redeemable Convertible Preferred Stock and Stockholders&rsquo; Deficit, and the interim Condensed Consolidated Statements
of Cash Flows for the three months ended March 31, 2026 and 2025, are unaudited. The unaudited interim condensed consolidated financial
statements have been prepared on the same basis as the audited annual consolidated financial statements and, in management&rsquo;s opinion,
include adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company&rsquo;s financial
position as of March 31, 2026 and its result of operations for the three months ended March 31, 2026 and 2025 are not necessarily
indicative of the results to be expected for the full fiscal year or any other period.

 These unaudited interim condensed consolidated
financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company&rsquo;s
audited annual consolidated financial statements for the year ended December 31, 2025, included in the proxy statement/prospectus
filed by CGC on May 6, 2026. The accounting policies applied in the preparation of these interim condensed consolidated financial
statements are consistent with those disclosed in the Company&rsquo;s audited consolidated financial statements and accompanying notes.
The disclosures provided herein include only those policies that have been newly adopted or updated during the interim period, if any.

 Prior to the receipt of the de-SPAC and PIPE
Proceeds, the Company determined that its existing liquidity was not sufficient to fund operations for at least twelve months from the
date of issuance of its audited annual consolidated financial statements, which raised substantial doubt about the Company&rsquo;s ability
to continue as a going concern. The Company has experienced net losses and negative cash flows from operations since its inception. The
Company expects it will continue to incur significant costs including research and development expenses related to its ongoing operations
until it successfully develops a commercial product and achieves revenues adequately to support the Company&rsquo;s operations. However,
Factorial believes that its cash on hand, including the net proceeds from the de-SPAC and PIPE Proceeds will be sufficient to meet its
working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing. Accordingly,
management has concluded that the substantial doubt about the Company&rsquo;s ability to continue as a going concern has been alleviated.
Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated
delays in negotiations with Original Equipment Manufacturers (&ldquo;OEMs&ldquo;) and tier-one automotive suppliers or other suppliers,
supply chain challenges, competitive pressures, and regulatory developments, among other developments. To the extent that Factorial&rsquo;s
current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing.
If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to
decrease its level of investment in product development or scale back its operations.

 6

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 2 - Summary of Significant
Accounting Policies

 Principles of Consolidation

 The accompanying condensed consolidated financial
statements include the accounts of the Company and its four wholly owned subsidiaries. All intercompany accounts and transactions have
been eliminated in the preparation of the consolidated financial statements in accordance with the provisions under ASC Topic 810 Consolidation .

 Use of Estimates

 The preparation of the financial statements in
conformity with U.S. GAAP requires 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 consolidated financial statements, and the amounts of expenses
during the reporting period. On an ongoing basis, the Company&rsquo;s management evaluates its estimates, judgments, and methodologies.
Significant estimates and assumptions in the consolidated financial statements include those related to warrant liabilities, convertible
promissory notes and stock-based compensation. The Company bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and
liabilities. Actual results may differ materially from these estimates under different assumptions or conditions. Changes in estimates
are reflected in reported results in the period in which they become known.

 Collaboration Arrangements and Partnership Agreements

 The Company enters into collaborative arrangements
with various parties individually through joint development agreements (&ldquo;JDAs&rdquo;) to evaluate and test its technology. The
agreements are executed in anticipation of entering into either a purchasing agreement for the Company&rsquo;s sellable products or jointly
developing a commercialized product. As part of the JDAs, the counterparty may either reimburse the Company for certain costs incurred
through a fixed fee payment or per unit payment or share certain costs with the Company.

 The Company assesses each collaborative arrangement
to determine whether it is in scope for ASC Topic 808, Collaborative Arrangements (&ldquo;ASC 808&rdquo;). In making the
determination, the Company considers whether the arrangement involves joint operating activities performed by parties that are both active
participants in the activities and exposed to significant risks and rewards that are dependent on the commercial success of such activities.
All of the JDAs entered into by the Company have been concluded to be arrangements within the scope of ASC 808. As a result, payments
received/paid from/to the counterparties have been netted against the research and development expenses incurred by the Company.

 The Company assesses each collaborative arrangement
to determine whether it is in scope for ASC Topic 606, Revenue from Contracts with Customers (&ldquo;ASC 606&rdquo;). In making
the determination, the Company considers if some or all aspects of the arrangement represent a transaction with a customer. All of the
JDAs entered into by the Company to date have been concluded to be arrangements outside the scope of ASC 606. As a result, no revenue
has been recognized by the Company.

 For the three months ended March 31, 2026,
and 2025, the Company recognized approximately $3,410 and $34, respectively in expense reimbursements from arrangements, which are recorded
net within research and development expenses on the condensed consolidated statements of operations. The Company had one partner that
accounted for $3,360 in expense reimbursements for the three months ended March 31, 2026.

 In February 2026, the Company entered into
a new development agreement with PowerCo SE (&ldquo;PowerCo&rdquo;). The development agreement has various terms and conditions and has
a term of fifteen months; however, PowerCo has the right to terminate under certain conditions. The Company entered into this development
agreement for purposes of assessing its technology through evaluation and testing of its batteries.

 In January 2026, the Company entered into
a partnership agreement with a note holder as further described in Note 7. The partnership agreement includes up to $900 of consideration
for the performance of research and development services to the note holder.

 7

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Deferred Transaction Costs

 The Company complies with the requirements of
ASC 340, Other Assets and Deferred Costs , with regards to transaction costs. Prior to the completion of the transaction (potential
business combination with Cartesian Growth Corporation III) as mentioned in Note 1 of the audited annual consolidated financial statements
for the year ended December 31, 2025, direct transaction costs are capitalized as deferred transaction costs. If the transaction
is completed, the deferred transaction costs are charged to additional paid-in capital and offset the proceeds received from the potential
business combination. As of March 31, 2026, and December 31, 2025, the Company had $3,468 and $1,423 of deferred transaction
costs incurred, respectively.

 Convertible Promissory Notes, Fair Value

 During January 2026, the Company entered
into Note Purchase Agreements and a Convertible Promissory Note Agreement pursuant to which it could receive proceeds up to $5,340 (the
 &ldquo;January 2026 Notes&rdquo;) from new investors. The Company determined that it is eligible for the fair value option election
in connection with the Convertible Promissory Notes. The Convertible Promissory Notes meet the definition of a &ldquo;recognized financial
liability&rdquo; which is an acceptable financial instrument eligible for the fair value option under ASC Topic 825 Financial Instruments
(&ldquo;ASC 825&rdquo;). At the date of issuance, the fair value of the Convertible Promissory Notes were derived using the scenario-based
method (&ldquo;SBM&rdquo;) as further described in Note 3. The fair value option election was made to enhance the relevance and transparency
of information presented related to the features embedded in the Convertible Promissory Notes.

 Changes in the fair value of the Convertible
Promissory Notes are recorded as gains or losses in the Company&rsquo;s consolidated statements of operations in each reporting period.
For the three months ended March 31, 2026, the Company recorded a loss on the change in fair value of convertible promissory notes
of $300.

 Recently Adopted Accounting Pronouncements

 From time to time, new accounting pronouncements
are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. After completion
of the business combination described in Note 15, the Company expects it will be considered an &ldquo;emerging growth company&rdquo;
as defined in the Jumpstart Our Business Startups Act of 2012, as amended (the &ldquo;Jobs Act&rdquo;). The Jobs Act provides that an
emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus,
an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private
companies. The Company has elected to avail itself of this extended transition period and, as a result, the Company will not be required
to adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

 In
July 2025, the FASB issued ASU 2025- 05, Financial Instruments&mdash;Credit Losses (Topic 326): Measurement of Credit Losses
for Accounts Receivable and Contract Assets (&ldquo;ASU 2025 - 05&rdquo;).
ASU 2025 - 05 provides optional practical expedients intended to simplify
the application of the current expected credit loss model to current trade accounts receivable and current contract assets arising from
revenue transactions under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15,
2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting
periods in which financial statements have not yet been issued or made available for issuance. The Company adopted the guidance effective
January 1, 2026. The adoption did not have a material impact on its accounting policies, financial position, results of operations,
or cash flows, given the short - term nature and historically no loss experience
of its trade receivables and contract assets.

 New Accounting Pronouncements &ndash; Not Yet Adopted

 In November 2024, the FASB issued ASU 2024-03,
Disaggregation of Income Statement Expenses (DISE) (&ldquo;ASU 2024-03&rdquo;), requiring additional disclosure of the nature of expenses
included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions
presented on the face of the income statement as well as disclosures about selling expenses. The amendment in this update applies to
all public business entities and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting
periods beginning after December 15, 2027. The Company is currently evaluating the provisions of the amendments and the impact on
its disclosures.

 8

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 3 - Fair Value Measures

 The Company&rsquo;s financial assets subject
to fair value measurements on a recurring basis. The following table presents information about the Company&rsquo;s financial assets
and liabilities measured at fair value and the level of input utilized to determine such fair values (in thousands):

 Fair value
 measurements as of March 31, 2026

 Total
 Level 1
 Level 2
 Level 3

 Assets:

 Money
 market (included in cash and cash equivalents)
 $ 10,245
 $ 10,245
 $ -
 $ -

 Money
 market (included in restricted cash)
 884
 884
 -
 -

 Total
 Assets
 $ 11,129
 $ 11,129
 $ -
 $ -

 Liabilities:

 Warrant liability Series B-1
 $ 681
 $ -
 $ -
 $ 681

 Warrant liability Series D
 2,803
 -
 -
 2,803

 Convertible
 promissory notes &ndash; related parties
 20,296
 -
 -
 20,296

 Convertible
 promissory notes
 4,600
 -
 -
 4,600

 Total
 Liabilities
 $ 28,380
 $ -
 $ -
 $ 28,380

 Fair value
 measurements as of December 31, 2025

 Total
 Level 1
 Level 2
 Level 3

 Assets:

 Money
 market (included in cash and cash equivalents)
 $ 14,152
 $ 14,152
 $ -
 $ -

 Money
 market (included in restricted cash)
 881
 881
 -
 -

 Total
 Assets
 $ 15,033
 $ 15,033
 $ -
 $ -

 Liabilities:

 Warrant liability Series B-1
 $ 608
 $ -
 $ -
 $ 608

 Warrant liability Series D
 2,770
 -
 -
 2,770

 Convertible
 promissory notes &ndash; related parties
 18,889
 -
 -
 18,889

 Convertible
 promissory notes
 -
 -
 -
 -

 Total
 Liabilities
 $ 22,267
 $ -
 $ -
 $ 22,267

 9

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 The following table presents a roll-forward of
the aggregate fair values of the Company&rsquo;s Warrant liabilities and the Company&rsquo;s Convertible promissory notes for which fair
value is determined by Level 3 inputs (in thousands):

 Convertible

 Promissory

 Warrant
 Warrant
 Notes
 Convertible

 Liability
 Liability
 Related
 Promissory

 Total
 Series B
 - 1
 Series D
 Parties
 Notes

 December 31, 2024
 $ 1,148
 $ 114
 $ 1,034
 $ -
 $ -

 Issuance of convertible promissory notes
 -
 -
 -
 -
 -

 Loss on issuance
 -
 -
 -
 -
 -

 Change in fair value
 -
 -
 -
 -
 -

 March 31, 2025
 $ 1,148
 $ 114
 $ 1,034
 $ -
 $ -

 Issuance of convertible promissory notes
 10,000
 -
 -
 10,000
 -

 Loss on issuance
 4,500
 -
 -
 4,500
 -

 Change in fair value
 6,619
 494
 1,736
 4,389
 -

 December 31, 2025
 $ 22,267
 $ 608
 $ 2,770
 $ 18,889
 $ -

 Issuance of convertible promissory notes
 4,300
 -
 -
 -
 4,300

 Loss on issuance
 -
 -
 -
 -
 -

 Change in fair value
 1,813
 73
 33
 1,407
 300

 March 31, 2026
 $ 28,380
 $ 681
 $ 2,803
 $ 20,296
 $ 4,600

 Certain of the Company&rsquo;s financial instruments
are not measured at fair value on a recurring basis but are recorded at amounts that approximate their fair value due to their liquid
or short-term nature, such as accounts payable, accrued expenses, and other current liabilities.

 Warrant Liability Series B-1

 In connection with the issuance of Series B-1
redeemable convertible preferred stock of the Company (&ldquo;Series B-1&rdquo;) on October 28, 2019, the Company entered into
a warrant agreement with Massachusetts Development Finance Agency, or its registered assignees to purchase 19,930 Series B-1 redeemable
convertible preferred stock (&ldquo;Series B-1 Warrant Agreements&rdquo;). The warrant was issued at a purchase price of $0.81 per
share, with a maturity date of February 1, 2029, or the closing of the Company&rsquo;s Initial Public Offering.

 Warrant Liability Series D

 In connection with the issuance of Series D
redeemable convertible preferred stock of the Company (&ldquo;Series D&rdquo;) on November 30, 2021, the Company entered into
a warrant for preferred stock with each of Mercedes-Benz Investment Company LLC and Stellantis(each a &ldquo;Holder&rdquo;) (&ldquo;Series D
Agreement&rdquo;). Upon closing of the Series D Agreement, Mercedes-Benz Investment Company LLC and its affiliates (&ldquo;Mercedes-Benz&rdquo;)
and Stellantis became related parties to the Company. During 2022, the Warrant Agreements were amended and restated with both Stellantis
and Mercedes-Benz to eliminate certain milestone-based provisions. The Amended Warrants modified the original agreements by setting the
number of shares issuable upon exercise at a fixed 137,814 shares per Holder at a fixed price of $27.2105 per share. The warrants have
a maturity date of February 1, 2029, or the closing of the Company&rsquo;s Initial Public Offering. The Amended Warrants remain
consistent with the Warrant Agreements to require settlement through the issuance of the then most senior redeemable convertible preferred
stock of the Company to the Holder. At inception, the monetary value of the obligation is based on a fixed monetary amount known at inception.

 To estimate the fair value of the Series B-1
and D Warrant Agreements, the Company applied the Probability Weighted Equity Return Method (&ldquo;PWERM&rdquo;). Under this approach,
the Company develops multiple scenarios and ascribes a probability weighting to each scenario and related estimated fair value. Key inputs
and assumptions in the PWERM include the probability and the estimated value of the security in each liquidity scenario, in addition
to scenario specific assumptions. The two scenarios used in the valuation of the Series B-1 and D Warrant Agreements are a SPAC
Exit scenario and Option Pricing Method scenario. The Company applied a 90% weighting to the SPAC Exit Scenario and 10% to the Option
Pricing Method (&ldquo;OPM&rdquo;) scenario as of March 31, 2026. The Company applied a 75% weighting to the SPAC Exit Scenario
and 25% to the OPM scenario as of December 31, 2025.

 10

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 The following are assumptions used in valuing
the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of March 31, 2026:

 Series B-1
 Series D

 Discount
 rate
 25 %
 25 %

 Expected life
 (in years)
 0.20
 0.20

 Future projected price per share
 $ 37.76
 $ 37.76

 Strike price
 $ 0.08
 $ 27.21

 The following are assumptions used in valuing
the Series B-1 and D Warrant Agreements in the SPAC Exit scenario, as of December 31, 2025:

 Series B-1
 Series D

 Discount
 rate
 25 %
 25 %

 Expected life
 (in years)
 0.38
 0.38

 Future projected price per share
 $ 37.76
 $ 37.76

 Strike price
 $ 0.08
 $ 27.21

 The significant unobservable inputs used in the
fair value measurement of the Series B-1 and D warrant liability in the SPAC Exit scenario are the discount rate and the expected
life. The future projected price per share is estimated based on the SPAC purchase price as outlined in the Company&rsquo;s Business
Combination Agreement. The discount rate reflects current market assessments of the time of value of money and the risks specific to
the Company given its stage of development.

 The expected life is based upon the fact that
the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management&rsquo;s
estimated holding period to an exit/liquidity event.

 The following are the assumptions used in valuing
the Series B-1 and D Warrant Agreements in the OPM scenario, as of March 31, 2026:

 Series B-1
 Series D

 Share value
 $ 18.16
 $ 33.61

 Assumed volatility
 90 %
 37 %

 Assumed risk-free
 interest rate
 3.8 %
 3.8 %

 Expected life
 (in years)
 2
 2

 Expected dividends
 -
 -

 The following are the assumptions used in valuing
the Series B-1 and D Warrant Agreements in the OPM scenario, as of December 31, 2025:

 Series B-1
 Series D

 Share value
 $ 18.14
 $ 33.71

 Assumed volatility
 90 %
 37 %

 Assumed risk-free
 interest rate
 3.5 %
 3.5 %

 Expected life
 (in years)
 2
 2

 Expected dividends
 -
 -

 The significant unobservable inputs used in the
fair value measurement of the Series B-1 and D warrant liability in the OPM scenario are the equity value of the Company, the expected
life and assumed volatility. The equity value of the Company is derived from a discounted cash flow analysis based on the Company&rsquo;s
best estimates of future cash flows. The assumptions underlying these valuations include projected future revenue and cash flows, discount
rates, market adjustments and multiples, selection of comparable companies, the lack of marketability of our equity, and probability
of possible future events, including the expected time to liquidity. These underlying assumptions represent our best estimates at the
time they were made, which involves inherent uncertainty and the application of judgment. Changes to the key assumptions and estimates
used in the valuations could result in materially different fair values of our common and preferred stock at each valuation date.

 11

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 The expected life is based upon the fact that
the Warrant Agreements would not persist through a liquidity event, and therefore the expected life is based upon management&rsquo;s
estimated holding period to an exit/liquidity event. The expected volatility is based upon observed historical volatilities of a cohort
of guideline public companies. Equity allocation mechanics are based upon the distribution waterfall as outlined in the Company&rsquo;s
operating agreement. Significant increases (decreases) in the equity value, the expected life, or the assumed volatility, could result
in significantly higher (lower) fair value measurements.

 As of March 31, 2026, the Company had reserved
295,558 shares of common stock for potential conversion of Series B-1 and D Warrants.

 Convertible Promissory Notes &ndash; Related Parties

 To estimate the fair value of the August 2025
Notes, the Company applied the SBM method. The fair value of the August 2025 Notes includes an estimate of the value of accrued
interest. The significant unobservable inputs used in the fair value measurement of the August 2025 Notes are the underlying share
value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios.

 The assumptions used in determining the fair
value of the August 2025 Notes under the SBM during the three months ended March 31, 2026, were as follows:

 Series D
 Three
 Months Ended

 March 31, 2026

 SPAC Exit Scenario
 85 %

 Qualified Financing Scenario
 7.5 %

 Dissolution Scenario
 7.5 %

 Assumed volatility
 40 %

 Assumed risk-free interest rate
 3.7 %

 Expected life (in years)
 .50

 Assumed discount rate
 20 %

 Share value
 $ 37.35

 The assumptions used in determining the fair
value of the August 2025 Notes under the SBM as of December 31, 2025, were as follows:

 Series D
 December 31,
 2025

 SPAC Exit Scenario
 75 %

 Qualified Financing Scenario
 15 %

 Dissolution Scenario
 10 %

 Assumed volatility
 40 %

 Assumed risk-free interest rate
 3.50 %

 Expected life (in years)
 .75

 Assumed discount rate
 20 %

 Share value
 $ 34.47

 To estimate the share value of the Series D
redeemable convertible preferred stock we used a PWERM. The two scenarios used in the estimation of the Series D redeemable convertible
preferred stock are a SPAC Exit scenario and Option Pricing Method scenario. As of March 31, 2026, we applied a 85% weighting to
the SPAC Exit scenario and 15% weighting to the Option Pricing Method scenario.

 12

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Convertible Promissory Notes

 To estimate the fair value of the January 2026
Notes, the Company applied the SBM method. The fair value of the January 2026 Notes includes an estimate of the value of accrued
interest. The significant unobservable inputs used in the fair value measurement of the January 2026 Notes are the underlying share
value, the expected life, assumed volatility, assumed discount rate, share value, and the probability of scenarios.

 The assumptions used in determining the fair
value of the January 2026 Notes under the SBM during the three months ended March 31, 2026, were as follows:

 Three Months
 Ended
 March 31, 2026
 January 26,
 2026

 SPAC Exit Scenario
 85 %
 80 %

 Qualified Financing Scenario
 7.5 %
 10 %

 Dissolution Scenario
 7.5 %
 10 %

 Expected life (in years)
 .50
 .68

 Assumed discount rate
 20 %
 20 %

 Note 4 - Property and Equipment

 Property and equipment, net consists of the following
(in thousands):

 As of

 March 31,
 2026
 December 31,
 2025

 Leasehold improvements
 $ 10,680
 $ 10,680

 Machinery and equipment
 16,081
 16,315

 Furniture and fixtures
 414
 419

 Computer and software
 211
 216

 Buildings
 1,160
 1,227

 Building Fixtures
 1,256
 1,206

 Land
 3,196
 3,382

 Advances on purchases of property and
 equipment
 617
 632

 Total
 $ 33,615
 $ 34,077

 Accumulated depreciation
 (13,409 )
 (12,801 )

 Total
 $ 20,206
 $ 21,276

 Advances on purchases of property and equipment
are payments made before the related asset (such as machinery and equipment) are delivered and are not depreciated until the asset is
placed in service.

 Depreciation expense totaled $882 and $1,984
for the three months ended March 31, 2026, and 2025, respectively, and was recorded as operating expenses in the condensed consolidated
statements of operations. Depreciation expense was allocated as $850 and $1,775 to research and development expense, net and $32 and
$209 to selling, general and administrative expenses for the three months ended, March 31, 2026, and 2025, respectively.

 13

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 5 - Accrued Expenses

 Accrued expenses consisted of the following (in
thousands):

 As of

 March 31,
 2026
 December 31,
 2025

 Accrued compensation and benefits
 $ 838
 $ 760

 Accrued audit and tax services
 166
 67

 Accrued legal and professional
 320
 172

 Accrued transaction costs
 2,327
 1,423

 Accrued other
 477
 559

 Total accrued expenses
 $ 4,128
 $ 2,981

 NOTE 6 &ndash; CONVERTIBLE PROMISSORY NOTES &ndash; RELATED PARTIES

 The following table shows the components of the
Company&rsquo;s indebtedness (in thousands):

 Three Months Ended

 March 31,
 2026

 Total convertible promissory notes - related parties,
 at fair value as of December 31, 2025
 $ 18,889

 Change in fair value
 1,407

 Total convertible promissory notes
 - related parties, at fair value
 $ 20,296

 14

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 NOTE 7 &ndash; CONVERTIBLE PROMISSORY NOTES

 During January 2026, the Company issued
the January 2026 Notes pursuant to which it could receive proceeds up to $5,340. The January 2026 Notes bear interest of 5%
per annum and mature on either August 1, 2028 or January 1, 2029. The January 2026 Notes provide the holders with certain
conversion features including: a mandatory conversion upon a qualified financing event, an optional conversion upon a non-qualified financing
event and an optional conversion upon an acquisition of the Company.

 Concurrently with the issuance of the January 2026
Notes, the Company entered into a partnership agreement with a note holder. Pursuant to the partnership agreement, the Company may receive
up to $2,240 in total consideration. The deliverables of the partnership agreement coincide with payments to the Company on the convertible
note. Deliverables under the partnership agreement are aligned with, and contingent upon, funding milestones under the convertible note,
which provide for up to $1,340 in aggregate principal funding to the Company of which $300 in proceeds have been received as of March 31,
2026, with an issuance cost of $37. The note holder had the option to request funding in part or in full. Subsequently, on May 18,
2026, the Company received the remaining proceeds of $1,040. In addition, the partnership agreement includes up to $900 of consideration
for the performance of research and development services to the note holder.

 The following table shows the components of the Company&rsquo;s indebtedness
(in thousands):

 Three Months Ended

 March 31,
 2026

 Convertible promissory notes principal balance
 $ 4,300

 Change in fair value
 300

 Total convertible promissory notes,
 at fair value
 $ 4,600

 15

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 8 - Commitments and
Contingencies

 Leases

 The Company&rsquo;s leases include various operating
leases for offices, laboratory space, and storage space, expiring at various dates through November 2032. Many leases include one
or more options to renew. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed
to be reasonably certain. The Company&rsquo;s finance lease for the facility in Methuen, Massachusetts was terminated in October 2025.
Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords&rsquo; operating expenses such
as property tax, insurance, and common area maintenance.

 The components of lease expenses recorded within
the condensed consolidated statements of operations for the three months ended March 31, 2026, and 2025 are as follows (in thousands):

 Three Months
 Ended March 31,

 2026
 2025

 Finance lease costs:

 Amortization of right-of-use
 assets
 $ -
 $ 207

 Interest on financing
 lease liabilities
 -
 185

 Total finance lease costs
 -
 392

 Operating lease costs:

 Operating lease expenses
 480
 497

 Variable lease expenses
 217
 199

 Short-term lease expenses
 -
 18

 Total
 operating lease costs
 697
 714

 Total lease expenses
 $ 697
 $ 1,106

 Other information related to agreements treated
as finance and operating leases was as follows:

 Three Months
 Ended March 31,

 2026
 2025

 Operating cash flows from operating leases
 $ (489 )
 $ (493 )

 Financing cash flows from finance lease
 $ -
 $ (353 )

 As of

 March 31,
 2026
 December 31,
 2025

 Weighted-average remaining lease term &ndash;
 operating leases (years)
 5.5
 5.9

 Weighted-average discount rate &ndash; operating leases
 8.04 %
 8.05 %

 Remaining lease term &ndash; finance lease (years)
 -
 -

 Discount rate &ndash; finance lease
 N/A
 N/A

 The remaining lease obligations are substantially
unchanged from year end.

 Legal Proceedings

 From time to time, the Company may be subject
to legal claims or be party to legal proceedings arising in the normal course of business. While the outcome of such claims or proceedings
cannot be predicted with certainty, the Company&rsquo;s management expects that any such liabilities, to the extent not provided for
by insurance or otherwise, would not have a material effect on the Company&rsquo;s financial condition, results of operations or cash
flows.

 The Company is party to an arbitration, initiated
on March 14, 2025, before the International Centre for Dispute Resolution. A hearing was conducted in June 2026, and post-hearing
submission are due in July 2026. The hearing is regarding a contractual dispute in which a vendor is seeking $4,900 in damages,
interest, and other relief. The Company does not believe that such payment is owed, is defending against such claims, and it has asserted
counterclaims. The Company believes that a loss is neither probable nor remote and is unable to reasonably estimate the amount or range
of possible loss due to the stage of the proceedings and the uncertainty regarding the resolution of the competing claims.

 16

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Note 9 - Redeemable Convertible
Preferred Stock

 No redeemable convertible preferred stock was
issued, converted, or redeemed during the three months ended March 31, 2026. Total carrying value remains $249,652. Terms and rights
are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025.

 Note 10 - Common Stock

 The Company was authorized to issue 32,000,000
shares of its common stock as of March 31, 2026, and December 31, 2025. The voting, dividend, and liquidation rights of the
holders of the Company&rsquo;s common stock are subject to and qualified by the rights, powers and preference of the Preferred Stockholders
set forth in Note 9 - Redeemable Convertible Preferred Stock.

 Each share of common stock entitles the holder
to one vote, together with the Preferred Stockholders, on all matters submitted to a vote of the Company&rsquo;s stockholders. Terms
and rights are unchanged from the audited annual consolidated financial statements for the year ended December 31, 2025.

 Total common shares issued and outstanding were
5,068,690 as of March 31, 2026.

 Note 11 - Stock Based Compensation

 Equity Compensation Plans

 The 2019 Stock Incentive Plan (the &ldquo;2019
Plan&rdquo;), was adopted by the Board of Directors to reserve a sufficient number of shares to facilitate the grants of stock options
and restricted stock to employees, officers and directors, non-employee advisors and consultants in exchange for certain services. Awards
granted under the 2019 Plan are issued at the discretion of the Board of Directors. Awards generally vest over four years; however, vesting
terms are subject to terms set forth by the Board of Directors when the award is granted. Stock options granted under the 2019 Plan expire
10 years from the date of grant, which was subsequently amended.

 Share-Based Compensation Awards

 The Company estimates the fair value of stock
options with service conditions and performance conditions using the Black-Scholes valuation model. The resulting fair value is recorded
as compensation cost on a straight-line basis over the requisite service period. The key inputs and assumptions used to estimate the
fair value of stock options include the value of the underlying stock at grant date, expected term, stock price volatility, the appropriate
annual risk-free rate, and expected annual dividend yield.

 Given the Company&rsquo;s lack of historical
data, the Company&rsquo;s estimate of the expected term was calculated in accordance with the simplified method. Additionally, the Company
has identified publicly traded comparable companies with similar characteristics (e.g., lithium battery manufacturing) whose historical
stock price volatilities were used in the estimation of expected volatility. The risk-free interest rate is based on the U.S. Treasury
zero coupon instrument with a duration/term that equals the expected term calculated by the Company.

 For stock options with performance conditions,
vesting is also subject to service conditions; however, the number of options that ultimately vest also depends on the attainment of
certain predefined performance criteria. Note that stock options with performance conditions were issued to two strategic consultants
of the Company and the performance criteria are related to the achievement of certain third-party purchase orders and contracts. No stock
options with performance conditions were granted during the three months ended March 31, 2026.

 17

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 The assumptions made for purposes of estimating
the fair value under the Black Scholes valuation model for stock options granted during the three months ended March 31, 2026 and
2025 were as follows:

 Three Months
 Ended March 31,

 2026
 2025

 Expected term of options (years)
 5.00 - 6.07
 5.00 - 6.06

 Risk free interest rate
 3.83%
 - 3.98%
 4.02%
 &ndash; 4.43%

 Volatility
 60.92%
 65.79%
 64.37%
 65.81%

 Expected dividend yield
 -
 -

 Common stock grant date fair value per share
 $25.18
 - $27.78
 $3.23

 Option grant date fair value per share
 $13.89
 - $17.42
 $1.87
 - $2.03

 For the three months ended March 31, 2026,
and 2025, the Company recorded stock-based compensation expense of $1,534 and $3,857, respectively. The following table provides stock-based
compensation expense by class reflected in the Company&rsquo;s condensed consolidated statements of operations related to stock options
(including stock options with performance conditions) for the three months ended March 31, 2026, and 2025 (in thousands):

 Three Months
 Ended March 31,

 2026
 2025

 Research and development
 $ 240
 $ 347

 Selling, general and administrative
 1,294
 3,510

 Total
 $ 1,534
 $ 3,857

 Stock Options

 The following table summarizes stock option activity
for the three months ended March 31, 2026, and 2025:

 Number
 of

 Options
 Weighted

 -Average

 Exercise Price
 Weighted-

 Average

 Remaining

 Contractual

 Term

 (Years)
 Aggregate

 Intrinsic Value
 (in thousands)

 Outstanding as of December 31, 2024 (1)
 5,085,269
 $ 6.78
 7.28
 $ 1,172

 Granted
 594,691
 3.23

 Exercised
 (300 )
 8.21

 -

 Cancelled
 or forfeited
 (555,215 )
 3.86

 Outstanding as of March 31, 2025
 5,124,445
 $ 3.00
 7.11
 $ 1,172

 Options vested and expected to vest as of March 31, 2025
 (2)
 5,004,445
 $ 3.00
 7.08

 Exercisable as of March 31, 2025
 3,696,298
 $ 2.91
 6.68
 $ 1,172

 18

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Number
 of

 Options
 Weighted-

 Average

 Exercise Price
 Weighted-

 Average

 Remaining

 Contractual

 Term

 (Years)

 Aggregate

 Intrinsic Value
 (in thousands)

 Outstanding as of December 31, 2025 (3)
 5,546,772
 $ 3.83
 6.94
 $ 31,996

 Granted
 33,580
 25.45

 Exercised
 (29,252 )
 3.10

 667

 Cancelled
 or forfeited
 (12,179 )
 5.08

 Outstanding as of March 31, 2026
 5,538,921
 $ 4.03
 6.72
 $ 131,528

 Options vested and expected to vest as of March 31, 2026
 (4)
 5,448,921
 $ 4.05
 6.71

 Exercisable as of March 31, 2026
 4,436,262
 $ 3.06
 6.18
 $ 109,673

 (1) Includes 245,628 of stock options subject
 to performance conditions

 (2) Does not include 120,000 stock options subject to performance conditions
 which are improbable as of March 31, 2025.

 (3) Includes 215,628 of stock options subject to performance conditions

 (4) Does not include 90,000 stock options subject to performance conditions
 which are improbable as of March 31, 2026.

 The aggregate intrinsic value of stock options
is calculated as the difference between the exercise price of the stock options and the fair value of the Company&rsquo;s common stock
for those stock options that had exercise prices lower than the fair value of the Company&rsquo;s common stock. As of March 31,
2026 there was $6,803 of total unrecognized stock-based compensation expense to be recognized over a weighted-average period of 4 years,
respectively. As of March 31, 2026, the Company had $656 of total unrecognized stock-based compensation expense included in the
total above for stock options with performance conditions currently considered not probable of achievement.

 Note 12 - Net Loss Per
Common Share

 Basic and diluted net loss per common share is
computed by dividing net loss by the weighted average number of common shares outstanding during the period.

 Basic and diluted losses per share are calculated
as follows (in thousands, except share and per share data):

 Three Months
 Ended March 31,

 2026
 2025

 Numerator:

 Net loss
 $ (8,575 )
 $ (12,870 )

 Net loss attributable to common stockholders&mdash;basic and
 diluted
 $ (8,575 )
 $ (12,870 )

 Denominator:

 Weighted average number of common shares outstanding
 5,056,994
 5,016,149

 Net loss per share attributable to common stockholders&mdash;basic
 and diluted
 $ (1.70 )
 $ (2.57 )

 19

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 The following common stock equivalents were excluded
from the calculation of diluted loss per share attributable to common stockholders because their inclusion would have been anti-dilutive:

 Three Months
 Ended March 31,

 2026
 2025

 Series A-1 redeemable convertible preferred
 stock
 1,234,568
 1,234,568

 Series A-2 redeemable convertible preferred stock
 2,362,204
 2,362,204

 Series B-1 redeemable convertible preferred stock
 2,718,539
 2,718,539

 Series C-1 redeemable convertible preferred stock
 3,570,724
 3,570,724

 Series C-2 redeemable convertible preferred stock
 2,513,698
 2,513,698

 Series D redeemable convertible preferred stock
 5,950,204
 5,950,204

 Preferred stock warrants
 295,558
 295,558

 Preferred stock issued upon conversion of convertible promissory
 notes (1)
 560,024
 -

 Options to purchase common stock
 5,538,921
 5,124,445

 Restricted stock units
 1,394,670
 1,414,922

 (1) Due
 to the multiple conversion options provided for within the Company's convertible promissory
 notes, the Company applied the if-converted method to the calculation of the anti-dilutive
 shares underlying such notes to determine the estimated shares that the notes would convert
 into as of March 31, 2026. This assumption included consideration of the multiple conversion
 features and applying probability weightings to an assumed price of approximately $38 per
 share ($19 per share after applying the 50% discount).

 NOTE 13 &ndash; SEGMENT
INFORMATION

 The Company conducts business as a single operating
segment. In reaching this conclusion, management considers the definition of the (&ldquo;CODM&rdquo;), how the business is defined by
the CODM, the nature of the information provided to the CODM, and how that information is used to make operating decisions, allocate
resources, and assess performance. The Company&rsquo;s CODM is the chief executive officer. The results of operations provided to and
analyzed by the CODM are at the consolidated level which is the level that the CODM manages the business, allocates resources, makes
key resource decisions, and assesses performance.

 The key measure of segment profit and loss that
the CODM uses to allocate resources and assess performance is the Company&rsquo;s net loss. The table below shows a reconciliation of
the Company&rsquo;s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed
under U.S. GAAP to the Company&rsquo;s total net loss in the condensed consolidated statements of operations:

 Three Months
 Ended March 31,

 2026
 2025

 Operating expenses

 Reimbursement
 from JDAs and others
 $ 3,410
 $ 34

 Payroll expense
 (5,860 )
 (8,133 )

 Occupancy expense
 (859 )
 (1,497 )

 Professional
 service expense
 (916 )
 (606 )

 Research and
 development expense
 (933 )
 (537 )

 Depreciation
 expense
 (882 )
 (1,984 )

 Other
 operating expense
 (451 )
 (399 )

 Loss
 from operations
 $ (6,491 )
 $ (13,122 )

 Total other income (expense),
 net
 (2,084 )
 252

 Net loss
 $ (8,575 )
 $ (12,870 )

 Assets provided to CODM are consistent with those
reported on the condensed consolidated balance sheet with particular emphasis on the company&rsquo;s available liquidity, including its
cash and cash equivalents reduced by current liabilities. All long-lived assets are maintained in, and all losses are attributable to
the United States of America and South Korea.

 20

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 NOTE 14 - Related Party
Transactions

 Collaboration Arrangements

 The Company has established JDAs with various
partners with some of the partners also making investments in the Company through the purchase of preferred shares. In connection with
the Series D Agreements, the Company entered into both Warrant and JDA agreements with Mercedes-Benz and Stellantis.

 Uwe Keller, a member of the Company&rsquo;s Board
of Directors, represents Mercedes-Benz who is an investor in the Company&rsquo;s Preferred Stock and holder of Series D Warrants.
For the three months ended March 31, 2026, the Company recognized no expense reimbursements for the services provided under the
JDA with Mercedes-Benz. For the three months ended March 31, 2025, the Company recognized $24 in expense reimbursements for the
services provided under the JDA with Mercedes-Benz, which are recorded net within research and development expenses on the condensed
consolidated statement of operations. There were no amounts due from Mercedes-Benz as of March 31, 2026, and December 31, 2025.

 Michael Bly, a member of the Company&rsquo;s
Board of Directors, represents Stellantis who is an investor in the Company&rsquo;s Preferred Stock and holder of Series D Warrants.
For the three months ended March 31, 2026, and 2025, the Company recognized no expense reimbursements for the services provided
under the JDA with Stellantis. There were no amounts due from Stellantis as of March 31, 2026. Amounts due from Stellantis totaled
$1,000 which are included in receivables under collaboration agreements on the condensed consolidated balance sheets as of December 31,
2025.

 In August 2025, the Company modified its
existing JDA with Stellantis. The modified JDA required the Company to make a $2,000 payment to Stellantis for services related to the
production and testing of a demo fleet. The Company and Stellantis jointly developed a production timeline as outlined in the agreement,
which includes deliverables of Stellantis to the Company through June 2027 such as, module and pack safety reports, battery management
system results, installation and retrofitting of test cells, and validation results of the demo fleet. In December 2025, the Company
prepaid $2,000 to Stellantis for these services. As of March 31, 2026, and December 31, 2025, $40 and $160 are included in
other non-current assets, respectively on the condensed consolidated balance sheets. As of March 31, 2026, and December 31,
2025, $910 and $950 are included in prepaid expenses and other current assets, respectively on the condensed consolidated balance sheets.
During the three months ended March 31, 2026, $160 of expense was recognized as part of the agreement and is included in research
and development expenses on the condensed consolidated statements of operations.

 Consulting Arrangements

 In March of 2020, the Company entered into
a consulting services agreement with Joseph Taylor who also serves as Executive Chairman of the Company&rsquo;s Board of Directors. For
the three months ended March 31, 2026 and 2025, the Company incurred $88 and $44, respectively in expenses for consulting services
provided by Joesph Taylor recorded within selling, general and administrative expenses on the condensed consolidated statements of operations.
Amounts due to Joseph Taylor totaled $30 and $190 as of March 31, 2026, and December 31, 2025, respectively and are included
in accounts payable.

 Note 15 - Subsequent Events

 The Company has evaluated subsequent events through
June 10, 2026.

 As discussed in Note 1, on June 5, 2026,
upon the closing of the de-SPAC Transaction, the Company became a wholly-owned subsidiary of CGC. Under the BCA, each outstanding Class A
ordinary share of CGC (each, a &ldquo;CGC Class A Share&rdquo;), each outstanding Class B ordinary share of CGC and each outstanding
preference share of CGC was converted into one share of Series A Common Stock, par value $0.00001 per share, (the &ldquo;PubCo Series A
Common Stock&rdquo;). Each share of Factorial Common Stock (excluding treasury shares, dissenting shares and shares held by the Factorial
founders) issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged
for a number of shares of PubCo Series A Common Stock equal to the consideration ratio of approximately 3.67 (the &ldquo;Consideration
Ratio&rdquo;), which was based on an implied Factorial equity value of $1,100,000. Each share of Factorial Common Stock held by the Factorial
Founders issued and outstanding as of immediately prior to the Effective Time, was automatically canceled and extinguished and exchanged
for a number of shares of Series B Common Stock, par value $0.00001 per share (the &ldquo;PubCo Series B Common Stock&rdquo;)
equal to the Consideration Ratio. Each share of Factorial Preferred Stock issued and outstanding as of immediately prior to the Effective
Time was automatically canceled and extinguished and converted into the right to receive a number of shares of PubCo Series A Common
Stock, par value $0.00001 per share, equal to the Consideration Ratio. PubCo received gross proceeds of approximately $112,100 in connection
with the de-SPAC Transaction and the sale of a private placement of PubCo Series A Common Stock, prior to the payment of transaction
expenses.

 21

 Factorial Inc.

 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)

 (In thousands, except share and per share
data)

 Additionally, and in congruence with the consummation
of the de-SPAC transaction, each option to purchase Factorial Common Stock (each, a &ldquo;Factorial Option&rdquo;), whether vested or
unvested, ceased to represent the right to purchase Factorial Common Shares and was canceled in exchange for options to purchase PubCo
Series A Common Stock under the equity incentive plan adopted by CGC in advance of the Closing (the &ldquo;PubCo Equity Incentive
Plan&rdquo;), in an amount equal to the product of (x) the number shares of Factorial Common Stock subject to such Factorial Option
immediately prior to the Effective Time, multiplied by (y) the Consideration Ratio, at an exercise price per share equal to the
quotient of (i) the exercise price per share of such Factorial Option immediately prior to the Effective Time, divided by (ii) the
Consideration Ratio, and generally subject to the same terms and conditions that applied to the corresponding Factorial Option immediately
prior to the Effective Time. Each restricted stock unit award that was outstanding with respect to Factorial Common Stock (each, a &ldquo;Factorial
RSU Award&rdquo;), whether vested or unvested, ceased to have any rights in respect of the Factorial Common Stock and was canceled in
exchange for a restricted stock unit award under the PubCo Equity Incentive Plan that settled in a number of shares of PubCo Series A
Common Stock in an amount and subject to such terms and conditions, in each case, as set forth on the allocation schedule, that was generally
subject to the same terms and conditions that applied to the corresponding Factorial RSU Award immediately prior to the Effective Time.

 On
April 1, 2026, the Company modified an outstanding equity award granted to a consultant that included performance based vesting
conditions. As a result of the modification, 90,000 previously granted stock options were forfeited. Pursuant to the modification, and
contingent upon the closing of the Company &rsquo;s pending business combination, the Company is required to grant the consultant
RSUs with an aggregate grant date fair value of $250. Additionally, the modification provides for the issuance of 100,000 RSUs subject
to performance conditions as defined in the amended agreement.

 On April 27, 2026, the Company entered into
a definitive agreement to sell its wholly-owned subsidiary Factorial Germany GmbH for a total consideration of $6. The transaction will
close at a later date, subject to the satisfaction of customary closing conditions in accordance with German law and registration with
the German Commercial Register.

 On May 18, 2026, the Company received $1,040
of proceeds related to the January 2026 Notes.

 On June 5, 2026, the Company entered into
an agreement with Clear Street LLC (&ldquo;Clear Street&rdquo;), pursuant to which Clear Street agreed to act as capital markets advisor
to the Company for a term of twelve months. As consideration for these services, the agreement provides for the issuance to Clear Street
of 100,000 shares of PubCo Series A Common Stock.

 22

EX-99.2 · tm2617149d1_ex99-2.htm

Type

EX-99.2

File

tm2617149d1_ex99-2.htm

Document text
EX-99.2 · tm2617149d1_ex99-2.htm EX-99.2 24 tm2617149d1_ex99-2.htm EXHIBIT 99.2 Exhibit 99.2 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION (in thousands, except share and per share data, unless otherwise stated) Capitalized terms used but not defined in this Exhibit 99.2 shall have the meanings ascribed to them in the Current Report on Form 8-K (“Form 8-K”) filed with the Securities and Exchange Commission (the “Commission”) on June 10, 2026 and, if not defined in the Form 8-K, capitalized terms used but not defined in this Exhibit 99.2 shall have the meanings ascribed to them in the definitive proxy statement/prospectus filed by Cartesian Growth Corporation III with the Commission on May 6, 2026, prior to the consummation of the business combination (the “Proxy Statement/Prospectus”). Introduction The following is selected unaudited pro forma condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination and related transactions. The unaudited pro forma condensed combined balance sheet as of March 31, 2026 gives pro forma effect to the Business Combination as if it was consummated on March 31, 2026. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and the year ended December 31, 2025 give pro forma effect to the Business Combination as if it was consummated on January 1, 2025, the beginning of the earliest period presented. The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following: · Factorial’s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2026, included as Exhibit 99.1 to the Form 8-K; · Factorial’s audited consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus; · CGC’s unaudited condensed financial statements as of and for the three months ended March 31, 2026, included in the Quarterly Report on Form 10-Q filed with the Commission on May 15, 2026; and · CGC’s audited financial statements for the year ended December 31, 2025, included in the Annual Report on Form 10-K filed with the Commission on March 23, 2026; and · Factorial Common Stock is calculated based on shares outstanding as of the Merger Effective Time, and shares underlying vested and outstanding Factorial Options as of the Merger Effective Time for purposes of determining the Consideration Ratio. The unaudited pro forma condensed combined financial information should also be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Factorial” included in Exhibit 99.3 to the Form 8-K and incorporated by reference. The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the actual results of operations of the combined company would have been had the Business Combination occurred on March 31, 2026 or January 1, 2025, respectively. The unaudited pro forma condensed combined financial information has been prepared, in accordance with Article 11 of Regulation S-X and is for informational purposes only. It is subject to several uncertainties and assumptions as described in the accompanying notes. Further, the unaudited pro forma condensed combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information becomes available and analyses are performed. Description of the Transaction On December 17, 2025, CGC entered into the Business Combination Agreement with Factorial and Merger Sub, pursuant to which on June 5, 2026 (the “Merger Effective Time”) Merger Sub merged with and into Factorial, with Factorial surviving the merger as a wholly-owned subsidiary of CGC. The board of directors of CGC has approved the Business Combination and the Domestication. In connection with, and as part of, the Domestication, CGC became a Delaware corporation and changed its corporate name to Factorial Energy, Inc. (“PubCo”) and all outstanding securities of CGC converted into securities of PubCo, as described in more detail in the Proxy Statement/Prospectus. By virtue of the Merger and without any action on the part of any Party or any other person, the Aggregate Merger Consideration, equal to the Equity Value of $1.1 billion, consisting of a number of shares of PubCo Common Stock equal to the Equity Value divided by the Redemption Price, was issued as set forth in (i)-(iv) or reserved for issuance as set forth in (v)-(vi) below: i. At the Merger Effective Time, each share of Factorial Common Stock that was issued and outstanding as of immediately prior to the Merger Effective Time (excluding treasury shares, dissenting shares and shares held by the Factorial Founders) was automatically canceled and converted into the right to receive a corresponding number of shares of PubCo Series A Common Stock equal to the Consideration Ratio and each share of Factorial’s capital stock that was issued and outstanding as of immediately prior to the Merger Effective Time held by the Factorial Founders was automatically canceled and converted into the right to receive a corresponding number of shares of PubCo Series B Common Stock equal to the Consideration Ratio; ii. The number of shares of Factorial Common Stock set forth in (i) above gave effect to: a. The conversion of each outstanding convertible debt instrument including accrued interest (including the Factorial Convertible Notes) into Factorial Common Stock pursuant to its terms; b. The conversion of each issued and outstanding share of Factorial Preferred Stock into a number of shares of Factorial Common Stock in accordance with the terms of Section 5.1 of the Factorial Certificate of Incorporation in effect immediately prior to the Merger Effective Time; and c. The conversion of each issued and outstanding Factorial Warrant into a number of shares of Factorial Common Stock in accordance with the terms of the corresponding warrant agreements; iii. each share of Factorial Common Stock held immediately prior to the Merger Effective Time by Factorial as treasury stock was automatically cancelled and extinguished, and no consideration was paid with respect thereto; iv. each share of capital stock of Merger Sub issued and outstanding immediately prior to the Merger Effective Time was automatically cancelled and extinguished and converted into one share of Factorial Common Stock; v. each outstanding and unexercised vested Factorial Option to purchase shares of Factorial Common Stock became a PubCo Option containing the same terms, conditions, vesting and other provisions as were historically applicable to such Factorial Options and each resulting PubCo Option became exercisable for the number of shares of PubCo Series A Common Stock equal to the Consideration Ratio multiplied by the number of shares of Factorial common stock subject to the Factorial Option as of immediately prior to the Merger Effective Time, rounded down to the nearest whole share, at an exercise price equal to the per share exercise price of the Factorial Option divided by the Consideration Ratio, rounded up to the nearest whole cent; and vi. each Factorial RSU that was outstanding with respect to shares of Factorial Common Stock was cancelled in exchange for a PubCo RSU under the PubCo Incentive Plan containing the same terms, conditions, vesting and other provisions as were historically applicable to such Factorial RSU, and each resulting PubCo RSU will settle into a number of shares of PubCo Series A Common Stock equal to a number of shares of PubCo Series A Common Stock as set forth on an allocation schedule, rounded down to the nearest whole share. In addition, PubCo consummated the PIPE Financing pursuant to the PIPE Purchase Agreements. Under the Institutional Investor Stock Purchase Agreement, the Institutional Investor committed to purchase 7,500,000 shares of PubCo Series A Common Stock for an aggregate purchase price of $75.0 million at $10.00 per share. Prior to Closing, the Institutional Investor purchased 2,000,000 Class A ordinary shares of CGC in open market or privately negotiated transactions, which reduced its remaining PIPE Financing purchase commitment on a share-for-share basis. Accordingly, through the PIPE Financing, PubCo issued 5,500,000 shares of PubCo Series A Common Stock to the Institutional Investor for an aggregate purchase price of $55.0 million. Under the Sponsor Investor Stock Purchase Agreement, the Sponsor Investor committed to purchase 2,400,168 shares of PubCo Series A Common Stock (based on the Merger Effective Time Redemption Price) for an aggregate purchase price of $25.0 million. Prior to Closing, the Sponsor Investor purchased 1,470,764 Class A ordinary shares of CGC in the open market, which reduced its remaining PIPE Financing purchase commitment on a share-for-share basis. Accordingly, through the PIPE Financing, PubCo issued 929,404 shares of PubCo Series A Common Stock to the Sponsor Investor at the closing Redemption Price of $10.41593671 per share, for an aggregate purchase price of approximately $9.7 million. In connection with the Institutional Investor’s open market purchases, and pursuant to the Letter Agreement among the Institutional Investor, Factorial and the Sponsor executed on May 18, 2026, the Sponsor transferred at Closing 90,000 shares of PubCo Series A Common Stock to the Institutional Investor, representing the $900,000 Differential Amount divided by $10.00, and Factorial reimbursed the Sponsor in cash for such Differential Amount. In addition, pursuant to the Investor Stock Purchase Agreements, the Sponsor transferred, directly or indirectly through forfeiture and reissuance, an aggregate of 750,000 shares of PubCo Series A Common Stock to the Institutional Investor and 250,000 shares of PubCo Series A Common Stock to the Sponsor Investor. After giving effect to these Sponsor share transfers , the Institutional Investor received 6,340,000 shares for $55.0 million, or an effective purchase price of approximately $8.68 per share, and the Sponsor Investor effectively received 1,179,404 shares for $9.7 million, or an effective purchase price of approximately $8.21 per share. Note that based on the nature of such Sponsor to investor transfers, no expense is recorded by PubCo as a result of the transfers. The diagram below depicts a simplified version of the combined company’s organizational structure immediately following the consummation of the Business Combination and the PIPE Financing: Set forth below is a calculation, on a per CGC Class A Ordinary Share basis, of the approximate net cash received by PubCo from the Trust Account and PIPE Financing. Such calculations are based upon (i) cash held in the Trust Account as of March 31, 2026 assuming the Merger Effective Time redemption price of $10.41593671 (“Redemption Price”) per Public Share and (ii) $64,681 of gross cash proceeds received from the PIPE Financing, and (iii) approximate transaction expenses of $22,057 including the estimated PIPE Financing transaction expenses of $3,750, Factorial’s approximate transaction expenses of $10,259, and CGC’s approximate transaction expenses of $8,048. Pursuant to the Investor Stock Purchase Agreements, the PIPE Investors were entitled to satisfy a portion of their respective purchase obligations through the acquisition of Public Shares and the non-redemption of such shares. In connection with the Closing, the Institutional Investor acquired 2,000,000 Public Shares and the Sponsor Investor acquired 1,470,764 Public Shares, each of which reduced such investor’s obligation to purchase shares of PubCo Common Stock at Closing on a share-for-share basis. The calculations set forth below give effect to those Public Share purchases in determining the number of shares of PubCo Common Stock issued to the PIPE Investors at Closing. Below is a calculation, on a per CGC Class A Share basis, of the cash received by PubCo from the Trust Account and PIPE Financing, net of transaction expenses. The total number of shares outstanding in the table below gives effect to the issuance of shares of PubCo Common Stock upon consummation of the Business Combination. (in thousands, except share and per share amounts) Actual Redemptions (1) CGC Class A Ordinary Shares Not Redeemed 4,548,687 Gross Cash Proceeds of Trust Account $ 47,379 Gross Cash Proceeds from the PIPE Financing $ 64,681 Transaction Expenses (2) $ 21,410 Total Shares Outstanding 107,023,245 Net Cash per share of CGC Class A Shares $ 0.85 (1) Reflects redemption of 23,051,313 of CGC Class A Shares out of the 27,600,000 of CGC Class A Ordinary Shares available for redemption by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC Class A Shares (the “NRA Shares”) that the Institutional Investor and the Sponsor Investor purchased prior to the Closing to partially satisfy their PIPE Financing obligations. (2) Includes cash transaction expenses relating to both the Business Combination and the PIPE Financing. This amount includes $1,346 of cash transaction expenses paid prior to the Closing and $20,064. However, this amount excludes $647 that was payable in Pubco Series A Common Stock for the merger underwriter fee as it’s a non-cash transaction expense. Refer to Note (c) of the unaudited condensed combined pro forma balance sheets as of March 31, 2026 for more information. Accounting for the Business Combination The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under a reverse recapitalization, CGC will be treated as the “acquired” company for financial reporting purposes. Factorial has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances: · Factorial’s shareholders will have the largest voting interest in PubCo; · As a result of such voting interest, Factorial’s shareholders will have the ability to nominate a majority of the members of the PubCo Board of Directors; · Factorial’s senior management will be the senior management of PubCo; and · Factorial is the larger entity, in terms of substantive operations and employee base. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Factorial issuing shares for the net assets of CGC, accompanied by a recapitalization. The net assets of CGC will be stated at fair value, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Factorial. Basis of Pro Forma Presentation The historical financial information has been adjusted to give pro forma effect to Factorial’s issuance of Factorial Convertible Notes in May 2026, that converted into Pubco Series A Common Stock in connection with the Business Combination. Although the Factorial Convertible Notes converted into Pubco Series A Common Stock in connection with the Business Combination, such Factorial Convertible Notes were not issued in connection with, or contingent upon, the Business Combination, as the August 2025 Factorial Convertible Notes were issued to existing investors in Factorial prior to the negotiation of the Business Combination Agreement and the January and May 2026 Factorial Convertible Notes were issued to strategic partners with whom Factorial is party to commercial arrangements and all of the shares issuable upon conversion of the Factorial Convertible Notes have been included in the Aggregate Fully Diluted Factorial Shares. For the Factorial Convertible Notes issued in May 2026, the Company estimated the pro forma effect for proceeds received under such convertible notes through the Merger Effective Time. The pro forma effect of the May 2026 Factorial Convertible Notes issuance has been assumed to have occurred as of March 31, 2026 for balance sheet purposes. The adjustments presented on the unaudited pro forma condensed combined financial statements have been identified and presented to provide relevant information necessary for a more accurate understanding of the combined company upon consummation of the Business Combination. The pro forma adjustments included in the unaudited pro forma condensed combined balance sheet as of March 31, 2026 and in the unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 are based on preliminary estimates. The final amounts recorded may differ from the information presented. Factorial and CGC did not have any historical relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies. The pro forma shares of the combined common stock issued and outstanding immediately after the Business Combination are presented below: Pro Forma Combined CGC’s Public Shareholders (1) 4,548,687 Sponsor and DirectorCo (2) 5,810,000 PIPE Institutional Investor (3) 6,340,000 PIPE Sponsor Investor (4) 1,179,404 Factorial Shareholders (5) 89,083,036 Cantor Advisory Fee (6) 62,118 Total shares outstanding 107,023,245 (1) Reflects redemption of 23,051,313 CGC Class A Shares out of the 27,600,000 CGC Class A Ordinary Shares available for redemption by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC Class A Shares (the “NRA Shares”) that the Institutional Investor and the Sponsor Investor purchased prior to the Closing to partially satisfy their PIPE Financing obligations. (2) Amount includes 5,710,000 Founder Shares held by the Sponsor and 100,000 Founder Shares held by DirectorCo (in which, each of CGC’s independent directors hold an interest in 30,000 Founder Shares). (3) Amount includes (i) the Institutional Investor’s subscription for 5,500,000 shares of PubCo Series A Common Stock at a subscription price of $10.00 per share; plus (ii) the constructive transfer at the Closing of an aggregate of 750,000 shares of PubCo Series A Common Stock from the Sponsor to the Institutional Investor; and plus (iii) an aggregate of 90,000 shares of Pubco Series A Common Stock constructively transferred to the Institutional Investor by the Sponsor as part of the Letter Agreement. The effective subscription price of the Institutional Investor is $8.68 per share, taking into account the foregoing transfers from the Sponsor. (4) Amount includes (i) the Sponsor Investor’s subscription for 929,404 shares of PubCo Series A Common Stock at a subscription price equal to the Redemption Price; plus (ii) the constructive transfer at the Closing of an aggregate of 250,000 shares of PubCo Series A Common Stock from the Sponsor to the Sponsor Investor. The effective subscription price of the Sponsor Investor is $8.21 per share, taking into account the foregoing transfer from the Sponsor. (5) Includes (i) an aggregate of 3,081,263 shares of PubCo Series A Common Stock issued to holder of Factorial Common Stock from conversion of Factorial Common Stock based upon the Consideration Ratio; (ii) an aggregate of 15,512,744 shares of PubCo Series B Common Stock issued to the Factorial Founders from the exchange of shares of Factorial Common Stock based upon the Consideration Ratio; (iii) an aggregate of 67,314,957 shares of PubCo Series A Common Stock issued to holders of Factorial Preferred Stock from the exchange of shares of Factorial Preferred Stock; (iv) an aggregate of 2,811,447 shares of PubCo Series A Common Stock issued to holders of the Factorial Convertible Notes from conversion of the Factorial Convertible Notes along with accrued interest into shares of Factorial Common Stock immediately before the Business Combination and the subsequent exchange into shares of PubCo Series A Common Stock; and (v) an aggregate of 362,625 shares of PubCo Series A Common Stock issued to holders of the Factorial Warrants from their cashless exercise of the warrants for shares of Factorial Preferred Stock and converted into shares of Factorial Common Stock immediately before the Business Combination and subsequent exchange for PubCo Series A Common Stock. (6) Amount includes 62,118 shares of PubCo Series A Common Stock issued to Cantor pursuant to the financial advisor engagement letter as outlined in the section entitled “ Certain Engagements in Connection with the Business Combination ” of the Proxy Statement/Prospectus. Unaudited Condensed Combined Pro Forma Balance Sheets as of March 31, 2026 (in thousands, except share and per share data) Pro Forma Pro Forma Combined Historical Adjustments for Q2 2026 Transaction Accounting Pro Forma Balance CGCT Factorial Transactions Notes Adjustments Notes Sheet Assets Current assets: Cash and cash equivalents $ 396 $ 25,449 $ 1,040 (a) $ 287,480 (b) $ 118,808 (240,101 ) (f) (16,386 ) (c) 60,931 (d) Deferred offering costs - 3,468 - (3,468 ) (c) - Prepaid expenses and other current assets 113 5,078 - - 5,191 Total current assets 509 33,995 1,040 88,455 123,999 Restricted cash - 884 - - 884 Property and equipment, net - 20,206 - - 20,206 Operating lease right-of-use assets, net - 7,266 - - 7,266 Other assets 10 40 - - 50 CGC Investments held in Trust Account 285,869 - - (285,869 ) (b) - Total assets $ 286,388 $ 62,391 $ 1,040 $ (197,414 ) $ 152,405 Liabilities, convertible preferred stock and stockholders' equity (deficit) Current liabilities: Accounts payable $ - $ 656 $ - $ - $ 656 Accrued expenses 1,312 4,128 - (3,352 ) (c) 2,088 Accrued offering costs 75 - - - 75 Operating lease liabilities, current portion - 1,401 - - 1,401 Total current liabilities 1,387 6,185 - (3,352 ) 4,220 Operating lease liabilities, net of current portion - 6,817 - - 6,817 Convertible notes liability - 24,896 1,040 (a) (25,936 ) (e) - Deferred UW fee payable 13,140 - - (13,140 ) (c) - Warrant liability - 3,484 - (3,484 ) (e) - Total liabilities 14,527 41,382 1,040 (45,912 ) 11,037 Redeemable convertible preferred stock Factorial Series A-1 redeemable convertible preferred stock - 327 - (327 ) (e) - Factorial Series A-2 redeemable convertible preferred stock - 655 - (655 ) (e) - Factorial Series B-1 redeemable convertible preferred stock - 2,169 - (2,169 ) (e) - Factorial Series C-1 redeemable convertible preferred stock - 28,303 - (28,303 ) (e) - Factorial Series C-2 redeemable convertible preferred stock - 26,013 - (26,013 ) (e) - Factorial Series D redeemable convertible preferred stock - 192,185 - (192,185 ) (e) - CGC Class A common stock subject to redemption 285,869 - - (285,869 ) (f) - Total redeemable convertible preferred stock 285,869 249,652 - (535,521 ) - Stockholders’ equity (deficit) PubCo Series A common stock - - - 8 (e) 9 1 (f) Pubco Series B common stock - - - 2 (e) 2 CGC Class B Common Stock 1 - - (1 ) (f) - Additional paid-in capital - 36,285 - (3,362 ) (c) 409,374 268,142 (e) 47,379 (f) 60,931 (d) Accumulated deficit (14,009 ) (264,151 ) - 10,886 (e) (267,274 ) Accumulated other comprehensive income - (743 ) - - (743 ) Factorial Treasury stock - (34 ) - 34 (e) - Total stockholders' equity (deficit) (14,008 ) (228,643 ) - 384,020 141,368 Total liabilities, convertible preferred stock and stockholders' equity (deficit) $ 286,388 $ 62,391 $ 1,040 $ (197,414 ) $ 152,405 The pro forma adjustments to the unaudited condensed combined pro forma balance sheet as of March 31, 2026 consist of the following: (a) Reflects Factorial’s issuance of additional Convertible Notes in May 2026 for an aggregate $1,040 face value, which were converted, along with accrued interest, into Factorial Common Stock immediately before the consummation of the Business Combination necessitating inclusion in these pro forma adjustments. Note that Factorial has elected the Fair Value Option for the Convertible Notes in accordance with ASC 825, Financial Instruments; however, these pro forma adjustments for the May 2026 transaction herein are not giving effect to any change in fair value of the notes on the date of issuance stemming from such election. Assumptions regarding changes in fair value, including accrued interest, of the Factorial Convertible Notes, are recorded as transaction accounting adjustments in (e). (b) Represents the interest earned, based on the Redemption Price of $10.41593671 per CGC Class A Ordinary Share, on investments held in the Trust Account held by CGC of $1,611, and the transfer of both CGC’s investments held in the Trust Account, and the interest earned to cash and cash equivalents prior to the consideration of Redemptions as outlined in (f). Refer to the below table for the pro forma entries. The interest earned is recorded as income for CGC through accumulated deficit and then reclassified into additional paid-in capital because of the Business Combination as described in (f)(i). Refer to the below table for the pro forma entries: Cash and cash equivalents CGC Investments held in Trust Account Accumulated deficit Transfer of CGC’s investments held in trust account 287,480 (287,480 ) Interest Earned on Investments Held in Trust Account 1,611 (1,611 ) Total 287,480 (285,869 ) (1,611 ) (c) Reflects the following pro forma adjustments for transaction costs associated with the Business Combination (refer to below table for pro forma entries): CGC’s transaction expenses of approximately $8,048 related to the Business Combination, of which $11 had been paid as of March 31, 2026 and $8,037 was paid in cash at Closing. The transaction expenses of $8,048 includes a $4,311 underwriting fee, and other transaction costs of $3,737, including $1,147 incurred and expensed through March 31, 2026 (of which $11 had been paid as of March 31, 2026), and $2,590 incurred after March 31, 2026 through the Closing of the Business Combination. The expenses incurred after March 31, 2026, are recorded as expense for CGC through accumulated deficit and then reclassified into additional paid-in capital in consummation of the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP ASC 805. Under this method of accounting, Factorial is the accounting acquirer, and as a result, qualifying transaction costs incurred by Factorial are treated as deferred offering costs and any balance below the net proceeds from this reverse recapitalization will be charged directly to equity. This recording complies with the requirements of FASB ASC Topic 340-10-S99-1, “Other Assets and Deferred Costs — SEC Materials” (“ASC 340-10-S99”) and Commission Staff Accounting Bulletin Topic 5A, “Expenses of Offering”. Deferred offering costs consist of legal and other professional expenses incurred through the balance sheet date that are directly related to the Business Combination and are reflected in shareholders’ equity (deficit) in these pro formas of the Business Combination with any balance below the net proceeds from this Business Combination. Factorial’s transaction expenses are approximately $10,259 for transaction expenses related to the Business Combination. The transaction expenses of $10,259 include a $5,000 merger underwriting fee paid in both cash and PubCo Series A Common Stock, $3,468 of other related transaction expenses incurred through March 31, 2026 (of which $1,263 had been paid as of March 31, 2026), and $1,791 of other related transaction expenses incurred after March 31, 2026 through the close of the Business Combination. These costs are reflected in additional paid-in capital in these pro formas. The $5,000 merger underwriter fee was payable in $2,500 in cash and the remaining $2,500 in a combination of cash and publicly traded common equity securities of the post-combination company. The cash portion of this remaining amount equaled (a) a fraction, the numerator of which is the amount by which the total proceeds received by the combined company in connection with any equity financing consummated in connection with the Business Combination and the cash delivered from CGC’s trust account at the Closing exceed $75,000, and the denominator of which is $50,000, multiplied by (b) $2,500, with the remainder payable in shares of common equity of the post-combination company. Based on actual redemptions, $1,853 was payable in cash, and the remaining $647 was payable in Pubco Series A Common Stock. The adjustment of the $1,853 payment in PubCo Series A Common Stock is reflected in additional paid-in capital in these pro formas. Deferred UW Fee Payable Accrued Expenses Deferred Offering Costs Cash and cash equivalents Additional paid-in capital CGC cash payments of transaction expenses and adjustments (13,140 ) (1,147 ) (8,037 ) 6,250 Factorial cash payments of transaction expenses (2,205 ) (3,468 ) (8,349 ) (9,612 ) Total (13,140 ) (3,352 ) (3,468 ) (16,386 ) (3,362 ) (d) At the Merger Effective Time, the Institutional Investor purchased from PubCo an aggregate of 6,340,000 shares of PubCo Series A Common Stock for an aggregate purchase price of $55,000, pursuant to a stock purchase agreement and the Sponsor Investor purchased from PubCo an aggregate of 1,179,404 shares of PubCo Series A Common Stock, for an aggregate purchase price of $9,681 pursuant to a stock purchase agreement. The Institutional Investor and the Sponsor Investor satisfied in part their purchase obligations under the stock purchase agreements through purchases of 3,470,764 NRA Shares in the aggregate at market prices. Such shares were subject to Non-Redemption Agreements and the proceeds from CGC’s trust account released at Closing reflect non-redemption of such shares. CGC incurred PIPE Financing transactions costs of $3,750, leading to net PIPE Financing proceeds of $60,931. (e) Reflects the following pro forma adjustments for conversion of historical Factorial instruments associated with the Business Combination and the elimination of CGC accumulated deficit: i. The assumption includes the conversion of the $15,340 face value of the Factorial Convertible Notes which converted, at fair value, in accordance with the respective agreements resulting in 766,397 shares of Factorial Common Stock. The resulting 766,397 shares of Factorial Common Stock were then exchanged into 2,811,447 shares of PubCo Series A Common Stock with a $0.0001 par value per share in accordance with the Business Combination. The Company elected the Fair Value Option for the Factorial Convertible Notes in accordance with ASC 825, Financial Instruments . The Factorial Convertible Notes issued from issuance respectively through the three months ended March 31, 2026, included an aggregate fair value adjustment of $10,596 as of March 31, 2026. The pro forma adjustments also give effect to the change in conversion value of the Factorial Convertible Notes issued in May 2026 as a result of the Business Combination representing its carrying value of May 2026 Notes plus assumed interest through June 5, 2026 for pro forma purposes. As such, the estimated carrying value of the Factorial Convertible Notes required an incremental adjustment to accumulated deficit of $3,123, which consists of incremental value inclusive of the conversion value of interest to adjust the Factorial Convertible Notes to $29,059 as of the Merger Effective Time. ii. The conversion of 18,349,937 shares of Factorial Preferred Stock into Factorial Common Stock on a one-to-one basis and then exchanged into 67,314,957 shares of PubCo Series A Common Stock with a $0.0001 par value per share. iii. The cashless exercise of 295,558 Factorial Warrants into 362,625 shares of Factorial Common Stock immediately before the consummation of the Business Combination and then exchanged into 372,907 PubCo Series A Common Stock. iv. The exchange of 839,951 shares of Factorial Common Stock into 3,081,263 shares of PubCo Series A Common Stock with a $0.0001 par value per share. v. The exchange of 4,228,739 shares of Factorial Common Stock into 15,512,744 shares of PubCo Series B Common Stock with a $0.0001 par value per share. This adjustment has no impact on additional paid-in capital. vi. The removal of Factorial Treasury Stock into additional paid-in capital immediately prior to the Merger Effective Time by the Company as treasury stock was be automatically cancelled and extinguished, and no consideration was paid with respect thereto. vii. The elimination of historical CGC accumulated deficit of $14,009, through additional paid-in capital, net of the accumulated deficit impact of the assumed $3,123 change in fair value on the Factorial Convertible Notes discussed in footnote (e)(i). The income impact of the CGC pro forma interest earned on investments held in Trust of $1,611 discussed in footnotes (b) and (f)(i) and the accumulated deficit impact of the CGC transaction costs estimated to be incurred after May 31, 2026 of $2,590 discussed in footnote (c) are reclassified into additional paid-in capital due to the effects of the Business Combination as they represent income and expenses of CGC that are eliminated. (f) Reflects the following pro forma adjustments for redemptions associated with the Business Combination (refer to below table for pro forma entries): i. 4,548,687 CGC Class A Ordinary shares previously subject to redemption for cash but not redeemed (accreted to the Redemption Price through an adjustment to accumulated deficit of $1,611 through the adjustment discussed in footnote (b)) and transferred to shareholders’ equity at $0.00001 par value. ii. The conversion of 6,900,000 CGC Class B Shares into 6,900,000 shares of PubCo Series A Common Stock, with a par value $0.00001 per share. Additionally, both the CGC Private Warrants and CGC Public Warrants survive the Business Combination and convert into PubCo Warrants and therefore result in no pro forma financial statement impact. CGC Class A Common Stock Subject to Redemption CGC Class B Common Stock Accumulated deficit PubCo Series A common stock Additional paid-in capital Cash and cash equivalents Redemptions (285,869 ) - (1,611 ) - 47,379 (240,101 ) CGC Class B Conversion (1 ) 1 Total (285,869 ) (1 ) (1,611 ) 14 47,379 (240,101 ) Unaudited Condensed Combined Pro Forma Statement of Operations For the Three Months Ended March 31, 2026 (in thousands, except share and per share data) Pro Forma Combined Historical Transaction Accounting Pro Forma Statement of CGCT Factorial Adjustments Notes Operations Operating expenses: Research and development, net $ - $ 1,942 $ - $ 1,942 Selling, general and administrative 811 4,549 2,590 (a) 7,950 Total operating expense 811 6,491 2,590 9,892 Loss from operations (811 ) (6,491 ) (2,590 ) (9,892 ) Financing costs related to issuance of convertible promissory note - (37 ) 37 (b) - Change in fair value of warrant liability - (106 ) 106 (b) - Change in fair value of convertible promissory notes - (1,707 ) 1,707 (b) - Other income (expense), net 2,492 (234 ) (2,492 ) (c) (234 ) Income (loss) before provision for income taxes 1,680 (8,575 ) (3,232 ) (10,126 ) Income tax expense - - - - Net income/(loss) $ 1,680 $ (8,575 ) $ (3,232 ) $ (10,126 ) Basic and diluted weighted average shares outstanding, Class A Common Stock Subject to Redemption 27,600,000 - Basic and diluted net income per share, Class A Common Stock Subject to Redemption $ 0.06 $ - Basic and diluted weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable 6,900,000 - Basic net loss per share, CGC Class B Common Stock, non-redeemable $ 0.24 $ - Basic and diluted weighted average common stock outstanding 5,056,994 Basic and diluted net loss per share, common stock $ (1.70 ) Basic and diluted pro forma weighted average shares outstanding 107,023,245 (d) Basic and diluted pro forma net loss per share $ (0.09 ) The pro forma adjustments to the unaudited condensed combined pro forma statement of operations for the three months ended March 31, 2026 consist of the following: (a) Reflects CGC’s transaction expenses of approximately $2,590 ($3,737 total less $1,147 expensed by CGC through March 31, 2026) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders’ equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles related to reverse recapitalizations. (b) Represents an adjustment to eliminate the financing costs related to Factorial’s issuance of Factorial Convertible Notes during the three months ended March 31, 2026, the change in fair value of the Factorial Convertible Notes issued during the three months ended March 31, 2026, and change in the fair value of the Factorial Warrants during the three months ended March 31, 2026, as this pro forma financial information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the exchange of the Factorial Convertible Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest period presented (i.e., January 1, 2025). (c) Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds from CGC’s IPO held in Trust for the three months ended March 31, 2026. (d) The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed in the Business Combination for the entire period. Net Loss per Share Net loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025. The following unaudited pro forma condensed combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders at the time of the Business Combination for the three months ended March 31, 2026. Calculation of pro forma net loss per share excludes the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075 shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance under the PubCo Incentive Plan and ESPP. Further, under the Business Combination Agreement, the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of such awards. Therefore, the impact of Factorial Options and Factorial RSUs has been excluded from these unaudited condensed pro forma financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following the Business Combination. Pro Forma Combined For the three months ended March 31, 2026 Pro forma net loss $ (10,126 ) Pro forma basic and diluted net loss per share $ (0.09 ) Number of shares of PubCo Common Stock CGC’s Public Shareholders 4,548,687 Sponsor and DirectorCo 5,810,000 PIPE Institutional Investor 6,340,000 PIPE Sponsor Investor 1,179,404 Factorial Shareholders 89,083,036 Cantor Advisory Fee 62,118 Total shares outstanding 107,023,245 Unaudited Condensed Combined Pro Forma Statement of Operations For the Year Ended December 31, 2025 (in thousands, except share and per share data) Pro Forma Combined Historical Transaction Accounting Pro Forma Statement of CGCT Factorial Adjustments Notes Operations Operating expenses: Research and development, net $ - $ 24,323 $ - $ 24,323 Selling, general and administrative 1,158 22,202 3,061 (a) 26,421 Loss and impairment on lease termination - 17,063 - 17,063 Total operating expense 1,158 63,588 3,061 67,807 Loss from operations (1,158 ) (63,588 ) (3,061 ) (67,807 ) Financing costs related to issuance of convertible promissory note - (4,608 ) 4,608 (b) - Change in fair value of warrant liability - (2,230 ) 2,230 (b) - Change in fair value of convertible promissory notes - (4,389 ) 4,389 (b) - Other income (expense), net 7,377 970 (7,377 ) (c) 970 Income (loss) before provision for income taxes 6,219 (73,845 ) 789 (66,837 ) Income tax expense - - - - Net income/(loss) $ 6,219 $ (73,845 ) $ 789 $ (66,837 ) Basic and diluted weighted average shares outstanding, Class A Common Stock Subject to Redemption 18,197,802 - Basic and diluted net income per share, Class A Common Stock Subject to Redemption $ 0.25 $ - Basic weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable 6,593,407 - Basic net loss per share, CGC Class B Common Stock, non-redeemable $ 0.25 $ - Diluted weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable 6,900,000 - Diluted net loss per share, CGC Class B Common Stock, non-redeemable $ 0.25 $ - Basic and diluted weighted average common stock outstanding 5,026,704 Basic and diluted net loss per share, common stock $ (14.69 ) Basic and diluted pro forma weighted average shares outstanding 107,023,245 (d) Basic and diluted pro forma net loss per share $ (0.62 ) The pro forma adjustments to the unaudited condensed combined pro forma statement of operations for the year ended December 31, 2025 consist of the following: (a) Reflects CGC’s transaction expenses of approximately $3,061 ($3,737 total less $676 expensed by CGC through December 31, 2025) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders’ equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles related to reverse recapitalizations. (b) Represents an adjustment to eliminate the financing costs related to Factorial’s issuance of Factorial Convertible Notes during the year ended December 31, 2025, the change in fair value of the Factorial Convertible Notes issued during the year ended December 31, 2025, and change in the fair value of the Factorial Warrants during the year ended December 31, 2025, as this pro forma financial information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the exchange of the Factorial Convertible Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest period presented (i.e., January 1, 2025). (c) Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds from CGC’s IPO held in Trust for the year ended December 31, 2025. (d) The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number of shares redeemed in the Business Combination for the entire period. Net Loss per Share Net loss per share was calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares were outstanding since January 1, 2025. The following unaudited pro forma condensed combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders at the time of the Business Combination for the year ended December 31, 2025. Calculation of pro forma net loss per share excludes the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075 shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance under the PubCo Incentive Plan and ESPP. Further, under the Business Combination Agreement, the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of such awards. Therefore, the impact of Factorial Options and Factorial RSUs has been excluded from these unaudited condensed pro forma financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following the Business Combination. Pro Forma Combined For the three months ended March 31, 2026 Pro forma net loss $ (66,837 ) Pro forma basic and diluted net loss per share $ (0.62 ) Number of shares of PubCo Common Stock CGC’s Public Shareholders 4,548,687 Sponsor and DirectorCo 5,810,000 PIPE Institutional Investor 6,340,000 PIPE Sponsor Investor 1,179,404 Factorial Shareholders 89,083,036 Cantor Advisory Fee 62,118 Total shares outstanding 107,023,245

Document text

EX-99.2 · tm2617149d1_ex99-2.htm

EX-99.2
 24
 tm2617149d1_ex99-2.htm
 EXHIBIT 99.2

 Exhibit 99.2

 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
INFORMATION

(in thousands, except share and per share data, unless otherwise stated)

 Capitalized terms used but not defined in this
Exhibit 99.2 shall have the meanings ascribed to them in the Current Report on Form 8-K (&ldquo;Form 8-K&rdquo;) filed
with the Securities and Exchange Commission (the &ldquo;Commission&rdquo;) on June 10, 2026 and, if not defined in the Form 8-K,
capitalized terms used but not defined in this Exhibit 99.2 shall have the meanings ascribed to them in the definitive proxy statement/prospectus
filed by Cartesian Growth Corporation III with the Commission on May 6, 2026, prior to the consummation of the business combination
(the &ldquo;Proxy Statement/Prospectus&rdquo;).

 Introduction

 The following is selected unaudited pro forma
condensed combined financial information to aid you in your analysis of the financial aspects of the Business Combination and related
transactions.

 The unaudited pro forma condensed combined
balance sheet as of March 31, 2026 gives pro forma effect to the Business Combination as if it was consummated on March 31,
2026. The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2026 and the
year ended December 31, 2025 give pro forma effect to the Business Combination as if it was consummated on January 1, 2025,
the beginning of the earliest period presented.

 The unaudited pro forma condensed combined
financial information was derived from and should be read in conjunction with the following:

 &middot; Factorial&rsquo;s unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2026,
included as Exhibit 99.1 to the Form 8-K;

 &middot; Factorial&rsquo;s audited consolidated financial statements for the year ended December 31, 2025, included in the Proxy
Statement/Prospectus;

 &middot; CGC&rsquo;s unaudited condensed financial statements as of and for the three months ended March 31, 2026, included in the Quarterly
Report on Form 10-Q filed with the Commission on May 15, 2026; and

 &middot; CGC&rsquo;s audited financial statements for the year ended
December 31, 2025, included in the Annual Report on Form 10-K filed with the Commission on March 23, 2026; and

 &middot; Factorial Common Stock is calculated based on shares outstanding as of the Merger Effective Time, and shares underlying vested and
outstanding Factorial Options as of the Merger Effective Time for purposes of determining the Consideration Ratio.

 The unaudited pro forma condensed combined financial
information should also be read together with &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of
Operations of Factorial&rdquo; included in Exhibit 99.3 to the Form 8-K and incorporated by reference.

 The unaudited pro forma condensed combined
financial information has been presented for illustrative purposes only and does not necessarily reflect what the actual results of operations
of the combined company would have been had the Business Combination occurred on March 31, 2026 or January 1, 2025, respectively.
The unaudited pro forma condensed combined financial information has been prepared, in accordance with Article 11 of Regulation S-X
and is for informational purposes only. It is subject to several uncertainties and assumptions as described in the accompanying notes.

 Further, the unaudited pro forma condensed
combined financial information also may not be useful in predicting the future financial condition and results of operations of the combined
company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein
due to a variety of factors. The unaudited pro forma adjustments represent management&rsquo;s estimates based on information available
as of the date of these unaudited pro forma condensed combined financial statements and are subject to change as additional information
becomes available and analyses are performed.

 Description of the Transaction

 On December 17, 2025, CGC entered into the
Business Combination Agreement with Factorial and Merger Sub, pursuant to which on June 5, 2026 (the &ldquo;Merger Effective Time&rdquo;)
Merger Sub merged with and into Factorial, with Factorial surviving the merger as a wholly-owned subsidiary of CGC.

 The board of directors of CGC has approved the
Business Combination and the Domestication. In connection with, and as part of, the Domestication, CGC became a Delaware corporation and
changed its corporate name to Factorial Energy, Inc. (&ldquo;PubCo&rdquo;) and all outstanding securities of CGC converted into securities
of PubCo, as described in more detail in the Proxy Statement/Prospectus.

 By virtue of the Merger and without any action
on the part of any Party or any other person, the Aggregate Merger Consideration, equal to the Equity Value of $1.1 billion, consisting
of a number of shares of PubCo Common Stock equal to the Equity Value divided by the Redemption Price, was issued as set forth in (i)-(iv) or
reserved for issuance as set forth in (v)-(vi) below:

 i. At the Merger Effective Time, each share of Factorial Common Stock that was issued and outstanding as of immediately prior to the
Merger Effective Time (excluding treasury shares, dissenting shares and shares held by the Factorial Founders) was automatically canceled
and converted into the right to receive a corresponding number of shares of PubCo Series A Common Stock equal to the Consideration
Ratio and each share of Factorial&rsquo;s capital stock that was issued and outstanding as of immediately prior to the Merger Effective
Time held by the Factorial Founders was automatically canceled and converted into the right to receive a corresponding number of shares
of PubCo Series B Common Stock equal to the Consideration Ratio;

 ii. The number of shares of Factorial Common Stock set forth in (i) above gave effect to:

 a. The conversion of each outstanding convertible debt instrument including accrued interest (including the Factorial Convertible Notes)
into Factorial Common Stock pursuant to its terms;

 b. The conversion of each issued and outstanding share of Factorial Preferred Stock into a number of shares of Factorial Common Stock
in accordance with the terms of Section 5.1 of the Factorial Certificate of Incorporation in effect immediately prior to the Merger
Effective Time; and

 c. The conversion of each issued and outstanding Factorial Warrant into a number of shares of Factorial Common Stock in accordance with
the terms of the corresponding warrant agreements;

 iii. each share of Factorial Common Stock held immediately prior to the Merger Effective Time by Factorial as treasury stock was automatically
cancelled and extinguished, and no consideration was paid with respect thereto;

 iv. each share of capital stock of Merger Sub issued and outstanding immediately prior to the Merger Effective Time was automatically
cancelled and extinguished and converted into one share of Factorial Common Stock;

 v. each outstanding and unexercised vested Factorial Option to purchase shares of Factorial Common Stock became a PubCo Option containing
the same terms, conditions, vesting and other provisions as were historically applicable to such Factorial Options and each resulting
PubCo Option became exercisable for the number of shares of PubCo Series A Common Stock equal to the Consideration Ratio multiplied
by the number of shares of Factorial common stock subject to the Factorial Option as of immediately prior to the Merger Effective Time,
rounded down to the nearest whole share, at an exercise price equal to the per share exercise price of the Factorial Option divided by
the Consideration Ratio, rounded up to the nearest whole cent; and

 vi. each Factorial RSU that was outstanding with respect to shares of Factorial Common Stock was cancelled in exchange for a PubCo RSU
under the PubCo Incentive Plan containing the same terms, conditions, vesting and other provisions as were historically applicable to
such Factorial RSU, and each resulting PubCo RSU will settle into a number of shares of PubCo Series A Common Stock equal to a number
of shares of PubCo Series A Common Stock as set forth on an allocation schedule, rounded down to the nearest whole share.

 In addition, PubCo consummated the PIPE Financing
pursuant to the PIPE Purchase Agreements. Under the Institutional Investor Stock Purchase Agreement, the Institutional Investor committed
to purchase 7,500,000 shares of PubCo Series A Common Stock for an aggregate purchase price of $75.0 million at $10.00 per share.
Prior to Closing, the Institutional Investor purchased 2,000,000 Class A ordinary shares of CGC in open market or privately negotiated
transactions, which reduced its remaining PIPE Financing purchase commitment on a share-for-share basis. Accordingly, through the PIPE
Financing, PubCo issued 5,500,000 shares of PubCo Series A Common Stock to the Institutional Investor for an aggregate purchase price
of $55.0 million. Under the Sponsor Investor Stock Purchase Agreement, the Sponsor Investor committed to purchase 2,400,168 shares of
PubCo Series A Common Stock (based on the Merger Effective Time Redemption Price) for an aggregate purchase price of $25.0 million.
Prior to Closing, the Sponsor Investor purchased 1,470,764 Class A ordinary shares of CGC in the open market, which reduced its remaining
PIPE Financing purchase commitment on a share-for-share basis. Accordingly, through the PIPE Financing, PubCo issued 929,404 shares of
PubCo Series A Common Stock to the Sponsor Investor at the closing Redemption Price of $10.41593671 per share, for an aggregate purchase
price of approximately $9.7 million.

 In connection with the Institutional Investor&rsquo;s
open market purchases, and pursuant to the Letter Agreement among the Institutional Investor, Factorial and the Sponsor executed on May 18,
2026, the Sponsor transferred at Closing 90,000 shares of PubCo Series A Common Stock to the Institutional Investor, representing
the $900,000 Differential Amount divided by $10.00, and Factorial reimbursed the Sponsor in cash for such Differential Amount. In addition,
pursuant to the Investor Stock Purchase Agreements, the Sponsor transferred, directly or indirectly through forfeiture and reissuance,
an aggregate of 750,000 shares of PubCo Series A Common Stock to the Institutional Investor and 250,000 shares of PubCo Series A
Common Stock to the Sponsor Investor. After giving effect to these Sponsor share transfers , the Institutional Investor received 6,340,000
shares for $55.0 million, or an effective purchase price of approximately $8.68 per share, and the Sponsor Investor effectively received
1,179,404 shares for $9.7 million, or an effective purchase price of approximately $8.21 per share. Note that based on the nature of such
Sponsor to investor transfers, no expense is recorded by PubCo as a result of the transfers.

 The diagram below depicts a simplified version
of the combined company&rsquo;s organizational structure immediately following the consummation of the Business Combination and the PIPE
Financing:

 Set forth below is a calculation, on a per CGC
Class A Ordinary Share basis, of the approximate net cash received by PubCo from the Trust Account and PIPE Financing. Such calculations
are based upon (i) cash held in the Trust Account as of March 31, 2026 assuming the Merger Effective Time redemption price of
$10.41593671 (&ldquo;Redemption Price&rdquo;) per Public Share and (ii) $64,681 of gross cash proceeds received from the PIPE Financing,
and (iii) approximate transaction expenses of $22,057 including the estimated PIPE Financing transaction expenses of $3,750, Factorial&rsquo;s
approximate transaction expenses of $10,259, and CGC&rsquo;s approximate transaction expenses of $8,048. Pursuant to the Investor Stock
Purchase Agreements, the PIPE Investors were entitled to satisfy a portion of their respective purchase obligations through the acquisition
of Public Shares and the non-redemption of such shares. In connection with the Closing, the Institutional Investor acquired 2,000,000
Public Shares and the Sponsor Investor acquired 1,470,764 Public Shares, each of which reduced such investor&rsquo;s obligation to purchase
shares of PubCo Common Stock at Closing on a share-for-share basis. The calculations set forth below give effect to those Public Share
purchases in determining the number of shares of PubCo Common Stock issued to the PIPE Investors at Closing.

 Below is a calculation, on a per CGC Class A
Share basis, of the cash received by PubCo from the Trust Account and PIPE Financing, net of transaction expenses. The total number of
shares outstanding in the table below gives effect to the issuance of shares of PubCo Common Stock upon consummation of the Business Combination.

 (in thousands, except share and per share amounts)
 Actual
 Redemptions (1)

 CGC Class A Ordinary Shares Not Redeemed
 4,548,687

 Gross Cash Proceeds of Trust Account
 $ 47,379

 Gross Cash Proceeds from the PIPE Financing
 $ 64,681

 Transaction Expenses (2)
 $ 21,410

 Total Shares Outstanding
 107,023,245

 Net Cash per share of CGC Class A Shares
 $ 0.85

 (1) Reflects redemption of 23,051,313 of CGC Class A Shares out of the 27,600,000 of CGC Class A Ordinary Shares available for
redemption by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764
CGC Class A Shares (the &ldquo;NRA Shares&rdquo;) that the Institutional Investor and the Sponsor Investor purchased prior to the
Closing to partially satisfy their PIPE Financing obligations.

 (2) Includes cash transaction expenses relating to both the Business Combination and the PIPE Financing. This amount includes $1,346 of
cash transaction expenses paid prior to the Closing and $20,064. However, this amount excludes $647 that was payable in Pubco Series A
Common Stock for the merger underwriter fee as it&rsquo;s a non-cash transaction expense. Refer to Note (c) of the unaudited condensed
combined pro forma balance sheets as of March 31, 2026 for more information.

 Accounting for the Business Combination

 The Business Combination will be accounted for
as a reverse recapitalization in accordance with U.S. GAAP. Under a reverse recapitalization, CGC will be treated as the &ldquo;acquired&rdquo;
company for financial reporting purposes. Factorial has been determined to be the accounting acquirer based on evaluation of the following
facts and circumstances:

 &middot; Factorial&rsquo;s shareholders will have the largest voting interest in PubCo;

 &middot; As a result of such voting interest, Factorial&rsquo;s shareholders will have the ability to nominate a majority of the members of
the PubCo Board of Directors;

 &middot; Factorial&rsquo;s senior management will be the senior management of PubCo; and

 &middot; Factorial is the larger entity, in terms of substantive operations and employee base.

 Accordingly, for accounting purposes, the Business
Combination will be treated as the equivalent of Factorial issuing shares for the net assets of CGC, accompanied by a recapitalization.
The net assets of CGC will be stated at fair value, with no goodwill or other intangible assets recorded. Operations prior to the Business
Combination will be those of Factorial.

 Basis of Pro Forma Presentation

 The historical financial information has been
adjusted to give pro forma effect to Factorial&rsquo;s issuance of Factorial Convertible Notes in May 2026, that converted into
Pubco Series A Common Stock in connection with the Business Combination. Although the Factorial Convertible Notes converted into
Pubco Series A Common Stock in connection with the Business Combination, such Factorial Convertible Notes were not issued in connection
with, or contingent upon, the Business Combination, as the August 2025 Factorial Convertible Notes were issued to existing investors
in Factorial prior to the negotiation of the Business Combination Agreement and the January and May 2026 Factorial Convertible
Notes were issued to strategic partners with whom Factorial is party to commercial arrangements and all of the shares issuable upon conversion
of the Factorial Convertible Notes have been included in the Aggregate Fully Diluted Factorial Shares. For the Factorial Convertible Notes
issued in May 2026, the Company estimated the pro forma effect for proceeds received under such convertible notes through the
Merger Effective Time. The pro forma effect of the May 2026 Factorial Convertible Notes issuance has been assumed to have occurred
as of March 31, 2026 for balance sheet purposes. The adjustments presented on the unaudited pro forma condensed combined financial
statements have been identified and presented to provide relevant information necessary for a more accurate understanding of the combined
company upon consummation of the Business Combination.

 The pro forma adjustments included in the
unaudited pro forma condensed combined balance sheet as of March 31, 2026 and in the unaudited pro forma condensed combined
statements of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 are based on preliminary
estimates. The final amounts recorded may differ from the information presented.

 Factorial and CGC did not have any historical
relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between
the companies.

 The pro forma shares of the combined common
stock issued and outstanding immediately after the Business Combination are presented below:

 Pro Forma Combined

 CGC&rsquo;s Public Shareholders (1)
 4,548,687

 Sponsor and DirectorCo (2)
 5,810,000

 PIPE Institutional Investor (3)
 6,340,000

 PIPE Sponsor Investor (4)
 1,179,404

 Factorial Shareholders (5)
 89,083,036

 Cantor Advisory Fee (6)
 62,118

 Total shares outstanding
 107,023,245

 (1) Reflects redemption of 23,051,313 CGC Class A Shares out of the 27,600,000 CGC Class A Ordinary Shares available for redemption
by CGC Public Shareholders prior to the Closing. Note that the 4,548,687 shares presented herein include an aggregate of 3,470,764 CGC
Class A Shares (the &ldquo;NRA Shares&rdquo;) that the Institutional Investor and the Sponsor Investor purchased prior to the Closing
to partially satisfy their PIPE Financing obligations.

 (2) Amount includes 5,710,000 Founder Shares held by the Sponsor and 100,000 Founder Shares held by DirectorCo (in which, each of CGC&rsquo;s
independent directors hold an interest in 30,000 Founder Shares).

 (3) Amount includes (i) the Institutional Investor&rsquo;s subscription for 5,500,000 shares of PubCo Series A Common Stock
at a subscription price of $10.00 per share; plus (ii) the constructive transfer at the Closing of an aggregate of 750,000 shares
of PubCo Series A Common Stock from the Sponsor to the Institutional Investor; and plus (iii) an aggregate of 90,000 shares
of Pubco Series A Common Stock constructively transferred to the Institutional Investor by the Sponsor as part of the Letter Agreement.
The effective subscription price of the Institutional Investor is $8.68 per share, taking into account the foregoing transfers from the
Sponsor.

 (4) Amount includes (i) the Sponsor Investor&rsquo;s subscription for 929,404 shares of PubCo Series A Common Stock at a subscription
price equal to the Redemption Price; plus (ii) the constructive transfer at the Closing of an aggregate of 250,000 shares of PubCo
Series A Common Stock from the Sponsor to the Sponsor Investor. The effective subscription price of the Sponsor Investor is $8.21
per share, taking into account the foregoing transfer from the Sponsor.

 (5) Includes (i) an aggregate of 3,081,263 shares of PubCo Series A Common Stock issued to holder of Factorial Common Stock
from conversion of Factorial Common Stock based upon the Consideration Ratio; (ii) an aggregate of 15,512,744 shares of PubCo Series B
Common Stock issued to the Factorial Founders from the exchange of shares of Factorial Common Stock based upon the Consideration Ratio;
(iii) an aggregate of 67,314,957 shares of PubCo Series A Common Stock issued to holders of Factorial Preferred Stock from the
exchange of shares of Factorial Preferred Stock; (iv) an aggregate of 2,811,447 shares of PubCo Series A Common Stock issued
to holders of the Factorial Convertible Notes from conversion of the Factorial Convertible Notes along with accrued interest into shares
of Factorial Common Stock immediately before the Business Combination and the subsequent exchange into shares of PubCo Series A Common
Stock; and (v) an aggregate of 362,625 shares of PubCo Series A Common Stock issued to holders of the Factorial Warrants from
their cashless exercise of the warrants for shares of Factorial Preferred Stock and converted into shares of Factorial Common Stock immediately
before the Business Combination and subsequent exchange for PubCo Series A Common Stock.

 (6) Amount includes 62,118 shares of PubCo Series A Common Stock issued to Cantor pursuant to the financial advisor engagement letter
as outlined in the section entitled &ldquo; Certain Engagements in Connection with the Business Combination &rdquo; of the Proxy
Statement/Prospectus.

 Unaudited Condensed Combined Pro Forma Balance
Sheets as of March 31, 2026

(in thousands, except share and per share data)

 Pro
 Forma

 Pro
 Forma Combined

 Historical

 Adjustments for

 Q2 2026

 Transaction

 Accounting

 Pro
 Forma Balance

 CGCT

 Factorial

 Transactions

 Notes

 Adjustments

 Notes

 Sheet

 Assets

 Current assets:

 Cash and cash equivalents

 $
 396

 $
 25,449

 $
 1,040

 (a)

 $
 287,480

 (b)

 $
 118,808

 (240,101
 )

 (f)

 (16,386
 )

 (c)

 60,931

 (d)

 Deferred offering costs

 -

 3,468

 -

 (3,468
 )

 (c)

 -

 Prepaid expenses and
 other current assets

 113

 5,078

 -

 -

 5,191

 Total current assets

 509

 33,995

 1,040

 88,455

 123,999

 Restricted cash

 -

 884

 -

 -

 884

 Property and equipment,
 net

 -

 20,206

 -

 -

 20,206

 Operating lease right-of-use
 assets, net

 -

 7,266

 -

 -

 7,266

 Other assets

 10

 40

 -

 -

 50

 CGC Investments held
 in Trust Account

 285,869

 -

 -

 (285,869
 )

 (b)

 -

 Total assets

 $
 286,388

 $
 62,391

 $
 1,040

 $
 (197,414
 )

 $
 152,405

 Liabilities, convertible preferred stock and stockholders'
 equity (deficit)

 Current liabilities:

 Accounts payable

 $
 -

 $
 656

 $
 -

 $
 -

 $
 656

 Accrued expenses

 1,312

 4,128

 -

 (3,352
 )

 (c)

 2,088

 Accrued offering costs

 75

 -

 -

 -

 75

 Operating lease liabilities,
 current portion

 -

 1,401

 -

 -

 1,401

 Total current liabilities

 1,387

 6,185

 -

 (3,352
 )

 4,220

 Operating lease liabilities,
 net of current portion

 -

 6,817

 -

 -

 6,817

 Convertible notes liability

 -

 24,896

 1,040

 (a)

 (25,936
 )

 (e)

 -

 Deferred UW fee payable

 13,140

 -

 -

 (13,140
 )

 (c)

 -

 Warrant liability

 -

 3,484

 -

 (3,484
 )

 (e)

 -

 Total liabilities

 14,527

 41,382

 1,040

 (45,912
 )

 11,037

 Redeemable convertible preferred stock

 Factorial Series A-1
 redeemable convertible preferred stock

 -

 327

 -

 (327
 )

 (e)

 -

 Factorial Series A-2
 redeemable convertible preferred stock

 -

 655

 -

 (655
 )

 (e)

 -

 Factorial Series B-1
 redeemable convertible preferred stock

 -

 2,169

 -

 (2,169
 )

 (e)

 -

 Factorial Series C-1
 redeemable convertible preferred stock

 -

 28,303

 -

 (28,303
 )

 (e)

 -

 Factorial Series C-2
 redeemable convertible preferred stock

 -

 26,013

 -

 (26,013
 )

 (e)

 -

 Factorial Series D
 redeemable convertible preferred stock

 -

 192,185

 -

 (192,185
 )

 (e)

 -

 CGC Class A common
 stock subject to redemption

 285,869

 -

 -

 (285,869
 )

 (f)

 -

 Total redeemable convertible preferred stock

 285,869

 249,652

 -

 (535,521
 )

 -

 Stockholders&rsquo; equity (deficit)

 PubCo Series A common
 stock

 -

 -

 -

 8

 (e)

 9

 1

 (f)

 Pubco Series B common
 stock

 -

 -

 -

 2

 (e)

 2

 CGC Class B Common
 Stock

 1

 -

 -

 (1
 )

 (f)

 -

 Additional paid-in capital

 -

 36,285

 -

 (3,362
 )

 (c)

 409,374

 268,142

 (e)

 47,379

 (f)

 60,931

 (d)

 Accumulated deficit

 (14,009
 )

 (264,151
 )

 -

 10,886

 (e)

 (267,274
 )

 Accumulated other comprehensive
 income

 -

 (743
 )

 -

 -

 (743
 )

 Factorial Treasury stock

 -

 (34
 )

 -

 34

 (e)

 -

 Total stockholders' equity
 (deficit)

 (14,008
 )

 (228,643
 )

 -

 384,020

 141,368

 Total liabilities, convertible preferred stock and
 stockholders' equity (deficit)

 $
 286,388

 $
 62,391

 $
 1,040

 $
 (197,414
 )

 $
 152,405

 The pro forma
adjustments to the unaudited condensed combined pro forma balance sheet as of March 31, 2026 consist of the following:

 (a) Reflects Factorial&rsquo;s issuance of additional Convertible Notes in May 2026 for an aggregate $1,040 face value, which were
converted, along with accrued interest, into Factorial Common Stock immediately before the consummation of the Business Combination necessitating
inclusion in these pro forma adjustments. Note that Factorial has elected the Fair Value Option for the Convertible Notes in accordance
with ASC 825, Financial Instruments; however, these pro forma adjustments for the May 2026 transaction herein are not
giving effect to any change in fair value of the notes on the date of issuance stemming from such election. Assumptions regarding changes
in fair value, including accrued interest, of the Factorial Convertible Notes, are recorded as transaction accounting adjustments in (e).

 (b) Represents the interest earned, based on the Redemption Price of $10.41593671 per CGC Class A Ordinary Share, on investments
held in the Trust Account held by CGC of $1,611, and the transfer of both CGC&rsquo;s investments held in the Trust Account, and the interest
earned to cash and cash equivalents prior to the consideration of Redemptions as outlined in (f). Refer to the below table for the pro forma
entries. The interest earned is recorded as income for CGC through accumulated deficit and then reclassified into additional paid-in capital
because of the Business Combination as described in (f)(i). Refer to the below table for the pro forma entries:

 Cash and cash
 equivalents
 CGC Investments
 held in Trust Account
 Accumulated
 deficit

 Transfer of CGC&rsquo;s investments held in trust account
 287,480
 (287,480 )

 Interest Earned on Investments Held in Trust Account

 1,611
 (1,611 )

 Total
 287,480
 (285,869 )
 (1,611 )

 (c) Reflects the following pro forma adjustments for transaction costs associated with the Business Combination (refer to below table
for pro forma entries):

 CGC&rsquo;s transaction expenses of approximately $8,048
related to the Business Combination, of which $11 had been paid as of March 31, 2026 and $8,037 was paid in cash at Closing. The
transaction expenses of $8,048 includes a $4,311 underwriting fee, and other transaction costs of $3,737, including $1,147 incurred and
expensed through March 31, 2026 (of which $11 had been paid as of March 31, 2026), and $2,590 incurred after March 31,
2026 through the Closing of the Business Combination. The expenses incurred after March 31, 2026, are recorded as expense for CGC
through accumulated deficit and then reclassified into additional paid-in capital in consummation of the Business Combination.

 The Business Combination will be accounted for as a reverse
recapitalization in accordance with U.S. GAAP ASC 805. Under this method of accounting, Factorial is the accounting acquirer, and as a
result, qualifying transaction costs incurred by Factorial are treated as deferred offering costs and any balance below the net proceeds
from this reverse recapitalization will be charged directly to equity. This recording complies with the requirements of FASB ASC Topic
340-10-S99-1, &ldquo;Other Assets and Deferred Costs&thinsp;&mdash;&thinsp;SEC Materials&rdquo; (&ldquo;ASC 340-10-S99&rdquo;) and Commission
Staff Accounting Bulletin Topic 5A, &ldquo;Expenses of Offering&rdquo;. Deferred offering costs consist of legal and other professional
expenses incurred through the balance sheet date that are directly related to the Business Combination and are reflected in shareholders&rsquo;
equity (deficit) in these pro formas of the Business Combination with any balance below the net proceeds from this Business Combination.

 Factorial&rsquo;s transaction expenses are approximately
$10,259 for transaction expenses related to the Business Combination. The transaction expenses of $10,259 include a $5,000 merger underwriting
fee paid in both cash and PubCo Series A Common Stock, $3,468 of other related transaction expenses incurred through March 31,
2026 (of which $1,263 had been paid as of March 31, 2026), and $1,791 of other related transaction expenses incurred after March 31,
2026 through the close of the Business Combination. These costs are reflected in additional paid-in capital in these pro formas.

 The $5,000 merger underwriter fee was payable in $2,500
in cash and the remaining $2,500 in a combination of cash and publicly traded common equity securities of the post-combination company.
The cash portion of this remaining amount equaled (a) a fraction, the numerator of which is the amount by which the total proceeds
received by the combined company in connection with any equity financing consummated in connection with the Business Combination and the
cash delivered from CGC&rsquo;s trust account at the Closing exceed $75,000, and the denominator of which is $50,000, multiplied by (b) $2,500,
with the remainder payable in shares of common equity of the post-combination company. Based on actual redemptions, $1,853 was payable
in cash, and the remaining $647 was payable in Pubco Series A Common Stock. The adjustment of the $1,853 payment in PubCo Series A
Common Stock is reflected in additional paid-in capital in these pro formas.

 Deferred
 UW Fee
 Payable
 Accrued
 Expenses
 Deferred
 Offering
 Costs
 Cash and
 cash
 equivalents
 Additional
 paid-in
 capital

 CGC cash payments of transaction expenses and adjustments
 (13,140 )
 (1,147 )

 (8,037 )
 6,250

 Factorial cash payments of transaction expenses

 (2,205 )
 (3,468 )
 (8,349 )
 (9,612 )

 Total
 (13,140 )
 (3,352 )
 (3,468 )
 (16,386 )
 (3,362 )

 (d) At the Merger Effective Time, the Institutional Investor purchased from PubCo an aggregate of 6,340,000 shares of PubCo Series A
Common Stock for an aggregate purchase price of $55,000, pursuant to a stock purchase agreement and the Sponsor Investor purchased from
PubCo an aggregate of 1,179,404 shares of PubCo Series A Common Stock, for an aggregate purchase price of $9,681 pursuant to a stock
purchase agreement. The Institutional Investor and the Sponsor Investor satisfied in part their purchase obligations under the stock purchase
agreements through purchases of 3,470,764 NRA Shares in the aggregate at market prices. Such shares were subject to Non-Redemption Agreements
and the proceeds from CGC&rsquo;s trust account released at Closing reflect non-redemption of such shares. CGC incurred PIPE Financing
transactions costs of $3,750, leading to net PIPE Financing proceeds of $60,931.

 (e) Reflects the following pro forma adjustments for conversion of historical Factorial instruments associated with the Business
Combination and the elimination of CGC accumulated deficit:

 i. The assumption includes the conversion of the $15,340 face value of the Factorial Convertible Notes which converted, at fair value,
in accordance with the respective agreements resulting in 766,397 shares of Factorial Common Stock. The resulting 766,397 shares of Factorial
Common Stock were then exchanged into 2,811,447 shares of PubCo Series A Common Stock with a $0.0001 par value per share in accordance
with the Business Combination. The Company elected the Fair Value Option for the Factorial Convertible Notes in accordance with ASC
825, Financial Instruments . The Factorial Convertible Notes issued from issuance respectively through the three months ended March 31,
2026, included an aggregate fair value adjustment of $10,596 as of March 31, 2026. The pro forma adjustments also give effect
to the change in conversion value of the Factorial Convertible Notes issued in May 2026 as a result of the Business Combination representing
its carrying value of May 2026 Notes plus assumed interest through June 5, 2026 for pro forma purposes. As such, the estimated
carrying value of the Factorial Convertible Notes required an incremental adjustment to accumulated deficit of $3,123, which consists
of incremental value inclusive of the conversion value of interest to adjust the Factorial Convertible Notes to $29,059 as of the Merger
Effective Time.

 ii. The conversion of 18,349,937 shares of Factorial Preferred Stock into Factorial Common Stock on a one-to-one basis and then exchanged
into 67,314,957 shares of PubCo Series A Common Stock with a $0.0001 par value per share.

 iii. The cashless exercise of 295,558 Factorial Warrants into 362,625 shares of Factorial Common Stock immediately before the consummation
of the Business Combination and then exchanged into 372,907 PubCo Series A Common Stock.

 iv. The exchange of 839,951 shares of Factorial Common Stock into 3,081,263 shares of PubCo Series A Common Stock with a $0.0001
par value per share.

 v. The exchange of 4,228,739 shares of Factorial Common Stock into 15,512,744 shares of PubCo Series B Common Stock with a $0.0001
par value per share. This adjustment has no impact on additional paid-in capital.

 vi. The removal of Factorial Treasury Stock into additional paid-in capital immediately prior to the Merger Effective Time by the Company
as treasury stock was be automatically cancelled and extinguished, and no consideration was paid with respect thereto.

 vii. The elimination of historical CGC accumulated deficit of $14,009, through additional paid-in capital, net of the accumulated deficit
impact of the assumed $3,123 change in fair value on the Factorial Convertible Notes discussed in footnote (e)(i). The income impact of
the CGC pro forma interest earned on investments held in Trust of $1,611 discussed in footnotes (b) and (f)(i) and the
accumulated deficit impact of the CGC transaction costs estimated to be incurred after May 31, 2026 of $2,590 discussed in footnote
(c) are reclassified into additional paid-in capital due to the effects of the Business Combination as they represent income and
expenses of CGC that are eliminated.

 (f) Reflects the following pro forma adjustments for redemptions associated with the Business Combination (refer to below table for
pro forma entries):

 i. 4,548,687 CGC Class A Ordinary shares previously subject to redemption for cash but not redeemed (accreted to the Redemption
Price through an adjustment to accumulated deficit of $1,611 through the adjustment discussed in footnote (b)) and transferred to shareholders&rsquo; equity
at $0.00001 par value.

 ii. The conversion of 6,900,000 CGC Class B Shares into 6,900,000 shares of PubCo Series A Common Stock, with a par value $0.00001
per share. Additionally, both the CGC Private Warrants and CGC Public Warrants survive the Business Combination and convert into PubCo
Warrants and therefore result in no pro forma financial statement impact.

 CGC
 Class A
 Common
 Stock
 Subject to
 Redemption
 CGC
 Class B
 Common
 Stock
 Accumulated
 deficit
 PubCo
 Series A
 common
 stock
 Additional
 paid-in
 capital
 Cash
 and
 cash
 equivalents

 Redemptions
 (285,869 )
 -
 (1,611 )
 -
 47,379
 (240,101 )

 CGC Class B Conversion

 (1 )

 1

 Total
 (285,869 )
 (1 )
 (1,611 )
 14
 47,379
 (240,101 )

 Unaudited Condensed Combined Pro Forma Statement
of Operations

For the Three Months Ended March 31, 2026

(in thousands, except share and per share data)

 Pro
 Forma Combined

 Historical
 Transaction

 Accounting

 Pro
 Forma Statement of

 CGCT
 Factorial
 Adjustments
 Notes
 Operations

 Operating expenses:

 Research
 and development, net
 $ -
 $ 1,942
 $ -

 $ 1,942

 Selling,
 general and administrative
 811
 4,549
 2,590
 (a)
 7,950

 Total
 operating expense
 811
 6,491
 2,590

 9,892

 Loss from operations
 (811 )
 (6,491 )
 (2,590 )

 (9,892 )

 Financing costs related to issuance
 of convertible promissory note
 -
 (37 )
 37
 (b)
 -

 Change in fair value of warrant
 liability
 -
 (106 )
 106
 (b)
 -

 Change in fair value of convertible
 promissory notes
 -
 (1,707 )
 1,707
 (b)
 -

 Other income
 (expense), net
 2,492
 (234 )
 (2,492 )
 (c)
 (234 )

 Income (loss) before provision
 for income taxes
 1,680
 (8,575 )
 (3,232 )

 (10,126 )

 Income
 tax expense
 -
 -
 -

 -

 Net income/(loss)
 $ 1,680
 $ (8,575 )
 $ (3,232 )

 $ (10,126 )

 Basic and
 diluted weighted average shares outstanding, Class A Common Stock Subject to Redemption
 27,600,000
 -

 Basic
 and diluted net income per share, Class A Common Stock Subject to Redemption
 $ 0.06
 $ -

 Basic and
 diluted weighted average common stock outstanding, CGC Class B Common Stock, non-redeemable
 6,900,000
 -

 Basic
 net loss per share, CGC Class B Common Stock, non-redeemable
 $ 0.24
 $ -

 Basic and
 diluted weighted average common stock outstanding

 5,056,994

 Basic
 and diluted net loss per share, common stock

 $ (1.70 )

 Basic and diluted pro forma
 weighted average shares outstanding

 107,023,245
 (d)

 Basic
 and diluted pro forma net loss per share

 $ (0.09 )

 The pro forma adjustments to the unaudited
condensed combined pro forma statement of operations for the three months ended March 31, 2026 consist of the following:

 (a) Reflects CGC&rsquo;s transaction expenses of approximately $2,590 ($3,737 total less $1,147 expensed by CGC through March 31,
2026) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of
transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders&rsquo;
equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles
related to reverse recapitalizations.

 (b) Represents an adjustment to eliminate the financing costs related to Factorial&rsquo;s issuance of Factorial Convertible Notes during
the three months ended March 31, 2026, the change in fair value of the Factorial Convertible Notes issued during the three months
ended March 31, 2026, and change in the fair value of the Factorial Warrants during the three months ended March 31, 2026, as
this pro forma financial information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the
exchange of the Factorial Convertible Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest
period presented (i.e., January 1, 2025).

 (c) Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds
from CGC&rsquo;s IPO held in Trust for the three months ended March 31, 2026.

 (d) The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination
occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if
it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes
that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number
of shares redeemed in the Business Combination for the entire period.

 Net Loss per Share

 Net loss per share was calculated using the historical
weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares
were outstanding since January 1, 2025.

 The following unaudited pro forma condensed
combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders
at the time of the Business Combination for the three months ended March 31, 2026. Calculation of pro forma net loss per share excludes
the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC
Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable
upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075
shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested
as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance
under the PubCo Incentive Plan and ESPP.

 Further, under the Business Combination Agreement,
the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive
provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying
shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself
cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of
such awards. Therefore, the impact of Factorial Options and Factorial RSUs has been excluded from these unaudited condensed pro forma
financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following
the Business Combination.

 Pro Forma Combined

 For the three months ended March 31, 2026

 Pro forma net loss
 $ (10,126 )

 Pro forma basic and diluted net loss per share
 $ (0.09 )

 Number of shares of PubCo Common Stock

 CGC&rsquo;s Public Shareholders
 4,548,687

 Sponsor and DirectorCo
 5,810,000

 PIPE Institutional Investor
 6,340,000

 PIPE Sponsor Investor
 1,179,404

 Factorial Shareholders
 89,083,036

 Cantor Advisory Fee
 62,118

 Total shares outstanding
 107,023,245

 Unaudited Condensed Combined Pro Forma Statement
of Operations

For the Year Ended December 31, 2025

(in thousands, except share and per share data)

 Pro
 Forma Combined

 Historical

 Transaction
 Accounting

 Pro
 Forma Statement of

 CGCT

 Factorial

 Adjustments

 Notes

 Operations

 Operating expenses:

 Research
 and development, net

 $
 -

 $
 24,323

 $
 -

 $
 24,323

 Selling,
 general and administrative

 1,158

 22,202

 3,061

 (a)

 26,421

 Loss
 and impairment on lease termination

 -

 17,063

 -

 17,063

 Total
 operating expense

 1,158

 63,588

 3,061

 67,807

 Loss from operations

 (1,158
 )

 (63,588
 )

 (3,061
 )

 (67,807
 )

 Financing costs related to
 issuance of convertible promissory note

 -

 (4,608
 )

 4,608

 (b)

 -

 Change in fair value of warrant
 liability

 -

 (2,230
 )

 2,230

 (b)

 -

 Change in fair value of convertible
 promissory notes

 -

 (4,389
 )

 4,389

 (b)

 -

 Other income (expense), net

 7,377

 970

 (7,377
 )

 (c)

 970

 Income (loss) before provision
 for income taxes

 6,219

 (73,845
 )

 789

 (66,837
 )

 Income
 tax expense

 -

 -

 -

 -

 Net income/(loss)

 $
 6,219

 $
 (73,845
 )

 $
 789

 $
 (66,837
 )

 Basic and diluted weighted
 average shares outstanding, Class A Common Stock Subject to Redemption

 18,197,802

 -

 Basic and diluted net income
 per share, Class A Common Stock Subject to Redemption

 $
 0.25

 $
 -

 Basic weighted average common
 stock outstanding, CGC Class B Common Stock, non-redeemable

 6,593,407

 -

 Basic net loss per share, CGC
 Class B Common Stock, non-redeemable

 $
 0.25

 $
 -

 Diluted weighted average common
 stock outstanding, CGC Class B Common Stock, non-redeemable

 6,900,000

 -

 Diluted net loss per share,
 CGC Class B Common Stock, non-redeemable

 $
 0.25

 $
 -

 Basic and diluted weighted
 average common stock outstanding

 5,026,704

 Basic and diluted net loss
 per share, common stock

 $
 (14.69
 )

 Basic and diluted pro forma
 weighted average shares outstanding

 107,023,245

 (d)

 Basic and diluted pro forma
 net loss per share

 $
 (0.62
 )

 The pro forma adjustments to the unaudited
condensed combined pro forma statement of operations for the year ended December 31, 2025 consist of the following:

 (a) Reflects CGC&rsquo;s transaction expenses of approximately $3,061 ($3,737 total less $676 expensed by CGC through December 31,
2025) related to the Business Combination, excluding the $4,311 underwriter fee. Note that this adjustment does not reflect $10,259 of
transaction expenses incurred by Factorial. The $10,259 of Factorial transaction expenses are presented net within stockholders&rsquo;
equity (deficit) on the unaudited combined pro forma balance sheet as of March 31, 2026 pursuant to applicable accounting principles
related to reverse recapitalizations.

 (b) Represents an adjustment to eliminate the financing costs related to Factorial&rsquo;s issuance of Factorial Convertible Notes during
the year ended December 31, 2025, the change in fair value of the Factorial Convertible Notes issued during the year ended December 31,
2025, and change in the fair value of the Factorial Warrants during the year ended December 31, 2025, as this pro forma financial
information assumes the Business Combination occurred on January 1, 2025 and therefore, includes the exchange of the Factorial Convertible
Notes and Factorial Warrants into shares of PubCo Series A Common Stock as of the earliest period presented (i.e., January 1,
2025).

 (c) Represents an adjustment to eliminate interest earned on marketable securities held in the Trust Account associated with the proceeds
from CGC&rsquo;s IPO held in Trust for the year ended December 31, 2025.

 (d) The calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the Business Combination
occurred as of the earliest period presented (January 1, 2025). In addition, as the Business Combination is being reflected as if
it had occurred on this date, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes
that the shares have been outstanding for the entire period presented. This calculation is retroactively adjusted to eliminate the number
of shares redeemed in the Business Combination for the entire period.

 Net Loss per Share

 Net loss per share was calculated using the historical
weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination, assuming the shares
were outstanding since January 1, 2025.

 The following unaudited pro forma condensed
combined financial information has been prepared to present the actual impact of redemptions of ordinary shares by Public Shareholders
at the time of the Business Combination for the year ended December 31, 2025. Calculation of pro forma net loss per share excludes
the following securities: (a) 20,600,000 shares of PubCo Series A Common Stock issuable upon the exercise of 13,800,000 CGC
Public Warrants and 6,800,000 CGC Private Warrants; (b) 24,755,591 shares of PubCo Series A Common Stock that will be issuable
upon the exercise or settlement of 19,639,374 Factorial Options, with a weighted average exercise price of $1.09 and of which 16,524,075
shares are exercisable based on shares outstanding as of the Merger Effective Time, and 5,116,217 Factorial RSUs, of which none are vested
as of the Merger Effective Time; and (c) any shares of PubCo Series A Common Stock that will initially be available for issuance
under the PubCo Incentive Plan and ESPP.

 Further, under the Business Combination Agreement,
the converted Factorial Options and Factorial RSUs retained substantially the same terms, including vesting conditions and other substantive
provisions, as were applicable immediately prior to the Business Combination, with only equitable adjustments to the number of underlying
shares and, for options, the exercise price to reflect the consideration ratio. As a result, the Business Combination did not in itself
cause these awards to vest nor is it expected to result in incremental stock-based compensation expense solely from the conversion of
such awards. Therefore, the impact of Factorial Options and Factorial RSUs has been excluded from these unaudited condensed pro forma
financial statements as such awards remained as outstanding equity awards and not PubCo Series A Common Stock immediately following
the Business Combination.

 Pro Forma Combined

 For the three months ended March 31, 2026

 Pro forma net loss
 $ (66,837 )

 Pro forma basic and diluted net loss per share
 $ (0.62 )

 Number of shares of PubCo Common Stock

 CGC&rsquo;s Public Shareholders
 4,548,687

 Sponsor and DirectorCo
 5,810,000

 PIPE Institutional Investor
 6,340,000

 PIPE Sponsor Investor
 1,179,404

 Factorial Shareholders
 89,083,036

 Cantor Advisory Fee
 62,118

 Total shares outstanding
 107,023,245

EX-99.3 · tm2617149d1_ex99-3.htm

Type

EX-99.3

File

tm2617149d1_ex99-3.htm

Document text
EX-99.3 · tm2617149d1_ex99-3.htm EX-99.3 25 tm2617149d1_ex99-3.htm EXHIBIT 99.3 Exhibit 99.3 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF FACTORIAL Capitalized terms used but not defined in this Exhibit 99.3 shall have the meanings ascribed to them in the Current Report on Form 8-K (“Form 8-K”) filed with the Securities and Exchange Commission (the “SEC”) on June 10, 2026 and, if not defined in the Form 8-K, capitalized terms used but not defined in this Exhibit 99.2 shall have the meanings ascribed to them in the definitive proxy statement/prospectus filed by Cartesian Growth Corporation III with the SEC on May 6, 2026, prior to the consummation of the business combination (the “Proxy Statement/Prospectus”). The following discussion and analysis of financial condition and results of operations of Factorial Inc. (for purposes of this section, “Factorial,” “Company,” “we,” “our” or “us”) should be read together with Factorial’s audited financial statements for the years ended December 31, 2025 and 2024 included in the Proxy Statement/Prospectus beginning on Page F-25, Factorial’s unaudited condensed financial statements for the three months ended March 31, 2026 and 2025, and related notes included in Exhibit 99.1 to this Form 8-K, as well as the unaudited pro forma condensed combined financial information included in Exhibit 99.2 to this Form 8-K. This discussion contains forward-looking statements reflecting our current expectations, estimates, and assumptions concerning events and financial trends that may affect our future operating results or financial position. Our actual results and the timing of events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included in the Proxy Statement/Prospectus. Overview Factorial, a US-based leader in solid-state battery technology, develops next generation battery technology for planned use by drone, mobile robots, roadgoing vehicles, energy storage, and other demanding applications. Our FEST ® cells are designed to meet the demands of the high-power market and, relative to conventional Li-ion batteries, deliver lighter weight, smaller size, longer life, and faster charging, in each case meeting or exceeding conventional batteries in each of these key parameters we believe are valued by end users. Factorial is a development stage company with no revenue to date that has incurred a net loss of approximately $8.6 million, with cash used in operations of $6.1 million, for the three months ended March 31, 2026 and an accumulated deficit of approximately $264.2 million as of March 31, 2026. The Business Combination Factorial entered into the Business Combination Agreement with CGC on December 17, 2025. Pursuant to the Business Combination Agreement, and after CGC’s shareholders voted to approve it, Merger Sub, a newly formed subsidiary of CGC, merged with and into Factorial. Upon the Closing, the separate corporate existence of Merger Sub ceased to exist, and Factorial survived and became a wholly-owned subsidiary of CGC. In connection with the consummation of the Business Combination, CGC changed its corporate name to Factorial Energy Inc. The Business Combination was accounted for as a reverse recapitalization. Factorial was deemed the accounting acquirer and the combined entity is the successor SEC registrant, meaning that Factorial’s financial statements for previous periods will be disclosed in the registrant’s future periodic reports filed with the SEC. Under this method of accounting, CGC was treated as the acquired company for financial statement reporting purposes. As a result of the closing of the Business Combination, the most significant change in Factorial’s financial position and results is a $92.0 million net increase in cash and cash equivalents (as compared to Factorial’s consolidated balance sheet at March 31, 2026), which includes $112.1 million in gross proceeds from the PIPE Financing (inclusive of the proceeds from the trust account resulting from NRA Shares acquired by PIPE Investors to satisfy their obligations under the applicable Investor Stock Purchase Agreement) that was received at the Closing offset by the transaction expenses, which occurred on June 5, 2026. Transaction expenses paid at closing for the Business Combination and PIPE Financing were approximately $21.1 million. See the section entitled “ Unaudited Pro Forma Condensed Combined Financial Information .” As a result of the Business Combination, Factorial became the successor to an SEC-registered and Nasdaq-listed company, which will require Factorial to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Factorial expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees, and additional internal and external accounting, legal, and administrative resources, including increased personnel costs, audit and other professional service fees. Key Trends, Opportunities and Uncertainties Factorial is a pre-revenue company. We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those in the sections of the Proxy Statement/Prospectus titled “ Business — Our Competitive Strengths”, “Business — Our Growth Strategy ”, “ Business — Manufacturing and Supply”, “ Business — Research and Development”, “ Business — Competitive Landscape”, Business — Government Regulation and Compliance” and “ Risk Factors .” We identified a material weakness in our internal control over financial reporting relating to inadequate resources to ensure proper system access and segregation of duties, timely and accurate preparation of reconciliations of accounts, and timely and accurate assessment, review and documentation of various transactions to ensure accurate recording of accounts in our financial statements in a timely manner. This material weakness led to a conclusion that our internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2026. Since December 2025, Factorial has added additional headcount to its finance team, including a chief financial officer, an accounting manager, and a staff accountant. The Company plans to increase staffing of its technical accounting and internal audit function during 2026 and will engage outside consultants to advise on improvements surrounding its controls over financial reporting. As of the date of this filing, management has taken remediation actions during 2026 and expects to complete the remediation actions related to Factorial’s material weakness over financial reporting during 2027 and expects to incur approximately $0.8 million in associated costs. Basis of Presentation Factorial currently conducts its business through one operating segment. As a pre-revenue company with no commercial operations, Factorial’s activities to date have been limited and were conducted primarily in the United States and Korea and its historical results are reported under U.S. GAAP and in U.S. dollars. Factorial’s Korean subsidiary’s functional currency is the Korean Won. Upon commencement of commercial operations, Factorial expects to expand its global operations substantially, including in the United States, Asia, and the European Union, and as a result Factorial expects its future results to be sensitive to foreign currency transaction and translation risks and other financial risks that are not reflected in its historical financial statements. As a result, Factorial expects that the financial results it reports for periods after it begins commercial operations will not be comparable to the financial results included in the Proxy Statement/Prospectus. Components of Results of Operations Factorial is a research and development stage company, and its historical results may not be indicative of its future results for reasons that may be difficult to anticipate. Accordingly, the drivers of Factorial’s future financial results, as well as the components of such results, may not be comparable to Factorial’s historical or projected results of operations. Research and Development Expense To date, Factorial’s research and development expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs associated with the expansion and ramp up of our engineering facility in the United States and Cheonan, South Korea, including the material and supplies to support the product development and process engineering efforts. As Factorial ramps up its engineering operations to complete the development of its solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets, Factorial anticipates that research and development expenses will increase significantly for the foreseeable future as Factorial expands its hiring of scientists, engineers, and technicians and continues to invest in additional plant and equipment for product development (e.g. multi-layer cell stacking, packaging and engineering), building prototypes, and testing of battery cells as the team works to meet the full set of Original Equipment Manufacturers (“OEMs”) product requirements. General and Administrative Expense General and administrative expenses consist mainly of personnel-related expenses for Factorial’s executive, sales and marketing and other administrative functions and expenses for outside professional services, including legal, accounting and other advisory services. Factorial is expanding its headcount in anticipation of planning for and ramping up commercial manufacturing operations and to meet public company financial and compliance requirements. Accordingly, in addition to the non-recurring transaction costs discussed above, Factorial expects its general and administrative expenses to increase significantly in the near term and for the foreseeable future. Upon commencement of commercial operations, Factorial also expects general and administrative expenses to include sales, marketing and advertising costs. Financing Costs Related to Issuance of Convertible Promissory Notes – Related Parties Financing costs related to issuance of convertible promissory notes to related parties represents the excess of the fair value of the convertible promissory notes over the proceeds received, if any, as well as direct financing costs paid in cash at issuance. Financing Costs Related to Issuance of Convertible Promissory Notes Financing costs related to issuance of convertible promissory notes represents the excess of the fair value of the convertible promissory notes over the proceeds received, if any, as well as direct financing costs paid in cash at issuance. Change in Fair Value of Convertible Promissory Notes – Related Parties Change in fair value of convertible promissory notes to related parties represents the fair value adjustment to mark the convertible promissory note liability to fair value. Change in Fair Value of Convertible Promissory Notes Change in fair value of convertible promissory notes represents the fair value adjustment to mark the convertible promissory note liability to fair value. Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities represents the fair value adjustment to mark the warrant liabilities to fair value based on changes in the underlying equity valuation. Other (Expenses) Income, Net Factorial’s other income (expense) consists of interest income from interest-bearing accounts, interest expense, and the effects of foreign currency. Provision for Income Taxes Factorial’s income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Factorial maintains a valuation allowance against the full value of its U.S. and state net deferred tax assets because Factorial believes the recoverability of the tax assets is not more likely than not. Results of Operations Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025 The following table sets forth Factorial’s historical operating results for the periods indicated: Three Months Ended March 31, $ % 2026 2025 Change Change (in thousands, except Share and per Share Amounts) Operating expenses: Research and development $ (1,942 ) $ (6,754 ) $ (4,812 ) (71.2 )% General and administrative (4,549 ) (6,368 ) (1,819 ) (28.6 )% Total operating expenses (6,491 ) (13,122 ) (6,631 ) (50.5 )% Loss from operations (6,491 ) (13,122 ) (6,631 ) (50.5 )% Other income (expense): Financing costs related to issuance of convertible promissory notes (37 ) — 37 N/M 1 Change in fair value of convertible promissory notes – related parties (1,407 ) — 1,407 N/M Change in fair value of convertible promissory notes (300 ) — 300 N/M Change in fair value of warrant liabilities (106 ) — 106 N/M Other income (expense), net (234 ) 252 (486 ) N/M Total other income (expense), net (2,084 ) 252 (2,336 ) N/M Net loss (8,575 ) (12,870 ) (4,295 ) (33.4 )% Net loss attributable to common stockholders $ (8,575 ) $ (12,870 ) $ (4,295 ) (33.4 )% Net loss $ (8,575 ) $ (12,870 ) $ (4,295 ) (33.4 )% Other comprehensive income (loss): Foreign currency translation adjustments and other (298 ) 8 306 N/M Total comprehensive loss (8,873 ) (12,862 ) (3,989 ) (31.0 )% Comprehensive loss attributable to common stockholders $ (8,873 ) $ (12,862 ) $ (3,989 ) (31.0 )% Basic and Diluted net loss per share $ (1.70 ) $ (2.57 ) $ (0.87 ) (33.9 )% Basic and Diluted weighted-average common shares outstanding 5,056,994 5,016,149 40,845 0.1 % (1) Not Meaningful (“N/M”) Research and Development Research and development expenses decreased by $4.8 million, or 71.2%, from $6.7 million for the three months ended March 31, 2025 to $1.9 million for the three months ended March 31, 2026. The decline primarily resulted from receipts of $3.4 million from joint development partners for the three months ended March 31, 2026, compared to $0.03 million for the three months ended March 31, 2025, which are recorded net in research and development expenses. The decrease was further attributable to the absence of occupancy and depreciation costs that had previously been allocated to research and development, following the exit of the Methuen, Massachusetts facility in October 2025. General and Administrative General and administrative expenses decreased by $1.8 million, or 28.6%, from $6.3 million for the three months ended March 31, 2025 to $4.5 million for the three months ended March 31, 2026, primarily due to a decline in stock-based compensation expense. General and administrative stock-based compensation expense decreased by $2.2 million, or 63%, from $3.5 million for the three months ended March 31, 2025, to $1.3 million for the three months ended March 31, 2026. The decrease was further attributable to the absence of occupancy and depreciation costs that had previously been allocated to general and administrative expenses, following the exit of the Methuen, Massachusetts facility in October 2025. These decreases were partially offset by increases in professional services expenses including legal, audit, and advisory fees. Financing Costs Related to Issuance of Convertible Promissory Notes In January 2026, we issued convertible promissory notes under which we could receive aggregate proceeds of up to $5.4 million. During the three months ended March 31, 2026, we received proceeds of $4.3 million. We incurred issuance costs of $0.04 million, which was recorded as a financing cost. Change in Fair Value of Convertible Promissory Notes – Related Parties The fair value of our convertible promissory notes to related parties increased by $1.4 million for the three months ended March 31, 2026. These notes were issued in 2025. Changes in fair value of convertible promissory notes to related parties are non-cash and are included in net loss. Change in Fair Value of Convertible Promissory Notes The fair value of our convertible promissory notes increased by $0.3 million for the three months ended March 31, 2026. These notes were issued in January 2026. Changes in fair value of convertible promissory notes are non-cash and are included in net loss. Change in Fair Value of Warrant Liabilities The change in fair value of our warrant liabilities increased by $0.1 million for the three months ended March 31, 2026. There was no change in fair value of our warrant liabilities for the three months ended March 31, 2025. Changes in fair value of warrant liabilities are non-cash and are included in net loss. Other Income (Expense), Net Other income (expense), net reflected an expense of $0.2 million for the three months ended March 31, 2026, compared to income of $0.3 million for the three months ended March 31, 2025, a change of $0.5 million. The change is due to fluctuations in the effects of foreign exchange offset by a reduction interest income. Provision for Income Taxes The Company did not record an income tax provision for the three months ended March 31, 2026 or 2025 due to losses incurred and the establishment of a full valuation allowance against deferred tax assets. Liquidity and Capital Resources Since inception, we have financed our operations primarily from the sales of preferred and convertible preferred stock, and equity-linked securities. As of March 31, 2026, our principal sources of liquidity were our cash and cash equivalents in the amount of $25.5 million. Our cash equivalents are invested primarily in U.S. Treasury money market funds. As of the date of this filing, Factorial has yet to generate any revenue from its business operations. To date, Factorial has funded its capital expenditure and working capital requirements through equity as further discussed below. Factorial’s ability to successfully develop its products, commence commercial operations and expand its business will depend on many factors, including its working capital needs, the availability of equity or debt financing and, over time, its ability to generate cash flows from operations. As of March 31, 2026, Factorial’s cash and cash equivalents amounted to $25.5 million. As a result of the closing of the Business Combination, Factorial’s cash and cash equivalents have increased to approximately $116.6 million on June 10, 2026. In January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the Closing the convertible notes were converted into shares issued by Factorial in conjunction with the Business Combination and exchanged for shares of PubCo Series A Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds of $5.4 million. Factorial expects its capital expenditures and working capital requirements to increase materially in the near future, as it seeks to accelerate its research and development efforts and scale up the production operations with its OEM partners. As described in “Information about Factorial” section of the Proxy Statement/Prospectus, Factorial expects to satisfy early demand for its solid-state battery products by expanding its existing fabrication line operations in South Korea and the United States, to support initial commercial production. During the three months ended March 31, 2026, Factorial paid capital expenditures for such expansion of approximately $0.5 million and expects to incur capital expenditures of approximately $7.5 million during the remainder of 2026. The expansion is expected to be completed by the end of 2027. Beyond the initial investment to expand our existing fabrication line operations in South Korea and the United States, we do not plan to build or acquire additional manufacturing facilities or incur substantial capital expenditures for the expansion of our existing facilities. Instead, as demand grows, including incremental high spec applications and gigawatt-scale ramp-up in the automotive market, we expect to scale primarily through a partner manufacturing approach. Factorial believes that its cash on hand, including the net proceeds from CGC’s cash in trust post redemption and the PIPE Financing, will be sufficient to meet its working capital and capital expenditure requirements for a period of at least twelve months from the date of this filing and sufficient to fund its operations until it commences commercial production of the Factorial solid-state battery, assuming Factorial is able to do so as currently contemplated. Factorial may, however, need additional cash resources due to changed business conditions or other developments, including unanticipated delays in negotiations with OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges, competitive pressures, and regulatory developments, among other developments. To the extent that Factorial’s current resources are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing. If the financing is not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level of investment in product development or scale back its operations, which could have an adverse impact on its business and financial prospects. Based on its current operating plan, the Company estimates that its cash and cash equivalents as of the date of this filing will be sufficient to fund its operating expenses and capital expenditure requirements into the first quarter of 2028. The Company has based this estimate on assumptions that may prove to be wrong and could deplete its liquid resources sooner than it currently expects. Cash Flows The following table provides a summary of Factorial’s cash flow data for the periods indicated: Three Months Ended March 31, $ % 2026 2025 Change Change Amount in thousands Net cash provided (used in) operating activities $ (6,120 ) $ (6,103 ) $ 17 0.3 % Net cash provided (used in) investing activities (487 ) (172 ) $ 315 183.1 % Net cash provided (used in) financing activities 3,302 (205 ) $ 3,507 N/M Cash Flows from Operating Activities Factorial’s cash flows used in operating activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related to research and development and general and administrative activities. As Factorial continues to ramp up hiring for technical headcounts to accelerate its developmental efforts, Factorial expects its cash used in operating activities to increase significantly before it starts to generate any material cash flows from its business. Net cash used in operating activities was $6.1 million for the three months ended March 31, 2026, and 2025 and primarily represents payments on employee compensation and benefits, R&D materials, facilities, and professional fees. The payments were offset by an increase in receivables under collaboration agreements of $2.2 million during the three months ended March 31, 2026. Receivables under collaboration agreements decreased by $0.5 million during the three months ended March 31, 2025. Cash Flows from Investing Activities Factorial’s cash flows used in investing activities, to date, have been comprised of purchases of property and equipment and purchases and disposals of equipment. Factorial expects the costs to acquire property and equipment to increase in the near future as it builds pilot and sample production lines for its FEST Silicon and Solstice programs. Net cash used from investing activities was $0.5 million and $0.2 million for the three months ended March 31, 2026, and 2025, respectively, which was used for property and equipment purchases. The 2026 purchases were entirely to support production in Korea. Cash Flows from Financing Activities Through March 31, 2026, Factorial has financed its operations primarily through the sale of equity and equity-linked securities. In addition, in January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million Net cash from financing activities was $3.3 million for the three months ended March 31, 2026, and primarily represents proceeds from issuance of convertible notes, offset by the payment of deferred transaction costs. Net cash used in financing activities was $.2 million for the three months ended March 31, 2025, and primarily represents principal payments on the Company’s former finance lease for the Methuen, Massachusetts facility. Contractual Obligations and Commitments Factorial leases its headquarters space in Billerica, Massachusetts (the “Billerica Sublease”) under a single sublease classified as an operating lease expiring on October 30th, 2032. The Billerica Sublease does not contain any provision for an extension. Factorial also leased laboratory and office space in Tallahassee, Florida (the “Tallahassee Lease”) under a single lease classified as an operating lease that expired at the end of its term on February 28th, 2025. Additionally, Factorial leases laboratory and storage space, which includes offices, in Woburn, Massachusetts (the “Woburn Lease”) under a single lease classified as an operating lease expiring on April 30, 2028. The Woburn Lease does not contain any provision for extension. Finally, Factorial leased laboratory and manufacturing space, which included offices, in Methuen, Massachusetts (the “Methuen Lease”) under a single lease classified as a financing lease. The Methuen Lease was terminated on October 18, 2025. Factorial has not commenced negotiations with respect to extending the Billerica Sublease or the related lease between the applicable sublessor from whom the Company subleases such property and the ultimate lessor, but intends to do so prior to the expiration thereof. In January 2026, Factorial entered into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the Closing the notes were converted into shares issued by Factorial in conjunction with the Business Combination and exchanged for shares of PubCo Series A Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds of $5.4 million. Off-Balance Sheet Arrangements Factorial is not a party to any off-balance sheet arrangements, as defined under SEC rules. Critical Accounting Policies Factorial’s financial statements have been prepared in accordance with GAAP. In the preparation of these financial statements, Factorial is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. There have been no significant changes to our critical accounting policies in the preparation of our condensed consolidated financial statements during the three months ended March 31, 2026 compared to those disclosed in our audited annual consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus. Critical Accounting Estimates There have been no significant changes to our critical accounting estimates in the preparation of our condensed consolidated financial statements during the three months ended March 31, 2026 compared to those disclosed in our audited annual consolidated financial statements for the year ended December 31, 2025, included in the Proxy Statement/Prospectus. Emerging Growth Company Status 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 are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Each of Factorial and CGC is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. This may make it difficult or impossible to compare Factorial’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used. PubCo may continue to qualify as an “emerging growth company” after the Business Combination until the earliest of (i) such time as of which it is a “large accelerated filer”, (ii) its annual gross revenues exceed $1.235 billion, (iii) it issues more than $1 billion of non-convertible debt securities during a three-year period or (iv) the end of the fifth fiscal year after CGC’s IPO, which occurred in 2025. Recent Accounting Pronouncements See Note 2 to the audited consolidated financial statements included in the Proxy Statement/Prospectus for more information about recent accounting pronouncements, the timing of their adoption, and Factorial’s assessment, to the extent it has made one, of their potential impact on Factorial’s financial condition and its results of operations and cash flows. Quantitative and Qualitative Disclosures About Market Risk Factorial is exposed to a variety of markets and other risks including the effects of change in interest rates, inflation and foreign currency translation and transaction risks as well as risks to the availability of funding sources, hazard events and specific asset risks. Interest Rate Risk The market interest risk in Factorial’s financial instruments and financial positions represents the potential loss arising from adverse changes in interest rates. As of March 31, 2026, we had cash and cash equivalents of $25.4 million and restricted cash of $0.9 million, substantially all of which was held in interest-bearing accounts for which the fair market value would be affected by change in the general level of U.S. interest rates. However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in the interest rate would not have a material effect on the fair market value of our cash and cash equivalents. A significant change in interest rates may also have an impact on the valuation of our equity and equity-linked instruments, as discussed in “Equity Valuations.” This could cause a material change in the carrying value of our equity and equity-linked instruments. Foreign Currency Risk Factorial’s U.S. entities and certain foreign subsidiaries have the U.S. dollar as their functional currency, while Factorial’s South Korea entity has the Korean Won as their functional currency. Factorial’s current and potential future subsidiaries could be expected to have other functional currencies, reflecting their principal operating markets. Once Factorial starts commercialization, it expects to be exposed to both additional currency transaction and translation risk. To date, Factorial has not hedged such exposure, although it may do so in the future.

Document text

EX-99.3 · tm2617149d1_ex99-3.htm

EX-99.3
 25
 tm2617149d1_ex99-3.htm
 EXHIBIT 99.3

 Exhibit 99.3

 MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS OF FACTORIAL

 Capitalized terms used but not defined in
this Exhibit 99.3 shall have the meanings ascribed to them in the Current Report on Form 8-K (&ldquo;Form 8-K&rdquo;)
filed with the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) on June 10, 2026 and, if not defined in the Form 8-K,
capitalized terms used but not defined in this Exhibit 99.2 shall have the meanings ascribed to them in the definitive proxy statement/prospectus
filed by Cartesian Growth Corporation III with the SEC on May 6, 2026, prior to the consummation of the business combination (the
 &ldquo;Proxy Statement/Prospectus&rdquo;).

 The following discussion and analysis of financial
condition and results of operations of Factorial Inc. (for purposes of this section, &ldquo;Factorial,&rdquo; &ldquo;Company,&rdquo;
 &ldquo;we,&rdquo; &ldquo;our&rdquo; or &ldquo;us&rdquo;) should be read together with Factorial&rsquo;s audited financial statements
for the years ended December 31, 2025 and 2024 included in the Proxy Statement/Prospectus beginning on Page F-25, Factorial&rsquo;s
unaudited condensed financial statements for the three months ended March 31, 2026 and 2025, and related notes included in Exhibit 99.1
to this Form 8-K, as well as the unaudited pro forma condensed combined financial information included in Exhibit 99.2 to this
Form 8-K. This discussion contains forward-looking statements reflecting our current expectations, estimates, and assumptions concerning
events and financial trends that may affect our future operating results or financial position. Our actual results and the timing of
events could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those identified below and those discussed in the sections entitled &ldquo;Risk Factors&rdquo;
and &ldquo;Cautionary Note Regarding Forward-Looking Statements&rdquo; included in the Proxy Statement/Prospectus.

 Overview

 Factorial, a US-based leader in solid-state battery
technology, develops next generation battery technology for planned use by drone, mobile robots, roadgoing vehicles, energy storage,
and other demanding applications. Our FEST &reg; cells are designed to meet the demands of the high-power market and, relative
to conventional Li-ion batteries, deliver lighter weight, smaller size, longer life, and faster charging, in each case meeting or exceeding
conventional batteries in each of these key parameters we believe are valued by end users.

 Factorial is a development stage company with
no revenue to date that has incurred a net loss of approximately $8.6 million, with cash used in operations of $6.1 million, for
the three months ended March 31, 2026 and an accumulated deficit of approximately $264.2 million as of March 31, 2026.

 The Business Combination

 Factorial entered into the Business Combination
Agreement with CGC on December 17, 2025. Pursuant to the Business Combination Agreement, and after CGC&rsquo;s shareholders voted
to approve it, Merger Sub, a newly formed subsidiary of CGC, merged with and into Factorial. Upon the Closing, the separate corporate
existence of Merger Sub ceased to exist, and Factorial survived and became a wholly-owned subsidiary of CGC. In connection with the consummation
of the Business Combination, CGC changed its corporate name to Factorial Energy Inc. The Business Combination was accounted for as a
reverse recapitalization. Factorial was deemed the accounting acquirer and the combined entity is the successor SEC registrant, meaning
that Factorial&rsquo;s financial statements for previous periods will be disclosed in the registrant&rsquo;s future periodic reports
filed with the SEC. Under this method of accounting, CGC was treated as the acquired company for financial statement reporting purposes.
As a result of the closing of the Business Combination, the most significant change in Factorial&rsquo;s financial position and results
is a $92.0 million net increase in cash and cash equivalents (as compared to Factorial&rsquo;s consolidated balance sheet at March 31,
2026), which includes $112.1 million in gross proceeds from the PIPE Financing (inclusive of the proceeds from the trust account
resulting from NRA Shares acquired by PIPE Investors to satisfy their obligations under the applicable Investor Stock Purchase Agreement)
that was received at the Closing offset by the transaction expenses, which occurred on June 5, 2026. Transaction expenses paid at
closing for the Business Combination and PIPE Financing were approximately $21.1 million. See the section entitled &ldquo; Unaudited
Pro Forma Condensed Combined Financial Information .&rdquo;

 As a result of the Business Combination, Factorial
became the successor to an SEC-registered and Nasdaq-listed company, which will require Factorial to hire additional personnel and implement
procedures and processes to address public company regulatory requirements and customary practices. Factorial expects to incur additional
annual expenses as a public company for, among other things, directors&rsquo; and officers&rsquo; liability insurance, director fees,
and additional internal and external accounting, legal, and administrative resources, including increased personnel costs, audit and
other professional service fees.

 Key Trends, Opportunities and Uncertainties

 Factorial is a pre-revenue company. We believe
that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and
challenges, including those in the sections of the Proxy Statement/Prospectus titled &ldquo; Business&thinsp;&mdash;&thinsp;Our Competitive
Strengths&rdquo;, &ldquo;Business&thinsp;&mdash;&thinsp;Our Growth Strategy &rdquo;, &ldquo; Business&thinsp;&mdash;&thinsp;Manufacturing
and Supply&rdquo;, &ldquo; Business&thinsp;&mdash;&thinsp;Research and Development&rdquo;, &ldquo; Business&thinsp;&mdash;&thinsp;Competitive
Landscape&rdquo;, Business&thinsp;&mdash;&thinsp;Government Regulation and Compliance&rdquo; and &ldquo; Risk Factors .&rdquo;

 We identified a material weakness in our internal
control over financial reporting relating to inadequate resources to ensure proper system access and segregation of duties, timely and
accurate preparation of reconciliations of accounts, and timely and accurate assessment, review and documentation of various transactions
to ensure accurate recording of accounts in our financial statements in a timely manner. This material weakness led to a conclusion that
our internal control over financial reporting and disclosure controls and procedures were not effective as of March 31, 2026.

 Since December 2025, Factorial has added
additional headcount to its finance team, including a chief financial officer, an accounting manager, and a staff accountant. The Company
plans to increase staffing of its technical accounting and internal audit function during 2026 and will engage outside consultants to
advise on improvements surrounding its controls over financial reporting. As of the date of this filing, management has taken remediation
actions during 2026 and expects to complete the remediation actions related to Factorial&rsquo;s material weakness over financial reporting
during 2027 and expects to incur approximately $0.8 million in associated costs.

 Basis of Presentation

 Factorial currently conducts its business through
one operating segment. As a pre-revenue company with no commercial operations, Factorial&rsquo;s activities to date have been limited
and were conducted primarily in the United States and Korea and its historical results are reported under U.S. GAAP and in U.S. dollars.
Factorial&rsquo;s Korean subsidiary&rsquo;s functional currency is the Korean Won. Upon commencement of commercial operations, Factorial
expects to expand its global operations substantially, including in the United States, Asia, and the European Union, and as a result
Factorial expects its future results to be sensitive to foreign currency transaction and translation risks and other financial risks
that are not reflected in its historical financial statements. As a result, Factorial expects that the financial results it reports for
periods after it begins commercial operations will not be comparable to the financial results included in the Proxy Statement/Prospectus.

 Components of Results of Operations

 Factorial is a research and development stage
company, and its historical results may not be indicative of its future results for reasons that may be difficult to anticipate. Accordingly,
the drivers of Factorial&rsquo;s future financial results, as well as the components of such results, may not be comparable to Factorial&rsquo;s
historical or projected results of operations.

 Research and Development Expense

 To date, Factorial&rsquo;s research and development
expenses have consisted primarily of personnel-related expenses for scientists, experienced engineers and technicians as well as costs
associated with the expansion and ramp up of our engineering facility in the United States and Cheonan, South Korea, including the material
and supplies to support the product development and process engineering efforts. As Factorial ramps up its engineering operations to
complete the development of its solid-state, lithium-metal batteries and required process engineering to meet automotive cost targets,
Factorial anticipates that research and development expenses will increase significantly for the foreseeable future as Factorial expands
its hiring of scientists, engineers, and technicians and continues to invest in additional plant and equipment for product development
(e.g. multi-layer cell stacking, packaging and engineering), building prototypes, and testing of battery cells as the team works to meet
the full set of Original Equipment Manufacturers (&ldquo;OEMs&rdquo;) product requirements.

 General and Administrative Expense

 General and administrative expenses consist mainly
of personnel-related expenses for Factorial&rsquo;s executive, sales and marketing and other administrative functions and expenses for
outside professional services, including legal, accounting and other advisory services. Factorial is expanding its headcount in anticipation
of planning for and ramping up commercial manufacturing operations and to meet public company financial and compliance requirements.
Accordingly, in addition to the non-recurring transaction costs discussed above, Factorial expects its general and administrative expenses
to increase significantly in the near term and for the foreseeable future. Upon commencement of commercial operations, Factorial also
expects general and administrative expenses to include sales, marketing and advertising costs.

 Financing Costs Related to Issuance of Convertible Promissory
Notes &ndash; Related Parties

 Financing costs related to issuance of convertible
promissory notes to related parties represents the excess of the fair value of the convertible promissory notes over the proceeds received,
if any, as well as direct financing costs paid in cash at issuance.

 Financing Costs Related to Issuance of Convertible Promissory
Notes

 Financing costs related to issuance of convertible
promissory notes represents the excess of the fair value of the convertible promissory notes over the proceeds received, if any, as well
as direct financing costs paid in cash at issuance.

 Change in Fair Value of Convertible Promissory Notes &ndash;
Related Parties

 Change in fair value of convertible promissory
notes to related parties represents the fair value adjustment to mark the convertible promissory note liability to fair value.

 Change in Fair Value of Convertible Promissory Notes

 Change in fair value of convertible promissory
notes represents the fair value adjustment to mark the convertible promissory note liability to fair value.

 Change in Fair Value of Warrant Liabilities

 Change in fair value of warrant liabilities represents
the fair value adjustment to mark the warrant liabilities to fair value based on changes in the underlying equity valuation.

 Other (Expenses) Income, Net

 Factorial&rsquo;s other income (expense) consists
of interest income from interest-bearing accounts, interest expense, and the effects of foreign currency.

 Provision for Income Taxes

 Factorial&rsquo;s income tax provision consists
of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain
tax positions, changes in deferred tax assets and liabilities, and changes in the tax law. Factorial maintains a valuation allowance
against the full value of its U.S. and state net deferred tax assets because Factorial believes the recoverability of the tax assets
is not more likely than not.

 Results of Operations

 Comparison of the Three Months Ended March 31, 2026 to
the Three Months Ended March 31, 2025

 The following table sets forth Factorial&rsquo;s historical
operating results for the periods indicated:

 Three Months
 Ended March 31,
 $
 %

 2026
 2025
 Change
 Change

 (in thousands, except
 Share and per Share Amounts)

 Operating expenses:

 Research and development
 $ (1,942 )
 $ (6,754 )
 $ (4,812 )
 (71.2 )%

 General and administrative
 (4,549 )
 (6,368 )
 (1,819 )
 (28.6 )%

 Total operating expenses
 (6,491 )
 (13,122 )
 (6,631 )
 (50.5 )%

 Loss from operations
 (6,491 )
 (13,122 )
 (6,631 )
 (50.5 )%

 Other income (expense):

 Financing costs related to issuance of convertible promissory
 notes
 (37 )
 &mdash;
 37
 N/M 1

 Change in fair value of convertible promissory notes&thinsp;&ndash;&thinsp;related
 parties
 (1,407 )
 &mdash;
 1,407
 N/M

 Change in fair value of convertible promissory notes
 (300 )
 &mdash;
 300
 N/M

 Change in fair value of warrant liabilities
 (106 )
 &mdash;
 106
 N/M

 Other income (expense), net
 (234 )
 252
 (486 )
 N/M

 Total other income (expense), net
 (2,084 )
 252
 (2,336 )
 N/M

 Net loss
 (8,575 )
 (12,870 )
 (4,295 )
 (33.4 )%

 Net loss attributable to common stockholders
 $ (8,575 )
 $ (12,870 )
 $ (4,295 )
 (33.4 )%

 Net loss
 $ (8,575 )
 $ (12,870 )
 $ (4,295 )
 (33.4 )%

 Other comprehensive income (loss):

 Foreign currency translation adjustments
 and other
 (298 )
 8
 306
 N/M

 Total comprehensive loss
 (8,873 )
 (12,862 )
 (3,989 )
 (31.0 )%

 Comprehensive loss attributable to
 common stockholders
 $ (8,873 )
 $ (12,862 )
 $ (3,989 )
 (31.0 )%

 Basic and Diluted net loss per share
 $ (1.70 )
 $ (2.57 )
 $ (0.87 )
 (33.9 )%

 Basic and Diluted weighted-average
 common shares outstanding
 5,056,994
 5,016,149
 40,845
 0.1 %

 (1) Not Meaningful (&ldquo;N/M&rdquo;)

 Research and Development

 Research and development expenses decreased by
$4.8 million, or 71.2%, from $6.7 million for the three months ended March 31, 2025 to $1.9 million for the three months ended
March 31, 2026. The decline primarily resulted from receipts of $3.4 million from joint development partners for the three months
ended March 31, 2026, compared to $0.03 million for the three months ended March 31, 2025, which are recorded net in research
and development expenses. The decrease was further attributable to the absence of occupancy and depreciation costs that had previously
been allocated to research and development, following the exit of the Methuen, Massachusetts facility in October 2025.

 General and Administrative

 General and administrative expenses decreased
by $1.8 million, or 28.6%, from $6.3 million for the three months ended March 31, 2025 to $4.5 million for the three months ended
March 31, 2026, primarily due to a decline in stock-based compensation expense. General and administrative stock-based compensation
expense decreased by $2.2 million, or 63%, from $3.5 million for the three months ended March 31, 2025, to $1.3 million for the
three months ended March 31, 2026. The decrease was further attributable to the absence of occupancy and depreciation costs that
had previously been allocated to general and administrative expenses, following the exit of the Methuen, Massachusetts facility in October 2025.
These decreases were partially offset by increases in professional services expenses including legal, audit, and advisory fees.

 Financing Costs Related to Issuance of Convertible Promissory
Notes

 In January 2026, we issued convertible promissory
notes under which we could receive aggregate proceeds of up to $5.4 million. During the three months ended March 31, 2026, we received
proceeds of $4.3 million. We incurred issuance costs of $0.04 million, which was recorded as a financing cost.

 Change in Fair Value of Convertible Promissory Notes &ndash;
Related Parties

 The fair value of our convertible promissory
notes to related parties increased by $1.4 million for the three months ended March 31, 2026. These notes were issued in 2025.
Changes in fair value of convertible promissory notes to related parties are non-cash and are included in net loss.

 Change in Fair Value of Convertible Promissory Notes

 The fair value of our convertible promissory
notes increased by $0.3 million for the three months ended March 31, 2026. These notes were issued in January 2026. Changes
in fair value of convertible promissory notes are non-cash and are included in net loss.

 Change in Fair Value of Warrant Liabilities

 The change in fair value of our warrant liabilities
increased by $0.1 million for the three months ended March 31, 2026. There was no change in fair value of our warrant liabilities
for the three months ended March 31, 2025. Changes in fair value of warrant liabilities are non-cash and are included in net loss.

 Other Income (Expense), Net

 Other income (expense), net reflected an expense
of $0.2 million for the three months ended March 31, 2026, compared to income of $0.3 million for the three months ended
March 31, 2025, a change of $0.5 million. The change is due to fluctuations in the effects of foreign exchange offset by a
reduction interest income.

 Provision for Income Taxes

 The Company did not record an income tax provision
for the three months ended March 31, 2026 or 2025 due to losses incurred and the establishment of a full valuation allowance against
deferred tax assets.

 Liquidity and Capital Resources

 Since inception, we have financed our operations
primarily from the sales of preferred and convertible preferred stock, and equity-linked securities. As of March 31, 2026, our principal
sources of liquidity were our cash and cash equivalents in the amount of $25.5 million. Our cash equivalents are invested primarily
in U.S. Treasury money market funds.

 As of the date of this filing, Factorial has
yet to generate any revenue from its business operations. To date, Factorial has funded its capital expenditure and working capital requirements
through equity as further discussed below. Factorial&rsquo;s ability to successfully develop its products, commence commercial operations
and expand its business will depend on many factors, including its working capital needs, the availability of equity or debt financing
and, over time, its ability to generate cash flows from operations.

 As of March 31, 2026, Factorial&rsquo;s
cash and cash equivalents amounted to $25.5 million. As a result of the closing of the Business Combination, Factorial&rsquo;s cash
and cash equivalents have increased to approximately $116.6 million on June 10, 2026. In January 2026, Factorial entered
into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the
Closing the convertible notes were converted into shares issued by Factorial in conjunction with the Business Combination and exchanged
for shares of PubCo Series A Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds
of $5.4 million.

 Factorial expects its capital expenditures and
working capital requirements to increase materially in the near future, as it seeks to accelerate its research and development efforts
and scale up the production operations with its OEM partners. As described in &ldquo;Information about Factorial&rdquo; section of the
Proxy Statement/Prospectus, Factorial expects to satisfy early demand for its solid-state battery products by expanding its existing
fabrication line operations in South Korea and the United States, to support initial commercial production. During the three months ended
March 31, 2026, Factorial paid capital expenditures for such expansion of approximately $0.5 million and expects to incur capital
expenditures of approximately $7.5 million during the remainder of 2026. The expansion is expected to be completed by the end of 2027.
Beyond the initial investment to expand our existing fabrication line operations in South Korea and the United States, we do not
plan to build or acquire additional manufacturing facilities or incur substantial capital expenditures for the expansion of our existing
facilities. Instead, as demand grows, including incremental high spec applications and gigawatt-scale ramp-up in the automotive market,
we expect to scale primarily through a partner manufacturing approach.

 Factorial believes that its cash on hand, including
the net proceeds from CGC&rsquo;s cash in trust post redemption and the PIPE Financing, will be sufficient to meet its working capital
and capital expenditure requirements for a period of at least twelve months from the date of this filing and sufficient to fund
its operations until it commences commercial production of the Factorial solid-state battery, assuming Factorial is able to do so as
currently contemplated. Factorial may, however, need additional cash resources due to changed business conditions or other developments,
including unanticipated delays in negotiations with OEMs and tier-one automotive suppliers or other suppliers, supply chain challenges,
competitive pressures, and regulatory developments, among other developments. To the extent that Factorial&rsquo;s current resources
are insufficient to satisfy its cash requirements, Factorial may need to seek additional equity or debt financing. If the financing is
not available, or if the terms of financing are less desirable than Factorial expects, Factorial may be forced to decrease its level
of investment in product development or scale back its operations, which could have an adverse impact on its business and financial prospects.

 Based on its current operating plan, the Company
estimates that its cash and cash equivalents as of the date of this filing will be sufficient to fund its operating expenses and capital
expenditure requirements into the first quarter of 2028. The Company has based this estimate on assumptions that may prove to be wrong
and could deplete its liquid resources sooner than it currently expects.

 Cash Flows

 The following table provides a summary of Factorial&rsquo;s
cash flow data for the periods indicated:

 Three Months
 Ended

 March 31,
 $
 %

 2026
 2025
 Change
 Change

 Amount in thousands

 Net cash provided (used in) operating activities
 $ (6,120 )
 $ (6,103 )
 $ 17
 0.3 %

 Net cash provided (used in) investing activities
 (487 )
 (172 )
 $ 315
 183.1 %

 Net cash provided (used in) financing activities
 3,302
 (205 )
 $ 3,507
 N/M

 Cash Flows from Operating Activities

 Factorial&rsquo;s cash flows used in operating
activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related
to research and development and general and administrative activities. As Factorial continues to ramp up hiring for technical headcounts
to accelerate its developmental efforts, Factorial expects its cash used in operating activities to increase significantly before it
starts to generate any material cash flows from its business.

 Net cash used in operating activities was $6.1 million
for the three months ended March 31, 2026, and 2025 and primarily represents payments on employee compensation and benefits, R&D
materials, facilities, and professional fees. The payments were offset by an increase in receivables under collaboration agreements of
$2.2 million during the three months ended March 31, 2026. Receivables under collaboration agreements decreased by $0.5 million
during the three months ended March 31, 2025.

 Cash Flows from Investing Activities

 Factorial&rsquo;s cash flows used in investing
activities, to date, have been comprised of purchases of property and equipment and purchases and disposals of equipment. Factorial expects
the costs to acquire property and equipment to increase in the near future as it builds pilot and sample production lines for its FEST
Silicon and Solstice programs.

 Net cash used from investing activities was $0.5 million
and $0.2 million for the three months ended March 31, 2026, and 2025, respectively, which was used for property and equipment purchases.
The 2026 purchases were entirely to support production in Korea.

 Cash Flows from Financing Activities

 Through March 31, 2026, Factorial has financed
its operations primarily through the sale of equity and equity-linked securities. In addition, in January 2026, Factorial entered
into agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million

 Net cash from financing activities was $3.3 million
for the three months ended March 31, 2026, and primarily represents proceeds from issuance of convertible notes, offset by the payment
of deferred transaction costs. Net cash used in financing activities was $.2 million for the three months ended March 31, 2025,
and primarily represents principal payments on the Company&rsquo;s former finance lease for the Methuen, Massachusetts facility.

 Contractual Obligations and Commitments

 Factorial leases its headquarters space in Billerica,
Massachusetts (the &ldquo;Billerica Sublease&rdquo;) under a single sublease classified as an operating lease expiring on October 30th,
2032. The Billerica Sublease does not contain any provision for an extension. Factorial also leased laboratory and office space in Tallahassee,
Florida (the &ldquo;Tallahassee Lease&rdquo;) under a single lease classified as an operating lease that expired at the end of its term
on February 28th, 2025. Additionally, Factorial leases laboratory and storage space, which includes offices, in Woburn, Massachusetts
(the &ldquo;Woburn Lease&rdquo;) under a single lease classified as an operating lease expiring on April 30, 2028. The Woburn Lease
does not contain any provision for extension. Finally, Factorial leased laboratory and manufacturing space, which included offices, in
Methuen, Massachusetts (the &ldquo;Methuen Lease&rdquo;) under a single lease classified as a financing lease. The Methuen Lease was
terminated on October 18, 2025. Factorial has not commenced negotiations with respect to extending the Billerica Sublease or the
related lease between the applicable sublessor from whom the Company subleases such property and the ultimate lessor, but intends to
do so prior to the expiration thereof.

 In January 2026, Factorial entered into
agreements with new investors to issue convertible notes where Factorial can receive proceeds up to $5.4 million. Upon the Closing the
notes were converted into shares issued by Factorial in conjunction with the Business Combination and exchanged for shares of PubCo Series A
Common Stock in the Business Combination. As of June 10, 2026, Factorial has received proceeds of $5.4 million.

 Off-Balance Sheet Arrangements

 Factorial is not a party to any off-balance sheet arrangements,
as defined under SEC rules.

 Critical Accounting Policies

 Factorial&rsquo;s financial statements have been
prepared in accordance with GAAP. In the preparation of these financial statements, Factorial is required to use judgment in making estimates
and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as
of the date of the financial statements, as well as the reported expenses incurred during the reporting periods. There have been no significant
changes to our critical accounting policies in the preparation of our condensed consolidated financial statements during the three months
ended March 31, 2026 compared to those disclosed in our audited annual consolidated financial statements for the year ended December 31,
2025, included in the Proxy Statement/Prospectus.

 Critical Accounting Estimates

 There have been no significant changes to our critical accounting
estimates in the preparation of our condensed consolidated financial statements during the three months ended March 31, 2026 compared
to those disclosed in our audited annual consolidated financial statements for the year ended December 31, 2025, included in the
Proxy Statement/Prospectus.

 Emerging Growth Company Status

 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 are
required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take
advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such
election to not take advantage of the extended transition period is irrevocable.

 Each of Factorial and CGC is an &ldquo;emerging
growth company&rdquo; as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of
the extended transition period for new or revised financial accounting standards. This may make it difficult or impossible to compare
Factorial&rsquo;s financial results with the financial results of another public company that is either not an emerging growth company
or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential
differences in accounting standards used. PubCo may continue to qualify as an &ldquo;emerging growth company&rdquo; after the Business
Combination until the earliest of (i) such time as of which it is a &ldquo;large accelerated filer&rdquo;, (ii) its annual
gross revenues exceed $1.235 billion, (iii) it issues more than $1 billion of non-convertible debt securities during a three-year
period or (iv) the end of the fifth fiscal year after CGC&rsquo;s IPO, which occurred in 2025.

 Recent Accounting Pronouncements

 See Note 2 to the audited consolidated financial
statements included in the Proxy Statement/Prospectus for more information about recent accounting pronouncements, the timing of their
adoption, and Factorial&rsquo;s assessment, to the extent it has made one, of their potential impact on Factorial&rsquo;s financial condition
and its results of operations and cash flows.

 Quantitative and Qualitative Disclosures About Market Risk

 Factorial is exposed to a variety of markets
and other risks including the effects of change in interest rates, inflation and foreign currency translation and transaction risks as
well as risks to the availability of funding sources, hazard events and specific asset risks.

 Interest Rate Risk

 The market interest risk in Factorial&rsquo;s
financial instruments and financial positions represents the potential loss arising from adverse changes in interest rates. As of March 31,
2026, we had cash and cash equivalents of $25.4 million and restricted cash of $0.9 million, substantially all of which was held
in interest-bearing accounts for which the fair market value would be affected by change in the general level of U.S. interest rates.
However, due to the short-term maturities and the low-risk profile of our investments, an immediate 10% change in the interest rate would
not have a material effect on the fair market value of our cash and cash equivalents.

 A significant change in interest rates may also
have an impact on the valuation of our equity and equity-linked instruments, as discussed in &ldquo;Equity Valuations.&rdquo; This could
cause a material change in the carrying value of our equity and equity-linked instruments.

 Foreign Currency Risk

 Factorial&rsquo;s U.S. entities and certain foreign
subsidiaries have the U.S. dollar as their functional currency, while Factorial&rsquo;s South Korea entity has the Korean Won as their
functional currency. Factorial&rsquo;s current and potential future subsidiaries could be expected to have other functional currencies,
reflecting their principal operating markets. Once Factorial starts commercialization, it expects to be exposed to both additional currency
transaction and translation risk. To date, Factorial has not hedged such exposure, although it may do so in the future.

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EX-99.4

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tm2617149d1_ex99-4.htm

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EX-99.4 · tm2617149d1_ex99-4.htm EX-99.4 26 tm2617149d1_ex99-4.htm EXHIBIT 99.4 Exhibit 99.4 Factorial Lists on Nasdaq, Bringing Solid-State Batteries From Validation to Scale Leading American solid-state battery innovator, backed by global automakers and rapidly expanding into defense & aerospace, robotics, and hyperscale data centers, enters public markets with $1.3 billion equity value BOSTON. — June 08, 2026 (GLOBE NEWSWIRE) — Factorial Inc. (“Factorial”), a U.S. developer of solid - state battery technology, announced today that it has completed its previously announced business combination with Cartesian Growth Corporation III, a publicly traded special purpose acquisition company. The combined company will operate as Factorial Energy Inc., and its Series A common stock and warrants are expected to begin trading on the Nasdaq Stock Market (“Nasdaq”) under the ticker symbols “FAC” and “FACWW”, respectively, on June 8, 2026. The transaction implies an equity value of approximately $1.3 billion and provides more than $100 million in gross proceeds to support continued commercialization of Factorial’s next generation batteries for defense & aerospace, hyperscale data centers, and e-mobility. Factorial enters the public markets with a track record few battery companies match – support from the U.S. national security investment community, real world vehicle integrations, expansion into high - performance drones, and progress toward the first U.S. solid - state production program for passenger vehicles. Factorial’s capital-light commercialization model, built on joint manufacturing partnerships, is designed for rapid, scalable deployment. “We built Factorial to solve one of the hardest problems in energy – making solid - state real at scale,” said Siyu Huang, CEO of Factorial. “The automotive industry is the most demanding proving ground in the world, and we’ve shown our technology can perform in real cars on real roads. That foundation positions us to scale, providing power to drones, robotics, and next generation energy systems. Listing on Nasdaq gives us the platform to accelerate that work and deliver solid - state technology where it matters most.” “The team at Factorial is dedicated not just to powering the next generation of drones, robots, e-mobility and energy storage, but to creating long-term shareholder value,” noted Peter Yu, Chairman & CEO of Cartesian Growth Corporation III. “We are proud to anchor the common-equity PIPE and even more excited to open Factorial’s cap table to investors seeking to participate in the company’s brilliant future.” Factorial’s continuing leadership in solid-state batteries is most recently demonstrated by: · Partnerships with top drone integrators across three continents (KULR Technology Group, Inc., Tulip Tech B.V and JRES) to advance next-generation battery integration for electric aviation systems – Q2 2026 · Strategic investment from IQT supporting expansion into drones and robotics, alongside strategic supply chain partners POSCO Future M and Philenergy – Q1 2026 · Karma Automotive and Factorial Announce First Solid-State Battery Production Program in the U.S. for Passenger Vehicles – Q1 2026 · Mercedes-Benz integrated Factorial’s FEST ® cells into a lightly modified EQS test vehicle and completed a 1,205 km journey from Stuttgart, Germany to Malmö, Sweden on a single charge – Q3 2025 · Key technology milestone achieved to unlock demonstration fleet with Stellantis – Q3 2025 · First to launch a 100Ah+ lithium metal solid-state battery – Q1 2023 Factorial’s visionary management and board have deep knowledge in battery and automotive industries, including a founding team with extensive experience in battery material manufacturing, Executive Chairman Joe Taylor, Former Chairman and CEO of Panasonic North America, and Dieter Zetsche , Former Chairman of the Board of Daimler and Head of Mercedes-Benz Cars. To commemorate the closing, Factorial will ring the Nasdaq Opening Bell at 9:30 a.m. ET on June 17, 2026. A livestream and replay will be available at https://www.nasdaq.com/marketsite/bell-ringing-ceremony. Demonstration vehicles and battery cells will be exhibited outside Nasdaq on June 17 th from 10:00 a.m. to 11:30 a.m. ET; the vehicles are for display purposes and may not represent final Factorial equipped configurations. Members of the public are invited to attend. Advisors Cantor Fitzgerald & Co. served as exclusive financial advisor to Factorial and sole placement agent for the PIPE. Goodwin Procter LLP served as legal advisor to Factorial. Greenberg Traurig, LLP served as legal advisor to Cartesian Growth Corporation III. Thompson Coburn LLP served as legal advisor to Cantor Fitzgerald. The Blueshirt Group served as investor relations advisor to Factorial. ### About Factorial Energy Factorial Energy (Nasdaq: FAC) is a leading American solid-state battery innovator backed by In-Q-Tel – the not-for-profit strategic investor for the U.S. national security community and America’s allies – and Mercedes-Benz, Stellantis, Hyundai, and Kia. Through its proprietary FEST® and Solstice™ platforms, engineered for scalable manufacturing, Factorial delivers industry-leading performance across defense, space, and energy storage applications. Mercedes-Benz’ real-world road testing in a lightly modified test vehicle achieved over 1,200 km of range on a single charge, while Stellantis-lab testing verified 77 Ah cells demonstrating high energy density, fast-charging, and robust use for energy and power performance across temperature extremes. For more information, visit www.factorialenergy.com. Forward-Looking Statements Certain statements in this communication may be considered “forward-looking statements.” Forward-looking statements herein generally relate to future events or the future financial or operating performance of Factorial. For example, Factorial’s expectations regarding future financial performance, manufacturing capabilities and operations, Factorial’s business plans, and other projections concerning key performance metrics or milestones are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “project,” “target,” “plan,” or “potentially” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. While Factorial may elect to update such forward-looking statements in the future, it disclaims any obligation to do so. Factorial IR Contact: IR@factorialenergy.com Factorial Media Contact: Factorial@antennagroup.com

Document text

EX-99.4 · tm2617149d1_ex99-4.htm

EX-99.4
 26
 tm2617149d1_ex99-4.htm
 EXHIBIT 99.4

 Exhibit 99.4

 Factorial Lists
on Nasdaq,

 Bringing Solid-State
Batteries From Validation to Scale

 Leading
American solid-state battery innovator, backed by global automakers and rapidly expanding into defense & aerospace, robotics,
and hyperscale data centers, enters public markets with $1.3 billion equity value

 BOSTON.
 &mdash; June 08, 2026 (GLOBE NEWSWIRE) &mdash; Factorial Inc. (&ldquo;Factorial&rdquo;), a U.S. developer of solid - state
battery technology, announced today that it has completed its previously announced business combination with Cartesian Growth Corporation
III, a publicly traded special purpose acquisition company. The combined company will operate as Factorial Energy Inc., and its Series A
common stock and warrants are expected to begin trading on the Nasdaq Stock Market (&ldquo;Nasdaq&rdquo;) under the ticker symbols &ldquo;FAC&rdquo;
and &ldquo;FACWW&rdquo;, respectively, on June 8, 2026.

 The transaction implies an equity value
of approximately $1.3 billion and provides more than $100 million in gross proceeds to support continued commercialization of Factorial&rsquo;s
next generation batteries for defense & aerospace, hyperscale data centers, and e-mobility.

 Factorial
enters the public markets with a track record few battery companies match &ndash; support from the U.S. national security investment
community, real world vehicle integrations, expansion into high - performance
drones, and progress toward the first U.S. solid - state production program
for passenger vehicles. Factorial&rsquo;s capital-light commercialization model, built on joint manufacturing partnerships, is designed
for rapid, scalable deployment.

 &ldquo;We
built Factorial to solve one of the hardest problems in energy &ndash; making solid - state
real at scale,&rdquo; said Siyu Huang, CEO of Factorial. &ldquo;The automotive industry is the most demanding proving ground in the world,
and we&rsquo;ve shown our technology can perform in real cars on real roads. That foundation positions us to scale, providing power to
drones, robotics, and next generation energy systems. Listing on Nasdaq gives us the platform to accelerate that work and deliver solid - state
technology where it matters most.&rdquo;

 &ldquo;The team at Factorial is dedicated
not just to powering the next generation of drones, robots, e-mobility and energy storage, but to creating long-term shareholder value,&rdquo;
noted Peter Yu, Chairman & CEO of Cartesian Growth Corporation III. &ldquo;We are proud to anchor the common-equity PIPE and
even more excited to open Factorial&rsquo;s cap table to investors seeking to participate in the company&rsquo;s brilliant future.&rdquo;

 Factorial&rsquo;s continuing leadership
in solid-state batteries is most recently demonstrated by:

 &middot; Partnerships
 with top drone integrators across three continents (KULR
 Technology Group, Inc., Tulip Tech B.V and JRES) to advance next-generation battery
 integration for electric aviation systems &ndash; Q2 2026

 &middot; Strategic
 investment from IQT supporting expansion
 into drones and robotics, alongside strategic supply chain partners POSCO Future M and Philenergy
 &ndash; Q1 2026

 &middot; Karma
 Automotive and Factorial Announce First Solid-State Battery Production Program in the U.S.
 for Passenger Vehicles &ndash; Q1
 2026

 &middot; Mercedes-Benz
 integrated Factorial&rsquo;s FEST &reg; cells into a lightly modified EQS test
 vehicle and completed a 1,205 km journey from
 Stuttgart, Germany to Malm&ouml;, Sweden on a single charge &ndash; Q3 2025

 &middot; Key
 technology milestone achieved to
 unlock demonstration fleet with Stellantis &ndash; Q3 2025

 &middot; First
 to launch a 100Ah+ lithium metal solid-state battery &ndash;
 Q1 2023

 Factorial&rsquo;s
visionary management and board have deep knowledge in battery and automotive industries, including a founding team with extensive experience
in battery material manufacturing, Executive Chairman Joe Taylor, Former Chairman and CEO of Panasonic North America, and Dieter
Zetsche , Former Chairman of the Board of Daimler and Head of Mercedes-Benz Cars.

 To commemorate the closing, Factorial
will ring the Nasdaq Opening Bell at 9:30 a.m. ET on June 17, 2026. A livestream and replay will be available at https://www.nasdaq.com/marketsite/bell-ringing-ceremony.

 Demonstration vehicles and battery cells
will be exhibited outside Nasdaq on June 17 th from 10:00 a.m. to 11:30 a.m. ET; the vehicles are for display
purposes and may not represent final Factorial equipped configurations. Members of the public are invited to attend.

 Advisors

 Cantor Fitzgerald & Co. served
as exclusive financial advisor to Factorial and sole placement agent for the PIPE. Goodwin Procter LLP served as legal advisor to Factorial.
Greenberg Traurig, LLP served as legal advisor to Cartesian Growth Corporation III. Thompson Coburn LLP served as legal advisor to Cantor
Fitzgerald. The Blueshirt Group served as investor relations advisor to Factorial.

 ###

 About Factorial Energy

 Factorial Energy (Nasdaq: FAC) is a
leading American solid-state battery innovator backed by In-Q-Tel &ndash; the not-for-profit strategic investor for the U.S. national
security community and America&rsquo;s allies &ndash; and Mercedes-Benz, Stellantis, Hyundai, and Kia. Through its proprietary FEST&reg;
and Solstice&trade; platforms, engineered for scalable manufacturing, Factorial delivers industry-leading performance across defense,
space, and energy storage applications. Mercedes-Benz&rsquo; real-world road testing in a lightly modified test vehicle achieved over
1,200 km of range on a single charge, while Stellantis-lab testing verified 77 Ah cells demonstrating high energy density, fast-charging,
and robust use for energy and power performance across temperature extremes. For more information, visit www.factorialenergy.com.

 Forward-Looking Statements

 Certain statements in this communication
may be considered &ldquo;forward-looking statements.&rdquo; Forward-looking statements herein generally relate to future events or the
future financial or operating performance of Factorial. For example, Factorial&rsquo;s expectations regarding future financial performance,
manufacturing capabilities and operations, Factorial&rsquo;s business plans, and other projections concerning key performance metrics
or milestones are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as &ldquo;may,&rdquo;
 &ldquo;should,&rdquo; &ldquo;expect,&rdquo; &ldquo;intend,&rdquo; &ldquo;will,&rdquo; &ldquo;estimate,&rdquo; &ldquo;anticipate,&rdquo;
 &ldquo;believe,&rdquo; &ldquo;predict,&rdquo; &ldquo;project,&rdquo; &ldquo;target,&rdquo; &ldquo;plan,&rdquo; or &ldquo;potentially&rdquo;
or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties,
and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.
While Factorial may elect to update such forward-looking statements in the future, it disclaims any obligation to do so.

 Factorial IR Contact: IR@factorialenergy.com

 Factorial Media Contact: Factorial@antennagroup.com

Open on SEC

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