# EDGAR Filing Document

**Accession Number:** 0001866226
**File Stem:** 0001213900-26-036749
**Filing Date:** 2026-3
**Character Count:** 667412
**Document Hash:** 8cf071e0ec6ea514cffdfd2ea344ecc3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-036749.hdr.sgml**: 20260331

**ACCESSION NUMBER**: 0001213900-26-036749

**CONFORMED SUBMISSION TYPE**: 8-K/A

**PUBLIC DOCUMENT COUNT**: 32

**CONFORMED PERIOD OF REPORT**: 20260105

**ITEM INFORMATION**: Completion of Acquisition or Disposition of Assets

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20260331

**DATE AS OF CHANGE**: 20260331

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Evolution Metals & Technologies Corp.
- **CENTRAL INDEX KEY:** 0001866226
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 871006702
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K/A
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41183
- **FILM NUMBER:** 26816720

**BUSINESS ADDRESS:**
- **STREET 1:** 516 S DIXIE HWY
- **STREET 2:** UNIT 209
- **CITY:** WEST PALM BEACH
- **STATE:** FL
- **ZIP:** 33401
- **BUSINESS PHONE:** 251-280-1980

**MAIL ADDRESS:**
- **STREET 1:** 516 S DIXIE HWY
- **STREET 2:** UNIT 209
- **CITY:** WEST PALM BEACH
- **STATE:** FL
- **ZIP:** 33401

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Welsbach Technology Metals Acquisition Corp.
- **DATE OF NAME CHANGE:** 20210607

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K/A**

**(Amendment No. 2)**

**CURRENT REPORT**

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 5, 2026

**Evolution Metals & Technologies Corp.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Delaware** | **001-41183** | **87-1006702** |
| (State or other jurisdiction of<br> incorporation or organization) | (Commission File Number) | (IRS Employer<br> Identification No.) |

---

**4040 NE 2nd Ave, Ste 349**

**Miami, Florida 33137**

(Address and zip code of principal executive offices)

**561-225-3205**

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value per share | EMAT | The Nasdaq Stock Market LLC |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**EXPLANATORY NOTE**

On January 9, 2026, Evolution Metals & Technologies Corp. (the "Company" or "EMAT") filed a Current Report on Form 8-K (the "Original Report") as amended by Amendment No. 1 to the Original Report ("Amendment No. 1") filed on January 9, 2026 (the Original Report together with Amendment No. 1, referred to herein as the "Original Form 8-K"), to report, among other events, the completion of its previously announced acquisition of Evolution Metals LLC, a Delaware limited liability company ("EM") on January 5, 2026 (the "Business Combination"). Also as reported in the Original Form 8-K, as part of the Business Combination, EM acquired KCM Industry Co., Ltd., a Korean company ("KCM"), KMMI INC., a Korean company ("KMMI"), NS World Co., Ltd., a Korean company ("NS World") and Handa Lab Co., Ltd., a Korean company ("Handa Lab").

This Current Report on Form 8-K/A amends the Original Form 8-K to include the audited financial statements of EMAT, EM, KCM, KMMI, NS World and Handa Lab for the year ended December 31, 2025, and the Management's Discussion and Analysis of Financial Condition and Results of Operations of EM for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024 and of EMAT, KCM, KMMI, NS World and Handa Lab for the years ended December 31, 2025 and 2024, as well as including the Unaudited Pro Forma Financial Statements of the Company and EM as of and for the year ended December 31, 2025, giving effect to the acquisition of EM.

Except as described above, this Current Report on Form 8-K/A does not amend, update, or change any other items or disclosures in the Original Form 8-K and does not purport to reflect any information or events subsequent to the filing date of the Original Form 8-K. Capitalized terms used but not defined herein have the meanings assigned to them in the Original Form 8-K. This Current Report on Form 8-K/A should be read in conjunction with the Original Form 8-K.

**Item 2.01 Completion of Acquisition or Disposition of Assets.**

**Financial Information**

The audited financial statements of EMAT for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.1 and incorporated herein by reference.

The audited financial statements of EM for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.2 and incorporated herein by reference.

The audited financial statements of KCM for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.3 and incorporated herein by reference.

The audited financial statements of KMMI for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.4 and incorporated herein by reference.

The audited financial statements of NS World for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.5 and incorporated herein by reference.

The audited financial statements of Handa Lab for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.6 and incorporated herein by reference.

The unaudited pro forma condensed combined financial information of EMAT (formerly Welsbach Technology Metals Acquisition Corp.), EM, KCM, KMMI, NS World, and Handa Lab for the year ended December 31, 2025, is filed as Exhibit 99.7 and incorporated herein by reference.

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

The Management's Discussion and Analysis of Financial Condition and Results of Operations for EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.8 and incorporated herein by reference.

The Management's Discussion and Analysis of Financial Condition and Results of Operations of EM for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024 is filed as Exhibit 99.9 and incorporated herein by reference.

The Management's Discussion and Analysis of Financial Condition and Results of Operations for KCM for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.10 and incorporated herein by reference.

The Management's Discussion and Analysis of Financial Condition and Results of Operations for KMMI for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.11 and incorporated herein by reference.

The Management's Discussion and Analysis of Financial Condition and Results of Operations for NS World for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.12 and incorporated herein by reference.

The Management's Discussion and Analysis of Financial Condition and Results of Operations for Handa Lab for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.13 and incorporated herein by reference.

**Item 9.01 Financial Statements and Exhibits.**

(a) *Financial Statements of Business Acquired.*

The audited financial statements of EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.1 and incorporated herein by reference.

The audited financial statements of EM for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.2 and incorporated herein by reference.

The audited financial statements of KCM for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.3 and incorporated herein by reference.

The audited financial statements of KMMI for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.4 and incorporated herein by reference.

The audited financial statements of NS World for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.5 and incorporated herein by reference.

The audited financial statements of Handa Lab for the years ended December 31, 2025 and 2024, are filed as Exhibit 99.6 and incorporated herein by reference.

(b) *Pro Forma Financial Information.*

The unaudited pro forma condensed combined financial information of EMAT (formerly Welsbach Technology Metals Acquisition Corp.), EM, KCM, KMMI, NS World, and Handa Lab for the year ended December 31, 2025, is filed as Exhibit 99.7 and incorporated herein by reference.

(d) *Exhibits*.

The following exhibits are being filed herewith:

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 23.1\* | [Consent of UHY LLP for EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024.](ea028354901ex23-1.htm) |
| 23.2\* | [Consent of UHY LLP for EM for the years ended December 31, 2025 and 2024.](ea028354901ex23-2.htm) |
| 23.3\* | [Consent of Grassi & Co., CPAs, P.C. for KCM for the year ended December 31, 2025.](ea028354901ex23-3.htm) |
| 23.4\* | [Consent of Ernst & Young Han Young for KCM for the year ended December 31, 2024.](ea028354901ex23-4.htm) |
| 23.5\* | [Consent of UHY LLP for KMMI for the year ended December 31, 2025.](ea028354901ex23-5.htm) |
| 23.6\* | [Consent of Ernst & Young Han Young for KMMI for the year ended December 31, 2024.](ea028354901ex23-6.htm) |
| 23.7\* | [Consent of UHY LLP for NS World for the year ended December 31, 2025.](ea028354901ex23-7.htm) |
| 23.8\* | [Consent of Ernst & Young Han Young for NS World for the year ended December 31, 2024.](ea028354901ex23-8.htm) |
| 23.9\* | [Consent Grassi & Co., CPAs, P.C. for Handa Lab for the year ended December 31, 2025.](ea028354901ex23-9.htm) |
| 23.10\* | [Consent of Ernst & Young Han Young for Handa Lab the year ended December 31, 2024.](ea028354901ex23-10.htm) |
| 99.1 | [Audited financial statements of Evolution Metals & Technologies Corp. (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024 (incorporated by reference to WTMA's Annual Report on Form 10-K (File No. 001-41183) filed with the SEC on February 20, 2026).](https://www.sec.gov/Archives/edgar/data/1866226/000121390026018858/ea0275540-10k_evolution.htm#a_027) |
| 99.2\* | [Audited financial statements of EM the years ended December 31, 2025 and 2024.](ea028354901ex99-2.htm) |
| 99.3\* | [Audited financial statements of KCM for the years ended December 31, 2025 and 2024.](ea028354901ex99-3.htm) |
| 99.4\* | [Audited financial statements of KMMI for the years ended December 31, 2025 and 2024.](ea028354901ex99-4.htm) |
| 99.5\* | [Audited financial statements of NS World for the years ended December 31, 2025 and 2024.](ea028354901ex99-5.htm) |
| 99.6\* | [Audited financial statements of Handa Lab for the years ended December 31, 2025 and 2024.](ea028354901ex99-6.htm) |
| 99.7\* | [Unaudited pro forma condensed combined balance sheet of the Company as of December 31, 2025, and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025.](ea028354901ex99-7.htm) |
| 99.8 | [Management's discussion and analysis of financial condition and results of operations of EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and December 31, 2024 (incorporated by reference to WTMA's Annual Report on Form 10-K (File No. 001-41183) filed with the SEC on February 20, 2026).](https://www.sec.gov/Archives/edgar/data/1866226/000121390026018858/ea0275540-10k_evolution.htm#a_012) |
| 99.9\* | [Management's discussion and analysis of financial condition and results of operations of EM for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024.](ea028354901ex99-9.htm) |
| 99.10\* | [Management's discussion and analysis of financial condition and results of operations of KCM for the years ended December 31, 2025 and 2024.](ea028354901ex99-10.htm) |
| 99.11\* | [Management's discussion and analysis of financial condition and results of operations of KMMI for the years ended December 31, 2025 and 2024.](ea028354901ex99-11.htm) |
| 99.12\* | [Management's discussion and analysis of financial condition and results of operations of NS World for the years ended December 31, 2025 and 2024.](ea028354901ex99-12.htm) |
| 99.13\* | [Management's discussion and analysis of financial condition and results of operations of Handa Lab for the years ended December 31, 2025 and 2024.](ea028354901ex99-13.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March 31, 2026

---

| | |
|:---|:---|
| **Evolution Metals & Technologies Corp.** | **Evolution Metals & Technologies Corp.** |
| By*:* | */s/ Christopher Clower* |
| Name: | Christopher Clower |
| Title: | Chief Financial Officer and Chief Operating Officer |

---

## Exhibit 23.1

**Exhibit 23.1**

<u>Independent Registered Public Accounting Firm's Consent</u>

We hereby consent to the incorporation by reference our report dated February 20, 2026, with respect to our audits of Evolution Metals & Technologies Corp.'s (formerly, Welsbach Technology Metals Acquisition Corp.) consolidated financial statements as of and for the years ended December 31, 2025 and 2024, that appears in this Amendment No.2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial doubt about Evolution Metals & Technologies Corp.'s ability to continue as a going concern.

*/s/ UHY LLP*

New York, New York

March 31, 2026

## Exhibit 23.2

**Exhibit 23.2**

<u>Independent Registered Public Accounting Firm's Consent</u>

We hereby consent to the inclusion of our report dated March 31, 2026, with respect to our audits of Evolution Metals LLC's consolidated financial statements as of December 31, 2025 and 2024 and for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, that appears in this Amendment No.2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial doubt about Evolution Metals LLC's ability to continue as a going concern.

*/s/ UHY LLP*

New York, New York

March 31, 2026

## Exhibit 23.3

**Exhibit 23.3**

<u>Independent Registered Public Accounting Firm's Consent</u>

We consent to the inclusion in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated March 31, 2026, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audit of the financial statements of KCM Industry Co., Ltd. as of December 31, 2025 and for the year then ended, which report appears in such Amendment No. 2 to Form 8-K.

---

| |
|:---|
| */s/ Grassi & Co., CPAs, P.C.* |
| Grassi & Co., CPAs, P.C. |
| Glastonbury, Connecticut |
| March 31, 2026 |

---

## Exhibit 23.4

**Exhibit 23.4**

<u>Consent of Independent Auditor</u>

We hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April 21, 2025 relating to the financial statements of KCM Industry Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment No. 2 to Form 8-K.

 

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

## Exhibit 23.5

**Exhibit 23.5**

<u>Independent Registered Public Accounting Firm's Consent</u>

We hereby consent to the inclusion of our report dated March 31, 2026, with respect to our audit of KMMI Inc.'s financial statements as of December 31, 2025 and for the year then ended that appears in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial doubt about KMMI Inc.'s ability to continue as a going concern.

*/s/ UHY LLP*

New York, New York

March 31, 2026

## Exhibit 23.6

**Exhibit 23.6**

<u>CONSENT OF INDEPENDENT AUDITOR</u>

We hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April 21, 2025 relating to the financial statements of KMMI Inc. for the year ended December 31, 2024, which appears in such Amendment No. 2 to Form 8-K.

 

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

## Exhibit 23.7

**Exhibit 23.7**

<u>Independent Registered Public Accounting Firm's Consent</u>

We hereby consent to the inclusion of our report dated March 31, 2026, with respect to our audit of NS World Co. Ltd.'s financial statements as of December 31, 2025 and for the year then ended that appears in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained explanatory paragraphs regarding substantial doubt about NS World Co. Ltd.'s ability to continue as a going concern and regarding related party transactions.

*/s/ UHY LLP*

New York, New York

March 31, 2026

## Exhibit 23.8

**Exhibit 23.8**

<u>CONSENT OF INDEPENDENT AUDITOR</u>

We hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April 21, 2025 relating to the financial statements of NS World Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment No. 2 to Form 8-K.

 

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

## Exhibit 23.9

**Exhibit 23.9**

<u>Independent Registered Public Accounting Firm's Consent</u>

We consent to the inclusion in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated March 31, 2026, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audit of the financial statements of Handa Lab Co., Ltd. as of December 31, 2025 and for the year then ended, which report appears in such Amendment No. 2 to Form 8-K.

---

| |
|:---|
| */s/ Grassi & Co., CPAs, P.C.* |
| Grassi & Co., CPAs, P.C. |
| Glastonbury, Connecticut |
| March 31, 2026 |

---

## Exhibit 23.10

**Exhibit 23.10**

<u>CONSENT OF INDEPENDENT AUDITOR</u>

We hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April 21, 2025 relating to the financial statements of Handa Lab Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment No. 2 to Form 8-K.

 

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

## Exhibit 99.2

**Exhibit 99.2**

**EVOLUTION METALS LLC FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **Audited Financial Statements of Evolution Metals LLC as of December 31, 2025 and 2024 and for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024** |  |
| [Report of Independent Registered Public Accounting Firm PCAOB ID 1195](#f_001) | F-2 |
| [Balance Sheet as of December 31, 2025 and 2024](#f_002) | F-3 |
| [Statement of Operations for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024](#f_003) | F-4 |
| [Statement of Changes in Member's Deficit for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024](#f_004) | F-5 |
| [Statement of Cash Flows for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024](#f_005) | F-6 |
| [Notes to Financial Statements](#f_006) | F-7 |

---

**Report of Independent Auditors**

To the Board of Directors of and <br> Stockholders of Evolution Metals and <br> Technologies Corp.

**Opinion on the Consolidated financial statements**

We have audited the accompanying consolidated balance sheets of Evolution Metals LLC (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, member's deficit, and cash flows for the year ended December 31, 2025 and the period from February 8, 2024 (Inception) to December 31, 2024, and the related notes to the consolidated financial statements (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and the period from February 8, 2024 (Inception) to December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company consummated its business combination subsequent to December 31, 2025. However, the Company's business plan is dependent on future financing, and the Company's working capital is not sufficient to complete its planned activities for the upcoming year. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's evaluation of the events, conditions and plans regarding these matters are also described in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, and our opinion is not modified with respect to that matter.

**Basis for Opinion**

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company's auditor since 2024.

/s/ UHY LLP

New York, New York

March 31, 2026

**EVOLUTION METALS LLC AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| **ASSETS** |  |  |
| **Current assets** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $11684923 | $2614710 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 58679 | 23191 |
| &nbsp;&nbsp;&nbsp;Notes receivable, current, net | 1493348 | 957717 |
| &nbsp;&nbsp;&nbsp;Notes receivable, related party, net | 4167451 | 1624850 |
| &nbsp;&nbsp;&nbsp;Convertible notes receivable, net |  | 1981420 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 17404401 | 7201888 |
| &nbsp;&nbsp;&nbsp;Deferred transaction costs | 9265298 | 3994751 |
| &nbsp;&nbsp;&nbsp;Notes receivable, net of current portion, net |  | 4500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**TOTAL ASSETS** | $26669699 | $15696639 |
| **LIABILITIES AND MEMBERS' DEFICIT** |  |  |
| **Current liabilities** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $4651165 | $1523278 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 339471 | 84337 |
| &nbsp;&nbsp;&nbsp;Notes payable, related party | 483582 |  |
| &nbsp;&nbsp;&nbsp;July Investment Agreement Derivative (Note 8) | 379204796 | 53231638 |
| &nbsp;&nbsp;&nbsp;CPU Share Allocation Obligations (Note 8) | 292679981 | 10231516 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 677358995 | 65070769 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**TOTAL LIABILITIES** | 677358995 | &nbsp;&nbsp;&nbsp;&nbsp;65070769 |
| **COMMITMENTS AND CONTINGENCIES (NOTE 13)** |  |  |
| **MEMBERS' DEFICIT** |  |  |
| &nbsp;&nbsp;&nbsp;Member units, voting, $0.0001 par value; unlimited units authorized as of December 31, 2025 and 2024; 100,000 and 1,000,000 units issued and outstanding as of December 31, 2025 and 2024, respectively | 10 | 100 |
| &nbsp;&nbsp;&nbsp;Member units, non-voting, $0.0001 par value; unlimited units authorized as of December 31, 2025; 900,000 units issued and outstanding as of December 31, 2025; No units authorized, issued and outstanding as of December 31, 2024 | 90 |  |
| &nbsp;&nbsp;&nbsp;Convertible preferred units, $0.0001 par value; unlimited units authorized as of December 31, 2025 and 2024, 59,671,021 and 35,230,021 units issued and outstanding as of December 31, 2025 and 2024, respectively | 26261904 | 9587352 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (676957426) | (58961582) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income | 6126 |  |
| **TOTAL MEMBERS' DEFICIT** | (650689296) | (49374130) |
| **TOTAL LIABILITIES AND MEMBERS' DEFICIT** | $26669699 | $15696639 |

---

 

*The accompanying notes are an integral part of these consolidated financial statements.*

 

**EVOLUTION METALS LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended<br> December 31,<br> 2025** | **For the<br> Period from<br> February 8,<br> 2024<br> (inception) to<br> December 31,<br> 2024** |
| **Operating expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | $7948985 | $3598833 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 341804 | 202641 |
| **Loss from operations** | **(8290789)** | **(3801474)** |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of CPU Share Allocation Obligations | (274278481) | (1860869) |
| &nbsp;&nbsp;&nbsp;Change in fair value of July Investment Agreement Derivative | (325973158) | (15571302) |
| &nbsp;&nbsp;&nbsp;Day one loss on CPU Share Allocation Obligations | (403536) | (227994) |
| &nbsp;&nbsp;&nbsp;Day one loss on July Investment Agreement Derivatives |  | (20160319) |
| &nbsp;&nbsp;&nbsp;Interest income | 117772 | 779206 |
| &nbsp;&nbsp;&nbsp;Allowance for credit losses | (9417652) | (18118830) |
| &nbsp;&nbsp;&nbsp;Other income | 250000 |  |
| Total other expense, net | (609705055) | (55160108) |
| **Net loss** | $**(617995844)** | $**(58961582)** |
| **Other comprehensive income (loss):** |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 6126 |  |
| Total other comprehensive income | 6126 |  |
| **Comprehensive loss** | $**(617989718)** | $**(58961582)** |
| Weighted average participating member units, basic and diluted | 1000000 | 1000000 |
| Net loss per participating member units, basic and diluted | $(618.00) | $(58.96) |

---

 

*The accompanying notes are an integral part of these consolidated financial statements*.

**EVOLUTION METALS LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S DEFICIT**

**FOR THE YEAR ENDED DECEMBER 31, 2025 AND FOR THE PERIOD FROM**

**FEBRUARY 8, 2024 (INCEPTION) TO DECEMBER 31, 2024**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Member Units,<br> Voting** | **Member Units,<br> Voting** | **Member Units,<br> Non-Voting** | **Member Units,<br> Non-Voting** | **Convertible<br> Preferred Units** | **Convertible<br> Preferred Units** | | | |
|  | **Units** | **Amount** | **Units** | **Amount** | **Units** | **Amount** | **Accumulated**<br>**Deficit** | **Accumulated<br> Other<br> Comprehensive**<br>**Income** | **Members'**<br>**Deficit** |
| **Balance, February 8, 2024 (inception)** | **—** | $**—** | **—** | $**—** | **—** | $**—** | $**—** | $**—** | $**—** |
| Issuance of member units | 1000000 | 100 |  |  |  |  |  |  | 100 |
| Issuance of convertible preferred units |  |  |  |  | 35230021 | 9587352 |  |  | 9587352 |
| Net loss |  |  |  |  |  |  | (58961582) |  | (58961582) |
| **Balance, December 31, 2024** | **1000000** | **100** | **—** | **—** | **35230021** | **9587352** | **(58961582)** | **—** | **(49374130)** |
| Issuance of convertible preferred units |  |  |  |  | 24441000 | 16674552 |  |  | 16674552 |
| Conversion of member units, voting to member units<br> non-voting | (900000) | (90) | 900000 | 90 |  |  |  |  |  |
| Foreign currency translation adjustment |  |  |  |  |  |  |  | 6126 | 6126 |
| Net loss |  |  |  |  |  |  | (617995844) |  | (617995844) |
| **Balance, December 31, 2025** | **100000** | $**10** | **900000** | $**90** | **59671021** | $**26261904** | $**(676957426)** | $**6126** | $**(650689296)** |

---

 

*The accompanying notes are an integral part of these consolidated financial statements.*

 

 

**EVOLUTION METALS LLC AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | |
|:---|:---|:---|
|  | **For the<br> Year Ended <br> December 31,<br> 2025** | **For the<br> Period from<br> February 8,<br> 2024<br> (inception) to <br> December 31,<br> 2024** |
| **Cash flows from operating activities** |  |  |
| Net loss | $(617995844) | $(58961582) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowances for credit losses | 9417651 | 18118830 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Day one loss on CPU Share Allocation Obligations | 403536 | 227994 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Day one loss on July Investment Agreement Derivatives |  | 20160319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of CPU Share Allocation Obligations | 274278481 | 1860869 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of July Investment Agreement Derivative | 325973158 | 15571302 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation |  | 40000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Paid in kind – interest |  | (709467) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (35527) | (23191) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (909067) | 576731 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 255134 | 87 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | (8612478) | (3138108) |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Collection of notes receivable | 200000 |  |
| &nbsp;&nbsp;&nbsp;Issuance of notes receivable, related party | (5085201) | (3249700) |
| &nbsp;&nbsp;&nbsp;Issuance of notes receivable | (1127262) | (10723650) |
| &nbsp;&nbsp;&nbsp;Acquisition of notes receivable | (2000) |  |
| &nbsp;&nbsp;&nbsp;Issuance of convertible notes receivable |  | (12500000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | (6014463) | (26473350) |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible preferred units | 24441000 | 17730005 |
| &nbsp;&nbsp;&nbsp;Proceeds from notes payable, related party | 489737 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from July Investment Agreement |  | 17500017 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of member units |  | 100 |
| &nbsp;&nbsp;&nbsp;Payments for deferred transaction costs | (1233737) | (3003954) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by financing activities** | 23697000 | 32226168 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash | 154 |  |
| **Net change in cash** | 9070213 | 2614710 |
| Cash, beginning of period | 2614710 |  |
| **Cash, end of period** | $11684923 | $2614710 |
| **Supplemental cash flow information:** |  |  |
| &nbsp;&nbsp;&nbsp;Taxes paid | $— | $— |
| &nbsp;&nbsp;&nbsp;Interest paid | $— | $— |
| **Supplemental disclosure of noncash investing and financing activities:** |  |  |
| Fair value of CPU Share Allocation Obligations issued in connection with issuance of certain convertible preferred units | $8169984 | $8370647 |
| Fair value of July Investment Agreement Derivative issued in connection with issuance of certain convertible preferred units | $— | $37660336 |
| Deferred transaction costs included within accounts payable and accrued expenses | $4036954 | $990797 |

---

 

*The accompanying notes are an integral part of these consolidated financial statements.*

 

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 1 — Description of Organization and Business Operations**

Evolution Metals LLC (the "Company" or "EM LLC") was formed in Delaware in February 2024 to develop a secure, reliable global supply chain for critical minerals and materials ("CMM"), leveraging advanced technologies and strategic consolidation of midstream and downstream manufacturers. The Company will support key industries, such as automotive while driving a sustainable future through efficient processing and the application of cutting edge robotics and artificial intelligence ("AI"). The Company has two wholly owned subsidiaries: EM LLC (Korea), incorporated in South Korea on January 10, 2025, and EMT Sub Co. Ltd ("EMT Sub") incorporated in South Korea on January 21, 2025.

To achieve this vision, the Company entered into equity purchase agreements during 2024 to acquire a controlling equity interest in four separate Korean entities (collectively, the "Four Entities") critical to the CMM supply chain in order to combine initial capabilities believed to serve as the foundation for the Company's growth — transforming raw materials into essential components for further manufacturing; recycling lithium batteries; producing materials that are essential feedstocks used in the production of advanced magnets, which include (a) bonded magnets that are vital components in various high-tech applications (including automotive, aerospace, and consumer electronics industries) and (b) sintered magnets that are crucial for high-performance applications (particularly in the defense and aerospace sectors where precision and durability are paramount); developing AI software and machines to drive automation, innovation, and efficiency to reduce labor costs, lower manufacturing reject rates, and automating the quality of control processes.

Upon completion of the acquisition of the Four Entities, the Company is expected to produce materials annually, including magnets and battery metals to meet the growing global demand driven by the electrification of transportation, the expansion of green energies, advancements in healthcare technologies, military and defense manufacturing, and consumer appliances, among others.

On April 1, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Welsbach Technology Metals Acquisition Corp., a Delaware corporation ("WTMA"), WTMA Merger Subsidiary LLC, a Delaware limited liability company and direct wholly owned subsidiary of WTMA ("Merger Sub"), and NewCo Inc., a Delaware corporation ("NewCo") and William David Wilcox Jr., as the sole stockholders of NewCo. On November 6, 2024, the Company, WTMA and Merger Sub entered into an Amended and Restated Agreement and Plan of Merger, as amended by the November 11, 2024 Amendment No 1 to Amended and Restated Agreement and Plan of Merger, the February 10, 2025 Amendment No 2 to Amended and Restated Agreement and Plan of Merger, the March 31, 2025 Amendment No 3 to Amended and Restated Agreement and Plan of Merger, the June 11, 2025 Amendment No. 4 to Amended and Restated Agreement and Plan of Merger, the July 21, 2025 Amendment No. 5 to Amended and Restated Agreement and Plan of Merger, and the January 5, 2026 Amendment No. 6 to Amended and Restated Agreement and Plan of Merger (collectively, the "Amended Merger Agreement"). The Amended Merger Agreement provides that Merger Sub will be merged with and into the Company, with the Company being the surviving corporation and resulting in EM LLC being a wholly owned subsidiary of WTMA (the "Merger" and, collectively with the other transactions contemplated by the Amended Merger Agreement, the "Business Combination"). The consummation of the transactions contemplated by the Amended Merger Agreement are conditioned on the consummation of the acquisition of the Four Entities.

On May 14, 2025, the initial Registration Statement on Form S-4 relating to the Business Combination was declared effective by the SEC. On July 29, 2025 and August 7, 2025, WTMA filed Post-Effective Amendments to its Registration Statement on Form S-4 relating to the Business Combination. The Registration Statement, as amended, was declared effective by the SEC on August 8, 2025.

On January 5, 2026, the Company completed the acquisitions of the Four Entities and then subsequently consummated the Business Combination contemplated by the Amended Merger Agreement (the "Closing"). After consummation of the Business Combination, WTMA changed its name to Evolution Metals & Technologies Corp. (such post-closing entity is referred to as "New EM"). On January 6, 2026, New EM's common stock began to trade on the Nasdaq Stock Market LLC ("Nasdaq") under the symbol "EMAT" (see Note 4).

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 2 — Liquidity and Going Concern**

Historically, the Company's primary sources of liquidity have been cash flows from issuance of convertible preferred units. The Company reported a net loss of approximately $617,996,000 for the year ended December 31, 2025. As of December 31, 2025, the Company had an aggregate cash balance of approximately $11,685,000 and a net working capital deficit of approximately $659,955,000. These are indicators of substantial doubt as to the Company's ability to continue as a going concern for at least one year from issuance of these consolidated financial statements.

On January 5, 2026, the Company consummated the Business Combination and is now focused on executing its post-combination operating plan and capital formation strategy. The Business Combination did not include significant external financing at closing, and the Company expects to require additional capital to support its operations and growth initiatives. Management is actively pursuing additional sources of capital, including equity and strategic financing arrangements.

Based on the Company's current liquidity position and expected operating needs, management has concluded that substantial doubt about the Company's ability to continue as a going concern has not been alleviated. The Company expects to address its liquidity requirements through the execution of its capital-raising plans and the continued development of its operating business.

The Company's future capital requirements will depend on many factors, including the Company's timing and extent of its research and the acquisition of processing facilities. In order to finance these opportunities and associated costs, the Company would need to raise additional financing. While there can be no assurances, the Company intends to raise such capital through additional equity raises. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital on acceptable terms when needed, its product development business, results of operations and financial condition would be materially and adversely affected.

As a result of the above, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standard Board's ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date these financial statements are available to be issued. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

**Note 3 — Summary of Significant Accounting Policies**

 ****

***Basis of Presentation and Principles of Consolidation:*** The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), expressed in U.S. dollars. References to GAAP issued by the FASB in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards Codification ("ASC"). The consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

 ****

***Emerging Growth Company:*** The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups ("JOBS") Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as to those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

***Use of Estimates:*** The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as more current information becomes available and accordingly the actual results could differ significantly from those estimates. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The Company's most significant assumptions and estimates relate to the estimation of the allowance for credit losses, fair value of the July Investment Agreement Derivative, and the fair value of the CPU Share Allocation Obligations, which includes the post-money valuation of the Company, (see Note 8 and Note 12). These estimates are based on assumptions which management believes are reasonable. The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates.

 ****

***Foreign Currency Translation and Transactions:*** The Company's reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction.

Assets and liabilities are translated using the exchange rate in effect as of the balance sheet date. Expenses are translated using the average exchange rates in effect for the periods presented. The effects of translating these consolidated financial statements from functional currency to reporting currency are recorded in accumulated other comprehensive income or loss as a component of member's equity. For the year ended December 31, 2025 a translation gain of approximately $6,000 was recognized and for the period from February 8, 2024 (inception) to December 31, 2024, no translation gain was recognized.

Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in other (expense) income, net in the consolidated statements of operations and comprehensive loss using the average exchange rates in effect during the period.

 ****

***Segment Information:*** ASC 280, "Segment Reporting" ("ASC 280"), defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company's CODM is the manager, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that there is only one reportable segment. When evaluating the Company's performance and making key decisions regarding resource allocation, the CODM reviews several key metrics including operating expenses and cash and cash equivalents. The measure of segment assets is reported on the consolidated balance sheets as total assets.

Operating expenses, inclusive of general and administrative costs and sales and marketing costs, are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to fund operations until the Business Combination closes. The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. The categories of operating expenses, as reported on the consolidated statements of operations and comprehensive loss, are the significant segment expenses provided to the CODM on a regular basis.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

 ****

***Cash and Cash Equivalents:*** The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

 ****

***Concentration of Credit Risk:*** Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution and notes receivable. Cash accounts in a financial institution may at times exceed the Federal Depository Insurance Corporation limit. The amount over these insured limits as of December 31, 2025 was approximately $11,425,000. As of December 31, 2025, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.

The Company is subject to potential credit risk related to business, economic and financial market conditions that affect entities it has advanced amounts to which has been heightened as a result of recent economic and financial market conditions, including in connection with the uncertainties and challenges in the overall economy, including, among other things, inflationary pressure and increased interest rates. Certain entities that have received advances from the Company have experienced significant financial difficulties (including bankruptcy), and others may experience financial difficulties in the future. These difficulties expose the Company to increased risk related to collectability.

 ****

***Fair Value of Financial Instruments:*** ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"), clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

*Level 1:* Inputs based on unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

---

| | |
|:---|:---|
| *Level 2:* | Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar instruments in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data. |

---

---

| | |
|:---|:---|
| *Level 3:* | Inputs reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for the asset and liability in the market and significant to the overall fair value measurement. |

---

An asset's or liability's fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and liabilities measured at fair value are based on one or more of the following techniques noted in ASC 820:

● *Market approach:* Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

● *Cost approach:* Amount that would be required to replace the service capacity of an asset (replacement cost).

 

*●* *Income approach:* Techniques to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option pricing, and excess earnings models).

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

The Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The Company's financial instruments with a carrying value that approximates fair value consist of cash and cash equivalents, prepaid and other current assets, notes receivable, convertible notes receivable, accounts payable and accrued expenses because of the short-term nature or expected settlement dates of these instruments. The Company's financial instruments that are measured at fair value on a recurring basis consist of money market funds, the July Investment Agreement Derivative (see Note 8 and Note 12) and the CPU Share Allocation Obligations (see Note 8 and Note 12).

 ****

***Notes Receivable:*** Notes receivable consists of secured and unsecured promissory notes with no conversion features and was accounted for as receivables in the scope of ASC 310, "Receivables" ("ASC 310"), which was initially recorded at present value and subsequently re-measured at amortized cost (see Note 5). Notes receivable is reported net of an allowance for credit losses on the accompanying consolidated balance sheets.

 ****

***Convertible Notes Receivable:*** Convertible notes receivable consists of convertible promissory notes that can convert into a privately held company's equity securities at the Company's election and was accounted for as receivables in the scope of ASC 310, which was initially recorded at present value and subsequently re-measured at amortized cost (see Note 6). The notes did not meet the definition of a debt security in the scope of ASC 320, "Investments — Debt Securities" ("ASC 320"). Convertible notes receivable were reported net of an allowance for credit losses on the accompanying consolidated balance sheets.

 ****

***Allowance for Credit Losses:*** The Company recognizes an allowance for credit losses on notes receivable, convertible notes receivable and notes receivable — related party (collectively, the "Outstanding Receivables") in an amount equal to the estimated probable losses net of recoveries. The Company currently monitors financial conditions of the companies it has Outstanding Receivables owed from on a continuing basis. After considering current economic conditions and financial stability of its Outstanding Receivables counterparties, an allowance for credit losses is maintained in the consolidated balance sheets at a level which management believes is sufficient to cover all probable future credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions that might impact collectability.

The Company classifies loans as non-accrual and recognizes income only to the extent cash is received when there is reasonable doubt about collectability of principal and interest. Management used judgment in reaching this determination for all Outstanding Receivables. When a loan is placed on non-accrual status, all previously accrued but uncollected interest is reversed or charged off as a provision for credit losses and the accrual of interest income is discontinued. If a payment is received when a loan is non-accrual, the payment is applied to the principal balance. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. As of December 31, 2025, the convertible notes receivable were classified as non-accrual (see Note 6). As of December 31, 2024, there were no Outstanding Receivables classified as non-accrual.

Outstanding Receivables are carried at amortized cost, net of allowances for credit losses. Amortized cost approximated book value as of December 31, 2025 and 2024. After all reasonable attempts to collect a receivable have failed, the amount of the receivable is written off against the allowance.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

The following table represents a roll forward of the allowance for credit losses for the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes <br> receivable** | **Convertible <br> notes <br> receivable** | **Notes <br> receivable – <br> related party** |
| **Allowance Balance, February 8, 2024 (Inception)** | $— | $— | $— |
| Provision | 5265933 | 11228047 | 1624850 |
| Write offs |  |  |  |
| Recoveries and other |  |  |  |
| **Allowance Balance, December 31, 2024** | $**5265933** | $**11228047** | $**1624850** |
| Provision | 4893632 | 1981420 | 2542600 |
| Write offs |  |  |  |
| Recoveries and other |  |  |  |
| **Allowance Balance, December 31, 2025** | $**10159565** | $**13209467** | $**4167450** |

---

An aging analysis of the Company's past due Outstanding Receivables was as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1-30 Days <br> Past Due** | **31-60 Days <br> Past Due** | **Greater than <br> 61 Days <br> Past Due** | **Total** |
| **December 31, 2025** | | | | |
| Notes Receivable | $— | $9000000 | $331785 | $9331785 |
| Convertible Notes Receivable (not accruing interest) |  |  | 13209467 | 13209467 |
| Notes Receivable, Related Party |  |  |  |  |
|  | $— | $9000000 | $13541252 | $22541252 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **1-30 Days <br> Past Due** | **31-60 Days <br> Past Due** | **Greater than <br> 61 Days <br> Past Due** | **Total** |
| **December 31, 2024** | | | | |
| Notes Receivable | $— | $— | $— | $— |
| Convertible Notes Receivable | 13209467 |  |  | 13209467 |
| Notes Receivable, Related Party |  |  |  |  |
|  | $13209467 | $— | $— | $13209467 |

---

For the year ended December 31, 2025, the interest income that would have been recorded under original terms was $2,008,969. For the year ended December 31, 2025, interest income actually received in cash was $0. For the year ended December 31, 2025, the interest income forgone was $2,008,969.

 ****

***Convertible Preferred Units:*** Convertible preferred units consist of preferred units issued with either (i) an option to convert into New EM common shares at the option of the holders or (ii) automatic conversion into New EM Common Stock ninety days after closing of the Business Combination. (see Note 4). The convertible preferred units are accounted for as permanent equity in the scope of ASC 815, "Derivatives and Hedging" ("ASC 815") and recorded at fair value which is representative of the proceeds received (see Note 10).

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

***Derivative Liabilities:*** Certain agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of shares of New EM common shares to certain investors and vendors. The Company applies ASC 480, "Distinguishing Liabilities and Equity" ("ASC 480"), ASC 815, and ASC 718, "Compensation — Stock Compensation" ("ASC 718") in its evaluation of the terms of each agreement. Financial instruments that were identified in each agreement and

● meet the criteria to be accounted for as a liability in accordance with ASC 480 were reported at fair value at issuance and were re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations and comprehensive loss;

● do not meet the criteria to be accounted for as a liability in accordance with ASC 480 and do not meet the criteria to be accounted for as equity in accordance with ASC 815 are accounted for as a liability and were reported at fair value at issuance and were re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations and comprehensive loss;

● meet the criteria of a liability-classified share-based payment transaction in accordance with ASC 718 were measured based on the fair value of the transaction on the date of grant and remeasured to fair value each reporting period until settlement or cancellation.

Agreements where multiple financial instruments are identified that would individually warrant separate accounting as a derivative instrument are bundled together as a single, compound embedded derivative that is bifurcated and accounted for separately from the host contract in accordance with ASC 815.

 ****

***Impairment of Long-Lived Assets:*** The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that an asset group's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analysis in accordance with ASC 360-10, "*Impairment or Disposal of Long-Lived Assets*" ("ASC 360-10"), which requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company did not record impairment losses during the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024.

 ****

***Business Combinations and Asset Acquisitions:*** The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business and therefore should be accounted for as a business combination, or if the transaction should be accounted for as an asset acquisition. Under ASC 805, "Business Combinations" ("ASC 805"), an acquisition does not qualify as a business when substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets. If the Company determines that the screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, the Company further considers whether the acquisition includes, at a minimum, inputs and processes that have the ability to create outputs in the form of revenue. If the assets acquired meet this criteria, the transaction is accounted for as a business combination.

The Company accounts for acquisitions that qualify as asset acquisitions utilizing a cost accumulation model whereby the purchase price of the acquisition is allocated to the assets acquired on a relative fair value basis on the date of acquisition. Inputs used to determine such fair values are primarily based upon internally developed models, publicly-available information, a risk-adjusted discount rate and/or publicly-available data regarding transactions consummated by other market participants, as applicable.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

The Company accounts for business combinations under the acquisition method of accounting under ASC 805, whereby identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree are recognized and measured as of the acquisition date at fair value. Goodwill is recognized to the extent by which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired, liabilities assumed, and noncontrolling interest requires management's judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items.

Transaction-related costs related to asset acquisitions are capitalized as part of the cost basis of the acquired assets. Transaction-related expenses and restructuring costs that are deemed to be part of an acquisition of a business are expensed as incurred.

 ****

***Deferred Transaction Costs:*** Commissions, legal fees and other costs that are direct and incremental costs directly related to the contemplated reverse capitalization transaction (see Note 4 and Note 15) are capitalized as deferred transaction costs until the consummation of the transaction. The costs will be reclassified to additional paid-in capital upon the closing of the transaction. If the transaction does not close, these transaction costs will be written off to general and administrative expenses at such time the transaction is determined to be unsuccessful. As of December 31, 2025 and 2024, deferred transaction costs totaling approximately $9,265,000 and $3,995,000, respectively, were recorded on the accompanying consolidated balance sheets related to the anticipated reverse capitalization (see Note 4 and Note 15).

 ****

***Share-Based Compensation Cost:*** Compensation cost attributable to liability-classified share-based payment transactions is recorded over the vesting term of a share-based payment transaction, net of estimated forfeitures. Changes in the estimated vesting term are determined each reporting period and prospectively applied to the unrecognized compensation cost associated with an unvested transaction. Changes in the fair-value-based measure are recognized as compensation cost (with a corresponding increase or decrease in the share-based liability) either immediately if the award is vested or based on the percentage of the vesting term that has completed if the award is unvested.

A modification of a liability-classified award is accounted for as an exchange of an original award for a new award and is accounted for by calculating the award's fair-value-based measure and multiplying this amount by the percentage of the service rendered as of the modification date. Compensation cost is adjusted for the difference between the cumulative cost recognized for the modified award the cumulate cost recognized for the original award.

 ****

***Net Loss Per Unit:*** Net loss per unit is calculated and reported under the "two-class" method, which is an earnings allocation model that treats participating securities as having rights to earnings that otherwise would have been available to holders of member units. Under the two-class method, earnings for the period are required to be allocated between member units and participating securities based upon their respective rights to receive distributed and undistributed earnings. For net loss per share computation purposes, the Company's member units, voting and member units, non-voting are considered one single class of common equity because both classes have the same dividend and liquidation rights. The Company's convertible preferred units do not participate in the earnings or losses of the Company and are therefore not participating securities.

Basic net loss per unit is computed by dividing net loss for the period by the weighted average number of member units outstanding during the period. In periods when the Company is in a net loss position, potentially dilutive securities are excluded from the computation of diluted net loss per unit because their inclusion would have an anti-dilutive effect. Thus, basic net loss per unit is the same as diluted net loss per unit.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

Diluted net loss per unit is computed similar to basic net loss per unit except that the denominator is increased to include the potential dilutive effect of member unit equivalents on the average number of member units outstanding during the period. As of December 31, 2025 and 2024, there are no potentially dilutive securities currently issued and outstanding.

 ****

***Income Taxes:*** The Company is treated as a partnership for U.S. federal and most applicable state and local income tax purposes effective May 16, 2025. As a partnership, the Company is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by the Company is passed through to and included in the taxable income or loss of its members on a pro rata basis. As such, no recognition of federal or state income taxes for the Company has been provided for in the accompanying consolidated financial statements.

The Company accounts for income taxes in accordance with ASC 740, "Income Taxes" ("ASC 740"), which prescribes a recognition threshold and measurement process for accounting for uncertain tax positions and also provides guidance on various related matters such as derecognition, interest, penalties, and disclosures required. The Company does not have any entity-level uncertain tax positions. The Company files income tax returns in the U.S. federal jurisdictions, various state jurisdictions, and Korea. Generally, the Company is subject to examination by U.S. federal (or state and local) income tax authorities for three years from filing a tax return.

 ****

***Recent Accounting Pronouncements, adopted:***

ASU 2023-09, "Improvements to Income Tax Disclosures" ("ASU 2023-09") provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid. The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this standard resulted in additional tax disclosures in the consolidated financial statements.

ASU 2024-01, "Compensation-Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01") introduces updates to accounting standards related to the classification and measurement of financial instruments under ASC 320. The update primarily focuses on clarifying guidance for equity securities, debt instruments, and other financial assets, particularly in the areas of fair value measurement and impairment recognition. It aims to improve consistency and comparability in the reporting of financial instruments by refining the criteria for classifying securities and enhancing the methodology for recognizing and measuring impairments. ASU 2024-01 also mandates additional disclosures to provide greater transparency around the valuation techniques and assumptions used in determining the fair value of financial instruments. The update is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this standard did not have a material impact on the consolidated financial statements.

ASU 2024-02, "Codification Improvements-Amendments to Remove References to the Concepts Statements" ("ASU 2024-02") updates accounting standards for revenue recognition, lease accounting, and impairment of long-lived assets. ASU 2024-02 provides enhanced guidance for estimating variable consideration, accounting for contract modifications, determining lease terms, and simplifying impairment testing for long-lived assets. It also introduces increased disclosure requirements for financial instruments and derivatives. ASU 2024-02 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

 ****

***Recent Accounting Pronouncements, not yet adopted:***

ASU 2024-03, "Disaggregation of Income Statement Expenses ("DISE")" ("ASU 2024-03") requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosure about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 3 — Summary of Significant Accounting Policies** (cont.)

ASU 2023-06, "Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative" ("ASU 2023-06") incorporates several disclosure and presentation requirements currently residing in SEC Regulation S-X and S-K into the ASC. The amendments are applied prospectively and are effective when the SEC removes the related requirements from Regulation S-X and S-K. Any amendments the SEC does not remove by June 30, 2027 will not be effective. Early adoption is prohibited. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

ASU 2025-03, "Business Combination and Consolidation: Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity" ("ASU 2025-03") provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. The update aims to improve consistency and comparability in financial reporting, especially when companies merge with a special-purpose acquisition company ("SPAC"). ASU 2025-03 requires entities to apply the same factors used for determining the accounting acquirer in other acquisition transactions. Essentially, it aims to make financial reporting more comparable and decision-useful for investors by ensuring that the accounting acquirer is appropriately identified in acquisitions of VIEs, particularly in SPAC transactions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company's consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flow

**Note 4 — Proposed Business Combination**

 ****

***Merger Agreement with Welsbach Technology Metals Acquisition Corp***

Key terms of the Amended Merger Agreement include, but are not limited to, the following:

● Each issued and outstanding share of the Company's voting member units, nonvoting member units, and convertible preferred units on an as-converted basis will automatically be cancelled and converted into the right to receive the number of shares of New EM common stock in accordance with the Amended Merger Agreement.

● Total consideration consisted of (i) 416,436,066 shares of New EM common stock in exchange for the Company's voting member units issued and outstanding immediately prior to the Merger, (ii) 62,601,409 shares of New EM common stock in exchange for the Company's nonvoting member units issued and outstanding immediately prior to the Merger, and (iii) 109,436,178 shares of New EM common stock in exchange for the Company's convertible preferred units issued and outstanding immediately prior to the Merger.

● The New EM board of directors after the Closing will consist of six directors, which shall initially include six director nominees designated by the Company and reasonably acceptable to WTMA.

● The obligations of the Company to consummate the Merger are conditioned on, among other things, that as of the Closing, New EM would have available to it a positive amount of cash after giving effect to (x) the amount in the WTMA trust account as of the Closing, after deducting the amount required to satisfy WTMA's obligations to its stockholders (if any) that exercise their rights to redeem all or a portion of their shares of WTMA common stock pursuant to the WTMA charter and certain WTMA and EM LLC transaction expenses, plus (y) the amount of funding actually received by WTMA from its private investment in public equity offering prior to or substantially concurrently with the Closing, plus (z) the aggregate gross proceeds received or to be received by WTMA or EM LLC pursuant to any agreement or arrangement entered into prior to or substantially concurrently with the Closing in connection with the issuance or other grant of any interests of WTMA or EM LLC or any of WTMA's subsidiaries, if any (the "Minimum Available Cash Condition"). The Minimum Available Cash Condition is for the sole benefit of EM LLC.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 4 — Proposed Business Combination** (cont.)

● The Closing is subject to certain conditions, including, but not limited to, the approval of the Company's voting member and the approval of the stockholders of WTMA. Holders of WTMA's public shares will have the opportunity to redeem all or a portion of their public shares for cash in connection with the Business Combination.

In connection with the Amended Merger Agreement, the Company entered into a Sponsor Support and Lock-Up Agreement with WTMA, Welsbach Acquisition Holdings LLC, a Delaware limited liability company (the "Sponsor"), and certain officers and directors of WTMA ("Sponsor Persons") on November 6, 2024 and amended on February 10, 2025 WTMA (collectively, the "Amended Sponsor Support and Lock-Up Agreement"). Pursuant to the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to, among other things, vote all of its shares of WTMA common stock (as defined within the Amended Sponsor Support and Lock-Up Agreement) in favor of the Amended Merger Agreement and the Business Combination. Also pursuant to the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to certain customary lock-up restrictions on their ability to transfer their WTMA common stock and the shares of New EM common stock they will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

In connection with the Amended Merger Agreement, the Company also entered into an EM Equityholder Support and Lock-Up Agreement with WTMA and the sole member of the Company on November 6, 2024 and amended on February 10, 2025 (collectively and as further supplemented, the "Amended EM Equityholder Lock-Up Agreement"). Pursuant to the Amended EM Equityholder Lock-Up Agreement, the sole voting member of the Company agreed to execute and deliver written consents with respect to the Company's outstanding voting member units to adopt the Amended Merger Agreement and related transactions, approving the Business Combination. Also pursuant to the Amended EM Equityholder Lock-up Agreement, the holders of the member units of EM LLC agreed to certain customary lock-up restrictions on their ability to transfer their EM LLC common units and the shares of New EM common stock they will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

On January 5, 2026, in connection with the Business Combination, the equityholders of the Four Entities and the Company's holders of the Company's member units entered into lock-up agreements under which they agreed to certain customary lock-up restrictions on their ability to transfer the shares of New EM common stock they received at closing of the Business Combination until up to the third anniversary of the close of the Business Combination. Similarly, on January 5, 2026, the Company's convertible preferred units entered into lock-up agreements under which they agreed to certain customary lock-up restrictions on their ability to transfer the shares of New EM common stock they received at closing of the Business Combination until seven calendar days following the close of the Business Combination.

**Note 4 — Proposed Business Combination** (cont.)

During the period from February 8, 2024 (inception) to December 31, 2024, the Company entered into seven agreements to acquire controlling interests in seven different entities in connection with the Business Combination. Two of these agreements were terminated as of December 31, 2024, one of these agreements was terminated as of July 3, 2025, and the remaining agreements with four entities were terminated and replaced with share exchange agreements between each of the four Korean companies and a subsidiary of the Company ("EMT Sub"). The share exchange agreements were approved by the shareholders of the four Korean domiciled companies on June 2, 2025, with no dissenting shareholders. The share exchange agreements were consummated on January 5, 2026, immediately prior to the closing of the Business Combination. Under the share exchange agreements with the Four Entities, EMT Sub acquired the following shares of each target's common stock in exchange for the following number of non-voting EM LLC member units to be contributed to EMT Sub by EM LLC:

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Target** | **Shares of <br> Target's <br> common stock** | **Exchange <br> Ratio** | **EM Units** | **Value** |
| NS World, Co., Ltd. ("NSW") | 289055 | 0.009427 | 2725 | $12970000 |
| Handa Lab Co., Ltd. ("Handa") | 380800 | 0.004138 | 1576 | $7500000 |
| KCM Industry Co., Ltd. ("KCM") | 21666 | 0.1396 | 3026 | $14400000 |
| KMMI, Inc.("KMMI") | 22080 | 0.4187 | 9244 | $44000000 |

---

During the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, the Company has incurred and paid approximately $2,047,000 and $1,553,000, respectively, in connection with the audit, accounting and legal fees of the seven entities for which agreements were entered into.

 ****

***Terminated Acquisitions during 2024***

On March 15, 2024, the Company entered into a heads of agreement with KMMI (the "First HOA") to acquire 100% of the outstanding shares of KMMI in exchange for shares of New EM common stock totaling an estimated $44.0 million, that will be adjusted based on the results of due diligence on KMMI. The closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025, the First HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and KMMI, which the Company is not directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into a heads of agreement with Handa (the "Second HOA"). to acquire 100% of the outstanding shares of Handa in exchange for shares of New EM common stock totaling an estimated $7.5 million, that will be adjusted based on the results of due diligence on Handa. The closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025, the Second HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and Handa, which the Company is not directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into a heads of agreement with KCM (the "Third HOA") to acquire 100% of the outstanding shares of KCM in exchange for shares of New EM common stock totaling an estimated $14.4 million, that will be adjusted based on the results of due diligence on KCM. The closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025, the Third HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and KCM, which the Company is not directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into a heads of agreement with NSW (the "Fourth HOA") to acquire 100% of the outstanding shares of NSW in exchange for shares of New EM common stock totaling an estimated $13.0 million, that will be adjusted based on the results of due diligence on NSW. The closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025, the Fourth HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and NSW, which the Company is not directly a party to until such time the Business Combination closes.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 4 — Proposed Business Combination** (cont.)

In March 2024, the Company entered into an investment agreement with Clever Co. Ltd ("Clever"), a company incorporated in Korea to acquire at least 80%, but up to 100%, of the outstanding shares of Clever Co. Ltd in exchange for shares of New EM common stock totaling at least an estimated $14.1 million, but up to an estimated $17.6 million, with the amount adjusted in proportion the percentage of shares acquired. In October 2024, the Company decided not to pursue the acquisition of Clever.

In June 2024, the Company entered into an investment agreement with Camston Wrather LLC ("CW"), a company incorporated in Delaware to acquire 100% of the outstanding Class D units of CW in exchange for $1,250.0 million, payable through the issuance of shares of New EM common stock totaling an estimated $850.0 million and in exchange for cash totaling $400.0 million. In October 2024, the Company decided not to pursue the acquisition of CW and in November 2024 sent CW notice of termination.

On August 26, 2024, the Company entered into an investment agreement with Robert N Feldman Revocable Living Trust (the "Trust"), owner of 100% of the shares of Critical Mineral Recovery, Inc ("CMR") (the "August CMR Investment Agreement") to acquire 100% of the outstanding shares of CMR. The August CMR Investment Agreement was subsequently terminated on November 4, 2024 as a result of a fire sustained at CMR's facility on October 30, 2024, which resulted in a total loss of the physical facility.

On November 4, 2024, the Company entered into a new investment agreement with the Trust (the "November CMR Investment Agreement") to acquire 100% of the outstanding shares of CMR in exchange for $400.0 million, payable through the issuance of shares of New EM common stock totaling an estimated $225.0 million and in exchange for cash totaling $175.0 million. The $175.0 million cash payment is to be used by CMR to redeem all of its outstanding shares for $125.0 million and to repay CMR's debt for $50.0 million. The actual purchase price will be adjusted based on the results of due diligence on CMR. In February 2025, the November CMR Investment Agreement was terminated and replaced by the February 2025 Merger Agreement, which the Company is not directly a party to until such time the Business Combination closes.

 ****

***Terminated Acquisitions during 2025***

In March 2025, the Company entered into an amended and restated agreement and plan of merger with WTMA, the Company Critical Mineral Recovery, Inc. ("CMR"), and the other parties thereto (the "March 2025 Merger Agreement") providing for the acquisition of CMR. The March 2025 Merger Agreement amended and restated the Agreement and Plan of Merger, dated February 10, 2025, in its entirety. The March 2025 Merger Agreement was terminated on July 3, 2025.

In September 2024, the Company entered into a Transactional Advance Agreement ("CMR Advance Agreement") with CMR. Under the CMR Advance Agreement, the Company agreed to advance CMR $12,000,000 in three installments in connection with the contemplated acquisition of CMR. During the period from February 8, 2024 (inception) to December 31, 2024, a total of $9,000,000 was advanced to CMR under the terms of the CMR Advance Agreement. No amounts were advanced to CMR during the year ended December 31, 2025. As of December 31, 2025, $9,000,000 was outstanding under the CMR Advance Agreement.

For the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, allowances for credit loss of $4,500,000 were included in the accompanying consolidated statements of operations and comprehensive loss. In light of the termination of the March 2025 Merger Agreement effective July 3, 2025, the Company determined a full allowance for credit losses was necessary for the monies advanced under the CMR Advance Agreement.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 5 — Notes Receivable**

Notes receivable consisted of the following as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2025** | **December 31,<br> 2024** |
| CMR Advances (see Note 4) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9000000 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9000000 |
| WTMA Sponsor Notes | 2319128 | 1191865 |
| WTMA Co-Sponsor Note | 331785 | 331785 |
| Acquired Notes | 2000 |  |
| Clever Note |  | 200000 |
| &nbsp;&nbsp;&nbsp;Notes Receivable | 11652913 | 10723650 |
| &nbsp;&nbsp;&nbsp;Less: Allowance for credit losses | (10159565) | (5265933) |
| &nbsp;&nbsp;&nbsp;Less: Notes receivable, current portion, net of allowance for credit losses | (1493348) | (957717) |
| &nbsp;&nbsp;&nbsp;Notes Receivable, net of current portion, net of allowance for credit losses | $— | $4500000 |

---

 

*WTMA Sponsor Notes*

During 2025 and 2024, the Company and the Sponsor entered into four unsecured promissory notes totaling approximately $1,127,000 and four unsecured promissory notes totaling approximately $1,192,000, respectively, (the "WTMA Sponsor Notes"). The WTMA Sponsor Notes are non-interest bearing and mature on the earlier of the (a) Closing or (b) liquidation of WTMA.

For the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, allowances for credit loss of approximately $564,000 and $596,000, respectively, related to the WTMA Sponsor Notes were included in the accompanying consolidated statements of operations and comprehensive loss.

 

*WTMA Co-Sponsor Note*

During April 2024, the Company and the co-sponsor of WTMA entered into a senior secured promissory note in the amount of approximately $332,000 (the "WTMA Co-Sponsor Note"). The WTMA Co-Sponsor Note is non-interest bearing and matures on the earlier of the (a) Closing or (b) March 31, 2025. The WTMA Co-Sponsor Note is senior to other obligations of the borrower at any time and is secured by all shares of the borrower on a pari-passu basis with other notes in the series. As of December 31, 2025, the WTMA Co-Sponsor Note was in maturity default.

 

*Acquired Notes*

During September 2025, the Company acquired two notes receivables with aggregate principal balance of approximately $56,578,000 for an aggregate purchase price of $2,000. These acquisitions were determined to be asset acquisitions. Accordingly, the acquired notes receivable were recorded at cost on the acquisition date. There were no transactions costs incurred related to these acquisitions during the year ended December 31, 2025.

 

*Clever Note*

During April 2024, the Company entered into a loan agreement (the "Clever Note") with Clever Co. Ltd ("Clever"), in the amount of $200,000. The Company collected the Clever Note in full during April 2025. Accordingly, during the year ended December 31, 2025, the Company removed the allowance for credit loss of $170,000 that was recorded as of December 31, 2024.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 6 — Convertible Notes Receivable**

During 2024 the Company entered into three convertible promissory notes with CW whereby the Company advanced an aggregate principal amount of $12,500,000 (collectively, the "CW Notes") to fund its working capital. With the first advancement under the CW Notes in June 2024, the Company became a senior lender under CW's credit agreement.

The Company has the option to convert 100% of the outstanding principal balance, excluding unpaid interest, on the CW Notes into CW's Class AA Units of capital stock at the rate of one CW's Class AA Unit per $1.00. Prepayment of principal and accrued interest without consent of the Company is permitted. The CW Notes bear interest at a rate per annum equal to the adjusted daily Secured Overnight Financing Rate (3.87% at December 31, 2025) ("SOFR") plus an applicable margin of 10.00% (13.87% at December 31, 2025) and matured on December 28, 2024 and is recorded on a paid in-kind basis through an increase in the outstanding principal balance amount of the CW Notes (inclusive of interest capitalized the prior quarter).

In November 2024, the Company terminated its investment agreement with CW (see Note 4) in accordance with the terms of the investment agreement and notified CW that approximately $4,174,000 of the advances made by the Company under the convertible note receivable were due and payable. As of September 30, 2025, the CW Note was placed in non-accrual status. As of December 31, 2025, approximately $13,209,000 was outstanding under the CW Notes and in maturity default, which includes $709,000 of paid in-kind interest income recognized during the period from February 8, 2024 (inception) to December 31, 2024 and included as a component of interest income on the accompanying consolidated statements of operations and comprehensive loss. For the year ended December 31, 2025, approximately $2,009,000 of paid in-kind interest was not recorded as the CW Notes were on non-accrual status.

For the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, an allowance for credit losses of approximately $1,981,000 and $11,228,000, respectively, related to the CW Notes, of which approximately $106,000 and $603,000, respectively, was related to paid in-kind interest, was included in the accompanying statements of operations and comprehensive loss.

**Note 7 — Notes Receivable, Related Party**

During 2025 and 2024, the Company and the voting member of the Company entered into nine unsecured promissory notes in the aggregate amount of approximately $3,145,000 and five unsecured promissory notes in the aggregate amount of approximately $3,250,000, respectively, (the "Related Party Notes"). The Related Party Notes are non-interest bearing and mature on the earlier of (a) the Closing or (b) December 31, 2025. As of December 31, 2025 and 2024, approximately $6,395,000 and $3,250,000 was outstanding under Related Party Notes. As of December 31, 2025, the Related Party Notes were in maturity default.

During November 2025, the Company advanced $1,940,000 to EMT Asia Co., Ltd. ("EMT Asia"), a company wholly owned by the voting member of the Company, pursuant to unsecured promissory notes bearing interest at 6% per annum and maturing on May 26, 2026 ("EMT Asia Note Receivable"). As of December 31, 2025, $1,940,000 was outstanding under the EMT Asia Note Receivable. For the year ended December 31, 2025, interest income totaled approximately $11,000 and was included as a component of interest income on the accompanying consolidated statements of operations and comprehensive loss.

For the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, allowance for credit losses of $2,543,000 and $1,625,000, respectively, related to the Related Party Notes and the EMT Asia Note Receivable were included in the accompanying consolidated statements of operations and comprehensive loss.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 8 — Derivative Liabilities**

 ****

***July Investment Agreement Derivative***

In July 2024 the Company entered into an investment agreement (the "July Investment Agreement") with an existing holder of the Company's convertible preferred units (the "Anchor Investor"), and amended in December 2024, whereby in exchange for $17,500,017 cash consideration (a) the Company committed to issue 17,500,017 units of convertible preferred units with the same rights, preferences and privileges and restrictions as the outstanding convertible preferred units, with a stated conversion rate of 5:1, whereby 3,500,000 shares of New EM common stock would be issued in exchange for the convertible preferred units issued at the closing of the Business Combination (see Note 10), (b) the Company will pass through the economics of the CW Notes to the Anchor Investor, whereby an estimated $25,000,000 cash payment and the shares of New EM stock totaling an estimated $212,500,000 the Company receives at closing of the Business Combination in connection with the conversion of the CW Notes will be transferred to the Anchor Investor, (c) an allocation of shares of New EM common stock valued at 10.0% of the Company's fully diluted ownership in New EM to the Anchor Investor at closing of the Business Combination. The Company is required to make a $45,000,000 payment to the Anchor Investor at closing of the Business Combination, by either (i) transferring New EM common shares totaling $45,000,000 that were included in the S-4 registration statement that are not subject to a lock up period or (ii) making a $45,000,000 cash payment. Other than the New EM common shares valued at $45,000,000 that may be transferred at closing of the Business Combination, the shares to be transferred to the Anchor Investor will be subject to a lock-up period.

Pursuant to the terms of the July Investment Agreement, the gross investment of the Anchor Investor as of the July Investment agreement will be secured by the managing member's life insurance policy totaling $2,500,000 and the Anchor Investor will assist the Company with raising an additional $30,000,000 of convertible preferred units from other investors.

Under the July Investment Agreement, the following financial instruments were identified:

● the Company's promise to issue the Anchor Investor an estimated $212,500,000 of New EM common shares (the "Anchor Investor Share Issuance Obligation") at closing of the Business Combination. The Anchor Investor Share Issuance Obligation is recorded as a liability in accordance with ASC 480.

● the Company's promise to issue a variable number of New EM common shares to the Anchor Investor equal to 10.0% of the Company's fully diluted ownership in New EM at closing of the Business Combination (the "Anchor Investor Share Allocation Obligation"). The Anchor Investor Share Allocation Obligation is recorded as a liability in accordance with ASC 480 and ASC 815.

● the requirement to pay the Anchor Investor $25,000,000 at closing of the Business Combination (the "Anchor Investor Payment Obligation"). The Anchor Investor Payment Obligation is recorded in accordance with ASC 815.

The above financial instruments are accounted for as a single, compound embedded derivative and referred to as the "July Investment Agreement Derivative". The fair value of the July Investment Agreement Derivative exceeded the proceeds received, and as such the July Investment Agreement Derivative was recorded at fair value with the excess of the fair value over the proceeds recorded as a day one loss on July Investment Agreement Derivative on the accompanying consolidated statements of operations and comprehensive loss.

As of the issuance date the July Investment Agreement Derivative was measured at fair value of approximately $37,660,000 and re-measured to fair value at each subsequent reporting period (see Note 12). For the period from February 8, 2024 (inception) to December 31, 2024, a day one loss on issuance of July Investment Agreement Derivative of approximately $20,160,000 was recorded as a component of other income (expense) on the accompanying consolidated statement of operations and comprehensive loss.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 8 — Derivative Liabilities** (cont.)

***Convertible Preferred Unit Issuance***

Certain convertible preferred unit issuances (see Note 10) provided investors with additional share allocation issuance whereby the investors will receive a variable number of New EM common shares equal to either: (i) 1.0% of the Company's fully diluted ownership in New EM at closing of the Business Combination for every additional $2,000,000 investment into the Company's convertible preferred units the investors purchase or (ii) a pro rata percentage of 1.0% of the Company's fully diluted ownership in New EM at closing of the Business Combination equal to the percentage of the investor's investment into the Company's convertible preferred units the investors purchase divided by either (a) $2,000,000 or (ii) $4,000,000, as determined by the terms of each investor's convertible preferred unit agreement.

The additional share allocation issuances are collectively referred to as the "CPU Share Allocation Obligations" and are calculated on one of the above methods based on the terms of the investor's specific convertible preferred unit agreement. The additional share allocation was provided to certain investors as an incentive to make additional future investments into the Company's convertible preferred units.

For convertible preferred unit issuances where proceeds received from the convertible preferred unit issuances exceeded the fair value of the CPU Share Allocation Obligation, the convertible preferred unit issuances were recorded net of the fair value attributed to the CPU Share Allocation Obligation at issuance.

For convertible preferred unit issuances where the fair value of the CPU Share Allocation Obligation exceeds the proceeds received from the convertible preferred unit issuances, the CPU Share Allocation Obligation was recorded at fair value with the excess of the fair value over the proceeds recorded as a day one loss on CPU Share Allocation Obligation on the accompanying consolidated statements of operations and comprehensive loss.

As of the various issuance dates, the CPU Share Allocation Obligations were measured at fair value aggregating to approximately $8,170,000 and $8,371,000 for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, respectively, and re-measured to fair value at each subsequent reporting period (see Note 12). For the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, the day one loss on CPU Share Allocation Obligations of approximately $404,000 and $228,000, respectively, were recorded as a component of other income (expense) on the accompanying consolidated statements of operations and comprehensive loss.

**Note 9 — Notes Payable, Related Party**

During 2025, the Company entered into five non-interest loan agreements with EMT Asia, a company wholly owned by the voting member of the Company, for aggregate proceeds of approximately KRW 695,347,000 (approximately $484,000 as of December 31, 2025) (the "EMT Asia Loans Payable"). All loans mature six months from the date of the loan and maturity dates range between May 2026 and June 2026. There are no prepayment penalties on these loan agreements. As of December 31, 2025, approximately $484,000 remains outstanding on these loan agreements.

**Note 10 — Members' Deficit**

The Company was authorized to issue an unlimited number of participating member units at no par value, an unlimited number of member non-voting units at no par value, and an unlimited number of convertible preferred units at no par value.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 10 — Members' Deficit** (cont.)

***Member Units:*** On May 15, 2025, the Company amended its operating agreement to create a non-voting member unit class. Subject to approval, the Company may issue an unlimited number of non-voting member units and any voting member units can be converted into non-voting member units. On May 15, 2025, 900,000 of the Company's member units held by the sole member were exchanged for 900,000 non-voting member units and par was proportionately reclassified between the classes of members units. There was no net effect to members' deficit for this exchange. As of December 31, 2025, there were 100,000 voting member units and 900,000 non-voting member units issued and outstanding.

The voting and non-voting member units have identical rights and preferences with the exception of voting rights.

 ****

***Convertible Preferred Units:*** During the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, the Company issued 24,441,000 and 35,230,021 convertible preferred units, respectively, in exchange for $1.00 per unit for gross proceeds of $24,441,000 and approximately $35,230,000, respectively. Certain issuances of convertible preferred units provide the investor an additional share allocation issuance (see Note 8).

The Company intends to use the proceeds from the convertible preferred units as working capital to complete the Business Combination (see Note 4) and acquire the Four Entities (see Note 1), with the exception if the convertible preferred unit issuance during June 2024 raising gross proceeds of $2,500,000, which was used to acquire the CW Note (see Note 6). The convertible preferred units were accounted for as permanent equity.

The rights, preferences, privileges and restrictions for the convertible preferred units are as follows:

 

*Dividends:* Non-cumulative, simple dividend of 5% per annum accrues on the principal amount, payable annually and deferred for the first 36-months.

 

*Liquidation preference:* None

 

*Conversion:* Convertible preferred units issued between February 8, 2024 (inception) and March 31, 2025 are convertible into shares of New EM common shares at the option of the holder, according to a conversion ratio set forth in the holder's convertible preferred unit agreement assuming a New EM common share price of $10.00 at Closing. Convertible preferred units issued between April 1, 2025 and December 31, 2025 will be automatically converted into shares of New EM common shares ninety days after the Closing.

The Conversion ratio for convertible preferred units issued as of December 31, 2025 was as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Convertible <br> Preferred <br> Units** | **Conversion <br> Ratio** | **New EM <br> common <br> shares** |
| March 2024 | 1100003 | 1:1 | 1100003 |
| April 2024 | 864655 | 1:1 | 864655 |
| May 2024 | 1265347 | 1:1 | 1265347 |
| June 2024 | 2500000 | 5:1 | 500000 |
| July 2024 | 19500016 | 5:1 | 3900003 |
| August 2024 | 100000 | 5:1 | 20000 |
| October 2024 | 5700000 | 5:1 | 1140000 |
| November 2024 | 500000 | 5:1 | 100000 |
| December 2024 | 3700000 | 5:1 | 740000 |
| January 2025 | 500000 | 5:1 | 100000 |

---

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 10 — Members' Deficit** (cont.)

---

| | | | |
|:---|:---|:---|:---|
|  | **Convertible <br> Preferred <br> Units** | **Conversion <br> Ratio** | **New EM <br> common <br> shares** |
| February 2025 | 2700000 | 5:1 | 540000 |
| March 2025 | 1850000 | 5:1 | 370000 |
| March 2025 | 2000000 | 1:1 | 2000000 |
| September 2025 | 16550000 | 6:1 | 2758333 |
| October 2025 | 620000 | 6:1 | 103333 |
| December 2025 | 221000 | 6:1 | 36833 |
| &nbsp;&nbsp;&nbsp;Total | 59671021 |  | 15538507 |

---

 

*Redemption:* The convertible preferred units are not redeemable at the option of the holder, on either a contingent or non-contingent basis.

 

*Voting:* The convertible preferred units are non-voting.

**Note 11 — Share-Based Compensation**

In September 2024, the Company entered into an agreement with a vendor (the "Vendor Agreement") whereby the Company has the option to settle its obligations for services provided with either cash payments when the services are rendered or the issuance of a fixed monetary amount of New EM common shares at the closing of the Business Combination (the "Vendor Share-Based Settlement Obligation"). The Vendor Agreement was classified as a liability share-based payment transaction in accordance with ASC 718 and ASC 480, with the identification of two service conditions. The vesting period is measured on the effective date of the agreement as the period the services are expected to be rendered, and re-assessed each reporting period until the services are fully rendered and the share-based payment transaction is fully vested.

In December 2024, the Company amended the Vendor Agreement (the "Amended Vendor Agreement"), replacing the Company's settlement options for services provided with an exclusive cash payment option. The Company determined the Amended Vendor Agreement was a modified liability-classified award. Accordingly, the Company re-measured the Vendor Share-Based Settlement Obligation as of the cancellation date noting a nominal change in the fair value for the period from February 8, 2024 (inception) to December 31, 2024 (see Note 12) and recognized the difference between the cumulative compensation cost under the original award and the cumulative cost on the modified award, as compensation cost.

**Note 12 — Fair Value Measurements**

The following table presents assets and liabilities measured at fair value by classification within the fair value hierarchy as of:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level I** | **Level II** | **Level III** | **Total** |
| **December 31, 2025** | | | | |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Money Market Funds | $11671467 | $— | $— | $11671467 |
| Total assets | $11671467 | $— | $— | $11671467 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;July Investment Agreement Derivative | $— | $— | $379204796 | $379204796 |
| &nbsp;&nbsp;&nbsp;CPU Share Allocation Obligation |  |  | 292679981 | 292679981 |
| Total liabilities | $— | $— | $671884777 | $671884777 |

---

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 12 — Fair Value Measurements** (cont.)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Level I** | **Level II** | **Level III** | **Total** |
| **December 31, 2024** | | | | |
| Assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Money Market Funds | $2588289 | $— | $— | $2588289 |
| Total assets | $2588289 | $— | $— | $2588289 |
| Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;July Investment Agreement Derivative | $— | $— | $53231638 | $53231638 |
| &nbsp;&nbsp;&nbsp;CPU Share Allocation Obligation |  |  | 10231516 | 10231516 |
| Total liabilities | $— | $— | $63463154 | $63463154 |

---

The following table provides a reconciliation of the beginning and ending balance associated with the liabilities measured at fair value using significant unobservable inputs for the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **July <br> Investment <br> Agreement <br> Derivative <br> (Level III)** | **CPU Share <br> Allocation <br> Obligation <br> (Level III)** |
| Balance, February 8, 2024 (inception) | $— | $— |
| Additions | 37660336 | 8370647 |
| Change in fair value | 15571302 | 1860869 |
| Balance, December 31, 2024 | 53231638 | 10231516 |
| Additions |  | 8169984 |
| Change in fair value | 325973158 | 274278481 |
| Balance, December 31, 2025 | $379204796 | $292679981 |

---

 ****

***Money Market Funds***

Money market funds are investments with maturities within three months of their purchase dates held at banks, that approximate fair value based on Level I measurements.

 ****

***Derivative Liabilities***

Prior to December 31, 2025, the Company utilized scenario-based valuation models to value the July Investment Agreement Derivative and the CPU Share Allocation Obligations (collectively, the "Derivative Liabilities") at issuance and each subsequent reporting period. A key estimate used in the valuations of the Derivative Liabilities is an enterprise valuation of New EM, which included the acquisition of the Four Entities which uses a sum-of-the-parts valuation model that combined the arm's length purchase prices of the Four Entities pursuant to acquisition agreements signed with the Company on February 10, 2025, and the invested capital of the Company for each measurement date. Prior to the termination of the March 2025 Merger Agreement, CMR was also included as a component of the sum-of-the-parts valuation model.

As of December 31, 2025, the Company updated its valuation methodology to reflect the advanced stage of the Business Combination and the availability of observable market-based inputs. At that date, substantially all substantive closing conditions had been satisfied, and the only remaining item was final Nasdaq listing approval, which was subsequently obtained on January 2, 2026, with the Business Combination closing on January 5, 2026. Given the proximity to closing and the presence of a publicly traded instrument directly linked to the post-closing equity structure, management determined that a market-based valuation approach more faithfully reflected fair value as of December 31, 2025.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 12 — Fair Value Measurements** (cont.)

Accordingly, for the December 31, 2025 measurement, the Company first determined the implied equity value of EM&T on a pro forma fully diluted basis at closing. The Company then applied a market-based adjustment derived from the trading price of WTMA Rights, which were publicly traded securities that converted into WTMA common shares at a fixed ratio upon consummation of the Business Combination. The implied ratio between the aggregate conversion value of the Rights and the trading price of WTMA common shares reflected the market's assessment of both (i) the probability of closing and (ii) expected post-closing share price performance. The final market-based adjustment incorporated the observable Rights pricing, which inherently reflected both closing risk and market expectations regarding post-closing performance.

As a result, the December 31, 2025 valuation of the Derivative Liabilities was based on the implied EM&T equity value at closing, adjusted by the market-derived factor from WTMA Rights pricing, rather than solely on the prior sum-of-the-parts enterprise valuation framework.

 

*<u>July Investment Agreement Derivative:</u>*

The Company utilized the following assumptions to value the July Investment Agreement Derivative:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** | **July 18, <br> 2024 <br> (issuance)** |
| Expected Business Combination date | January 5, 2026 | June 30, 2025 | June 30, 2025 |
| Term (years) | 0.01 | 0.50 | 0.95 |
| Risk free rate | 3.7% | 4.2% | 4.9% |
| CCC credit rating | 15.7% | 8.7% | 19.4% |
| Present value factor | 1.00 | 0.98 | 0.80 – 0.95 |
| Probability of Business Combination close | 90.0% | 60.0% | 60.0% |
| Market adjustment<sup>(1)</sup> | 45.5% | NA | NA |
| Expected Company fully diluted ownership of New EM | 96.5% | 71.3% | 71.3% |
| Additional share allocation percentage | 10.0% | 10.0% | 10.0% |

---

(1) Market adjustment inherently considers probability of Business
Combination close and post Business Combination close price movements to the New EM common share price per share.

A loss on change in fair value of July Investment Agreement Derivative was approximately $325,973,000 and $15,571,000 for the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, respectively, and was reported as a component of other income (expense) on the accompanying consolidated statements of operations and comprehensive loss.

 

*<u>CPU Share Allocation Obligations:</u>*

The CPU Share Allocation Obligations are contingent on the closing of the Business Combination and certain convertible preferred unit holders entering into additional convertible preferred unit agreements in increments of $2,000,000 or $4,000,000, as defined in an investor's specific convertible preferred unit agreement. As of December 31, 2025 and 2024, the CPU Share Allocation Obligation totaled 11.28% and 4.75%, respectively, which represented an estimated 10.84 % and 2.85%, respectively, of outstanding shares of New EM Common Stock at the Closing.

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 12 — Fair Value Measurements** (cont.)

The Company utilized the following assumptions to value the CPU Share Allocation Obligations as of the balance sheet dates:

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Expected Business Combination date | January 5, 2026 | June 30, 2025 |
| Term (years) | 0.01 | 0.50 |
| Risk free rate | 3.7% | 4.2% |
| Present value factor | 1.00 | 0.98 |
| Probability of Business Combination close | NA | 60.0% |
| Market adjustment<sup>(1)</sup> | 45.5% | NA |
| Expected Company fully diluted ownership of New EM | 96.5% | 71.3% |
| Additional share allocation percentages | 11.28% | 4.75% |

---

(1) Market adjustment inherently considers probability of Business
Combination close and post Business Combination close price movements to the New EM common share price per share.

The Company utilized the following assumptions to value the CPU Share Allocation Obligations as of the respective issuance dates:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **November 2025 <br> (issuances)** | **October 2025 <br> (issuances)** | **September 2025 <br> (issuances)** | **March 2025 <br> (issuances)** | **February 2025 <br> (issuances)** | **December 2024 <br> (issuances)** | **October 2024 <br> (issuances)** | **July 2024 <br> (issuance)** |
| Expected Business Combination date | December 30, 2025 | December 30, 2025 | December 30, 2025 | June 30, <br> 2025 | June 30, <br> 2025 | June 30, <br> 2025 | June 30, <br> 2025 | June 30, <br> 2025 |
| Term (years) | 0.12 – 0.15 | 0.20 – 0.23 | 0.27 – 0.29 | 0.25 | 0.35 – 0.37 | 0.54 – 0.56 | 0.68 | 0.92 |
| Risk free rate | 3.9% | 4.0% | 3.9% | 4.3% | 4.3% | 4.2 – 4.3% | 4.3% | 4.8% |
| Present value factor | 0.99 – 1.00 | 0.99 | 0.99 | 0.99 | 0.99 | 0.98 | 0.97 | 0.96 |
| Probability of Business Combination close | 60.0% | 60.0% | 60.0% | 60.0% | 60.0% | 60.0% | 60.0% | 60.0% |
| Expected Company fully diluted ownership of New EM | 98.7% | 98.7% | 97.8% | 71.3% | 71.3% | 71.3% | 71.3% | 71.3% |
| Additional share allocation percentages | 0.07% | 0.17% | 4.14% | 1.80% | 1.35% | 1.75% | 2.0% | 1.0% |

---

A loss on change in fair value of the CPU Share Allocation Obligations was approximately $274,278,000 and $1,861,000 for the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, respectively, and was reported as a component of other income (expense) on the accompanying consolidated statements of operations and comprehensive loss.

 ****

***Vendor Share-Based Settlement Obligation***

The Company utilized a scenario-based valuation model to value the Vendor Share-Based Settlement Obligation at issuance, utilizing the following assumptions:

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2024 <br> (cancellation)** | **September 20, <br> 2024 <br> (issuance)** |
| Expected Business Combination date | June 30, 2025 | June 30, 2025 |
| Term (years) | 0.53 | 0.78 |
| Risk free rate | 4.2% | 4.2% |
| Present value factor | 0.97 | 0.97 |
| Implied probability Business Combination closes | 8.3% | 15.4% |

---

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 12 — Fair Value Measurements** (cont.)

During the period from February 8, 2024 (inception) to December 31, 2024, the Company recognized $40,000 of compensation cost associated with the Amended Vendor Agreement, with approximately $6,000 of compensation cost recognized at the time the Vendor Agreement was modified and an additional compensation cost of approximately $34,000 was recognized as incremental compensation cost resulting from the modification of the award. As of December 31, 2025 and 2024, $40,000 was recorded as a component of accrued expenses associated with the Company's obligations for the services received under this agreement.

**Note 13 — Commitments and Contingencies**

 ****

***Indemnification Agreements:*** The Company enters into contractual relationships that contain indemnification provisions in its normal course of business with other parties. The Company may agree to hold other parties harmless against specific losses, such as those that could arise from a breach of representation, covenant, or third party infringement claims. It may not be possible to determine the maximum potential amount of liability under such indemnification agreements due to the unique facts and circumstances that are like to be involved in each particular claim and indemnification provision. Historically, there have been no such indemnification claims. Management believes any liability arising from these agreements will not be material to the Company's consolidated financial statements.

 ****

***Legal Matters:*** The Company may periodically become involved in legal proceedings, legal actions, and claims arising in the normal course of business, including proceedings relating to intellectual property, safety and health, employment and other matters. Management believes that the outcome of such legal proceedings, legal actions, and claims will not have a significant adverse effect, individually, or in aggregate, on the Company's financial position, results of operations or cash flows.

**Note 14 — Related Party Transactions**

The Company has entered into transactions with its voting member or a company owned solely by its managing member for consulting services, reimbursement of travel expenses incurred on behalf of the Company, and issuance of twelve unsecured promissory notes receivable.

During the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, the Company reimbursed its voting member for travel expenses and corporate expenses incurred on behalf of the Company totaling approximately $219,000 and $369,000, respectively. These amounts are included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, approximately $3,200 was owed to the Company's voting member and is included as a component of accounts payable on the accompanying consolidated balance sheets.

During the period from February 8, 2024 (inception) to December 31, 2024, the Company paid a company owned 100% by its voting member for consulting services totaling approximately $63,000. These amounts are included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. As of December 31, 2025 and 2024, no amounts were owed to this company. There were no amounts incurred or paid to this company during the year ended December 31, 2025.

During 2025 and 2024, the Company advanced approximately $3,145,000 and $3,250,000, respectively, to the Company's voting member under the Related Party Notes (see Note 7).

On November 26, 2025, the Company entered into two types of transactions with EMT Asia, a company wholly owned by the Company's voting member, whereby the Company advanced $1,940,000 pursuant to the EMT Asia Note Receivable (see Note 7) and the Company's subsidiaries borrowed approximately KRW 695,347,000 (approximately $484,000 as of December 31, 2025) pursuant to the EMT Asia Loans Payable (see Note 9).

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 15 — Subsequent Events**

On January 5, 2026, subsequent to the balance sheet date, the Company completed two concurrent transactions: a reverse recapitalization and the acquisition of four operating companies. These transactions represent non-recognized subsequent events in accordance with ASC 855, *Subsequent Events.* Accordingly, the accompanying financial statements as of and for the year ended December 31, 2025, do not reflect any effects of these transactions, and no post-acquisition operating results are included for the period then ended.

 ****

***Reverse Recapitalization***

On January 5, 2026, the Company was legally acquired by Welsbach Technology Metals Acquisition Corp. ("WTMA"), a special purpose acquisition company. For financial accounting and reporting purposes, this transaction was accounted for as a reverse recapitalization, with the Company being treated as the accounting acquirer. As a result, the historical financial statements of the Company will become the historical financial statements of the combined entity, which was renamed Evolution Metals & Technologies Corp. ("EM&T").

 ****

***Acquisition of Korean Operating Companies***

Concurrent with the reverse recapitalization on, January 5, 2026, in exchange for 6,461 shares of the Company and approximately $48.3 million of liabilities incurred to dissenting shareholders, the Company acquired 100% of the voting equity interests in four Korean operating companies: Handa Lab Co., Ltd. ("Handa Lab"), KMMI, INC. ("KMMI"), NS World Co., Ltd. ("NS World"), and KCM Industry Co., Ltd. ("KCM") (collectively, the "Operating Companies"). The primary purpose for the acquisitions is to build a complete and integrated global supply chain focused on midstream processing of critical materials, including precious metals, battery metals, magnets & rare earth elements, and its related products. Descriptions of the Operating Companies are as follows:

- Handa Lab specializes in the manufacturing and sale of intelligent monitoring systems, machine vision and laser testing systems, data gathering systems;

- KMMI focuses on the production of sintered magnets, using the NdPr alloy;

- NS World specializes in the production of bonded magnets, using NdPr alloy; and

- KCM specializes in the manufacturing and sale of neodymium-iron-boron ("NdFeb") powder for NdFeb permanent magnets.

The following table summarizes the total estimated consideration transferred for each acquisition:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***in thousands*** | **Handa<br> Lab** | **KMMI** | **NS<br> World** | **KCM** | **Total** |
| **Equity** | $2702 | $16141 | $6485 | $5423 | $30751 |
| Liabilities incurred to dissenting shareholders | 4814 | 27951 | 6507 | 9006 | 48278 |
| Total estimated consideration | $7516 | $44092 | $12992 | $14429 | $79029 |

---

**EVOLUTION METALS, LLC AND SUBSIDIARIES**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS**

**Note 15 — Subsequent Events** (cont.)

The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed. The initial accounting for this business combination is incomplete as the Company is still in the process of finalizing the valuation of certain intangible assets, property, plant, and equipment, liabilities assumed, and obligations incurred to former owners included in consideration. Accordingly, the provisional amounts are subject to change, and any adjustments are expected to be completed within the one-year measurement period from the acquisition date.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***in thousands*** | **Handa<br> Lab** | **KMMI** | **NS<br> World** | **KCM** | **Total** |
| Total estimated consideration | $7516 | $44092 | $12992 | $14429 | $79029 |
| Less: Net assets acquired |  |  |  |  |  |
| **Historical net assets (liabilities)** | 353 | (58) | (1710) | (976) | (2391) |
| Liabilities not assumed | 81 | 471 | 110 | 152 | 813 |
| Intangible assets (FV Step-up) | 3981 | 340 | 1620 | 940 | 6881 |
| Property, plant and equipment (FV Step-up) | 38 | (308) | 21 | (147) | (396) |
| Deferred tax liabilities (assets) | (804) | (7) | (328) | (159) | (1297) |
| Total identifiable net assets | 3649 | 439 | (287) | (190) | 3610 |
| Preliminary goodwill | $3867 | $43653 | $13279 | $14619 | $75419 |

---

The goodwill is attributable to expected strategic synergies and the value of the assembled workforces. The amount of goodwill expected to be deductible for tax purposes has not yet been determined.

Acquisition-related transaction costs of approximately $2.1 million, comprised of legal, advisory, and accounting fees, were expensed as incurred and are not included as a component of consideration transferred. Separately, the Company capitalized approximately $9.3 million in equity issuance costs, which will be reclassified to additional paid-in capital as a reduction of proceeds from the reverse recapitalization.

The following unaudited pro forma financial information presents the combined results of the Company and the Operating Companies as if the reverse acquisition and the acquisition of the Operating Companies had all occurred on January 1, 2025. This pro forma information is for informational purposes only and is not necessarily indicative of the results of operations that would have occurred had the acquisitions been completed on that date, nor is it indicative of future results.

---

| | | |
|:---|:---|:---|
| | **Year Ended<br> December 31,<br> (Unaudited)** | **Year Ended<br> December 31,<br> (Unaudited)** |
| <br>***in thousands*** | **2025** | **2024** |
| Pro Forma Revenue | $6833 | $6581 |
| Pro Forma Net Loss | $(22941) | $(63642) |

---

On February 24, 2026, the Company and the voting member of the Company entered into another unsecured promissory notes in the amount of $475,000.

## Exhibit 99.3

**Exhibit 99.3**

**KCM INDUSTRY CO., LTD. FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **Audited Financial Statements of KCM INDUSTRY Co., Ltd. as of and for each of the Years Ended December 31, 2025 and 2024** |  |
| [Report of Independent Auditors for the Year Ended December 31, 2025](#f_001) | F-2 |
| [Report of Independent Auditors for the Year Ended December 31, 2024](#f_002) | F-3 |
| [Balance Sheets](#f_003) | F-5 |
| [Statements of Operations](#f_004) | F-7 |
| [Statements of Comprehensive Loss](#f_005) | F-8 |
| [Statements of Changes in Stockholders' (Deficit) Equity](#f_006) | F-9 |
| [Statements of Cash Flows](#f_007) | F-10 |
| [Notes to the Financial Statements](#f_008) | F-11 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and<br> Stockholders of KCM INDUSTRY Co., Ltd.

**Opinion on the Financial Statements**

We have audited the accompanying balance sheet of KCM INDUSTRY Co., Ltd. (the "Company") as of December 31, 2025, and the related statement of operations and comprehensive loss for the year ended December 31, 2025, and statement of cash flows and changes in stockholders' deficit for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt About the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company's decline in sales associated with the business and net loss and negative cash flows from operations in the current period raise substantial doubt about its ability to continue as a going concern. Management's evaluation of the events and conditions, and management's plans regarding those matters, are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

*/s/ GRASSI & CO., CPAs, P.C.*

We have served as the Company's auditor since 2025.

Glastonbury, Connecticut

March 31, 2026

**Report of Independent Auditors**

**The Shareholders and Board of Directors**

**KCM Industry Co., Ltd.**

**Opinion**

We have audited the financial statements of KCM Industry Co., Ltd. (the "Company"), which comprise the balance sheet as of December 31, 2024, and the related statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements, the Company has incurred a net loss, has a negative working capital, and has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

April 21, 2025

**KCM INDUSTRY Co., Ltd.<br> Balance Sheets<br> As of December 31, 2025, and 2024<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Assets: |  |  |  |
| Cash and cash equivalents | 1 | $47964 | 4541 |
| Trade accounts receivable (Related party) | 2319 | 694885 | 295000 |
| Non-trade account receivable | 4 | 17423 |  |
| Non-trade account receivable (Related party) | 419 |  | 153000 |
| Inventories | 5 | 427433 | 1494851 |
| Prepaids and other current assets | 1 | 3362 | 10022 |
| Total current assets |  | 1191067 | 1957414 |
| Property, plant and equipment, net | 789 | 2698298 | 2599386 |
| Other non-current assets | 1 | 5874 | 17007 |
| Total non-current assets |  | 2704172 | 2616393 |
| &nbsp;&nbsp;&nbsp;Total assets |  | $3895239 | 4573807 |
| Liabilities and Stockholders' (deficit) equity |  |  |  |
| Liabilities: |  |  |  |
| Trade accounts payable |  | $47535 | 53700 |
| Non-trade accounts payable |  | 109468 | 95920 |
| Short-term debt | 9 | 300718 | 278911 |
| Short-term debt (Related party) | 919 | 575650 | 436055 |
| Current portion of long-term debt | 9 | 368074 | 253306 |
| Derivative liabilities | 6 | 151661 |  |
| Current portion of finance lease liabilities | 8 | 22663 | 13948 |
| Current portion of defined severance benefits | 16 | 109184 | 55218 |
| Other current liabilities |  | 44823 | 15955 |
| Total current liabilities |  | 1729776 | 1203013 |
| Long-term debt | 9 | 1857899 | 2053776 |
| Convertible debt | 610 |  | 882236 |
| Defined severance benefits | 16 | 93466 | 64972 |
| Long-term taxes payable | 13 | 33135 | 30378 |
| Finance lease liabilities | 8 | 47011 | 45200 |
| Total non-current liabilities |  | 2031511 | 3076562 |
| &nbsp;&nbsp;&nbsp;Total liabilities |  | 3761287 | 4279575 |

---

**KCM INDUSTRY Co., Ltd.<br> Balance Sheets — (Continued)<br> As of December 31, 2025, and 2024<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Mezzanine equity: |  |  |  |
| Redeemable convertible preferred stock |  | 1106583 |  |
| &nbsp;&nbsp;&nbsp;Total mezzanine equity |  | 1106583 |  |
| Stockholders' (deficit) equity: |  |  |  |
| Common stock, KRW 5,000 par value. Authorized 1,000,000 shares; issued and outstanding 20,000 shares as of December 31, 2025, and 2024 | 15 | 73174 | 73174 |
| Retained earnings (Accumulated deficit) |  | (921048) | 303915 |
| Accumulated other comprehensive loss |  | (124757) | (82857) |
| &nbsp;&nbsp;&nbsp;Total (deficit) equity |  | (972631) | 294232 |
| Total Liabilities and Stockholders' (deficit) equity |  | $3895239 | 4573807 |

---

See accompanying notes to financial statements.

**KCM INDUSTRY Co., Ltd.<br> Statements of Operations<br> For the years ended December 31, 2025, and 2024<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **2025** | **2024** |
| Net revenues | 2 | $995 | 672 |
| Net revenues (Related party) | 219 | 1298956 | 115324 |
| Total net revenues |  | 1299951 | 115996 |
| Cost of sales |  | (1747812) | (961893) |
| Gross loss |  | (447861) | (845897) |
| Other operating income | 14 |  | 61718 |
| Other operating expense | 14 |  | (8092) |
| Selling, general, and administrative expenses |  | (360540) | (493427) |
| Operating loss |  | (808401) | (1285698) |
| Other income | 19 | 43359 | 4539 |
| Other expense | 19 | (733) | (2359) |
| Interest income |  | 2586 | 2016 |
| Interest expense |  | (110205) | (116486) |
| Interest expense(Related party) | 19 | (24050) | (10159) |
| Gain on foreign currency |  | 4024 | 20258 |
| Loss on foreign currency |  | (12221) |  |
| Loss on derivatives |  | (153013) |  |
| Gain on financial instruments |  | 72536 |  |
| Loss on financial instruments | 610 | (252390) | (141146) |
| Loss before tax |  | (1238508) | (1529035) |
| Income tax expense | 11 | 2032 | 1741 |
| Loss for the year |  | $(1240540) | (1530776) |

---

See accompanying notes to financial statements.

**KCM INDUSTRY Co., Ltd.<br> Statements of Comprehensive Loss<br> For the years ended December 31, 2025, and 2024<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **2025** | **2024** |
| Loss for the year |  | $(1240540) | (1530776) |
| Other comprehensive loss: |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments, net of tax |  | (22020) | (126360) |
| &nbsp;&nbsp;&nbsp;Actuarial (loss) gain on defined severance benefits, net of tax | 16 | (19880) | 58646 |
| Total other comprehensive loss |  | (41900) | (67714) |
| Total comprehensive loss |  | $(1282440) | (1598490) |

---

See accompanying notes to financial statements.

**KCM INDUSTRY Co., Ltd.<br> Statements of Changes in Stockholders' (Deficit) Equity<br> For the years ended December 31, 2025, and 2024<br> (in US dollars)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common <br> stock** | **Additional<br> paid-in<br> capital** | **Accumulated<br> other<br> comprehensive<br> income (loss)** | **Retained <br> earnings** | **Total <br> stockholders' <br> equity** |
| Balances at January 1, 2024 | $73174 |  | (15143) | 1834691 | 1892722 |
| Loss for the year |  |  |  | (1530776) | (1530776) |
| Foreign currency translation adjustments, net of tax |  |  | (126360) |  | (126360) |
| Actuarial gain on defined severance benefits, net of tax |  |  | 58646 |  | 58646 |
| Balances at December 31, 2024 | $73174 |  | (82857) | 303915 | 294232 |
| Balances at January 1, 2025 | $73174 |  | (82857) | 303915 | 294232 |
| Loss for the year |  |  |  | (1240540) | (1240540) |
| Accretion of redeemable preferred stock to redemption value |  |  |  | 15577 | 15577 |
| Foreign currency translation adjustments, net of tax |  |  | (22020) |  | (22020) |
| Actuarial loss on defined severance benefits, net of tax |  |  | (19880) |  | (19880) |
| Balances at December 31, 2025 | $73174 |  | (124757) | (921048) | (972631) |

---

See accompanying notes to financial statements.

**KCM INDUSTRY Co., Ltd.<br> Statements of Cash Flow<br> For the years ended December 31, 2025, and 2024<br> (In US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  |  | **2025** | **2024** |
| Cash flows from operating activities |  |  |  |
| &nbsp;&nbsp;&nbsp;Loss for the year |  | $(1240540) | (1530776) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |  |  |  |
| Inventory write-down adjustment |  | 219010 | 827538 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |  | 140965 | 141471 |
| &nbsp;&nbsp;&nbsp;Interest expenses |  | 4272 | 10145 |
| &nbsp;&nbsp;&nbsp;Income taxes |  | 2032 | 1741 |
| &nbsp;&nbsp;&nbsp;Pension benefits provision |  | 72040 | 96791 |
| &nbsp;&nbsp;&nbsp;Loss on derivatives |  | 153013 |  |
| &nbsp;&nbsp;&nbsp;Loss on valuation of financial instrument |  | 252390 | 141146 |
| &nbsp;&nbsp;&nbsp;Miscellaneous Loss |  |  | 813 |
| &nbsp;&nbsp;&nbsp;Loss on Foreign Exchange Translation |  | 12221 |  |
| &nbsp;&nbsp;&nbsp;Gain on Disposal of Financial Instrument |  | (72536) |  |
| &nbsp;&nbsp;&nbsp;Gain on Foreign Exchange Translation |  |  | (20258) |
| &nbsp;&nbsp;&nbsp;Interest Income |  | (2542) | (1967) |
| &nbsp;&nbsp;&nbsp;Non-cash others |  | (6389) | 8771 |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable |  | (396169) | 351911 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade account receivable |  | (3754) | (5613) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories |  | 895794 | (730418) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets |  | 1081 | (827) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable |  | (7545) | 20977 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade accounts payable |  | 11301 | (13269) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Defined severance benefits and other |  | (7031) | (35924) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes payable |  | 45 | 18420 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities |  | 28731 | (15678) |
| Net cash provided by (used in) operating activities: |  | 56389 | (735006) |
| Cash flows from investing activities |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from Short-term financial instruments |  |  | 168624 |
| &nbsp;&nbsp;&nbsp;Proceeds from disposal of property, plant, and equipment | 7.0 |  | 59238 |
| &nbsp;&nbsp;&nbsp;Acquisitions of property, plant, and equipment |  | (1020) | (47655) |
| &nbsp;&nbsp;&nbsp;Acquisition of Short-term financial instruments |  |  | (29326) |
| Net cash (used in) provided by investing activities: |  | (1020) | 150881 |
| Cash flows from financing activities |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from short-term borrowings |  | 15117 | 43989 |
| &nbsp;&nbsp;&nbsp;Proceeds from short-term borrowings (Related party) |  | 256641 | 539597 |
| &nbsp;&nbsp;&nbsp;Repayment of short-term borrowings (Related party) |  | (126563) | (69649) |
| &nbsp;&nbsp;&nbsp;Repayment of long-term borrowings |  | (138769) | (6298) |
| &nbsp;&nbsp;&nbsp;Payment of lease liabilities |  | (17817) | (25017) |
| &nbsp;&nbsp;&nbsp;Repayment of convertible bonds |  | (281) |  |
| Net cash (used in) provided by financing activities: |  | $(11672) | 482622 |
| &nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash and cash equivalents |  | (274) | (6506) |
| &nbsp;&nbsp;&nbsp;Net increase (decrease) in cash and cash equivalents |  | 43697 | (101503) |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents at beginning of year |  | 4541 | 112550 |
| Cash and cash equivalents at end of year |  | $47964 | 4541 |

---

See accompanying notes to financial statements.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies**

(1) Description of Business

KCM INDUSTRY Co., Ltd. (the Company), established in 2021, specializes in the manufacture and sale of neodymium-iron-boron ("NdFeb") powder for NdFeb permanent magnets. The Company is one of the companies operating NdFeb Powder manufacture in South Korea. The Company offers diverse types of NdFeb Powder with different magnetic characteristics. The Company is headquartered in Gunsan, South Korea and production takes place at headquarter.

(2) Basis of Presentation

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern.

(3) Going Concern

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists.

Primarily due to an incline in sales associated with the business, the Company incurred losses of $1,240,540 for the year ended December 31, 2025. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, upon the economic environment and the Company's current capability, the Company may be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

(4) Use of Estimates

The preparation of financial statements in conformity with 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, deferred tax assets, property, plant, and equipment, inventory, lease liabilities and right-of-use assets, the fair value of convertible debt and derivative liabilities, actuarial valuation of defined severance benefits obligation, income tax uncertainties, and other contingencies.

(5) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

(6) Allowance for Credit Losses

The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written off. The estimate of expected credit losses is based on the Company's historical loss experience, adjusted for current and reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Company's customers such as known credit risk or industry trends.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies** (cont.)

The allowance is estimated over the contractual term of the financial asset adjusted for expected prepayments. The contractual term excludes any extensions, renewals, and modifications, unless the borrower has a contractual option that provides it with the unilateral ability to extend the maturity date. The Company does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable) in expected credit losses each period are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense.

Accounts receivable

The Company uses an aging schedule to estimate the allowance for credit losses for accounts receivable. This method categorizes receivables into different groups based on industry and the number of days past due. Past due status is measured based on the number of days since the payment due date. Receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics. The Company determines that the receivables no longer share similar risk characteristic if they are past due balances over 90 days and over a specified amount. The Company evaluates the collectability of accounts receivable with payments that are more than 90 days past due on a basis to determine if any are deemed uncollectible. Accounts receivable balances are deemed uncollectible and written off as a deduction from the allowance after all means of collection have been exhausted (see Note 3, 4).

(7) Trade Accounts Receivable

Trade accounts receivable is recorded at the invoiced amount, net of an allowance for credit losses and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the statements of cash flows.

(8) Inventories

Inventories are stated at the lower of cost and net realizable value. The cost of inventories is determined by the first-in, first-out (FIFO) method for raw materials and the weighted average method for work in progress and finished goods. The Company assesses the valuation of inventory and periodically writes down the value for estimated excess and obsolete inventory based upon assumptions about future demand and market conditions.

(9) Revenue Recognition

The Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

Shipping and handling costs associated with outbound freight, after control over a product has transferred to a customer, are accounted for as a fulfillment cost and are included in a cost of goods sold as incurred.

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from sales.

The Company's primary source of revenue is product revenues of Neodymium Powder (NdFeb Powder) for Neodymium Magnet which is used in manufacturing of household appliances and cars. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices, as such, no-provision- e.g. rebates or discounts is not provided. The Company provides an assurance type warranties on all of its products, which are not separate performance obligations and are outside the scope of Topic 606. There were no loss contingencies related to warranties recorded as of December 31, 2025 and 2024.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies** (cont.)

(10) Government grants

The Company receives grants from local government agencies and public institutions in relation to employee compensation and salaries that are necessary for the Company's business activities. Government grants are either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received. Government grants related to assets are presented in the statement of balance sheets by deducting the grant from the carrying amount of the asset. If it is not related to the acquisition of an asset, it can be treated as a grant related to income. Government grants related to income are presented to other income (presented in operating income) in the statement of profit or loss. The Company recognized no income-related grants for the year ended December 31, 2025, compared to $61,718 recognized for the year ended December 31, 2024. There were no asset-related grants that the Company recognized in 2025 and 2024.

There is no comprehensive accounting standard under GAAP specifically addressing government grants received by for-profit entities. In the absence of such guidance, the Company has elected to apply an accounting policy by analogy to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, which is commonly accepted in practice under GAAP. The Company believes that this policy appropriately reflects the economic substance of the transactions and enhances comparability with other industry participants.

(11) Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Plant and equipment under finance leases are stated at the present value of the lease payments.

Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings is 40 years, while the estimated useful lives of machinery and equipment is 8 years. Furthermore, the estimated useful life of vehicles is 5 years, and that of furniture and fixtures is 8 years.

Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded in other income or expense in the statement of operations.

(12) Leases

The Company has entered into various finance lease agreements for transportation equipment, apartment and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception, and records the leases in our financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

The Company has lease agreements with lease and non-lease components and has elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component.

The Company has elected not to present short-term leases on the balance sheets if the lease term is 12 months or less at lease inception and the leases do not contain purchase options or renewal terms that the Company are reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option. For certain leases we account for the lease and non-lease components as a single lease component.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies** (cont.)

Finance lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

Depreciation expenses for finance lease assets are recognized over the lease term and classified as cost of sales or selling, general, and administrative expenses depending on the nature of the leased asset. Interest expenses on finance lease liabilities are recognized as interest expenses in the statement of income over the lease term.

(13) Equipment Maintenance Activities

The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred.

(14) Other Assets

Prepaids, other current assets and other non-current assets consist of advanced payments, prepaid expenses, prepaid VAT, income tax assets, and leasehold deposits.

(15) Research and Development and Advertising

Research and development and advertising costs are expensed as incurred. There were no research and development expenses, nor advertising and promotion expenses incurred in both 2024 and 2025.

(16) Income Taxes

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent that it is more likely than not that sufficient taxable income will be available to realize the related tax benefits.

The Company recognizes and measures uncertain tax positions taken or expected to be taken in a tax return utilizing a two-step process.

In the first step, recognition, we determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50% of being realized upon ultimate settlement.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting company's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU became effective on a prospective basis for the Company for the year-end December 31, 2025. The effect of ASU 2023-09 is reflected in Note 12. Management has concluded that the adoption of this standard will not have a material impact on the Company's financial statements.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies** (cont.)

(17) Defined Severance Benefits

The Company has a defined severance benefits plan covering all employees upon their retirement according to the Retirement Benefit Security Act of Korea. Eligible employees with one or more years of service are entitled to severance payments upon the termination of their employment based on their length of service and pay rate. The Company recognizes defined severance benefits obligation in the balance sheets with a corresponding adjustment to Statements of Operations and Comprehensive Income (Loss). The obligations are measured annually, or more frequently if there is a remeasurement event, based on the measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of relevant high-quality corporate bonds in the market. The Company reviews actuarial assumptions and makes modifications to the assumptions based on current rates and trends when appropriate. The Company has adopted an amortization approach and the net cumulative gain or loss at the beginning of the period in excess of the corridor is amortized into net periodic benefit cost on a straight-line basis over the expected average remaining service period of the employees participating in the plan.

(18) Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

(19) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal fees incurred in connection with loss contingencies are expensed as incurred.

(20) Fair Value Measurements

The Company measured the convertible debt and derivative liabilities using fair value options. The Company's convertible debt has complex provisions, so we believe measuring them at fair value could better explain the characteristics of the financial instrument.

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 6):

● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

● Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

● Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**1. Summary of Significant Accounting Policies** (cont.)

(21) Foreign Currency

The functional currency of the Company is the Korean Won. Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in "Gain/Loss on foreign currency" in the statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the "Effect of exchange rate changes on cash and cash equivalents" in the Statements of Cash Flows.

Assets and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end of each period. Revenue and expenses for the Company are translated into U.S. dollars using average rates that approximate those in effect during the period. Currency translation adjustments are included in "Accumulated other comprehensive loss," a separate component of Stockholders' (deficit) equity.

(22) New Accounting Standards and Interpretations Not Yet Adopted

 

*Income Statement (Topic 220) Reporting Comprehensive Income — Expense Disaggregation Disclosures*

In November 2024, the FASB issued ASU 2024-03, which becomes effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The standard requires to disclose disaggregated information about certain income statement expense line items. The Company does not expect the standard to have a material effect on its financial statements and has begun evaluating disclosure presentation alternatives.

 

*Debt — Debt with Conversion and Other Options (Subtopic 470-20)*

In November 2024, the FASB issued ASU 2024-04, which becomes effective for annual reporting periods beginning after December 15, 2025, and interim periods within annual reporting periods. Early adoption is permitted for entities that have adopted the amendments in Update 2020-06. The amendments clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The Company is currently assessing the impact of the amendments on its financial statements.

 

*Income Taxes (Topic 740) — Improvements to Income Tax Disclosures*

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2025 for non-public business entities. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company does not expect the standard to have a material effect on its financial statements.

The Company has not early adopted any of the forthcoming new or amended accounting standards in preparing these condensed interim financial statements.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**2. Significant Risks and Uncertainties Including Business and Credit Concentrations**

The Company manufactures Neodymium Powder (NdFeb Powder) for Neodymium Magnet which is used in manufacturing of household appliances and cars. The Company's main products are NdFeb bonded powders with different types of magnetic characteristics.

The Company's operating segment is a single segment and composes of NdFeb Powder manufacturing segment, and as of the end of the reporting period, assets, and liabilities of the segment are the same as the attached financial statements.

The following table disaggregates revenue by category.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Revenue by category |  |  |
| &nbsp;&nbsp;&nbsp;Finished goods<sup>(\*1)</sup> | $1298956 | 72582 |
| &nbsp;&nbsp;&nbsp;Merchandise & Others<sup>(\*2)</sup> | 995 | 43414 |

---

(\*1) Revenue from sales of NdFeb Powder <br>

(\*2) Revenue other than sales of NdFeb Powder such as sales of rare earth raw materials, other raw materials, etc.

Domestic sales are approximately $1,299,951 (or 100% of total net revenue) and export sales are approximately $0 (or 0% of total net revenue) in 2025. Domestic sales are approximately $73,254 (or 63.2% of total net revenue) in 2024.

Sales to a small number of major customers account for the majority of the Company's total net revenue. The Company is making efforts to gain new customers by continuously expanding its sales activities not only to domestic magnet manufactures but also to overseas NdFeb Magnet manufactures.

The following table disaggregates trade accounts receivable by major customers.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Trade accounts receivable by customers |  |  |
| &nbsp;&nbsp;&nbsp;NS World Co., Ltd. | $694885 | 295000 |

---

Sales to one direct customer, NS World Co., Ltd., one of the Company's related parties (See note 19) represented 99.9% ($1,298,956) and 62.6% ($72,582) of total revenue in 2025, and 2024, respectively. In addition, equipment installation service provided to GCM VINA, represented 36.8% ($42,742) of total revenue in 2024.

**3. Trade Accounts Receivable**

As of December 31, 2025, and 2024, the Company's trade accounts receivable is attributable entirely to related parties (refer to Note 19). There was no effect in allowance for credit losses for trade accounts receivable.

**4. Non-trade account receivable**

The Company disaggregates the non-trade account receivable by type of financing receivable when assessing and monitoring risk and performance of the entire portfolio. Non-trade account receivable consists of accrued revenue and non-trade receivable, which are unsecured.

There was no allowance for credit losses related to non-trade account receivable recorded as of December 31, 2025, and 2024.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**5. Inventories**

Details of Inventories as of December 31, 2025, and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Merchandise | $23619 | 22109 |
| Raw materials | 74907 | 87879 |
| Work in process | 518128 | 349210 |
| &nbsp;&nbsp;&nbsp;Write-down of work in process | (365715) | (156832) |
| Work in process, net | 152413 | 192378 |
| Finished goods | 363007 | 1810909 |
| &nbsp;&nbsp;&nbsp;Write-down of finished goods | (186513) | (618424) |
| Finished goods, net | 176494 | 1192485 |
| &nbsp;&nbsp;&nbsp;Total | $427433 | 1494851 |

---

The amount of cost from write-down of inventories for the year ended December 31, 2025 is $552,228 and the write-down of inventories recorded for the year ended December 31, 2024 is $775,256. The write-down recognized at the cost of sales is $219,010, and the write-down recognized at the deduction of inventory assets is $223,028. The difference is due to a decrease in valuation allowance resulting from increased sales of goods and the difference in the exchange rate applied.

**6. Fair Value Measurements**

(1) Fair value represents the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements
are reported in one of three levels reflecting the significant inputs used to determine fair value.

---

| | |
|:---|:---|
| Level 1 — | Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. |
| Level 2 — | Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| Level 3 — | Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value. |

---

(2) The following summarizes our financial liabilities that are measured at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Classification** | **Measurement <br> Level** | **2025** | **2024** |
| Convertible debt | Financial liabilities | Level 3 | $— | 882236 |
| Dissenting shareholder appraisal rights | Derivative liabilities | Level 3 | 151661 |  |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**6. Fair Value Measurements** (cont.)

(3) The following
table summarizes changes in the convertible debt and dissenting shareholder appraisal rights during 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Convertible debts** | **Convertible debts** | **Dissenting shareholder<br> appraisal rights** | **Dissenting shareholder<br> appraisal rights** |
| <br>**(in US dollars)** | **2025** | **2024** | **2025** | **2024** |
| Balance as of January 1 | $882236 | 856497 |  |  |
| &nbsp;&nbsp;&nbsp;Loss in fair value | 252390 | 141146 | 153013 |  |
| &nbsp;&nbsp;&nbsp;Gain on extinguishment of Debt | (72536) |  |  |  |
| &nbsp;&nbsp;&nbsp;Repayment | (281) |  |  |  |
| &nbsp;&nbsp;&nbsp;Conversion to redeemable convertible preferred stocks | (1091448) |  |  |  |
| &nbsp;&nbsp;&nbsp;Changes in foreign currency translation | 29639 | (115407) | (1352) |  |
| Balance as of December 31 | - | 882236 | 151661 |  |

---

1) The change in fair value of the convertible debt resulted in a loss of $252,390 and $141,146 for the year ended December 31, 2025, and December 31, 2024, which was recognized in the statements of operations within loss on financial instruments. Convertible debts were converted to redeemable convertible preferred stocks during the year ended December 31, 2025.

2) As of December 31, 2025, the Company's derivative liability related to dissenting shareholder appraisal rights ("DSAR put option") is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. The change in fair value of the DSAR put option resulted in a loss of $153,013 for the year ended December 31, 2025, which was recognized in the statements of operations within loss on derivatives.

(4) Convertible
debts

1) The Company estimated the fair value of convertible debts using the Tsiveriotis-Fernandes model with strip and bootstrapping method. The fair value is estimated using Level 3 inputs based on Stock price volatility of similar listed companies.

2) Quantitative information as of December 31, 2024 for the significant unobservable inputs of convertible debts used to value the company's liabilities measured at fair value:

---

| | | | |
|:---|:---|:---|:---|
|  | **Unobservable Inputs** | **Assumptions** | **Factors** |
| December 31, 2024 | Volatility | Mean of the annual volatility of proxy companies | 45.80% |
|  | Risk neutrality probability, max | Dynamic hedge for each node | 47.80% |

---

As of December 31, 2025, there were no liabilities required to be measured at fair value.

3) For the fair value of the convertible debts, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects in the statement of profit or loss.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| <br>**(in US dollars)** | **Increase** | **Decrease** | **Increase** | **Decrease** |
| Volatility of underlying stock price (+/-10%p) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |  | (45574) | 31791 |
| Underlying stock price (+/- 5%p) |  |  | (33422) | 42079 |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**6. Fair Value Measurements** (cont.)

(5) DSAR put option

The DSAR put option represents a freestanding financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined price, contingent on closing of the Share Exchange Agreement described in Note 15.

The fair value of the DSAR put option is determined using a valuation model based on the difference between:

1) the present value of the expected cash settlement amount (including statutory interest), and

2) the present value of the underlying share value to be received in a share exchange transaction

The valuation incorporates significant assumptions, including:

1) expected cash settlement value based on contractual terms and statutory interest rates

2) estimated fair value of the Company's shares

3) probability of occurrence of the underlying transaction

4) discount rates reflecting the time value of money

Due to the use of significant unobservable inputs, the DSAR put option is classified as a Level 3 financial liability.

(6) The carrying amounts of our financial instruments, including cash and
cash equivalents, accounts receivable, commercial paper notes, accounts payable and accrued expenses, approximate fair value due to their
short maturities.

**7. Property, plant and equipment**

Details of property, plant and equipment as of December 31, 2025, and 2024 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Initial Cost** | **Initial Cost** | **Carrying Amount** | **Carrying Amount** |
| <br>**(in US dollars)** | **Useful**<br>**Lives** | **2025** | **2024** | **2025** | **2024** |
| Land<sup>(\*1)</sup> |  | $1143914 | 1116600 | 1143914 | 1116600 |
| Buildings, structures and related equipment<sup>(\*1)</sup> | 40 | 991073 | 967409 | 908482 | 910975 |
| Machinery and equipment<sup>(\*1)</sup> | 8 | 550979 | 537823 | 310221 | 370041 |
| Vehicles | 5 | 30901 | 30163 | 11411 | 17172 |
| Furniture and fixtures | 8 | 117813 | 114014 | 77354 | 88896 |
| Construction in progress |  | 168204 | 20408 | 168205 | 20408 |
| Finance lease right-of-use assets | 2 – 5 | 131410 | 104319 | 78711 | 75294 |
| Total |  | $3134294 | 2890736 | 2698298 | 2599386 |

---

---

| | |
|:---|:---|
| (\*1) | As of December 31, 2025, land, buildings, machinery, and equipment have been provided as security (with a secured amount of $3,052,478) for long-term debt. The contractual secured amount is set at 120% of the credit line agreed with Industrial Bank of Korea and Shinhan Bank (refer to Note 9, 18). |

---

Total depreciation for the years ended December 31, 2025, and 2024 were $140,965 and $141,471, respectively.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**8. Leases**

The Company has finance leases for certain transportation equipment, apartment and office equipment. Finance lease assets and liabilities are included in property, plant and equipment and finance lease liabilities, respectively, on the balance sheets.

The Company also has several non-cancellable short-term leases, primarily for an apartment used as dormitories for employees that expire in 12 months.

The Company's leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments only. The Company also elected to discount all lease liabilities using an incremental borrowing rate.

The components of lease expense for the years ended December 31, 2025, and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Finance lease expense: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation of right-of-use assets | $25388 | 19645 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 6981 | 6188 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sub-total | 32369 | 25833 |
| Short-term lease expense | 6218 | 12898 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $38587 | 38731 |

---

Amounts presented in the balance sheets as of December 31, 2025, and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Finance Leases: |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets | $131410 | 104319 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less: Accumulated amortization assets | (52699) | (29025) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property, plant and equipment, net | $78711 | 75294 |
| Long-term finance lease liabilities | $47011 | 45200 |
| Current portion of finance lease liabilities | 22663 | 13948 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $69674 | 59148 |

---

Other information related to leases as of December 31, 2025, and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Cash used in operations for finance leases | $24798 | 25017 |
| Right-of-use assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Finance leases | $24539 | 35360 |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Finance leases | 3.14 years | 2.78 years |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**8. Leases** (cont.)

Maturities of lease liabilities under noncancellable leases as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
| **(in US dollars)** | **2025<br> Finance<br> leases** |
| 2026 | $28676 |
| 2027 | 25274 |
| 2028 | 16262 |
| 2029 | 8101 |
| 2030 | 2215 |
| Total undiscounted lease payments | 80528 |
| &nbsp;&nbsp;&nbsp;Less imputed interest | (10854) |
| &nbsp;&nbsp;&nbsp;Total lease liabilities | $69674 |

---

**9. Debt**

(1) Short-Term
debt

Details of carrying amounts of short-term debts as of December 31, 2025, and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars) <br> Maturity Date** | **Interest rate <br> (%)** | **Borrowing <br> Limit** | **2025** | **2024** |
| Sep. 2026 | 4.6 | 436267 <sup>(\*1)</sup> | $436267 | 436055 |
| Jun. 2026 | 4.6 | 41815 | 41815 | 40816 |
| Mar. 2026 | 0.0 | 14984 | 14984 |  |
| May. 2026 | 6.0 | 139383 | 139383 |  |
| Oct. 2026 | 9.5 | 243919 | 243919 | 238095 |
| Total short-term debt |  |  | $876368 | 714966 |

---

(\*1) This represents working capital loan borrowed from the Company's CEO and employees.

**KCM INDUSTRY Co., Ltd.**<br> **Notes to the Financial Statements<br> December 31, 2025, and 2024**

**9. Debt** (cont.)

(2) Current portion of long-term debt

Details of carrying amounts of current portion of long-term debts as of December 31, 2025, and 2024 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars) <br> Description(\*1)** | **Maturity Date** | **Interest <br> Rate (%)** | **Borrowing <br> Limit** | **2025** | **2024** |
| Operating Funds Loan | Oct. 2026 | 12.0 | $139383 | $121960 | 136054 |
| Operating Funds Loan | Jan. 2026 – Dec. 2026 | 2.87 | 69691 | 23165 | 22612 |
| Operating Funds Loan | Jan. 2026 – Dec. 2026 | 2.92 | 348456 | 116077 | 94640 |
| Facility Funds Loan | Aug. 2026 – Dec. 2026 | 2.54 – 3.61 | 1533208 | 106872 |  |
| Total current portion of long-term debt |  |  |  | 368074 | 253306 |

---

(\*1) The debt has been classified as current portion of long-term debt because it matures less than 12 months.

(3) Long-Term Debt

Details of carrying amounts of long-term debt as of December 31, 2025, and 2024 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars) <br> Description** | **Maturity Date** | **Interest <br> Rate <br> (%)** | **Borrowing <br> Limit** | **2025** | **2024** |
| Facility Funds Loan<sup>(\*1, 2, 3)</sup> | Sep. 2027 – Jul. 2030 | 3.61 | $1533208 | $1184752 | 1156463 |
| Facility Funds Loan<sup>(\*1, 2, 3)</sup> | Mar. 2027 – Sep. 2032 | 2.54 | 627221 | 627221 | 612245 |
| Operating Funds Loan<sup>(\*1)</sup> | Oct. 2026 | 12.0 | 139383 | 121960 | 136054 |
| Operating Funds Loan | Sep. 2027 | 2.87 | 69691 | 40539 | 62184 |
| Operating Funds Loan | Feb. 2028 | 2.92 | 348456 | 251501 | 340136 |
| Total principal long-term debt |  |  |  | $2225973 | 2307082 |
| Less: current portion of long-term debt |  |  |  | (368074) | (253306) |
| Total long-term debt |  |  |  | $1857899 | 2053776 |

---

---

| | |
|:---|:---|
| (\*1) | In December 2025, the Company provided property, plant and equipment, (net book value: $2,242,777, secured amount: $3,052,478) as security in relation to this loan. The contractual secured amount is set at 120% of the credit line agreed with Industrial Bank of Korea and Shinhan Bank (refer to Note 7, 18). |

---

---

| | |
|:---|:---|
| (\*2) | In December 2025, the Company was provided guarantees from the representative director (with a guarantee amount of $373,765) in relation to this loan (refer to Note 18). |

---

---

| | |
|:---|:---|
| (\*3) | In December 2025, the Company established pledge fire insurance claims (with a pledge amount of $1,789,343). |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**9. Debt** (cont.)

(4) Future principal payments for long-term debt as of December 31,
2025 are as follows:

---

| | |
|:---|:---|
| **(in US dollars)** | **2025** |
| 2026 | $368073 |
| 2027 | 525423 |
| 2028 | 411318 |
| 2029 | 391972 |
| 2030 | 320113 |
| Thereafter | 209074 |
| Total | $2225973 |

---

**10. Convertible Debt**

(1) Details of carrying amounts of the convertible debt as of December 31,
2025 and 2024 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US dollars) <br> Maturity Date** | **Interest rate <br> (%)** | **2025** | **2024** |
| Sep. 2027 – Jun. 2030 | 0.25 | – | 882236 |

---

(2) Descriptive information of the Convertible debt

In June 2023, the Company issued $696,931 in par value of unsecured convertible debt due 2030.

Upon the issuance of convertible debt, the Company measured the convertible debt using fair value options. The Company's convertible debt has complex provisions, so the Company believes measuring them at fair value could better explain the characteristics of the financial instrument. The change in fair value of the convertible debt resulted in a loss of $252,390 for the year ended December 31, 2025, which was recognized as loss on valuation of financial instruments in the statements of operations.

The lender has the tag-along right, if the CEO intends to dispose of his holdings.

(3) Terms of the Convertible debt

The details of the Company's convertible debt are as follows:

---

| | |
|:---|:---|
| **Category** | **Details** |
| Issuance date | June 21, 2023 |
| Issuance amount | 1,000,000,000 KRW (equivalent to $696,913) |
| Coupon rate | Annual 0.25% |
| Guaranteed maturity interest rate | Annual 3.00% |
| Repayment terms | Repayment in 3-year installments after 4-year grace period |
| Types of securities to be issued upon conversion | Redeemable convertible preferred stocks (RCPS) |
| Conversion price | 600,000 KRW (equivalent to $418) |
| Conversion ratio | 1,666 shares per total face amount, cash repayment for odd lots |
| Conversion period | From the day following the bond issuance date to the bond maturity date |
| Adjustment of conversion ratio | Standard anti-dilution provisions. In the case of a listing or a backdoor listing, if the recent conversion price is less than 70% of the offering price or market price, the conversion price will be adjusted to 70% of the offering price or market price. |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**10. Convertible Debt** (cont.)

(4) Conversion

On April 14, 2025, Convertible bonds were converted into 1,666 shares of RCPS upon the exercise of conversion rights by Korea SMEs and Startups Agency.

**11. Redeemable convertible preferred stock**

(1) Descriptive information of the redeemable convertible preference
stock

On April 14, 2025, Convertible bonds were converted into 1,666 shares of RCPS upon the exercise of conversion rights by Korea SMEs and Startups Agency. The redeemable convertible preferred stock is contingently redeemable in cash at the holder's option. Because the shares are redeemable for cash at the holder's option and such redemption is outside the Company's control, the Company has classified the redeemable convertible preferred stock as mezzanine equity.

(2) Terms of the redeemable convertible preferred stock

The details of the Company's redeemable convertible preferred stock to be issued due to exercise of conversion rights are as follows:

---

| | |
|:---|:---|
| **Category** | **Details** |
| Voting rights | 1 voting right, same as common stock |
| Duration | From the day following the issuance date until 10 years later |
| Types of securities to be issued upon conversion | Common stocks |
| Conversion Ratio | 1 preferred share to 1 common share (certain adjustments may apply based on the IPO offering price) |
| Conversion Period | From the day following the issuance date until 10 years later (Subsequently automatically converted to common stock) |
| Adjustment of conversion ratio | standard anti-dilution provisions In the case of a listing, if the conversion price of RCPS is less than 70% of the offering price, the conversion ratio will be adjusted to 1/0.7 (about 1.43) shares per RCPS |
|  | 1,666 shares per total face amount, cash repayment for odd lots |
| Redemption Guaranteed Yield | 3.00%, annual |
| Redemption Claimable Period | From the day following the issuance date to 10 years after the lapse of 3 years |
| Dividends | participating cumulative, annual 1% |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**12. Income Taxes**

We are subject to income taxation through primarily in Republic of Korea.

(1) The components of income tax expense were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Current taxes |  |  |
| &nbsp;&nbsp;&nbsp;Korea | $2032 | 1741 |
| Deferred taxes |  |  |
| &nbsp;&nbsp;&nbsp;Korea |  |  |
| Income tax expense | $2032 | 1741 |

---

(2) The components of loss before income taxes are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;Korea | $(1238508) | (1529035) |

---

(3) Differences between the provision at the local statutory rate
and the provision recorded at the level are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Taxes computed at the local statutory rate | $(136236) | (151374) |
| &nbsp;&nbsp;&nbsp;Differences resulting from: |  |  |
| &nbsp;&nbsp;&nbsp;Other non-deductible expense | (79130) | 5967 |
| &nbsp;&nbsp;&nbsp;Tax credit | 4407 | (9661) |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | 212270 | 135178 |
| &nbsp;&nbsp;&nbsp;Provision for uncertain tax position | 2032 | 1716 |
| &nbsp;&nbsp;&nbsp;True-up |  | 19890 |
| &nbsp;&nbsp;&nbsp;Other | (1311) | 25 |
| Income tax (benefit) expense | $2032 | 1741 |
| Effective tax rate |  |  |

---

(4) The income tax effects of temporary differences that give rise
to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued vacation | $2489 | 2705 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 7664 | 5856 |
| &nbsp;&nbsp;&nbsp;Accrued payable | 3660 | 1188 |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | 1588 | 1772 |
| &nbsp;&nbsp;&nbsp;Convertible debt |  | 19995 |
| &nbsp;&nbsp;&nbsp;Defined severance benefits | 29605 | 18344 |
| &nbsp;&nbsp;&nbsp;Write-downs of Inventories | 60727 | 80688 |
| &nbsp;&nbsp;&nbsp;Derivative liabilities | 135681 |  |
| &nbsp;&nbsp;&nbsp;Net operating loss | 199476 | 43232 |
| &nbsp;&nbsp;&nbsp;Tax credit carry-forward | 28108 | 31700 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (411372) | (179731) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 57644 | 25749 |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**12. Income Taxes** (cont.)

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Non-trade account receivable |  | (1861) |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | (8658) | (7454) |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment | (11372) | (9988) |
| &nbsp;&nbsp;&nbsp;Inventory | (30281) |  |
| &nbsp;&nbsp;&nbsp;Pension plan asset | (7314) | (6446) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | (57644) | (25749) |
| Net deferred tax assets | $— |  |

---

**13. Uncertain Tax Positions**

The changes to the Company's gross unrecognized tax benefits were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Balance as of January 1 | $30378 | 32818 |
| &nbsp;&nbsp;&nbsp;Increases in balances related to prior year tax positions<sup>(\*1)</sup> | 2032 | 2124 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 725 | (4156) |
| &nbsp;&nbsp;&nbsp;Other |  | (408) |
| Balance as of December 31 | $33135 | 30378 |

---

(\*1) Mainly due to the labor costs of the concurrently engaged personnel which were subject to R&D tax credit.

**14. Other Operating Income and Expenses**

Other operating income includes government grants and other operating expenses include loss on disposal of property, plant and equipment.

**15. Stockholder's (Deficit) Equity**

The Company has 1 million shares of authorized stock, and authorizes shares of undesignated preferred stock, the rights, preferences, and privileges of which may be designated from time to time by our board of directors. The Company has 21,666 shares of authorized stock, consisting of: (i) 20,000 of common stock, par value KRW5,000 per share, and (ii) 1,666 shares of redeemable convertible preferred stock, par value KRW5,000 per share, issuable. (Refer to Note 10)

(1) Common Stock

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders.

The holders have no pre-emptive or other subscription rights, and there is no redemption or sinking fund provisions with respect to such shares. Common stock is subordinate to the preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of the Company.

(2) Accumulated other comprehensive loss

Accumulated other comprehensive loss is consist of foreign currency translation adjustments and actuarial gain on net liability of defined benefits. In case of the actuarial gain on liability of defined benefits, it is amortized into net periodic benefits cost on a straight-line basis over the expected average remaining service period of employees.

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**15. Stockholder's Equity** (cont.)

(3) Dissenting Shareholder Appraisal Rights

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. As of December 31, 2025, the fair value of the contingent, freestanding financial instrument was immaterial.

**16. Defined Severance Benefits**

(1) The following table sets forth the plan's defined severance
benefits as of December 31, 2025, and 2024. They were recorded in the Company's balance sheets as defined severance benefits
and represent the total defined severance benefit obligation less the fair value of plan assets.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Current portion of defined severance benefits | $175909 | 120543 |
| Plan assets | (66725) | (65325) |
| Defined severance benefits | 93466 | 64972 |
| &nbsp;&nbsp;&nbsp;Funded Status | $202650 | 120190 |

---

(2) The following table summarizes changes in plan's defined
severance benefits obligation including benefit costs and benefits paid during 2025, and 2024:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Changes in benefit obligation: |  |  |
| &nbsp;&nbsp;&nbsp;Benefit obligation at beginning of year | $185515 | 169469 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service costs | 72040 | 96791 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest costs | 4272 | 3957 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual benefit paid | (8975) | (3021) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actuarial loss (gain) | 12692 | (57994) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange rate changes | 3831 | (23687) |
| &nbsp;&nbsp;&nbsp;Benefit obligation at end of year | $269375 | 185515 |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**16. Defined Severance Benefits** (cont.)

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Changes in plan assets: |  |  |
| &nbsp;&nbsp;&nbsp;Fair value of plan assets at beginning of year | $65325 | 37617 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contribution by the employer | 7031 | 35924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Return on plan assets | 2542 | 1967 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actual benefit paid | (8975) | (3021) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Actuarial gain | (421) | 157 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administrative cost | (377) | (183) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency exchange rate changes | 1600 | (7136) |
| &nbsp;&nbsp;&nbsp;Fair value of plan assets at end of year | $66725 | 65325 |

---

The estimated total contribution for next fiscal year is $33,333.

(3) Net periodic benefit costs recognized during 2025, and 2024
were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Service costs | $72040 | 96791 |
| Interest costs | 4272 | 3957 |
| Expected return on plan assets | (2542) | (1967) |
| Administrative cost | 377 | 183 |
| Amortization of net actuarial loss | (6767) | 495 |
| Net periodic benefit costs recognized | $67380 | 99459 |

---

(4) The following table summarizes changes in accumulated other
comprehensive loss for defined severance benefits during 2025, and 2024:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Balance at the beginning of the year | $37415 | (21231) |
| &nbsp;&nbsp;&nbsp;Net actuarial (loss) gain, net of tax | (13113) | 58151 |
| &nbsp;&nbsp;&nbsp;Amortization of accumulated net actuarial (loss) gain | (6767) | 495 |
| Balance at the end of the year | $17535 | 37415 |

---

(5) Weighted-average assumptions used to determine defined severance
benefits obligation for 2025, and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Discount rate applicable to PBOs | 3.3% | 3.3% |
| Expected rate of return on plan assets | 3.4% | 3.0% |
| Rate of compensation increase | 2.4% | 2.4% |

---

(6) The expected maturity analysis of undiscounted defined severance
benefits as of December 31, 2025, and 2024 as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Less than 1 year | $123491 | 120543 |
| Between 1 – 2 years | 7529 | 7349 |
| Between 2 – 5 years | 11324 | 11053 |
| Over 5 years | 78296 | 76427 |
| &nbsp;&nbsp;&nbsp;Total | $220640 | 215372 |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**17. Supplemental Cash Flow Information**

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash receipt during the period for interest | $44 | 526 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | (105459) | (115509) |
| &nbsp;&nbsp;&nbsp;Income taxes paid | 45 | 18420 |
| Non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Reclassification of long-term borrowings to current liabilities | $246115 | 253306 |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets | 26739 | 43832 |

---

**18. Commitments and Contingencies**

(1) Guarantees

1) The detail of guarantee provided by third parties as of December 31, 2025 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US dollars)<br> Provider** | **Type** | **Guaranteed <br> Amount** | **Beneficiary** |
| Seoul Guarantee Insurance | Payment Guarantee | $70737 | KEPCO (Korea Electric Power Corporation) |

---

In addition to the list above, the representative director has provided guarantees (with a guarantee amount of $303,028 and $70,737) for long-term debt and joint guarantee for performance guarantee provided by Seoul Guarantee Insurance to the Company (refer to Note 9, 19).

2) The main commitments with financial institutions as of December 31, 2025 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US dollars)<br> Financial Institution** | **Type** | **Credit Line** | **Used <br> Amount** |
| Industrial Bank of Korea<sup>(\*1)</sup> | Facility Funds Loan<sup>(\*2)</sup> | $1533208 | 1184752 |
|  | Facility Funds Loan<sup>(\*2)</sup> | 627221 | 627221 |
|  | Operating Funds Loan | 243919 | 243919 |
| Shinhan Bank<sup>(\*1)</sup> | Operating Funds Loan | 139383 | 121960 |
| Korea SMEs and | Operating Funds Loan | 69691 | 40539 |
| &nbsp;&nbsp;&nbsp;Startups Agency | Operating Funds Loan | 348456 | 251501 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total |  | $2961878 | 2469892 |

---

---

| | |
|:---|:---|
| (\*1) | As of December 31, 2025, land, buildings, machinery, and equipment have been provided as security (with a secured amount of $3,052,478) for long-term debt. The contractual secured amount is set at 120% of the credit line agreed with Industrial Bank of Korea and Shinhan Bank (refer to Note 7, 9). |

---

---

| | |
|:---|:---|
| (\*2) | As of December 31, 2025, the Company established pledge fire insurance claims (with a pledge amount of $1,789,343) (refer to Note 9). |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**19. Related Party Transactions**

(1) The Company's list of Related parties is as follows:

---

| | |
|:---|:---|
| **Relationship** | **Name of Related Party** |
| Primary owners with more than 10% of shares | CHANG BAE LEE(CEO) |
|  | SU MIN LEE |
|  | HEE CHANG KIM |
|  | KUM SOON KANG |
| Other parties | NS WORLD Co., Ltd.<sup>(\*1)</sup> |
|  | EMT Asia Co., Ltd. |

---

---

| | |
|:---|:---|
| (\*1) | NS WORLD Co., Ltd has been identified as related party since CEO is primary owner with more than 10% of shares for both NS WORLD Co., Ltd and the Company. |

---

(2) Related party transactions between the Company and its related
parties comprise of sales of products and other services, expenses for raw materials and other expenses in the ordinary course of business,
which are included in the financial statements.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Net Sales | $1299951 | 115324 |
| Purchase of raw materials |  | 44350 |
| Interest expense | 24050 | 10159 |

---

(3) Amounts due from or to related parties, are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Trade accounts receivable | $694885 | 295000 |
| Non-trade account receivable |  | 153000 |

---

(4) Related party transactions between the Company and its officers,
employees, and affiliated companies comprise of short-term loan and short-term debt. Amount due from or to its officers, employees, and
affiliated companies, are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Beginning Short-term debt balance | $436055 |  |
| Borrowings | 256641 | 539597 |
| Repayments | (126653) | (69649) |
| Gain/Loss on foreign currency translation | (9517) | 33893 |
| Ending Short-term debt balance | $575650 | 436055 |

---

(5) The Company provides a guarantee for borrowing from a bank
and is provided guarantees from its officer for the Company's borrowings from banks.

---

| | |
|:---|:---|
| **(in US dollars)** | **2025** |
| Guarantee from the management | $373765 |

---

**KCM INDUSTRY Co., Ltd.<br> Notes to the Financial Statements<br> December 31, 2025, and 2024**

**20. Subsequent Events**

The Company has evaluated subsequent events from the financial statements date through the date the financial statements were available to be issued.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd.

Under the share exchange, all outstanding shares of the Company were transferred to EMT Sub in exchange for equity interests of EMT Sub. Existing shareholders of the Company received shares of EMT Sub at an exchange ratio of 0.13962 shares of EMT Sub for each share of the Company's common stock. No cash consideration was paid in connection with the share exchange, except for payments related to dissenting shareholders.

Certain shareholders exercised their appraisal rights under the Korean Commercial Law. Shareholders were entitled to exercise such rights from the date of the notice of the shareholders' meeting on May 16, 2025 through the closing of the shareholders' meeting on June 2, 2025. As a result, the Company recognized a derivative liability to dissenting shareholders in 2025.

The obligation to settle the appraisal rights remains with the Company; however, the funding required to satisfy such obligation is expected to be provided by Evolution Metals & Technologies Corp.

Upon the closing of the share exchange transaction in January 2026, the Company obtained shares of its parent company, Evolution Metals and Technologies Corp.("EMAT"), in exchange for its outstanding shares. The Company intends to liquidate such shares and use the proceeds to settle the obligation to dissenting shareholders.

The payment amount was approximately $9.0 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

## Exhibit 99.4

**Exhibit 99.4**

**KMMI INC. FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **Audited Financial Statements of KMMI INC. as of and for each of the Years Ended December 31, 2025 and 2024** |  |
| [Report of Independent Auditors for the Year Ended December 31, 2025](#f_001) | F-2 |
| [Report of Independent Auditors for the Year Ended December 31, 2024](#f_002) | F-3 |
| [Balance Sheets](#f_003) | F-5 |
| [Statements of Operations](#f_004) | F-6 |
| [Statements of Comprehensive Loss](#f_005) | F-7 |
| [Statements of Changes in Stockholders' Equity](#f_006) | F-8 |
| [Statements of Cash Flows](#f_007) | F-9 |
| [Notes to the Financial Statements](#f_008) | F-10 |

---

**Report of Independent Auditors**

To the Board of Directors of Evolution Metals & Technologies Corp. <br> and the Shareholders of KMMI Inc.

**Opinion**

We have audited the accompanying financial statements of KMMI Inc. (the Company), which comprise the balance sheet as of December 31, 2025, and the related statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements, the Company incurred a net loss, net cash outflows from operating activities, and has negative working capital. The Company has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

● Exercise
 professional judgment and maintain professional skepticism throughout the audit.

● Identify
 and assess the risks of material misstatement of the financial statements, whether due to
 fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
 include examining, on a test basis, evidence regarding the amounts and disclosures in the
 financial statements.

● Obtain
 an understanding of internal control relevant to the audit in order to design audit procedures
 that are appropriate in the circumstances, but not for the purpose of expressing an opinion
 on the effectiveness of the Company's internal control. Accordingly, no such opinion
 is expressed.

● Evaluate
 the appropriateness of accounting policies used and the reasonableness of significant accounting
 estimates made by management, as well as evaluate the overall presentation of the financial
 statements.

● Conclude
 whether, in our judgment, there are conditions or events, considered in the aggregate, that
 raise substantial doubt about the Company's ability to continue as a going concern
 for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

*/s/ UHY LLP*

 

New York, New York

March 31, 2026

**Report of Independent Auditors**

**The Shareholders and Board of Directors<br> KMMI Inc.**

**Opinion**

We have audited the financial statements of KMMI Inc. (the "Company"), which comprise the balance sheet as of December 31, 2024 and the related statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements, the Company has no source of revenue, incurred a net loss, and has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

April 21, 2025

**KMMI INC.<br> Balance Sheets<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Assets: |  |  |  |
| Cash and cash equivalents | 1(5) | $109646 | 492984 |
| Restricted cash | 1(5) | 35802 | 34014 |
| Short-term loan (Related parties) | 14 |  | 408163 |
| Non-trade account receivable (Related parties) | 14 | 70842 | 50783 |
| Prepaids and other current assets |  | 15378 | 14476 |
| Total current assets |  | 231668 | 1000420 |
| Property, plant and equipment, net | 3 | 1973509 | 2110588 |
| Operating lease right-of-use assets | 5 | 31757 | 72311 |
| Other non-current assets |  | 148473 | 97717 |
| Total non-current assets |  | 2153739 | 2280616 |
| &nbsp;&nbsp;&nbsp;Total assets |  | $2385407 | 3281036 |
| Liabilities and Stockholders' Equity |  |  |  |
| Liabilities: |  |  |  |
| Non-trade accounts payables |  | $67492 | 43680 |
| Short-term debt | 7 | 299672 |  |
| Current portion of long-term debt | 7 | 46414 | 37891 |
| Current portion of finance lease liabilities | 5 | 16487 | 16811 |
| Current portion of operating lease liabilities | 5 | 12959 | 33597 |
| Withholdings | 1(10) | 11367 | 2871 |
| Current portion of defined severance benefits | 11 | 20387 | 5795 |
| Share repurchase liabilities | 6 | 470679 |  |
| Other current liabilities | 13 | 33870 | 33061 |
| Total current liabilities |  | 979327 | 173706 |
| Long-term debt | 7 | 1309828 | 1330544 |
| Finance lease liabilities | 5 |  | 16093 |
| Operating lease liabilities | 5 |  | 12649 |
| Other non-current liabilities | 4 | 76919 | 62400 |
| Defined severance benefits | 11 | 78523 | 40588 |
| Total non-current liabilities |  | 1465270 | 1462274 |
| &nbsp;&nbsp;&nbsp;Total liabilities |  | 2444597 | 1635980 |
| Stockholders' equity: |  |  |  |
| Common stock, KRW 500 par value, 20,000,000 shares authorized, 22,080 shares issued and outstanding at December 31, 2025 and December 31, 2024 | 10 | 9337 | 9337 |
| Additional paid-in capital |  | 3937986 | 3937986 |
| Accumulated deficit |  | (3841835) | (2104584) |
| Accumulated other comprehensive income (loss) |  | (164678) | (197683) |
| &nbsp;&nbsp;&nbsp;Total equity |  | (59190) | 1645056 |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity |  | $2385407 | 3281036 |

---

See accompanying notes to financial statements.

**KMMI INC.<br> Statements of Operations<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **For the <br> year ended <br> December 31, <br> 2025** | **For the <br> year ended <br> December 31, <br> 2024** |
| Net revenues |  | $— |  |
| Cost of sales |  |  |  |
| Gross profit |  |  |  |
| Other operating income | 1(19) | 2529 |  |
| Selling, general, and administrative expenses | 1(16) | (1269677) | (868400) |
| Operating loss |  | (1267148) | (868400) |
| Other income |  | 4518 | 3187 |
| Other expense |  | (1592) | (1474) |
| Interest income (Related parties) | 14 | 18984 | 19795 |
| Interest income |  | 1407 | 1301 |
| Interest expense |  | (29651) | (30490) |
| Gain on foreign currency |  | 6910 | 60650 |
| Loss on foreign currency |  |  | (37089) |
| Loss on share repurchase liabilities | 6 | (470679) |  |
| Loss before tax |  | (1737251) | (852520) |
| Income tax expense | 8 |  |  |
| Loss for the year |  | $(1737251) | (852520) |

---

See accompanying notes to financial statements.

**KMMI INC.<br> Statements of Comprehensive Loss<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **For the <br> year ended <br> December 31, <br> 2025** | **For the <br> year ended <br> December 31, <br> 2024** |
| Loss for the year |  | $(1737251) | (852520) |
| Other comprehensive income (loss): |  |  |  |
| Foreign currency translation adjustments |  | 51598 | (279955) |
| Actuarial loss on defined severance benefits, net of tax | 11 | (18593) | (3956) |
| Total other comprehensive income (loss) |  | 33005 | (283911) |
| Total comprehensive loss |  | $(1704246) | (1136431) |

---

See accompanying notes to financial statements.

**KMMI INC.<br> Statements of Changes in Stockholders' Equity (Deficit)<br> (in US dollars)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common <br> stock** | **Additional <br> paid-in <br> capital** | **Accumulated <br> other <br> comprehensive <br> income (loss)** | **Accumulated <br> deficit** | **Total <br> stockholders' <br> equity** |
| Balances at January 1, 2024 | $9337 | 3937986 | 86228 | (1252064) | 2781487 |
| Loss for the year |  |  |  | (852520) | (852520) |
| Foreign currency translation adjustments |  |  | (279955) |  | (279955) |
| Actuarial loss on defined severance benefits, net of tax |  |  | (3956) |  | (3956) |
| Balances at December 31, 2024 | $9337 | 3937986 | (197683) | (2104584) | 1645056 |
| Balances at December 31, 2024 | $9337 | 3937986 | (197683) | (2104584) | 1645056 |
| Loss for the year |  |  |  | (1737251) | (1737251) |
| Foreign currency translation adjustments |  |  | 51598 |  | 51598 |
| Actuarial loss on defined severance benefits, net of tax |  |  | (18593) |  | (18593) |
| Balances at December 31, 2025 | $9337 | 3937986 | (164678) | (3841835) | (59190) |

---

See accompanying notes to financial statements.

**KMMI INC.<br> Statements of Cash Flows<br> (In US dollars)**

---

| | | |
|:---|:---|:---|
|  | **For the <br> year ended <br> December 31, <br> 2025** | **For the <br> year ended <br> December 31, <br> 2024** |
| Cash flows from operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Loss for the year | $(1737251) | (852520) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile loss for the year to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 207690 | 201706 |
| &nbsp;&nbsp;&nbsp;Interest expense | 29651 | 30490 |
| &nbsp;&nbsp;&nbsp;Pension Benefits Provision | 40686 | 22375 |
| &nbsp;&nbsp;&nbsp;Loss on foreign currency |  | 37074 |
| &nbsp;&nbsp;&nbsp;Gain on foreign currency | (6910) |  |
| &nbsp;&nbsp;&nbsp;Accretion expense | 5429 | 5122 |
| &nbsp;&nbsp;&nbsp;Loss on share repurchase liabilities | 470679 |  |
| &nbsp;&nbsp;&nbsp;Others | (28526) | (39872) |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaids and other current assets | (573) | (4420) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade accounts payables | 20793 | 14246 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Withholdings | 8500 | 594 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment of retirement benefits | (9215) |  |
| Net cash used in operating activities | (999047) | (585205) |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Acquisitions of property, plant and equipment | (18176) | (43826) |
| &nbsp;&nbsp;&nbsp;Increase in leasehold deposits | (65672) |  |
| &nbsp;&nbsp;&nbsp;Collection of loans | 421876 |  |
| &nbsp;&nbsp;&nbsp;Other investing activities | 17259 |  |
| Net cash provided by (used in) investing activities | 355287 | (43826) |
| Cash flows from financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from short-term debt | 302344 | 109972 |
| &nbsp;&nbsp;&nbsp;Repayment from long-term debt | (39164) |  |
| &nbsp;&nbsp;&nbsp;Payment of finance lease liabilities | (17376) | (15214) |
| Net cash provided by financing activities | $245804 | 94758 |
| Effect of exchange rate changes on cash and cash equivalents, and restricted cash | 16406 | (104717) |
| Net decrease in cash and cash equivalents, and restricted cash | (397956) | (534273) |
| Cash and cash equivalents, and restricted cash, at beginning of year | 526998 | 1165988 |
| Cash and cash equivalents, and restricted cash, at end of year | $145448 | 526998 |

---

See accompanying notes to financial statements.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** 

(1) Description of Business

KMMI INC. (the Company), established in 2021, is specialized in the manufacture and sale of NdPR block magnets and magnets for traction motors that are used in aerospace and defense, automobile, energy plant and other various industries. The Company is planning to initiate its operation in April 2026. The company operates as a single operating segment.

(2) Basis of Presentation

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. Certain prior period amounts in the statement of cash flows have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net loss, total assets, total liabilities, or stockholders' equity.

(3) Going Concern

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as going concern exists.

Primarily due to the absence of revenue sources and a focus on fixed asset investments as a newly established entity, the Company incurred losses of $1,737,251 and $852,520 for the years ended December 31, 2025 and 2024, respectively, and net cash outflows from operating activities of $999,047 and $585,205 for the years 2025 and 2024, respectively. As of December 31, 2025, the Company reported no revenues and had negative working capital of $893,107, which excludes cash and cash equivalents of $109,646 and restricted cash of $35,802. As of December 31, 2024, the Company had positive working capital of $333,730, which excludes cash and cash equivalents of $492,984 and restricted cash of $34,014. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months and to support its business development objectives, the attainment of which is not assured.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, upon the economic environment and the Company's current capability, there is no guarantee that the Company will be able to access future equity or debt financing when needed. Ultimately, the attainment of profitable operations is dependent upon future events, including obtaining adequate financing to fulfill the Company's growth and operating activities and achieving a level of revenues adequate to support the Company's cost structure. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

Subsequent to December 31, 2025, the Company completed a comprehensive share exchange in January 2026 and became a wholly owned subsidiary within a broader corporate group. Management has considered the impact of this transaction in its going concern assessment and expects that financial and operational support may be available, if necessary, to support the Company's planned operations. However, the extent and timing of such support are subject to uncertainties, and therefore the conditions described above continue to raise substantial doubt about the Company's ability to continue as a going concern.

(4) Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, allowance for credit losses, the valuation of deferred tax assets, lease liabilities and right-of-use assets, defined severance benefits, income tax uncertainties, and other contingencies.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

(5) Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

As of December 31, 2025, the Company maintains its cash and cash equivalents and restricted cash with Hana Bank and Industrial Bank of Korea(IBK), and both institutions are considered to be financially sound and stable within the Korean financial system.

The Company's cash and cash equivalents and restricted cash totaled $145,448 at period end. A portion of these balances exceeded the deposit insurance coverage limit which is KRW 100,000,000 per institution provided by the Korea Deposit Insurance Corporation (KDIC). The Company has not experienced any losses on these deposits to date, and management believes that the credit risk associated with these financial institutions remains low.

Restricted cash consists of certain cash pledged as collateral for the use of the Company's corporate credit card. Restricted cash with remaining restrictions of one year or less is classified as current on the balance sheets.

The Company has presented restricted cash separately from cash and cash equivalents in the balance sheets.

(6) Allowance for Credit Losses

The allowance for credit loss is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected. The estimate of expected credit losses is based on the Company's historical loss experience, adjusted for current and reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Company's customers such as known credit risk or industry trends.

The allowance for credit loss is estimated over the contractual term of the financial asset adjusted for expected prepayments. The contractual term excludes any extensions, renewals and modifications, unless the borrower has a contractual option that provides it with the unilateral ability to extend the maturity date. The Company does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable) in expected credit losses each period is recognized immediately in net income as a credit loss expense or a reversal of credit loss expense.

 

*Short-term and Long-term loans*

The Company determines the allowance for credit losses for short-term and long-term loans using estimates of probability of borrowers' default and loss given default applied to estimated exposure at default.

When measuring expected credit losses, the Company considers borrowers' historical payment patterns, borrowers' credit scores as published by consumer credit rating agencies, and current and reasonable and supportable forecasts of economic conditions in estimating borrowers' probability of default, exposure at default and estimated loss given default. The Company collectively evaluates the loans with similar credit risk characteristics. In addition, the Company evaluates the collectability of the loans on an individual basis when they no longer have similar risk characteristics to determine if any are deemed uncollectible. The loans are written off against the allowance for credit losses when deemed uncollectible.

(7) Property, Plant and Equipment

Property, plant and equipment are stated at cost. Right-of-use assets arising from finance leases are presented within property, plant and equipment in the balance sheets and are initially measured at the present value of lease payments.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: buildings range from 30 to 40 years, facility equipment and fixtures range from 5 to 10 years, machineries are 10 years, vehicles are 5 years.

Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded.

(8) Leases

The Company has entered into various operating and finance lease agreements for certain land, office space, vehicle, and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception and records the leases in the financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

The Company also elected the short-term lease exception, and therefore only recognizes right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise those options. The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain classes of underlying assets, the Company has elected the practical expedient not to separate lease and non-lease components. Under this election, lease and non-lease components are accounted for as a single lease component.

Operating lease right-of-use assets and lease liabilities are recognized at the present value of future lease payments at the commencement date. Finance lease right-of-use assets and lease liabilities are measured similarly. As most of the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

Lease expenses for operating leases are recognized on a straight-line basis over the lease term and classified as operating expenses by the nature of the leased asset. Depreciation expenses for finance lease assets are recognized over the lease term and classified as operating expenses by the nature of the leased asset. Interest expenses on finance lease liabilities are recognized as interest expenses in the statements of operations over the lease term.

(9) Equipment Maintenance Activities

The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred.

(10) Withholdings

Withholdings mainly consist of amounts withheld from employee remuneration for four major social insurance schemes (National Health Insurance, National Pension, Employment Insurance, and Industrial Accident Compensation Insurance).

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Other withholdings | $11367 | 2871 |
|  | $11367 | 2871 |

---

(11) Income Taxes

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent that it is more likely than not that sufficient taxable income will be available to realize the related tax benefits.

The Company recognizes and measures uncertain tax positions taken or expected to be taken in a tax return utilizing a two-step process. In the first step, recognition, we determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50% of being realized upon ultimate settlement.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU became effective on a prospective basis for the Company for the year-end December 31, 2025. The effect of ASU 2023-09 is reflected in Note 8. Management has concluded that the adoption of this standard will not have a material impact on the Company's financial statements.

(12) Defined Severance Benefits

The Company has a defined severance benefits plan covering all employees upon their retirement according to Retirement Benefit Security Act of Korea. Eligible employees with one or more years of service are entitled to severance payments upon the termination of their employment based on their length of service and pay rate. The Company recognizes the defined severance benefits obligation in the balance sheets with a corresponding adjustment to statements of operations and comprehensive loss. The obligations are measured annually, or more frequently if there is a remeasurement event, based on the measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of relevant high-quality corporate bonds in the market. The Company reviews actuarial assumptions and makes modifications to the assumptions based on current rates and trends when appropriate.

The Company recognizes the funded status of its defined severance benefits plan in the balance sheets as the difference between the fair value of plan assets and the related benefit obligation as of the measurement date. Overfunded plans are presented as net benefit assets, and underfunded or unfunded plans are presented as net benefit liabilities. The funded status is classified between current and non-current based on the expected timing of benefit payments and the related recovery of plan assets, as applicable.

The Company recognizes the components of net periodic benefit cost for its defined severance benefits in net income (generally within operating expenses or other expense, as applicable). Actuarial gains and losses and prior service cost or credit arising from plan amendments are initially recognized in other comprehensive income (loss) ("OCI") and accumulated in accumulated other comprehensive income (loss) ("AOCI"). The Company has adopted an amortization approach and the net cumulative gain or loss at the beginning of the period in excess of the corridor is amortized into net periodic benefit cost on a straight-line basis over the expected average remaining service period of the employees participating in the plan.

(13) Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

(14) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

(15) Capitalized Interest

The Company's policy is to capitalize interest cost incurred on debt during the construction of major projects exceeding one year.

A reconciliation of total interest cost to interest expense as reported in the statements of operations for the years ended December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Interest cost capitalized | $— | 1317 |
| Interest expense | 29651 | 30490 |
| &nbsp;&nbsp;&nbsp;Total | $29651 | 31807 |

---

(16) Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of employee-related costs, depreciation on buildings and equipment, amortization of right-of-use assets, professional and service fees, lease and utilities expense.

(17) Fair Value Measurements

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 6):

● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

● Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

● Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, other current asset, short-term loan, and non-trade accounts payables, approximate their fair value because of the short maturity of these instruments.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

(18) Foreign Currency

The functional currency of the Company is the Korean Won. Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in "Gain on foreign currency" and "Loss on foreign currency" in the statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the "Effect of exchange rate changes on cash and cash equivalents, and restricted cash" in the statements of cash flows.

Assets and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end of each period. Income and expenses for the Company are translated into U.S. dollars using average rates that approximate those in effect during the period. Foreign currency translation adjustments are included in "Accumulated other comprehensive income" a separate component of stockholders' equity.

(19) Government grants

Other operating income of the Company is comprised of government support income. The Company receives support income from local government agencies and public institutions in relation to lease payments and research activities that are necessary for the Company's operating activities. Government support income is either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received. Government support income related to assets are presented in the balance sheets by deducting the grant from the carrying amount of the asset. If it is not related to the acquisition of an asset, it can be treated as a grant related to income. Government support income related to income is presented in other operating income in the statement of operations. The Company did not recognize any government support income for the years ended December 31, 2024. During the year ended December 31, 2025, the Company recognized income-related government support income of $2,529.

(20) New Accounting Standards and Interpretations Not Yet Adopted

As the Company meets the definition of a public business entity ("PBE"), the Company applies the PBE effective dates for new accounting standards.

Income Statement (Topic 220) Reporting Comprehensive Income — Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, which requires disaggregated information about certain income statement expense line items. This standard is effective for all PBEs in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Management is currently evaluating the impact of adopting ASU 2024-03, including the timing of adoption and related disclosure requirements.

Financial Instruments (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets

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 a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively. The Company does not expect the standard to have a material effect on its financial statements.

**KMMI INC.<br> Notes to the Financial Statements**

**1.** **Summary of Significant Accounting Policies** (cont.)

Government Grants (Topic 832) — Accounting for Government Grants Received by Business Entities

In December 2025, the FASB issued ASU 2025-10, which provides guidance on the accounting and disclosure of government grants for business entities. The amendments are effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The standard requires prospective application, with certain disclosure requirements applied retrospectively to all periods presented. The Company is currently evaluating the impact of ASU 2025-10 on its financial statements and related disclosures. Based on its preliminary assessment, management believes that the Company's existing accounting policy for government grants is generally consistent with the recognition principles under ASU 2025-10; however, additional disclosures may be required upon adoption.

**2.** **Significant risks and uncertainties including business and credit concentrations** 

The Company manufactures NdPR block magnets and magnets for traction motors that are used in aerospace and defense, automobile, energy plant and other various industries. The Company has been preparing its operation by purchasing related equipment and machines since 2021. Revenue from contracts with the customers has not been occurred during the reporting period and the Company is making efforts to secure the market end-user and run its business operation.

**3.** **Property, plant and equipment** 

(1) Details of property, plant and equipment as of December 31,
2025 and 2024 are as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Initial Cost** | **Initial Cost** | **Accumulated depreciation** | **Accumulated depreciation** | **Net Carrying Value** | **Net Carrying Value** |
| <br>**(in US dollars)** | **Useful**<br>**Life Years** | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| Buildings | 30 to 40 | $970652 | 947475 | (87944) | (54370) | 882708 | 893105 |
| Machinery | 10 | 1158255 | 1130599 | (275674) | (156032) | 882581 | 974567 |
| Vehicles | 5 | 89185 | 88552 | (49475) | (31506) | 39710 | 57046 |
| Facility equipment and fixtures | 5 to 10 | 216816 | 194053 | (60115) | (33891) | 156701 | 160162 |
| Finance lease right-of-use assets |  | 71209 | 69509 | (59400) | (43801) | 11809 | 25708 |
| &nbsp;&nbsp;&nbsp;Total |  | $2506117 | 2430188 | (532608) | (319600) | 1973509 | 2110588 |

---

Total depreciation for the years ended December 31, 2025 and 2024 was $207,690 and $186,423, respectively, of which was recorded in selling, general, and administrative expense in each year.

(2) As of December 31, 2025, the details of property, plant
and equipment pledged as collateral are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Net <br> Carrying <br> Value** | **Pledged <br> Amount** | **Creditor** | **Relevant <br> Debt <br> Amount** |
| Collateral Provided Asset: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Buildings | $882708 | 418148 | Industrial Bank of Korea | 348456 |

---

**4.** **Asset Retirement Obligation** 

The Company has an asset retirement obligation (ARO) arising from contractual requirements associated with the retirement of its operating lease for land. This obligation requires the Company to restore the land to its original condition upon termination of the lease. The ARO liability was initially measured at fair value and is subsequently adjusted for accretion expense and changes in the amount or timing of the estimated cash flows. The corresponding asset retirement cost is capitalized as part of the operating lease right-of-use asset and is amortized on a straight-line basis over the lease term. This amortization is included in the lease expense presented in the statements of operations. The ARO liability is presented within "Other non-current liabilities" in the accompanying balance sheets.

**KMMI INC.<br> Notes to the Financial Statements**

**4.** **Asset Retirement Obligation** (cont.)

The following table presents the activity for the ARO for the years ended December 31, 2025, and 2024, respectively:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Beginning balance | $49952 | 51530 |
| Accretion expense | 5429 | 5122 |
| Foreign currency translation adjustments | 1174 | (6700) |
| Ending balance | $56555 | 49952 |

---

**5.** **Leases** 

The Company has operating leases for land and office, and finance leases for certain vehicle and equipment. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the balance sheets. Finance lease assets and liabilities are included in property, plant and equipment and finance lease liabilities, respectively, on the balance sheets.

The lease agreement for office space includes a renewal option for up to 10 years, renewable annually under the *Commercial Building Lease Protection Act* in Korea. Other lease agreements for land include both a purchase option at the agreed price and a renewal option for up to 50 years, renewable every 5 years under the lease contract. The lease term of the lease agreement for the office space was determined considering the renewal period of one year by the renewal option. In case of the lease agreement for land, since the Company is not reasonably certain to exercise these renewal options, the options were not considered in determining the lease term, and associated potential option payments were excluded from lease payments.

The Company's leases generally do not include termination options for either party to the lease restrictive financial or other covenants. Payments due under the lease contracts include fixed payments and variable payments. For the Company's land lease, variable payments are determined based on the rate of increase in land price. For the Company's office equipment lease, variable payments include those for amount of use. For office equipment lease for which the Company has elected not to separate lease and non-lease components, maintenance services are provided by the lessor at a fixed cost and are included in the fixed lease payments for the single, combined lease component.

(1) The components of lease expense for the years ended
December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating lease expense | $37848 | 40843 |
| Finance lease expense: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation of right-of-use assets | 14657 | 15283 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 4660 | 7763 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sub-total | 19317 | 23046 |
| Short-term lease expense | 670 | 3299 |
| Variable lease expense | 317 | 205 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $58152 | 67393 |

---

**KMMI INC.<br> Notes to the Financial Statements**

**5.** **Leases** (cont.)

(2) Amounts presented in the balance sheets as of December 31,
2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating leases: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | $31757 | 72311 |
| &nbsp;&nbsp;&nbsp;Non-current |  | 12649 |
| &nbsp;&nbsp;&nbsp;Current portion of operating lease liabilities | 12959 | 33597 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $12959 | 46246 |
| Finance leases: |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets | $71209 | 69509 |
| &nbsp;&nbsp;&nbsp;Less: Accumulated depreciation | (59400) | (43801) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $11809 | 25708 |
| Non-current | $— | 16093 |
| Current portion of finance lease liabilities | 16487 | 16811 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $16487 | 32904 |

---

(3) Other information related to leases as of December 31,
2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $29873 | 34110 |
| &nbsp;&nbsp;&nbsp;Operating cash flows from finance leases | 4660 | 7763 |
| &nbsp;&nbsp;&nbsp;Financing cash flows from finance leases | 17376 | 15214 |
| Right-of-use assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | $— | 14673 |
| &nbsp;&nbsp;&nbsp;Finance leases |  |  |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 1.42 years | 1.98 years |
| &nbsp;&nbsp;&nbsp;Finance leases | 0.82 years | 1.82 years |
| Weighted average discount rate: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 10.04% | 9.02% |
| &nbsp;&nbsp;&nbsp;Finance leases | 17.78% | 17.70% |

---

(4) Maturities of lease liabilities under noncancellable leases
as of December 31, 2025 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)<br> Maturity** | **Operating <br> leases** | **Finance <br> leases** |
| 2026 | 15198 | 17853 |
| Total undiscounted lease payments | 15198 | 17853 |
| Less imputed interest | (2239) | (1366) |
| Total | $12959 | 16487 |

---

**KMMI INC.<br> Notes to the Financial Statements**

**6.** **Fair Value Measurements** 

(1) Fair value represents the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value
measurements are reported in one of three levels reflecting the significant inputs used to determine fair value.

Level 1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date.

Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 — Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value.

(2) The following summarizes our financial liabilities that are
measured at fair value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Classification** | **Measurement <br> Level** | **2025** | **2024** |
| Dissenting Shareholder Appraisal Rights | Financial liabilities | Level 3 | $470679 |  |

---

As of December 31, 2025, the Company's share repurchase liabilities related to dissenting shareholder appraisal rights ("DSAR put option") is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs.

The change in fair value of the DSAR put option resulted in a loss of $470,679 for the year ended December 31, 2025, which was recognized in the statements of operations within loss on share repurchase liabilities.

(3) Valuation of DSAR Put Option

The DSAR put option represents a freestanding financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined price, contingent on closing of the Share Exchange Agreement described in Note 10. The Company accounts for this instrument at fair value, with changes in fair value recognized in earnings, in accordance with ASC 480.

The fair value of the DSAR put option is determined using a valuation model based on the difference between:

1) the present value of the expected cash settlement amount (including statutory interest), and

2) the present value of the underlying share value to be received in a share exchange transaction

The valuation incorporates significant assumptions, including:

1) expected cash settlement value based on contractual terms and statutory interest rates

2) estimated fair value of the Company's shares

3) probability of occurrence of the underlying transaction

4) discount rates reflecting the time value of money

Due to the use of significant unobservable inputs, the DSAR put option is classified as a Level 3 financial liability.

**KMMI INC.<br> Notes to the Financial Statements**

**7.** **Debt** 

(1) Short-Term Debt

Details of carrying amounts of short-term debts as of December 31, 2025, and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description<sup>(\*1)</sup>** | **Period** | **Interest rate <br> (%)** | **2025** | **2024** |
| Working capital loan | November 2025 – May 2026 | 6 | $160290 |  |
| Working capital loan | December 2025 – June 2026 | 6 | 69691 |  |
| Working capital loan | December 2025 – June 2026 | 6 | 69691 |  |
| &nbsp;&nbsp;&nbsp;Total |  |  | $299672 |  |

---

<sup>(\*1)</sup> This represents working capital loan borrowed from EMT Asia Co., Ltd.

(2) Long-Term Debt from Individual

Details of carrying amounts of long-term debt from individuals as of December 31, 2025 and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Description** | **Period<sup>(\*1)</sup>** | **Interest rate <br> (%)** | **2025** | **2024** |
| Individual cash loan | December 2022 – January 2027 | 1 | $278765 | 272109 |
| Individual cash loan | March 2023 – January 2027 | 1 | 99691 | 98027 |
| Individual cash loan | January 2023 – January 2027 | 1 | 250000 | 250000 |
| Individual cash loan | January 2024 – January 2027 | 1 | 278765 | 272109 |
| &nbsp;&nbsp;&nbsp;Total |  |  | $907221 | 892245 |

---

 

---

| | |
|:---|:---|
| <sup>(\*1)</sup> | On August 5, 2025, the Company amended the loans from individuals solely to extend the maturities to January 2027. Under ASC 470-50, the present-value change (discounted at the original 1% effective interest rate) was less than 10%, so the amendments were accounted for as modifications; no fees or costs were incurred, the effective interest rate remains 1%, and the carrying amounts equal principal with interest accrued until maturity. The fair value of these borrowings, discounted using the market interest rate, is $863,905 as of December 31, 2025. |

---

(3) Long-Term Debt from Bank and Government Agency

Details of carrying amounts of long-term debt from bank and government agency as of December 31, 2025 are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **(in US dollars) <br> Financial Institution** | **Description** | **Period** | **Interest <br> rate (%)** | **Borrowing <br> Limit** | **2025** | **2024** |
| Korea SMEs and Startups Agency | Working capital loans | February 2023 –<br> February 2028 | 2.97 | $139383 | $100564 | 136054 |
| Industrial Bank of Korea | Facility loans | April 2023 –<br> April 2033 | 2.54 | 348456 | 348456 | 340136 |
| &nbsp;&nbsp;&nbsp;Total principal long-term debt |  |  |  |  | $449020 | 476190 |
| &nbsp;&nbsp;&nbsp;Less: current portion of long-term debt |  |  |  |  | 46414 | 37891 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total |  |  |  |  | $402606 | 438299 |

---

**KMMI INC.<br> Notes to the Financial Statements**

**7.** **Debt** (cont.)

(4) Future principal payments for long-term debt as of December 31,
2025 are as follow

---

| | |
|:---|:---|
| **(in US dollars)** | **Long-term<br> debt** |
| 2026 | $46414 |
| 2027 | 982679 |
| 2028 | 65811 |
| 2029 | 58075 |
| 2030 | 58075 |
| Thereafter | 145188 |
| &nbsp;&nbsp;&nbsp;Total | $1356242 |

---

**8.** **Income Taxes** 

We are subject to income taxation primarily in Republic of Korea. The Korean entities are subject to periodic or special tax examinations by the Republic of Korea tax authorities in accordance with the Framework Act on National Taxes. In general, the statute of limitations for corporate income tax in Korea is 5 years (It extends to 7 years for non-filing and 10 years for fraudulent activities.). There are no ongoing tax audits or examinations by the Korean authorities.

(1) There is no income tax expense recorded attributable to current
taxes and deferred taxes.

(2) The components of loss before income taxes are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Korea | $(1737251) | (852520) |

---

(3) Differences between the provision at the local statutory
rate and the provision recorded at the level are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Tax rate | 11% | 9.9% |
| Taxes computed at the statutory rate | $(191098) | (84400) |
| Differences resulting from: |  |  |
| &nbsp;&nbsp;&nbsp;Other non-deductible expenses | 3726 | (364) |
| &nbsp;&nbsp;&nbsp;Tax credits | (64564) | (51577) |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | 248834 | 131820 |
| &nbsp;&nbsp;&nbsp;Other | 3102 | 4521 |
| Income tax (benefit) expense | $— |  |
| Effective tax rate |  |  |

---

The Company's primary business operations are conducted in Korea and are subject to Korea's corporate income tax law.

**KMMI INC.<br> Notes to the Financial Statements**

**8.** **Income Taxes** (cont.)

(4) The income tax effects of temporary differences that give
rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Provision | $3726 | 3273 |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment | 12299 | 10791 |
| &nbsp;&nbsp;&nbsp;Accrued vacation | 2592 | 1396 |
| &nbsp;&nbsp;&nbsp;Asset retirement obligation | 6221 | 4945 |
| &nbsp;&nbsp;&nbsp;Share repurchase liabilities | 51317 |  |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 3239 | 7836 |
| &nbsp;&nbsp;&nbsp;Accrued expense | 4655 | 1691 |
| &nbsp;&nbsp;&nbsp;Short-term debt |  |  |
| &nbsp;&nbsp;&nbsp;Long-term debt | 7988 | 3406 |
| &nbsp;&nbsp;&nbsp;Defined severance benefits | 6289 | 4592 |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | 94 | 128 |
| &nbsp;&nbsp;&nbsp;Net operating loss carry-forwards<sup>(\*1)</sup> | 298724 | 149041 |
| &nbsp;&nbsp;&nbsp;Tax credit carry-forwards<sup>(\*2)</sup> | 279014 | 209680 |
| Total deferred tax assets before valuation allowance | 676158 | 396779 |
| &nbsp;&nbsp;&nbsp;Valuation allowance | (657303) | (381559) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax assets | 18855 | 15220 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Other non-current assets | (13515) | (5027) |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | (4792) | (9704) |
| &nbsp;&nbsp;&nbsp;Withholdings | (8) | (7) |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | (540) | (482) |
| &nbsp;&nbsp;&nbsp;Construction in progress |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities | (18855) | (15220) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net deferred tax assets | $— |  |

---

---

| | |
|:---|:---|
| (\*1) | Net operation loss carry-forwards is available to be utilized for 15 years from the year of occurrence. The expiration years are as follows: $48,828 will expire in 2036, $493,558 will expire in 2037, $384,986 will expire in 2038, $746,706 will expire in 2039 and, $1,201,318 will expire in 2040 |

---

---

| | |
|:---|:---|
| (\*2) | Tax credit carry-forwards is available to be utilized for 10 years from the year of occurrence. The expiration years are as follows: $4,324 will expire in 2031, $11,701 will expire in 2032, $149,758 will expire in 2033, $49,236 will expire in 2034 and $63,994 will expire in 2035. |

---

**9.** **Uncertain Tax Positions** 

There is no unrecognized tax benefit as of December 31, 2025 and 2024.

**10.** **Stockholders' Equity** 

The Company has 20 million shares of authorized common stock, par value KRW 500 (approximately $0.4) per share issuable. As of December 31, 2025 and 2024, there were 22.080 thousand shares of common stock outstanding.

**KMMI INC.<br> Notes to the Financial Statements**

**10.** **Stockholders' Equity** (cont.)

*Issuance of common stock*

In July 2021, the Company was established with the issuance of 2,000 ordinary shares at a par value of KRW5,000 each. In June 2022, the Company implemented a 1-for-10 stock split, which increased the number of issued shares from 2,000 to 20,000. Subsequently, the general meeting of shareholders approved the issuance of 1,000 shares in June 2022 and 1,080 shares in August 2022 at a price of KRW 2,500,000 per share amounting to approximately $1,912,508 and $2,026,266, respectively.

 

*Common Stock*

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The holders have no pre-emptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Common stock is subordinate to the preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of the Company.

 

*Accumulated other comprehensive income*

Accumulated other comprehensive income is consist of foreign currency translation adjustments and actuarial loss on defined severance benefits. In case of the actuarial loss on defined severance benefits, it is amortized into net periodic benefits cost on a straight-line basis over the expected average remaining service period of employees.

 

*Dissenting Shareholder Appraisal Rights*

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for the Appraisal Shares was $1,992.75 per share, as determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close.

As of December 31, 2025, the appraisal rights were measured at a fair value of $470,679.

**11.** **Defined Severance Benefits** 

(1) The following table sets forth the defined severance benefits
obligation as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Fair value of plan assets | $— |  |
| Defined severance benefits | (98910) | (46383) |
| Funded Status | $(98910) | (46383) |

---

**KMMI INC.<br> Notes to the Financial Statements**

**11.** **Defined Severance Benefits** (cont.)

(2) The following table summarizes changes in the defined severance
benefits obligation including benefit costs and benefits paid during 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Beginning balance | $46383 | 24122 |
| Service cost | 40686 | 22296 |
| Interest cost | 1528 | 853 |
| Benefits paid | (9215) |  |
| Actuarial loss | 18852 | 4036 |
| Foreign currency translation adjustments | 676 | (4924) |
| Ending balance | $98910 | 46383 |
| Classification: |  |  |
| &nbsp;&nbsp;&nbsp;Current | $20387 | 5795 |
| &nbsp;&nbsp;&nbsp;Non-current | 78523 | 40588 |

---

The Company has not contributed to plan assets at the reporting date and no contribution expected to be paid to the plan during the next fiscal year beginning after the reporting date. The Company measured defined severance benefits using the most recent mortality tables and mortality improvement scale in selecting mortality assumptions as of December 31, 2025, and 2024.

(3) Net periodic benefit cost recognized during 2025 and 2024
were:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Service cost | $40686 | 22296 |
| Interest cost | 1528 | 853 |
| Amortization of net actuarial loss | 259 | 80 |
| Net periodic benefit cost recognized | $42473 | 23229 |

---

For the years ended December 31, 2025 and 2024, the service cost component is included in selling, general and administrative expenses, interest cost is included in interest expense, and the amortization of net actuarial loss is included in other expense in the statements of operations.

(4) The following table summarizes changes in accumulated other
comprehensive income for defined severance benefits during 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Beginning balance | $(6989) | (3033) |
| &nbsp;&nbsp;&nbsp;Actuarial loss, net of tax | (18852) | (4036) |
| &nbsp;&nbsp;&nbsp;Amortization of net actuarial loss | 259 | 80 |
| Ending balance | $(25582) | (6989) |

---

(5) Weighted-average assumptions used to determine defined severance
benefits obligation for 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Discount rate | 3.70% | 3.40% |
| Rate of compensation increase | 2.40% | 2.40% |

---

**KMMI INC.<br> Notes to the Financial Statements**

**11.** **Defined Severance Benefits** (cont.)

(6) The expected maturity analysis of undiscounted defined severance
benefits as of December 31, 2025 and 2024 as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Less than 1 year | $20387 | 6245 |
| Between 1 – 2 years | 12324 | 4487 |
| Between 2 – 5 years | 23493 | 14663 |
| Over 5 years | 64808 | 36628 |
| &nbsp;&nbsp;&nbsp;Total | $121012 | 62023 |

---

**12.** **Supplemental Cash Flow Information** 

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash receipt during the period for interest | $1407 | 1301 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | (18291) | (20203) |
| &nbsp;&nbsp;&nbsp;Income taxes received(paid) | 21 | (197) |
| Non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Transferred from construction in progress to the appropriate property, plant and equipment |  | 277916 |
| &nbsp;&nbsp;&nbsp;Reclassification of long-term loan(related parties) to short-term loan(related parties) |  | 439889 |
| &nbsp;&nbsp;&nbsp;Reclassification of other non-current assets(related parties) to non-trade account receivable(related parties) |  | 54730 |
| &nbsp;&nbsp;&nbsp;Transferred from withholdings to long-term debt |  | 293259 |
| &nbsp;&nbsp;&nbsp;Reclassification of short-term debt to long-term debt |  | 668338 |

---

**13.** **Commitments and Contingencies** 

(1) Guarantees

The list of guarantees provided by third parties to the Company as of December 31, 2024 and 2023, are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Guaranteed Amount** | **Guaranteed Amount** | |
| **(in US dollars)**<br>**Provider** | <br>**Type** | **2025** | **2024** | <br>**Beneficiary** |
| Seoul Guarantee Insurance | Payment guarantee for trade payables | $35124 | 34286 | Air First Co., Ltd |
| Seoul Guarantee Insurance | Performance guarantee A for ARO | 62840 | 61340 | Korea Land and Housing Corp. |
| Seoul Guarantee Insurance | Performance guarantee B for ARO | 1610 | 1571 | Korea Land and <br> Housing Corp |
| Seoul Guarantee Insurance | Payment guarantee for subsidiary refund | 2507 |  | Korea Occupational Safety and Health Agency |

---

**KMMI INC.<br> Notes to the Financial Statements**

**13.** **Commitments and Contingencies** (cont.)

(2) Non-compliance with laws or regulations

In accordance with the Korean Capital Markets Act, the Company shall submit a securities report to the Financial Services Commission (FSC) when issuing securities to over 50 investors. Failure to submit a securities report may result in a fine not exceeding 3/100 of the offering price or revenue amount on the securities report (KRW 2 billion if it exceeds KRW 2 billion). Management notes such report was required but not submitted to FSC on time in 2022 upon issuance of new shares. Management is aware that this legal obligation arising from the past violation would impose the fine upon submission of the past-due report to FSC. Accordingly, the Company has recognized the provision of $33,870 as of December 31, 2025 and $33,061 as of December 31, 2024, which are reflected in other current liabilities on the balance sheets.

**14.** **Related Party Transactions** 

(1) The Company's list of Related parties is as follows:

---

| | |
|:---|:---|
| **Relationship** | **Name of Related Party** |
| Management | Andy Chun (CEO) |
| Primary owners with more than 10% of shares | Soo Hyun Huh <br> Kyung Won Moon |
| Other parties that can significantly influence the management or operating policies | ADE METALS INC.<br> JNS INDUSTRY INC. |
| Management of the entity and members of their immediate families | Sun Mi Yu <br>Young Hun Kim <br>Hyuck Soo Lee <br>Annabeth Chun <br>Matthew Jiwon Chun <br>Emily Yewon Chun <br>Allen Chun <br>Daren Chun <br>Elin Chun <br>Tae Hwan Yu <br>Ji Hwan Yu <br>Sin Ja Park <br>Chang Soo Chun <br>Yoo Heon Chun |

---

(2) Related party transactions are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Related parties** | **Transactions** | **2025** | **2024** |
| ADE METALS INC. | Interest income | $15820 | 16496 |
| JNS INDUSTRY INC. | Interest income | 3164 | 3299 |
| ADE METALS INC. | Purchase of property, plant and equipment | 3934 |  |
| JNS INDUSTRY INC. | Purchase of property, plant and equipment |  | 24798 |
| JNS INDUSTRY INC. | Commission fee | 844 |  |
| Shareholders | Loss on share repurchase liabilities | 470679 |  |

---

**KMMI INC.<br> Notes to the Financial Statements**

**14.** **Related Party Transactions** (cont.)

In March 2022, the Company entered into a loan agreement with ADE METALS INC. for KRW 500 million. Subsequently, in April 2022, a similar loan agreement was executed with JNS INDUSTRY INC. for KRW 100 million. The Chief Executive Officer (CEO) of the Company has ownership interests in both entities: ADE METALS INC. is wholly owned by the CEO, and JNS INDUSTRY INC. is 20% owned by the CEO and 80% owned by the CEO's immediate family. Both loan agreements carry an interest rate of 4.5%. In July 2025, the Company received full repayment of the short-term loans

(3) Amounts due from related parties, are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Related parties** | **Balances** | **2025** | **2024** |
| ADE METALS INC. | Short-term loan | $— | 340136 |
| ADE METALS INC. | Non-trade account receivable<sup>(\*1)</sup> | 59156 | 42438 |
| JNS INDUSTRY INC. | Short-term loan |  | 68027 |
| JNS INDUSTRY INC. | Non-trade account receivable<sup>(\*1)</sup> | 11685 | 8345 |
| Shareholders | Share repurchase liabilities | 470679 |  |

---

<sup>(\*1)</sup> Non-trade account receivable consists of interest income receivable.

**15.** **Subsequent Events** 

The Company has evaluated subsequent events from the financial statements date through the date the financial statements were available to be issued.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd.

Under the share exchange, all outstanding shares of KMMI were transferred to EMT Sub in exchange for equity interests of EMT Sub. Existing shareholders of KMMI received shares of EMT Sub at an exchange ratio of 0.4187 shares of EMT Sub for each share of KMMI common stock. No cash consideration was paid in connection with the share exchange, except for payments related to dissenting shareholders.

Certain shareholders exercised their appraisal rights under the Korean Commercial Law. Shareholders were entitled to exercise such rights from May 16, 2025, the date of the notice of the shareholders' meeting, through the closing of the shareholders' meeting on June 2, 2025. As a result, the Company recognized a payable to dissenting shareholders in 2025.

The obligation to settle the appraisal rights remains with the Company; however, the funding required to satisfy such obligation is expected to be provided by Evolution Metals & Technologies Corp.

Upon the closing of the share exchange transaction in January 2026, the Company obtained shares of its parent company, Evolution Metals and Technologies Corp. ("EMAT"), in exchange for its outstanding shares. The Company intends to liquidate such shares and use the proceeds to settle the obligation to dissenting shareholders.

The payment amount was approximately $27.95 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

In March 2026, the Company entered into a short-term loan agreement with Beacon Advisory, a related party, for working capital purposes. Under the terms of the agreement, the Company borrowed approximately $67 thousand, with an annual interest rate of 4.6% and a maturity date of September 23, 2026.

## Exhibit 99.5

**Exhibit 99.5**

**NS WORLD FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Audited Financial Statements of NS World Co., Ltd. as of and for each of the Years Ended December 31, 2025 and 2024** | **Page** |
| [Report of Independent Auditors for the Year Ended December 31, 2025](#f_001) | F-2 |
| [Report of Independent Auditors for the Year Ended December 31, 2024](#f_002) | F-4 |
| [Balance Sheets](#f_003) | F-6 |
| [Statements of Operations](#f_004) | F-7 |
| [Statements of Comprehensive Loss](#f_005) | F-8 |
| [Statements of Changes in Stockholders' Deficit](#f_006) | F-9 |
| [Statements of Cash Flows](#f_007) | F-10 |
| [Notes to the Financial Statements](#f_008) | F-11 |

---

**Report of Independent Auditors**

To the Board of Directors of Evolution Metals & Technologies Corp. and <br> the Shareholders of NS World Co., Ltd

**Opinion**

We have audited the accompanying financial statements of NS World Co., Ltd (the Company), which comprise the balance sheet as of December 31, 2025, and the related statements of operations, comprehensive loss, changes in stockholders' deficit, and cash flows for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for Opinion**

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements, the Company has incurred a net loss, has negative working capital, and has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Related Party Transactions**

As discussed in Note 18 to the financial statements, the Company engages in significant transactions with related parties, including those involving revenues, inventory purchases, accounts receivable, and accounts payable. For the year ended December 31, 2025, revenue generated from related parties totaled $456,882, representing approximately 7.2% of the Company's total revenue. As of December 31, 2025, balances with related parties included trade accounts receivable of $927,335 and non-trade accounts receivable of $750,550, representing approximately 16.6% and 13.5% of total assets, respectively. In addition, related party trade accounts payable and non-trade accounts payable were $1,428,229 and $872,987, respectively, representing approximately 19.6% and 12.0% of total liabilities as of December 31, 2025. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

/s/ UHY LLP

New York, New York

March 31, 2026

**Report of Independent Auditors**

**The Shareholders and Board of Directors<br> NS World Co., Ltd.**

**Opinion**

We have audited the financial statements of NS World Co., Ltd. (the "Company"), which comprise the balance sheet as of December 31, 2024 and the related statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements, the Company has incurred a net loss, has a negative working capital, and has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Financial Statements**

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the Financial Statements**

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea<br> April 21, 2025

**NS World Co., Ltd.**

**Balance Sheets**

**(in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Assets: |  |  |  |
| Cash and cash equivalents |  | $793843 | 359394 |
| Current held-to-maturity investments |  |  | 28571 |
| Trade accounts receivable, net | 23 | 575079 | 716998 |
| Trade accounts receivable (related parties) | 2318 | 927335 | 674774 |
| Non-trade accounts receivable | 4 | 184252 | 1058424 |
| Non-trade accounts receivable (related parties) | 418 | 750550 | 1577693 |
| Inventories, net | 5 | 905883 | 981603 |
| Prepaids and other current assets |  | 108861 | 34364 |
| Total current assets |  | 4245803 | 5431821 |
| Property, plant and equipment, net | 178 | 1280826 | 1347492 |
| Operating lease right-of-use assets | 8 |  | 4616 |
| Other non-current assets |  | 50916 | 60320 |
| Total non-current assets |  | 1331742 | 1412428 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets |  | $5577545 | 6844249 |
| Liabilities and Stockholders' Deficit |  |  |  |
| Liabilities: |  |  |  |
| Trade accounts payable |  | $411751 | 155660 |
| Trade accounts payable (related parties) | 18 | 1428229 | 640450 |
| Non-trade accounts payable |  | 117425 | 994381 |
| Non-trade accounts payable (related parties) | 18 | 872987 | 2149361 |
| Accrued expenses |  | 77052 | 77223 |
| Short-term debt | 9 | 367981 | 223298 |
| Short-term debt (related parties) | 918 | 2130412 | 2079543 |
| Current portion of long-term debt | 9 | 121848 | 198455 |
| Current portion of long-term debt (related parties) | 918 | 15653 | 9361 |
| Redeemable convertible preferred stock (related parties) | 61218 |  | 1007641 |
| Current portion of finance lease liabilities | 8 | 29191 | 30598 |
| Current portion of operating lease liabilities | 8 |  | 4616 |
| Current portion of defined severance benefits | 15 | 641226 | 498968 |
| Share repurchase liabilities | 619 | 109566 |  |
| Other current liabilities |  | 313733 | 134796 |
| Total current liabilities |  | 6637054 | 8204351 |
| Long-term debt | 9 | 40568 | 158537 |
| Long-term debt (related parties) | 918 | 205352 | 215728 |
| Other non-current liabilities |  | 25493 |  |
| Finance lease liabilities (non-current) | 8 | 36706 | 56506 |
| Defined severance benefits | 15 | 342712 | 290357 |
| Total non-current liabilities |  | 650831 | 721128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities |  | 7287885 | 8925479 |
| Stockholders' deficit: |  |  |  |
| Common stock, par value of KRW5,000, authorized 1,006,220 shares; issued and outstanding 289,055 shares as of December 31, 2025, and 251,555 shares as of December 31, 2024 | 14 | 1266165 | 1130991 |
| Additional paid-in capital |  | 815015 |  |
| Accumulated deficit |  | (3240547) | (2695335) |
| Accumulated other comprehensive loss |  | (550973) | (516886) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deficit |  | (1710340) | (2081230) |
| Total liabilities and stockholders' deficit |  | $5577545 | 6844249 |

---

See accompanying notes to the financial statements.

**NS World Co., Ltd.**

**Statements of Operations**

**(in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **For the <br> year ended<br> December 31, <br> 2025** | **For the <br> year ended<br> December 31, <br> 2024** |
| Net revenues | 12 | $5916888 | 5588220 |
| Net revenues (related parties) | 18 | 456882 | 463048 |
| Total revenues |  | 6373770 | 6051268 |
| Cost of sales |  | (5144325) | (5218333) |
| Selling, general, and administrative expenses | 1 | (1620895) | (1223833) |
| Other operating income (related parties) | 1318 | 37662 | 13197 |
| Other operating income | 13 | 23436 | 134172 |
| Operating loss |  | (330352) | (243529) |
| Other income (non-operating) |  | 37332 | 13309 |
| Other expense |  | (67391) | (108020) |
| Interest income |  | 8421 | 7362 |
| Interest expense |  | (57444) | (56630) |
| Interest expense (related parties) | 18 | (121222) | (87670) |
| Gain on foreign currency | 1 | 159375 | 257587 |
| Loss on foreign currency | 1 | (178156) | (229385) |
| Gain on valuation of redeemable convertible preferred stock | 6 | 114768 | 74950 |
| Loss on share repurchase liabilities | 19 | (110543) |  |
| Loss before tax |  | (545212) | (372026) |
| Income tax expense | 10 |  |  |
| Loss for the year |  | $(545212) | (372026) |

---

See accompanying notes to the financial statements.

**NS World Co., Ltd.**

**Statements of Comprehensive Loss**

**(in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **For the <br> year ended<br> December 31, <br> 2025** | **For the <br> year ended<br> December 31, <br> 2024** |
| Loss for the year |  | $(545212) | (372026) |
| Other comprehensive income (loss): |  |  |  |
| Foreign currency translation adjustments, net of tax |  | (78137) | 263950 |
| Actuarial loss on defined benefits, net of tax | 15 | (14440) | (104484) |
| Total other comprehensive income (loss) |  | (92577) | 159466 |
| Total comprehensive loss |  | $(637789) | (212560) |

---

See accompanying notes to the financial statements.

**NS World Co., Ltd.**

**Statements of Changes in Stockholders' Deficit**

**(in US dollars)**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common <br> stock** | **Additional <br> paid-in <br> capital** | **Accumulated <br> other <br> comprehensive <br> loss** | **Accumulated <br> deficit** | **Total <br> stockholders' <br> deficit** |
| Balances at January 1, 2024 | $1130991 |  | (676352) | (2323309) | (1868670) |
| Loss for the period |  |  |  | (372026) | (372026) |
| Foreign currency translation adjustments, net of tax |  |  | 263950 |  | 263950 |
| Actuarial loss on defined severance benefits, net of tax |  |  | (104484) |  | (104484) |
| Balances at December 31, 2024 | $1130991 |  | (516886) | (2695335) | (2081230) |
| Balances at January 1, 2025 | $1130991 |  | (516886) | (2695335) | (2081230) |
| Loss for the period |  |  |  | (545212) | (545212) |
| Foreign currency translation adjustments, net of tax |  |  | (78137) |  | (78137) |
| Actuarial gain on defined severance benefits, net of tax |  |  | (14440) |  | (14440) |
| Amortization of accumulated other comprehensive income |  |  | 58490 |  | 58490 |
| Changes in redeemable convertible preferred shares | 135174 | 815015 |  |  | 950189 |
| Balances at December 31, 2025 | $1266165 | 815015 | (550973) | (3240547) | (1710340) |

---

See accompanying notes to the financial statements.

**NS World Co., Ltd.<br> Statements of Cash Flows**

**(In US dollars)**

---

| | | |
|:---|:---|:---|
|  | **For the <br> year ended<br> December 31,<br> 2025** | **For the <br> year ended<br> December 31,<br> 2024** |
| Cash flows from operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Loss for the year | $(545212) | (372026) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile loss for the year to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Inventory write-down (up) adjustment | (7255) | 10449 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 178793 | 183557 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 178666 | 144300 |
| &nbsp;&nbsp;&nbsp;Pension benefits provision | 180316 | 157547 |
| &nbsp;&nbsp;&nbsp;Gain on valuation of redeemable convertible preferred stock | (114768) | (74950) |
| &nbsp;&nbsp;&nbsp;Interest income | (8421) | (7362) |
| &nbsp;&nbsp;&nbsp;Gain on foreign currency remeasurement | (141787) | (231916) |
| &nbsp;&nbsp;&nbsp;Loss on foreign currency remeasurement | 92901 | 193080 |
| &nbsp;&nbsp;&nbsp;Loss on share repurchase liabilities | 110543 |  |
| &nbsp;&nbsp;&nbsp;Others<sup>(\*1)</sup> | 59938 | (18514) |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts receivable, net | (192384) | 376352 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade accounts receivable, net | 1818971 | (1149251) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 107876 | 503346 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (52407) | (16431) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Trade accounts payable | 1174631 | (348716) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade accounts payables | (2277412) | 1200482 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other payables | 47313 | 48580 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 111055 | (89395) |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | (141276) | (108450) |
| Net cash provided by operating activities | 580081 | 400682 |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions of property, plant and equipment | (89746) | (219030) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from sale of short-term financial instruments | 29531 | 26140 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from disposal of property, plant and equipment | 28361 | 38181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receipt of government grants | 23476 | 60999 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in loans | (74531) | (86949) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in loans | 43594 | 58967 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other investing activities<sup>(\*2)</sup> | (211) | (16264) |
| Net cash used in investing activities | (39526) | (137956) |
| Cash flows from financing activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from short-term debt | 1450578 | 231245 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of short-term debt | (1306710) | (219853) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment from current portion of long-term debt | (214798) | (222423) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of finance lease liabilities | (40172) | (40904) |
| Net cash used in financing activities | $(111102) | (251935) |
| Effect of exchange rate changes on cash and cash equivalents | 4996 | (54128) |
| Net increase in cash and cash equivalents | 429453 | 10791 |
| Cash and cash equivalents as of beginning of year | 359394 | 402731 |
| Cash and cash equivalents as of end of year | $793843 | 359394 |

---

---

| | |
|:---|:---|
| (\*1) | USD 108,450 of amounts in prior periods has been reclassified as cash paid during the period for interest in order to conform to current year presentation. |

---

---

| | |
|:---|:---|
| (\*2) | USD 58,967 of amounts in prior periods has been reclassified as decrease in loans in order to conform to current year presentation. |

---

See accompanying notes to the financial statements.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies**

(1) Description of Business

NS World Co., Ltd. (the Company) was incorporated in 2013 and the Company's registered office is at 99, Naechuoksu-gil, Bugi-myeon, Cheongwon-gu, Cheongju-si, Chungcheongbuk-do, Republic of Korea. The Company specialize in the manufacture and sale of magnetic components for automobiles and electronic appliances.

(2) Basis of Presentation

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists.

(3) Going Concern

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists.

Primarily due to a recent operating loss associated with the business, the Company incurred losses of $545,212 and $372,026 for the years ended December 31, 2025 and 2024, respectively. The Company had negative working capital of $3,185,094 and $3,131,924 which excludes the cash and cash equivalents of $793,843 and $359,394, and accumulated deficits of $3,240,547 and $2,695,335 as of December 31, 2025 and 2024, respectively. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, upon the economic environment and the Company's current capability, the Company may be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

Subsequent to December 31, 2025, the Company completed a comprehensive share exchange in January 2026 and became a wholly owned subsidiary within a broader corporate group. Management has considered the impact of this transaction in its going concern assessment and expects that financial and operational support may be available, if necessary, to support the Company's planned operations. However, the extent and timing of such support are subject to uncertainties, and therefore the conditions described above continue to raise substantial doubt about the Company's ability to continue as a going concern.

(4) Use of Estimates

The preparation of financial statements in conformity with 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; allowance for credit losses. The valuation of fixed assets, inventory, notes receivable, lease liabilities and right-of-use asset; and fair value measurements of financial instruments, reserves for employee benefit obligations, income tax uncertainties, and other contingencies.

(5) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

The Company presents restricted cash separately from cash and cash equivalents in the balance sheets and there is no restricted cash for the year ended December 31, 2025, and 2024.

As of December 31, 2025, the Company maintains its cash and cash equivalents with Hana Bank, Woori Bank, Kookmin Bank and Industrial Bank of Korea (IBK),and the institutions are considered to be financially sound and stable within the Korean financial system.

The Company's cash and cash equivalents totaled $793,843 as of December 31, 2025, compared with $359,394 as of December 31, 2024. A portion of these balances exceeded the deposit insurance coverage limit which is KRW 100,000,000(equivalent to $69,691 and $68,027 for the year ended December 31, 2025, and 2024) per institution provided by the Korea Deposit Insurance Corporation (KDIC). The Company has not experienced any losses on these deposits to date, and management believes that the credit risk associated with these financial institutions remains low.

(6) Allowance for Credit Losses

The allowance for credit losses (ACL) is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected.

The estimate of expected credit losses is based on the Company's historical loss experience, adjusted for current and reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Company's customers such as known credit risk or industry trends.

The allowance is estimated over the contractual term of the financial asset adjusted for expected prepayments. The contractual term excludes any extensions, renewals and modifications, unless the borrower has a contractual option that provides it with the unilateral ability to extend the maturity date. The Company does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable) in expected credit losses each period are recognized immediately in net income as either credit loss expense or a reversal.

 

*Trade accounts receivable*

The Company uses an aging schedule to estimate the ACL for trade accounts receivable. This method categorizes trade receivables into different groups based on industry and the number of days past due. Past due status is measured based on the number of days since the payment due date. The trade receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics. The Company determines that the receivables no longer share similar risk characteristic if they are past due balances over 90 days and over a specified amount. The Company evaluates the collectability of trade accounts receivable with payments that are more than 90 days past due on an individual basis to determine if any are deemed uncollectible. Trade accounts receivable balances are deemed uncollectible and written off as a deduction from the allowance after all means of collection have been exhausted. The company deemed the receivables from bankrupt customers, which have not been collected for an extended period this year, as uncollectible and wrote them off. (See Note 3).

(7) Trade Accounts Receivable, net

Trade accounts receivable are recorded at the invoiced amount, net of an ACL and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the statements of cash flows.

(8) Inventories, net

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is determined by the weighted average method (for raw materials, sub-materials, finished goods and merchandise) and the specific identification method (for inventory in transit and work in process goods). The Company assesses the valuation of inventory and periodically writes down the value for estimated excess and obsolete inventory based upon assumptions about future demand and market conditions.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

Cost of sales primarily consists of the purchase cost of products sold to customers, production labor costs, and direct and indirect costs related to production.

(9) Revenue Recognition

The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

If the Company is principal in the revenue transactions, the Company recognizes revenue as gross, otherwise the Company recognizes on a net basis. Certain services that arrange for another party to transfer goods to a customer, where the Company does not maintain pricing discretion or retain control over the assets, are considered to act as an agent. Throughout the transaction, the Company does not retain the substantive risks and rewards associated with the underlying raw materials, and the counterparty retains control of the materials in a manner consistent with a typical sales transaction. The Company concludes to serve as an agent and recognizes the net amount as brokerage income in other operating income.

The Company engages in resale transactions where it purchases raw materials from specific parties, processes them, and resells them to the same counterparties. The Company provides a tolling manufacturing service for the counterparties in these arrangements, in which the counterparty retains control of the inventory throughout the process. The Company's performance obligation under these arrangements is the delivery of tolling services. Accordingly, the net transaction amount is recognized as revenue upon completion of these services. The toll process revenue recognized for the year ended December 31, 2025 was $7,985. The Company also engages in repurchase transactions where it sells raw materials to specific parties and repurchases them after they have been processed. The Company has an obligation to repurchase the inventory in these transactions. The Company maintains control of the inventory throughout the process as the Company retains legal title to the inventory and bears inventory risk throughout the process. The processing period is typically 15 to 60 days, and the pricing is determined based on the counterparties' processing costs. The Company accounts for these transactions as receiving toll manufacturing services rather than as distinct sales/purchases or product financing. As a result, the net transaction amount is recognized as processing fees (cost of goods manufactured). As of December 31, 2025, and 2024, the Company recognized non-trade accounts receivables of $802,237 and $2,555,265, respectively, and non-trade accounts payables of $914,930 and $3,114,212, respectively, related to repurchase transactions.

Shipping and handling costs associated with outbound freight, after control over product has transferred to a customer, are accounted for as a fulfillment cost and are included in selling, general and administrative expenses as incurred.

Taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from sales.

The Company's primary source of revenue is product and merchandise sales of components for automotive and home appliance magnets. Revenue from product and merchandise sales is recognized when control of the goods is transferred to the customer, which is typically at the point of delivery, at which time the significant risks and rewards of ownership also pass to the customer. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices, as such, no such provision — e.g. rebates or discounts — is provided. The Company provides assurance type warranties on all of its products, which are not separate performance obligations and are outside the scope of Topic 606. There was no loss contingencies related to warranties recorded as of December 31, 2025 and 2024.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(10) Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Plant and equipment under finance leases are stated at the present value of the lease payments.

Depreciation on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings is 20 years, while the estimated useful lives of machinery and equipment is 6 years and others are 5 years.

Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded.

(11) Government Grants

The Company receives grants from local government agencies and public institutions in relation to asset acquisition and research activity that are necessary for the Company's business activities. Government grants are either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received. Government grants related to assets are presented in the Balance Sheets by deducting the grant from the carrying amount of the asset. If it is not related to the acquisition of an asset, it can be treated as a grant related to income. Government grants related to income are presented to other income (presented in operating income) in the statement of operations. For the years ended December 31, 2025, and 2024, the Company recognized asset-related grants of $86,302 and $60,999, respectively, (recorded as netting in the related asset accounts on the balance sheets) and income-related grants of $17,413 and $78,162, respectively.

The Company has elected to apply an accounting policy by analogy to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, which is commonly accepted in practice under GAAP. The Company believes that this policy appropriately reflects the economic substance of the transactions and enhances comparability with other industry participants.

(12) Leases

The Company has entered into various operating and finance lease agreements for certain office spaces, transportation equipment and office equipment. The Company determines if an arrangement is a lease, or contains a lease, at inception and records the leases in the financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

The Company has lease agreements with lease and non-lease components, and elected to utilize the practical expedient to account for lease and non-lease components together as a single combined lease component.

The Company also elected the short-term lease exception, except for real estate, and therefore only recognizes right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option.

Both operating lease right-of-use assets and operating lease liabilities, as well as finance lease right-of-use assets and finance lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of future payments.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

Lease expenses for operating leases are recognized on a straight-line basis over the lease term and classified as cost of sales or selling, general and administrative expenses depending on the nature of the leased asset. Depreciation expense on the right-of-use assets arising from finance leases are recognized over the lease term and classified as cost of sales or selling, general and administrative expenses depending on the nature of the leased asset. Interest expenses on finance lease liabilities are recognized as interest expenses in the statements of operations over the lease term.

(13) Equipment Maintenance Activities

The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred.

(14) Other Assets

Other assets (current and non-current) consist of prepaid expenses, value added tax, advance payments and leasehold deposits.

(15) Research and Development and Advertising

Research and development and advertising costs are expensed as incurred. Research and development costs amounted to $163,496 and $188,492 in 2025 and 2024, respectively. Advertising costs amounted to $28,082 and $3,666 in 2025 and 2024. Such costs are included in selling, general, and administrative expenses in the statement of profit or loss.

(16) Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of employee-related costs, depreciation on buildings and equipment, amortization of right-of-use assets, professional and service fees, lease and utilities expense.

(17) Income Taxes

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent that it is more likely than not that sufficient taxable income will be available to realize the related tax benefits.

The Company recognizes and measures uncertain tax positions taken or expected to be taken in a tax return utilizing a two-step process. In the first step, recognition, we determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50 percent of being realized upon ultimate settlement.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU became effective on a prospective basis for the Company for the year-end December 31, 2025. The effect of ASU 2023-09 is reflected in Note 10. Management has concluded that the adoption of this standard will not have a material impact on the Company's financial statements.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(18) Defined Severance Benefits

The Company has a defined benefit pension plan covering substantially all employees upon their retirement in accordance with the Retirement Benefit Security Act of Korea. For executives, the retirement allowance is applied in accordance with the Company's Articles of Incorporation. Eligible employees and executives with one or more years of service are entitled to severance payments upon termination of employment, based on their length of service and pay rate.

The Company recognizes the net funded status of its pension plans in the balance sheets, measured as the difference between the projected benefit obligation and the fair value of plan assets, with corresponding changes recognized in earning or other comprehensive income. Under ASC 715, service cost, interest cost, expected return on plan assets, and the amortization of actuarial gains or losses and prior service cost are recognized in Net Income. Actuarial gains and losses and prior service cost arising from plan amendments are initially recorded in Other Comprehensive Income and subsequently amortized into Net Income in accordance with ASC 715.

The obligations are measured annually, or more frequently if there is a remeasurement event, based on our measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of relevant corporate bonds in the market.

The Company reviews actuarial assumptions and makes modifications to the assumptions based on current rates and trends when appropriate. The Company has adopted an amortization approach and the net cumulative gain or loss at the beginning of the period in excess of the corridor is amortized into net periodic benefit cost on a straight-line basis over the expected average remaining service period of the employees participating in the plan.

(19) Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

(20) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

(21) Fair Value Measurements

The Company measures the redeemable convertible preferred stock and dissenting shareholder appraisal rights at fair value.

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see Note 6):

● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

● Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

● Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

(22) Foreign Currency

The functional currency of the Company is the Korean Won. Transactions in foreign currency occur from overseas sales and purchases and are conducted in U.S. dollars and Japanese yen. Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in "Gain/Loss on foreign currency" in the statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the Gain/Loss on foreign currency in the statements of operations. As of December 31, 2025, net asset underlying the foreign currency-denominated value are $158,167. As of December 31, 2024, net asset underlying the foreign currency-denominated value are $277,812.

Assets and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end of each period. Revenue and expenses for the Company are translated into U.S. dollars using average rates that approximate those in effect during the period. Currency translation adjustments are included in "Accumulated other comprehensive loss" a separate component of Stockholders' deficit.

(23) Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) — Improvements to Income Tax Disclosures." The standard requires disclosure of specific categories of an entity's income tax expenses and income taxes paid among other disclosures. We adopted ASU 2023-09 for 2025 on a prospective basis, and upon adoption, the guidance did not have a material impact on our financial condition, results of operations, or cash flows, as the guidance pertains to disclosure only. Refer to Note 10 — "Income Taxes" for additional information.

In 2025, the FASB issued ASU 2025-05, which provides entities with a practical expedient permitting the use of current conditions as of the balance sheet date without incorporating expectations of future economic changes when developing reasonable and supportable forecasts as part of estimating expected credit losses.

The Company has elected to apply January 1, 2025, the practical expedient under ASU 2025-05. Consistent with this guidance, the Company does not incorporate forward-looking macroeconomic forecasts in its measurement of expected credit losses. Instead, the Company utilizes a historical roll-rate methodology based on the most recent three years of aging data to estimate expected credit losses on trade receivables. This approach aligns with the recent amendments, which permit credit loss estimates to be based solely on current conditions and observable historical loss experience. Under this framework, the Company's existing roll-rate model remains appropriate, and no additional forward-looking assumptions are required beyond the Company's historical collection patterns.

Accordingly, the Company's adoption of ASU 2025-05 did not have a material impact on its financial statements

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(24) New Accounting Standards and Interpretations Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income — Expense Disaggregation Disclosures, which becomes effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The standard requires to disclose disaggregated information about certain income statement expense line items. The Company has not yet completed its detailed assessment of the impact of this standard. Management is currently evaluating the potential effects of the new disclosure requirements on the Company's financial statement presentation and related disclosures. At this time, the Company has not identified any material impact on its financial statements; however, the evaluation remains ongoing.

In November 2024, the FASB issued ASU 2024-04, Debt — Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. ASU 2024-04 is effective for the Company's annual reporting periods beginning after December 15, 2025. Adoption is either with a prospective method of transition or a retrospective method of transition that is retrospective to the later of the beginning of earliest period presented and the date the entity adopted ASU 2020-06. Early adoption is permitted for all entities that have adopted ASU 2020-06. The Company does not expect the adoption of ASU 2024-04 to have a material effect on its financial statements.

In December 2025, the FASB issued ASU 2025-10 *Government Grants (Topic 832)*, which establishes the first comprehensive U.S. GAAP guidance for business entities on the recognition, measurement, and presentation of government grants. This new standard addresses the historical absence of explicit GAAP guidance that led many entities to analogize to IAS 20 or other models.

The guidance is effective for public business entities for annual periods beginning after December 15, 2028, including interim periods within those fiscal years, and one year later for all other entities. Early adoption is permitted.

The Company is currently evaluating the impact of this standard on its financial statements.

**2. Significant Risks and Uncertainties Including Business and Credit Concentrations**

The Company manufactures components for automotive and home appliance magnets. The Company's main products are plastic magnets and rubber magnets.

The Company has a single operating segment and as of the end of the reporting period, assets and liabilities of the segment are the same as presented in financial statements.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**2. Significant Risks and Uncertainties Including Business and Credit Concentrations** (cont.)

The following table disaggregates revenue by category.

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| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Revenue by category |  |  |
| &nbsp;&nbsp;&nbsp;Products | $5432286 | 4941810 |
| &nbsp;&nbsp;&nbsp;Merchandise | 933499 | 1046619 |
| &nbsp;&nbsp;&nbsp;Toll processing<sup>(\*)</sup> | 7985 | 62838 |

---

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| | |
|:---|:---|
| (\*) | This revenue corresponds to toll-processing revenue and relates to transactions in which the company purchases goods from the customer, Coreindus Co., Ltd., for consideration, performs processing, and then sells the processed goods. Because the company does not have control over the inventory in these transactions, the revenue is recognized on a net basis as an agent. |

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During 2025, domestic sales are approximately $5,877,248 (or 92% of total net revenue) and export sales are approximately $496,522 (or 8% of total net revenue).

During 2024, domestic sales are approximately $5,534,777 (or 91% of total net revenue) and export sales are approximately $516,491 (or 9% of total net revenue).

The major export countries are China and Vietnam. For the year ended December 31, 2025, the major export countries were China ($456,424 or 92%) and Vietnam ($18,692 or 4%)

Sales to a small number of major customers account for the majority of the Company's total net revenue. If orders from existing major customers decrease, there is a possibility of a loss of sales, which may adversely affect business results.

For the year ended December 31, 2025, the customers accounting for 10% or more of total revenue are Customer A and Customer B, with revenues of $2,854,759 (or 45% of total net revenue) and $1,296,620(or 20% of total net revenue), respectively.

For the year ended December 31, 2024, the customers that accounted for 10% or more of total revenue are Customer A and Customer B, with revenues of $2,238,762(or 37% of total net revenue) and $1,300,954(or 21% of total net revenue), respectively.

The following table disaggregates trade accounts receivable by major customers.

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| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **2025** | **2025** | **2024** | **2024** |
| Customer A | $31798 | (2)% | 190048 | (14)% |
| Customer B | 927335 | (61)% | 620307 | (45)% |
| &nbsp;&nbsp;&nbsp;Total | $959133 | (63)% | 810355 | (59)% |

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**3. Trade Accounts Receivable, net**

(1) Allowance for credit losses as of December 31, 2025 and
2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Allowance for credit losses (ACL) | $(33140) | (10297) |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**3. Trade Accounts Receivable, net** (cont.)

(2) The following is a summary of the changes in allowance for credit
losses for the years ended December 31, 2025 and 2024, respectively.

---

| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| <br>**(in US dollars)** | **Trade<br> Receivables** | **Trade<br> Receivables** |
| Beginning | $(10297) | (63028) |
| &nbsp;&nbsp;&nbsp;Recoveries |  | 48485 |
| &nbsp;&nbsp;&nbsp;Provision for credit losses | (22792) |  |
| &nbsp;&nbsp;&nbsp;Others | (51) | 4246 |
| Ending | $(33140) | (10297) |

---

(3) The following is contract liabilities representing the Company's
obligation to transfer goods or services to customers for which consideration has been received. There are no contract assets representing
the Company's right to consideration in exchange for goods or services transferred to the customers as of December 31, 2025 and
2024. These are presented within other current liabilities.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Contract liabilities | $78546 |  |

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**4. Non-trade Accounts Receivable and Payable**

(1) Non-trade accounts receivable

The Company disaggregates the non-trade account receivable by type of financing receivable when assessing and monitoring risk and performance of the entire portfolio.

Short-term loan receivables are unsecured and generally have terms of one year, requiring payments of principal and interest at maturity. Other receivables generally represent receivables from repurchase/resale transaction and are unsecured, and they generally have terms of less than one year, requiring payments of principal at maturity.

The amortized cost basis of non-trade account receivable, net as of December 31, 2025 and 2024, respectively, are as follows:

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| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Non-trade account receivable, net: |  |  |
| &nbsp;&nbsp;&nbsp;Short-term loan receivable | $10154 | 13993 |
| &nbsp;&nbsp;&nbsp;Short-term loan receivable (related parties) | 98383 | 62020 |
| &nbsp;&nbsp;&nbsp;Other receivables | 174097 | 982411 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Toll Processing | 150069 | 977573 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 24028 | 4838 |
| &nbsp;&nbsp;&nbsp;Other receivables (related parties) | 652168 | 1577693 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Toll Processing | 652168 | 1577693 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $934802 | 2636117 |

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There was no allowance for credit losses related to non-trade account receivable recorded as of December 31, 2025 and 2024.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**4. Non-trade Accounts Receivable and Payable** (cont.)

(2) Non-trade accounts payable

The balances of non-trade accounts payable as of December 31, 2025 and 2024, respectively, are as follows:

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| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Non-trade account payable, net: |  |  |
| &nbsp;&nbsp;&nbsp;Other payables | 117425 | 994381 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Toll Processing | 75372 | 966167 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 42053 | 28214 |
| &nbsp;&nbsp;&nbsp;Other payables (related parties) | 872987 | 2149361 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Toll Processing | 839558 | 2148045 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other | 33429 | 1316 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $990412 | 3143742 |

---

**5. Inventories**

Details of Inventories as of December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Raw materials | $208960 | 150252 |
| Indirect materials | 98690 | 160528 |
| Inventory in transit | 29747 |  |
| Work in process | 162981 | 345690 |
| Finished goods | 454565 | 356757 |
| Merchandise | 28592 | 51193 |
| &nbsp;&nbsp;&nbsp;Sub-total | 983535 | 1064420 |
| Write-down of raw materials | (790) | (1057) |
| Write-down of Indirect-materials | (32255) | (13964) |
| Write-down of Work in process | (5263) |  |
| Write-down of finished goods | (39344) | (67796) |
| &nbsp;&nbsp;&nbsp;Total | $905883 | 981603 |

---

As of December 31, 2025 and December 31, 2024, the balance of the inventory provision was $77,652 and $82,817 respectively. There was provision of $(-)7,255 and $10,449 incurred during the year ended December 31, 2025 and 2024, respectively.

**6. Fair Value Measurements**

(1) Fair value represents the price that would be received to sell
an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements
are reported in one of three levels reflecting the significant inputs used to determine fair value.

Level 1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date.

Level 2 — Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 — Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**6. Fair Value Measurements** (cont.)

(2) The following summarizes our financial liabilities that are
measured at fair value:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Classification** | **Measurement <br> Level** | **2025** | **2024** |
| Redeemable convertible preferred stock (RCPS) | Financial liabilities | Level 3 | $— | 1007641 |
| Dissenting shareholder appraisal rights (DSAR) | Share repurchase<br> liabilities | Level 3 | 109566 |  |

---

(3) The following table summarizes changes in the redeemable convertible
preferred stock and dissenting shareholder appraisal rights during 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| <br>**(in US dollars)** | **RCPS** | **DSAR** | **RCPS** | **DSAR** |
| Beginning January 1 | $1007641 |  | 1228062 |  |
| &nbsp;&nbsp;&nbsp;Loss (Gain) in fair value | (114768) | 110543 | (74950) |  |
| &nbsp;&nbsp;&nbsp;Conversion to common shares | (950189) |  |  |  |
| &nbsp;&nbsp;&nbsp;Changes in foreign currency translation | 57316 | (977) | (145471) |  |
| Ending December 31 |  | 109566 | 1007641 |  |

---

The change in fair value of the redeemable convertible preferred stock resulted in a gain of $114,768 and $74,950 for the year ended December 31, 2025, and December 31, 2024, which was recognized in the statements of operations within loss and gain on valuation of redeemable convertible preferred stock. Redeemable convertible shares were converted to common shares during the year ended December 31, 2025.

As of December 31, 2025, the Company's liability related to dissenting shareholder appraisal rights ("DSAR put option") is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. The change in fair value of the DSAR put option resulted in a loss of $110,543 for the year ended December 31, 2025, which was recognized in the statements of operations within loss on share repurchase liabilities.

(4) The carrying amounts of our financial instruments, including
cash and cash equivalents, accounts receivable, commercial paper notes, accounts payable and accrued expenses, approximate fair value
due to their short maturities.

Our short-term and long-term debt are recorded at amortized cost. The carrying amount of the long-term debt approximates its fair value as of December 31, 2025, and December 31, 2024, due primarily to the interest rates approximating market interest rates.

(5) Redeemable convertible preferred stock (RCPS)

The Company estimated the fair value of redeemable convertible preferred stock using the Tsiveriotis-Fernandes model with strip and bootstrapping method. The fair value is estimated using Level 3 inputs based on stock price volatility of similar listed companies.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**6. Fair Value Measurements** (cont.)

Quantitative information as of December 31, 2024 for the significant unobservable inputs of redeemable convertible preferred stock used to value the Company's Level 3 liabilities measured at fair value:

---

| | | | |
|:---|:---|:---|:---|
|  | **Unobservable <br> Inputs** | **Assumptions** | **Factors** |
| December 31, 2024 | Volatility | Mean of the annual volatility of proxy companies | 45.8% |
|  | Risk neutrality probability, max | Dynamic hedge for each node | 48.8% |

---

As of December 31, 2025, there were no liabilities required to be measured at fair value, as the redeemable convertible preferred stock, which matured in May 2025, was automatically converted into common stock upon maturity.

For the fair value of the redeemable convertible preferred stock, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects in the statement of profit or loss.

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| <br>**(in US dollars)** | **Increase** | **Decrease** | **Increase** | **Decrease** |
| Volatility of underlying stock price (+/-10%p) | $— |  | (21095) | 21060 |
| Underlying stock price (+/-5%p) |  |  | (31312) | 31312 |

---

(6) Valuation of DSAR Put Option

The DSAR put option represents a freestanding financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined price, contingent on closing of the Share Exchange Agreement described in Note 14. The Company accounts for this instrument as a derivative liability measured at fair value, with changes in fair value recognized in earnings.

The fair value of the DSAR put option is determined using a valuation model based on the difference between:

1) the present value of the expected cash settlement amount (including statutory interest), and

2) the present value of the underlying share value to be received in a share exchange transaction

The valuation incorporates significant assumptions, including:

1) expected cash settlement value based on contractual terms and statutory interest rates

2) estimated fair value of the Company's shares

3) probability of occurrence of the underlying transaction

4) discount rates reflecting the time value of money

Due to the use of significant unobservable inputs, the DSAR put option is classified as a Level 3 financial liability.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**7. Property, plant and equipment**

(1) Details of Property, plant and equipment as of December 31,
2025 and 2024 are as follows:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Accumulated** | **Accumulated** | **Carrying** | **Carrying** |
| | | **Initial Cost** | **Initial Cost** | **depreciation** | **depreciation** | **Amount** | **Amount** |
| <br>**(in US dollars)** |<br>**Useful**<br>**Lives** | **2025** | **2024** | **2025** | **2024** | **2025** | **2024** |
| Land |  | $666242 | 650333 |  |  | 666242 | 650333 |
| Buildings, structures and related equipment | 20 | 545392 | 502995 | (338380) | (289315) | 207012 | 213680 |
| Machinery and equipment | 6 | 928119 | 1001196 | (763141) | (772514) | 164978 | 228682 |
| Vehicles | 5 | 77575 | 49046 | (36097) | (29610) | 41478 | 19436 |
| Furniture and fixtures | 5 | 39465 | 38522 | (39462) | (38519) | 3 | 3 |
| Construction in progress |  | 20008 | 37354 |  |  | 20008 | 37354 |
| Tools and Office Equipment | 5 | 855366 | 805010 | (745658) | (684937) | 109708 | 120073 |
| Finance lease right-of-use assets | 5 | 148839 | 148753 | (77442) | (70822) | 71397 | 77931 |
| &nbsp;&nbsp;&nbsp;Total |  | $3281006 | 3233209 | (2000180) | (1885717) | 1280826 | 1347492 |

---

Total depreciation for the years ended December 31, 2025 and 2024 was $178,793 and $183,557, respectively.

(2) As of December 31, 2025, the details of Property, plant
and equipment pledged as collateral are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Collateral Provided Asset** | **Net<br> Carrying<br> Value** | **Pledged<br> Amount** | **Creditor** | **Relevant Debt <br> Amount** |
| Land and buildings | $800972 | 965419 | Industrial Bank of Korea | 737794 |
| Machinery and equipment | 50325 |  |  |  |

---

**8. Leases**

The Company has operating leases for certain office spaces and finance leases for certain transportation equipment. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the balance sheets. Finance lease assets and liabilities are included in property, plant and equipment and finance lease liabilities, respectively, on the balance sheets.

The lease agreement of office space includes renewal options. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments.

The Company's leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments only.

(1) The components of lease expense for the years ended December 31,
2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating lease expense | $— | 6158 |
| Finance lease expense: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right-of-use assets | 25727 | 32063 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 6770 | 11063 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sub-total | 32497 | 43126 |
| Short-term lease expense | 751 | 783 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $33248 | 50067 |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**8. Leases** (cont.)

(2) Amounts reported in the balance sheets as of December 31,
2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating Leases: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets | $— | 4616 |
| &nbsp;&nbsp;&nbsp;Long-term operating lease liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Current portion of long-term and short-term operating lease liabilities |  | 4616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $— | 4616 |
| Finance Leases: |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease right-of-use assets | $148839 | 148753 |
| &nbsp;&nbsp;&nbsp;Less: Accumulated amortization assets | (77442) | (70822) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $71397 | 77931 |
| &nbsp;&nbsp;&nbsp;Long-term finance lease liabilities | $36706 | 56506 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term finance lease liabilities | 29191 | 30598 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $65897 | 87104 |

---

(3) Other information related to leases as of December 31,
2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Cash used in operations for operating leases | $— | 6158 |
| &nbsp;&nbsp;&nbsp;Cash used in operations for finance leases | 40172 | 40904 |
| Right-of-use assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | $— | 5937 |
| &nbsp;&nbsp;&nbsp;Finance leases | 39960 |  |
| Reductions to ROU assets resulting from reductions to lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases |  | 5855 |
| &nbsp;&nbsp;&nbsp;Finance leases | 48476 | 32063 |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases |  | 0.84 years |
| &nbsp;&nbsp;&nbsp;Finance leases | 2.64 years | 2.54 years |
| Weighted average discount rate |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases |  | 6.83% |
| &nbsp;&nbsp;&nbsp;Finance leases | 9.69% | 10.03% |

---

(4) Maturities of lease liabilities under noncancellable leases
as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
| | **2025** |
| <br>**(in US dollars)** | **Finance<br> Lease** |
| 2026 | $34280 |
| 2027 | 24990 |
| 2028 | 6411 |
| 2029 | 6411 |
| 2030 | 2718 |
| Thereafter |  |
| &nbsp;&nbsp;&nbsp;Sub-total | 74810 |
| Less imputed interest | (8913) |
| &nbsp;&nbsp;&nbsp;Total | $65897 |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**9. Debt**

(1) Short-Term debt

Details of carrying amounts of short-term debt as of December 31, 2025 and 2024 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars) Maturity Date** | **Interest<br> Rate <br> (%)** | **Borrowing <br> Limit** | **2025** | **2024** |
| November 2026<sup>(\*)</sup> | 5.61 | $139383 | $139383 | 136054 |
| March 2026 – November 2026<sup>(\*)</sup> | 4.88 – 6.87 | 600739 | 579831 | 565988 |
| April 2026<sup>(\*)</sup> | 4.98 | 139383 | 139383 | 136054 |
| November 2026<sup>(\*)</sup> | 5.44 | 112377 | 112342 | 109660 |
| May 2026<sup>(\*)</sup> | 6.46 | 348456 | 323367 | 315646 |
| May 2026<sup>(\*)</sup> | 4.89 – 5.36 | 139383 | 139383 | 136054 |
| August 2026<sup>(\*)</sup> | 6.05 | 348456 | 348456 | 340136 |
| August 2026<sup>(\*)</sup> | 4.52 | 348456 | 348267 | 339951 |
| June 2026 | 4.60 | 300000 | 138000 | 138000 |
| May 2026 – June 2026 | 6.00 | 229981 | 229981 |  |
|  |  | 278765 |  | 85298 |
| &nbsp;&nbsp;&nbsp;Total |  |  | $2498393 | 2302841 |

---

(\*) The debt was borrowed from Industrial Bank of Korea, the primary owner of the Company.

The weighted-average interest rate on outstanding short-term debts was 5.54% at December 31, 2025.

(2) Long-Term Debt

Details of carrying amounts of long-term debt as of December 31, 2025 and 2024 are as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars) Description** | **Maturity Date** | **Interest <br> Rate <br> (%)** | **Borrowing<br> Limit** | **2025** | **2024** |
| Working capital loans | March 2027 | 4.52 | $125444 | $125444 | 122449 |
| Facility loans | September 2031 | 1.50 | 67182 | 55140 | 63184 |
| Facility loans | March 2031 | 1.50 | 40421 | 40421 | 39456 |
| Working capital loans | March 2026 – February 2027 | 3.13 – 3.17 | 557530 | 110294 | 288965 |
| Working capital loans | March 2028 | 3.06 | 69691 | 52122 | 68027 |
| &nbsp;&nbsp;&nbsp;Sub-total |  |  |  | 383421 | 582081 |
| Less: current portion of long-term debt |  |  |  | (137501) | (207816) |
| &nbsp;&nbsp;&nbsp;Total |  |  |  | $245920 | 374265 |

---

Future principal payments for long-term debt as of December 31, 2025 are as follows:

---

| | |
|:---|:---|
| **(in US dollars)** | **Long-term<br> debt** |
| Less than 1 year | $137501 |
| Between 1 – 2 years | 177894 |
| Between 2 – 5 years | 58813 |
| Over 5 years | 9213 |
| Total | $383421 |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**10. Income Taxes**

We are subject to income taxation primarily in Republic of Korea. The Korean entities are subject to periodic or special tax examinations by the Republic of Korea tax authorities in accordance with the Framework Act on National Taxes. In general, the statute of limitations for corporate income tax in Korea is 5 years (it extends to 7 years for non-filing and 10 years for fraudulent activities). There are no ongoing tax audits or examinations by the Korean authorities.

(1) There are no income tax (benefit) expenses recorded attributable
to current taxes and deferred taxes, except tax expenses (benefit) directly recorded in equity for the years ended December 31,
2025 and 2024.

(2) The components of loss before income taxes are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Korea | $(545212) | (372026) |

---

(3) Differences between the provision at the local statutory rate
and the provision recorded are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2024** | **2024** |
| <br>**(in US dollars)** | **Amount** | **Rate(%)** | **Amount** | **Rate(%)** |
| Taxes computed at the statutory rate | $(59973) | 11.0 | (36831) | 9.9 |
| Differences resulting from: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other non-deductible expense | (104) | (0.0) | (49605) | 13.3 |
| &nbsp;&nbsp;&nbsp;Tax credit | (43277) | 7.9 |  |  |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | 103354 | (18.9) | 78816 | (21.2) |
| &nbsp;&nbsp;&nbsp;Other |  |  | 7620 | (2.0) |
| Income tax (benefit) expense | $— |  |  |  |
| Effective tax rate (%) |  |  |  |  |

---

Our resulting effective tax rate differs from the applicable statutory rate primarily due to changes in the valuation allowance against our deferred tax assets.

The Company's primary business operations are conducted in Korea and are subject to Korea's corporate income tax law. Therefore, the Company applies the corporate income tax rate of Korea and do not apply the United States federal income tax rate.

(4) Income taxes of $109 were paid for the year ended December 31,
2025, and a tax refund of $19 was received for the year ended December 31, 2024.

(5) The income tax effects of temporary differences that give rise
to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued vacation | 15931 | 11733 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 6728 | 8624 |
| &nbsp;&nbsp;&nbsp;Redeemable convertible preferred stock | 115485 | 101453 |
| &nbsp;&nbsp;&nbsp;Retirement benefit | 126887 | 95914 |
| &nbsp;&nbsp;&nbsp;Inventories | 29455 | 32839 |
| &nbsp;&nbsp;&nbsp;Write-downs of inventories | 12093 | 15438 |
| &nbsp;&nbsp;&nbsp;Land revaluation | 47402 | 41643 |
| &nbsp;&nbsp;&nbsp;Net operating loss(NOL) carry-forward | 186988 | 114492 |
| &nbsp;&nbsp;&nbsp;Tax credit carry-forward<sup>(\*)</sup> | 203648 | 83581 |
| &nbsp;&nbsp;&nbsp;Loss on share repurchase liabilities | 12052 |  |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**10. Income Taxes** (cont.)

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Foreign currency translation | 4322 |  |
| &nbsp;&nbsp;&nbsp;Others | 32611 | 25675 |
| Total deferred tax assets before VA | 793602 | 531392 |
| &nbsp;&nbsp;&nbsp;Valuation allowance (VA) | (750356) | (488426) |
| Total deferred tax assets | 43246 | 42966 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment | (14468) | (11305) |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | (7333) | (7715) |
| &nbsp;&nbsp;&nbsp;Accrued expense | (9375) | (3980) |
| &nbsp;&nbsp;&nbsp;Provision and allowances | (644) | (2808) |
| &nbsp;&nbsp;&nbsp;Foreign currency translation |  | (7502) |
| &nbsp;&nbsp;&nbsp;Notes Receivable | (9612) | (8444) |
| &nbsp;&nbsp;&nbsp;Others | (1814) | (1212) |
| Total deferred tax liabilities | (43246) | (42966) |
| &nbsp;&nbsp;&nbsp;Net deferred tax assets | $— |  |

---

(\*) R&D (Research and Development) Tax Credit

**11. Uncertain Tax Positions**

There are no unrecognized tax benefits as of December 31, 2025 and 2024.

**12. Redeemable convertible preferred stock**

In May 2015, the Company issued 37,500 shares of redeemable convertible preferred stock ("RCPS") with a 10-year maturity.

The details of the Company's redeemable convertible preferred stock are as follows:

---

| | |
|:---|:---|
| **Category** | **Details** |
| Issuance Date | May 22, 2015 |
| Outstanding shares | 37,500 shares |
| Par Value | 5,000 KRW (equivalent to $3.5) |
| Issuance Amount | 750,000,000 KRW (equivalent to $522,685) |
| Conversion Price | 20,000 KRW (equivalent to $13.9) |
| Conversion Period | From the day following the issuance date until 10 years later (Subsequently automatically converted to common stock) |
| Conversion Ratio | 1 preferred share to 1 common share (certain adjustments may apply based on the IPO offering price) |
| Redemption Guaranteed Yield | Annual 5.8% |
| Redemption Claimable Period | After 42 months from the issuance date, until the conversion |
| Dividends | participating cumulative, annual 1% |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**12. Redeemable convertible preferred stock** (cont.)

Upon the holder's exercise of the redemption right during the year ended 2023, the RCPS became mandatorily redeemable in accordance with ASC 480, Distinguishing Liabilities from Equity. Therefore, the Company reclassified the RCPS to a financial liability. As of the reclassification date, the Company elected to measure the RCPS at fair value with changes in fair value recognized in earnings. See Note 6.

The automatic conversion of the RCPS to common equity in May 2025, resulted in derecognition of the RCPS liability through settlement via issuance of common shares. Immediately prior to conversion, the liability was remeasured to fair value as of the conversion date. As a result of the automatic conversion of 37,500 redeemable convertible preferred shares (conversion ratio: 1 preferred share to 1 common share, conversion price: KRW 20,000), the total number of issued and outstanding common shares increased to 289,055 as of the conversion date.

**13. Other Operating Income**

Other operating income for the years ended December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Government grant income | $17413 | 78162 |
| Income from the provision of technical services |  | 10612 |
| Brokerage income | 4518 |  |
| Rental income | 17213 | 17947 |
| Gain on Disposal of Tangible Assets | 21954 | 34265 |
| Other operating income |  | 6383 |
| &nbsp;&nbsp;&nbsp;Total | $61098 | 147369 |

---

**14. Stockholders' Deficit**

As of December 31, 2025, the Company has 1,043,720 authorized shares of which 289,055 shares of common stock were issued and outstanding, with a par value KRW 5,000 per share. As of December 31, 2024, the Company had the same 1,043,720 authorized shares, of which 251,555 were common stock and 37,500 were redeemable convertible preferred stock, all issued and outstanding. The redeemable convertible preferred stock was converted into common stock during the current year.

 

*Common Stock*

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The holders have no pre-emptive or other subscription rights, and there are no redemption or sinking fund provisions with respect to such shares. Common stock is subordinate to the preferred stock with respect to dividend rights and rights upon liquidation, winding up and dissolution of the Company.

 

*Accumulated other comprehensive income(loss)*

Accumulated other comprehensive income(loss) is consist of foreign currency translation adjustments and actuarial gain on net liability of defined benefits. In case of the actuarial gain on liability of defined benefits, it is amortized into net periodic benefits cost on a straight-line basis over the expected average remaining service period of employees.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**14. Stockholders' Deficit** (cont.)

*Dissenting Shareholder Appraisal Rights*

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for the Appraisal Shares was $44.87 per share, as determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close.

**15. Defined Severance Benefits**

(1) The following table sets forth the plan's benefit obligations,
fair value of plan assets, and funded status at December 31, 2025 and 2024;

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Benefit obligations | $1225225 | 1004416 |
| Fair value of plan assets | (241288) | (215091) |
| Funded status | $983937 | 789325 |

---

(2) The following table summarizes changes in the defined severance
benefits obligation including benefit costs and benefits paid during 2025 and 2024:

---

| | | |
|:---|:---|:---|
| | **Benefit obligations** | **Benefit obligations** |
| <br>**(in US dollars)** | **2025** | **2024** |
| Beginning balance | $1004416 | 878506 |
| Service cost | 180316 | 157547 |
| Interest cost | 21412 | 20840 |
| Actuarial loss | 18720 | 154893 |
| Benefits paid | (22460) | (81263) |
| Others | 22821 | (126107) |
| Ending balance | $1225225 | 1004416 |
| Classification: |  |  |
| &nbsp;&nbsp;&nbsp;Current | $641226 | 498968 |
| &nbsp;&nbsp;&nbsp;Non-current | 583999 | 505448 |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**15. Defined Severance Benefits** (cont.)

The following table summarizes changes in the plan assets during 2025 and 2024:

---

| | | |
|:---|:---|:---|
| | **Plan assets** | **Plan assets** |
| <br>**(in US dollars)** | **2025** | **2024** |
| Beginning balance | $215091 | 237239 |
| Employer contribution | 9141 | 8798 |
| Interest income | 7702 | 6666 |
| Actuarial gain (loss) | 4279 | (6658) |
| Benefits paid |  |  |
| Others | 5075 | (30954) |
| Ending balance | $241288 | 215091 |

---

As of December 31, 2025, the plan assets consisted of 99.7% time deposits and 0.3% cash equivalents.

(3) Net periodic benefit cost recognized and other changes in plan
assets and benefit obligations recognized in net loss.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Service cost | $180316 | 157547 |
| Interest cost | 13710 | 14174 |
| Amortization of net actuarial loss | 58490 | 57067 |
| Net periodic benefit cost recognized | $252516 | 228788 |

---

For the years ended December 31, 2025 and 2024, the service cost component is included in cost of sales and selling, general and administrative expenses, interest cost is included in interest expense, and the amortization of net actuarial loss is included in other expense in the statements of operations.

(4) The following table summarizes changes in accumulated other
comprehensive income(loss) for pension benefits during 2025 and 2024:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Beginning balance | $(770079) | (665595) |
| &nbsp;&nbsp;&nbsp;Net actuarial gain(loss), net of tax | (14441) | (161551) |
| &nbsp;&nbsp;&nbsp;Amortization of net actuarial loss | 58491 | 57067 |
| Ending balance | $(726029) | (770079) |

---

(5) Weighted-average assumptions used to determine benefit obligations
for 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in %)** | **2025** | **2024** |
| Discount rate | 3.3% | 3.2% |
| Rate of compensation increase | 2.4% | 2.4% |
| Expected rate of return on assets | 2.9% | 3.4% |
| Mortality rate – KIDI (Korea Insurance Development Institute) | 0.003 – 0.017% | 0.003 – 0.017% |
| Termination rate – KIDI under 300 employees | 6.3 – 30.0% | 6.3 – 30.0% |
| Salary scale – KIDI under 300 employees | 1.8 – 4.7% | 1.8 – 4.7% |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**15. Defined Severance Benefits** (cont.)

(6) The expected maturity analysis of the Company's undiscounted
benefit obligation based on the same assumptions used to measure the Company's benefit obligation as of December 31, 2025
and 2024 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Less than 1 year | $882513 | 714059 |
| Between 1 – 2 years | 25723 | 20675 |
| Between 2 – 5 years | 82217 | 65874 |
| Over 5 years | 362038 | 311833 |
| &nbsp;&nbsp;&nbsp;Total | $1352491 | 1112441 |

---

**16. Supplemental Cash Flow Information**

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash receipt during the period for interest | $719 | 696 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | (141276) | (108450) |
| &nbsp;&nbsp;&nbsp;Income taxes received(paid) | (109) | 19 |
| Non-cash investing and financing activities: |  |  |
| &nbsp;&nbsp;&nbsp;Obtaining a right-of-use asset in exchange for a lease liability | 25897 | 5937 |
| &nbsp;&nbsp;&nbsp;Conversion of the redeemable convertible preferred stock | 950189 |  |

---

**17. Commitments and Contingencies**

(1) Guarantees and Warranties

1) The list of payment guarantees provided by third parties to the Company as of December 31, 2025 is as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US dollars) Provider** | **Type** | **Guaranteed <br> Amount** | **Beneficiary** |
| K-SURE (Korea Trade Insurance Corporation) | Trade Bill Loan | $89902 | Industrial Bank of Korea |
| KODIT (Korea Credit Guarantee Fund) | Operating Funds Loan | 1156666 | Industrial Bank of Korea |
| SGI (Seoul Guarantee Insurance) | Government Grant | 11004 | Korea Occupational Safety and Health Agency |

---

2) The main commitments of short-term and long term debt with financial institutions as of December 31, 2025 are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **(in US dollars) Financial Institution** | **Type** | **Credit Line** | **Used<br> Amount** |
| Industrial Bank of Korea<sup>(\*1)(\*2)</sup> | Operating Funds Loan | $2409680 | 2351417 |
| KOSME (Korea SMEs and Startups Agency) | Operating Funds Loan | 627221 | 162415 |
| Woori Bank | Operating Funds Loan | 557530 |  |
| &nbsp;&nbsp;&nbsp;Total |  | $3594431 | 2513832 |

---

---

| | |
|:---|:---|
| (\*1) | As of December 31, 2025, land, buildings, machinery, and equipment have been provided as collateral (with a secured amount of $965,419) for long-term debt (refer to Note 7,9) and joint guarantees issued for related parties (refer to Note 18). |

---

---

| | |
|:---|:---|
| (\*2) | As of December 31, 2025, the Company established pledge fire insurance claims (with a pledge amount of $741,201) (refer to Note 9). |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**18. Related Party Transactions**

(1) The Company's list of related parties is as follows:

---

| | |
|:---|:---|
| **Relationship** | **Name of Related Party** |
| Primary owners with more than 10% of shares | Kim Kangyong (CEO) |
|  | Kang Sunhee |
|  | Industrial Bank of Korea (IBK) |
| Other parties with which the entity may deal if one party controls or can significantly influence the management | N&P Co., Ltd <br> Hi-Q MAG Co., Ltd. <br> Tianjin TNTT Co., Ltd.<br> KCM INDUSTRY Co., Ltd. |

---

(2) Transactions between the Company and its major shareholders
or other related parties, involving sales of products and services, expenses for raw materials, and other ordinary course business expenses,
are included in the financial statements.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Net sales | $456882 | 463048 |
| Tianjin TNTT Co., Ltd. | 456424 | 408254 |
| N&P Co., Ltd | 458 | 54794 |
| Rental income | 12656 | 13197 |
| N&P Co., Ltd | 12656 | 13197 |
| Other operating income(\*) | 25006 |  |
| Tianjin TNTT Co., Ltd. | 12936 |  |
| N&P Co., Ltd | 2227 |  |
| Hi-Q MAG Co., Ltd | 9843 |  |
| Interest income |  | 7343 |
| Industrial Bank of Korea |  | 7343 |
| Purchase of raw materials, merchandise | 1533032 | 667166 |
| Tianjin TNTT Co., Ltd. |  | 201771 |
| N&P Co., Ltd | 234076 | 392813 |
| KCM INDUSTRY Co., Ltd. | 1298956 | 72582 |
| Subcontracting costs(\*\*) | 656999 | 462491 |
| Tianjin TNTT Co., Ltd. | 282254 | 197556 |
| N&P Co., Ltd |  | 48728 |
| Hi-Q MAG Co., Ltd | 374745 | 216207 |
| Other expenses(\*\*\*) | 124221 | 95920 |
| Industrial Bank of Korea | 121221 | 87670 |
| Tianjin TNTT Co., Ltd. | 3000 | 2092 |
| N&P Co., Ltd |  | 6158 |

---

---

| | |
|:---|:---|
| (\*) | Consists of income from the provision of technical services and brokerage income, gain on disposal of tangible assets. |
| (\*\*) | Consists of repurchase transactions where the Company sells raw materials to specific parties and repurchases them after they have been processed. |

---

---

| | |
|:---|:---|
| (\*\*\*) | Primarily consists of interest expense ($121,221 in 2025 and $87,670 in 2024) |

---

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**18. Related Party Transactions** (cont.)

(3) Amounts due from or to its officers, employees, and significant
shareholders are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Cash and cash equivalents(\*) | $792125 | 310238 |
| Industrial Bank of Korea | 792125 | 310238 |
| Trade accounts receivable | 927335 | 674774 |
| Tianjin TNTT Co., Ltd. | 927335 | 620307 |
| N&P Co., Ltd |  | 54467 |
| Non-trade accounts receivable(\*\*) | 652168 | 1577693 |
| Tianjin TNTT Co., Ltd. | 652168 | 562089 |
| N&P Co., Ltd |  | 339390 |
| Hi-Q MAG Co., Ltd. |  | 671071 |
| Trade accounts payable | 1428229 | 640450 |
| Tianjin TNTT Co., Ltd. | 733345 |  |
| N&P Co., Ltd |  | 345450 |
| KCM INDUSTRY Co., Ltd. | 694884 | 295000 |
| Non-trade accounts payables(\*\*\*) | 872987 | 2149361 |
| Tianjin TNTT Co., Ltd. | 549175 | 792972 |
| N&P Co., Ltd |  | 450350 |
| Hi-Q MAG Co., Ltd. | 323812 | 906039 |

---

(\*) Cash held through Industrial Bank of Korea accounts

---

| | |
|:---|:---|
| (\*\*) | Excluded short-term loan. Most of the amounts were generated from repurchase/resale transactions. |

---

---

| | |
|:---|:---|
| (\*\*\*) | Most of the amounts were generated from repurchase/resale transactions. |

---

(4) Related party transactions between the Company, its officers,
employees, and significant shareholders comprise loan, debt and redeemable convertible preferred stock. Amounts due from or to its officers,
employees, and significant shareholders are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** |
| <br>**(in US dollars)** | **Short-term <br> loan** | **Short-term <br> debt** | **Long-term <br> debt** | **Short-term <br> loan** | **Short-term <br> debt** | **Long-term <br> debt** |
| Beginning | $62020 | 2088903 | 215728 | 34568 | 2538334 | 119746 |
| Increase<sup>(\*)</sup> | 106333 | 15792 |  | 64955 | 12669 | 131967 |
| Decrease<sup>(\*)</sup> | (71177) | (9675) | (15792) | (30792) | (160941) | (12669) |
| Others | 1206 | 51045 | 5417 | (6711) | (301158) | (23316) |
| Ending | $98383 | 2146065 | 205352 | 62020 | 2088904 | 215728 |

---

(\*) Increase reflects new issuances and reclassifications from long-term to short-term (liquidity replacement), while Decrease reflects repayments and reclassifications from short-term to long-term.

**NS World Co., Ltd.<br> Notes to the Financial Statements**

**18. Related Party Transactions** (cont.)

(5) The Company provides a guarantee for borrowing to entities under
common control and related parties (individuals).

---

| | |
|:---|:---|
| **(in US dollars)** | **2025** |
| Guarantee to entities under common control | $397240 |
| N&P Co., Ltd (Joint and several guarantee for borrowings) | 397240 |
| Guarantee to related parties (individuals) | 165031 |
| Kim Kangyong (CEO) (Joint and several guarantee for borrowings) | 165031 |
| &nbsp;&nbsp;&nbsp;Total | 562271 |

---

(6) The Company received a guarantee for borrowings from related
parties (individuals).

---

| | |
|:---|:---|
| **(in US dollars)** | **2025** |
| Guarantee from related parties (individuals) | $177838 |
| Kim Kangyong (CEO) (Joint and several guarantee for borrowings) | 177838 |

---

**19. Subsequent Events**

(1) Comprehensive share exchange and dissenting shareholders appraisal
rights

The Company has evaluated subsequent events from the financial statements date through the date the financial statements were available to be issued.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd.

Under the share exchange, all outstanding shares of the Company were transferred to EMT Sub in exchange for equity interests of EMT Sub. Existing shareholders of the Company received shares of EMT Sub at an exchange ratio of 0.009427 shares of EMT Sub for each share of the Company's common stock. No cash consideration was paid in connection with the share exchange, except for payments related to dissenting shareholders.

Certain shareholders exercised their appraisal rights under the Korean Commercial Law. Shareholders were entitled to exercise such rights from May 16, 2025, the date of the notice of the shareholders' meeting, through the closing of the shareholders' meeting on June 2, 2025. As a result, the Company recognized a payable to dissenting shareholders in 2025.

The obligation to settle the appraisal rights remains with the Company; however, the funding required to satisfy such obligation is expected to be provided by Evolution Metals & Technologies Corp.

Upon the closing of the share exchange transaction in January 2026, the Company obtained shares of its parent company, Evolution Metals and Technologies Corp. ("EMAT"), in exchange for its outstanding shares. The Company intends to liquidate such shares and use the proceeds to settle the obligation to dissenting shareholders.

The payment amount was approximately $6.50 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

(2) Extension of borrowings

In March 2026, the Company extended the maturity of one of its borrowings from the Industrial Bank of Korea amounting to $188,166 (equivalent to KRW 270 million) by one year, with the revised maturity date falling in March 2027. In March 2026, the Company's board also approved the extension of another of its borrowings from the Industrial Bank of Korea amounting to $139,383 (equivalent to KRW 200 million) by one year, with the revised maturity date falling in April 2027.

## Exhibit 99.6

**Exhibit 99.6**

**HANDA LAB CO., LTD. FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
|  | **Page** |
| **Audited Financial Statements of Handa Lab Co., LTD. as of and for each of the Years Ended December 31, 2025 and 2024** |  |
| [Report of Independent Auditors for the Year Ended December 31, 2025](#f_001) | F-2 |
| [Report of Independent Auditors for the Year Ended December 31, 2024](#f_002) | F-3 |
| [Consolidated Balance Sheets](#f_003) | F-4 |
| [Consolidated Statements of Operations](#f_004) | F-5 |
| [Consolidated Statements of Comprehensive Loss](#f_005) | F-6 |
| [Consolidated Statements of Changes in Stockholders' Equity](#f_006) | F-7 |
| [Consolidated Statements of Cash Flows](#f_007) | F-8 |
| [Notes to the Consolidated Financial Statements](#f_008) | F-9 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Board of Directors and<br> Stockholders of Handa Lab Co., Ltd. and Subsidiary

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of Handa Lab Co., Ltd. and Subsidiary (the "Company") as of December 31, 2025, and the related consolidated statement of operations and comprehensive loss for the year ended December 31, 2025, and consolidated statement of cash flows and changes in stockholders' equity for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

**Substantial Doubt About the Company's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company's decline in sales associated with the business and net loss and negative cash flows from operations in the current period raise substantial doubt about its ability to continue as a going concern. Management's evaluation of the events and conditions, and management's plans regarding those matters, are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

*/s/ GRASSI & CO., CPAs, P.C.*

We have served as the Company's auditor since 2025.

Glastonbury, Connecticut

March 31, 2026

**Report of Independent Auditors**

**The Shareholders and Board of Directors<br> Handa Lab Co., Ltd.**

**Opinion**

We have audited the consolidated financial statements of Handa Lab Co., Ltd. and subsidiary (the "Group"), which comprise the consolidated balance sheet as of December 31, 2024 and the related consolidated statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

**Basis for opinion**

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are required to be independent of the Group and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

**Substantial Doubt about the Group's Ability to Continue as a Going Concern**

The accompanying consolidated financial statements have been prepared assuming that the Group will continue as a going concern. As discussed in Note 1(3) to the consolidated financial statements, the Group has incurred a net loss, has a negative working capital, and has stated that these events or conditions indicate that a material uncertainty exists that casts significant doubt on the Group's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1(3). The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

**Responsibilities of Management for the Consolidated Financial Statements**

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Group's ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

**Auditor's Responsibilities for the Audit of the consolidated Financial Statements**

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

● Exercise professional judgment and maintain professional skepticism throughout the audit.

● Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

● Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control. Accordingly, no such opinion is expressed.

● Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

● Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Group's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea<br> April 21, 2025

**Handa Lab Co., Ltd. and Subsidiary<br> Consolidated Balance Sheets<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Assets: |  |  |  |
| Cash and cash equivalents |  | $461180 | 553907 |
| Trade accounts receivable | 23 | 70298 | 13320 |
| Non-trade account receivable | 4 | 17606 | 34607 |
| Non-trade account receivable (Related party) | 415 |  | 68027 |
| Short-term financial instruments |  |  | 204082 |
| Inventories | 5 | 3974 | 16593 |
| Prepaids and other current assets |  | 4356 | 1914 |
| Total current assets |  | 557414 | 892450 |
| Property, plant and equipment, net | 6 | 305295 | 292793 |
| Operating lease right-of-use assets | 7 | 1699 | 2716 |
| Intangible assets, net | 14 | 88787 | 94358 |
| Other non-current assets |  | 41192 | 16405 |
| Total non-current assets |  | 436973 | 406272 |
| &nbsp;&nbsp;&nbsp;Total assets |  | $994387 | 1298722 |
| Liabilities and Stockholders' Equity |  |  |  |
| Liabilities: |  |  |  |
| Trade accounts payable |  | $9359 | 1347 |
| Non-trade accounts payables |  | 33205 | 22542 |
| Contract liabilities |  | 40769 |  |
| Current portion of finance lease liabilities | 7 | 6624 | 6465 |
| Current portion of operating lease liabilities | 7 | 1170 | 2534 |
| Derivative liabilities | 17 | 81060 |  |
| Other current liabilities |  | 25826 | 10883 |
| &nbsp;&nbsp;&nbsp;Total current liabilities |  | 198013 | 43771 |
| Long-term debt | 8 | 409785 | 400000 |
| Long-term debt (Related party) | 815 | 23242 | 22687 |
| Finance lease liabilities (non-current) | 7 | 8928 | 13753 |
| Operating lease liabilities (non-current) | 7 | 529 | 182 |
| Total non-current liabilities |  | 442484 | 436622 |
| Total liabilities |  | 640497 | 480393 |
| Stockholders' equity: |  |  |  |
| Common stock, par value of KRW 5,000 (equivalent to $3.5) authorized 1,500,000 shares; 380,800 shares issued and outstanding as of December 31, 2025 and 2024 | 11 | 1514241 | 1514241 |
| Additional paid-in capital |  | (3058) | (3058) |
| Accumulated deficit |  | (1033521) | (546796) |
| Accumulated other comprehensive loss |  | (134399) | (158738) |
| Total equity attributable to the Company and Subsidiary |  | 343263 | 805649 |
| Non-controlling interest |  | 10627 | 12680 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total equity |  | 353890 | 818329 |
| &nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity |  | $994387 | 1298722 |

---

See accompanying notes to consolidated financial statements.

**Handa Lab Co., Ltd. and Subsidiary<br> Consolidated Statements of Operations<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **2025** | **2024** |
| Net revenues | 2 | $457569 | 487909 |
| Cost of sales |  | (511609) | (334806) |
| Cost of sales (Related party) | 15 |  | (9794) |
| Total cost of sales |  | (511609) | (344600) |
| Gross profit |  | (54040) | 143309 |
| Other operating income | 1(12) | 247430 | 439490 |
| Selling, general, and administrative expenses | 1(16) | (602514) | (736784) |
| Operating loss |  | (409124) | (153985) |
| Other income |  | 525 | 58 |
| Other expense |  | (148) | (2) |
| Interest income |  | 6059 | 8031 |
| Interest income (Related party) | 15 | 1378 | 1646 |
| Interest expense |  | (5685) | (6273) |
| Loss on derivatives |  | (81783) |  |
| Loss before tax |  | (488778) | (150525) |
| Income tax expense | 9 |  |  |
| Loss for the year |  | $(488778) | (150525) |
| Loss attributable to: |  |  |  |
| &nbsp;&nbsp;&nbsp;Owners of the Company |  | $(486725) | (148902) |
| &nbsp;&nbsp;&nbsp;Non-controlling interests |  | (2053) | (1623) |

---

See accompanying notes to consolidated financial statements.

**Handa Lab Co., Ltd. and Subsidiary<br> Consolidated Statements of Comprehensive Loss<br> (in US dollars)**

---

| | | | |
|:---|:---|:---|:---|
|  | **Notes** | **2025** | **2024** |
| Loss for the year |  | $(488778) | (150525) |
| Other comprehensive income (loss): |  |  |  |
| Foreign currency translation adjustments |  | 24339 | (116401) |
| Total other comprehensive income (loss) |  | 24339 | (116401) |
| Total comprehensive loss |  | $(464439) | (266926) |
| Total comprehensive loss attributable to: |  |  |  |
| &nbsp;&nbsp;&nbsp;Owners of the Company |  | $(462386) | (265303) |
| &nbsp;&nbsp;&nbsp;Non-controlling interests |  | (2053) | (1623) |

---

See accompanying notes to consolidated financial statements.

**Handa Lab Co., Ltd. and Subsidiary<br> Consolidated Statements of Changes in Stockholders' Equity<br> (in US dollars)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common <br> stock** | **Additional <br> paid-in <br> Capital** | **Accumulated <br> other <br> comprehensive <br> loss** | **Accumulated <br> deficit** | **Equity<br> attributable to<br> owners of the<br> Company** | **Non-<br> controlling <br> interests** | **Total <br> stockholders' <br> equity** |
| Balances at January 1, 2024 | $1176095 | (646) | (42337) | (397894) | 735218 | 14303 | 749521 |
| Loss for the year |  |  |  | (148902) | (148902) | (1623) | (150525) |
| Foreign currency translation adjustments |  |  | (116401) |  | (116401) |  | (116401) |
| Paid-in capital increase | 338146 | (2412) |  |  | 335734 |  | 335734 |
| Balances at December 31, 2024 | $1514241 | (3058) | (158738) | (546796) | 805649 | 12680 | 818329 |
| Balances at January 1, 2025 | $1514241 | (3058) | (158738) | (546796) | 805649 | 12680 | 818329 |
| Loss for the year |  |  |  | (486725) | (486725) | (2053) | (488778) |
| Foreign currency translation adjustments |  |  | 24339 |  | 24339 |  | 24339 |
| Balances at December 31, 2025 | $1514241 | (3058) | (134399) | (1033521) | 343263 | 10627 | 353890 |

---

See accompanying notes to consolidated financial statements

**Handa Lab Co., Ltd. and Subsidiary<br> Consolidated Statements of Cash Flows<br> (in US dollars)**

---

| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Cash flows from operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Loss for the year | $(488778) | (150525) |
| Adjustments to reconcile loss for the year to net cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 20647 | 12197 |
| &nbsp;&nbsp;&nbsp;Amortization of Intangible Assets | 20405 | 21165 |
| &nbsp;&nbsp;&nbsp;Interest expenses | 5684 | 6273 |
| &nbsp;&nbsp;&nbsp;Interest Income | (7417) | (9677) |
| &nbsp;&nbsp;&nbsp;Loss on valuation of derivative instruments | 81783 |  |
| &nbsp;&nbsp;&nbsp;Interest received | 10051 | 12767 |
| &nbsp;&nbsp;&nbsp;Interest paid | (5778) | (6224) |
| &nbsp;&nbsp;&nbsp;Income taxes paid | (71) | (1675) |
| &nbsp;&nbsp;&nbsp;Others |  | (366) |
| &nbsp;&nbsp;&nbsp;Change in operating assets and liabilities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (57157) | 227447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade account receivable | 24293 | (3996) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 13141 | 178712 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (2345) | 9537 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | 8050 | (200164) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 41133 | (159482) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-trade accounts payables | 10295 | (9380) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 14807 | (14681) |
| Net cash used in operating activities | (311257) | (88072) |
| Cash flows from investing activities |  |  |
| &nbsp;&nbsp;&nbsp;Acquisitions of property, plant and equipment | (28064) | (29954) |
| &nbsp;&nbsp;&nbsp;Acquisition of short-term financial instruments |  | (329917) |
| &nbsp;&nbsp;&nbsp;Proceeds from short-term financial instruments | 210938 | 291793 |
| &nbsp;&nbsp;&nbsp;Proceeds from government grants | 11460 | 37846 |
| &nbsp;&nbsp;&nbsp;Acquisition of intangible assets | (21887) | (8179) |
| &nbsp;&nbsp;&nbsp;Increase in leasehold deposits | (15942) | (24451) |
| &nbsp;&nbsp;&nbsp;Insurance of loans | (17578) | (461884) |
| &nbsp;&nbsp;&nbsp;Collection of loans | 70313 | 388569 |
| Net cash provided by (used in) investing activities | 209240 | (136177) |
| Cash flows from financing activities |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from long-term borrowings |  | 244395 |
| &nbsp;&nbsp;&nbsp;Paid in capital increase |  | 338146 |
| &nbsp;&nbsp;&nbsp;Payment of finance lease liabilities | (5207) | (25366) |
| &nbsp;&nbsp;&nbsp;Stock issuance costs |  | (2412) |
| Net cash (used in) provided by financing activities | $(5207) | 554763 |
| Effect of exchange rate changes on cash and cash equivalents | 14497 | (70958) |
| Decrease (increase) in cash and cash equivalents | (107224) | 330514 |
| Cash and cash equivalents as of beginning of year | 553907 | 294351 |
| Cash and cash equivalents as of end of year | $461180 | 553907 |

---

See accompanying notes to consolidated financial statements.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies**

(1) Description of Business

Handa Lab Co., Ltd. (the "Company") and subsidiary (collectively, the "Group"), established in 2021, specialize in the manufacture and sale of intelligent monitoring systems, machine vision and laser testing systems, data gathering systems. The Company offers a diverse range of equipment and software, tailored to meet specific customer requirements in terms of specifications, functions, standards, and delivery timelines. Handa Corporation Co., Ltd., in which the Company holds a 60% stake, was established in 2023 and specializes in the manufacture and sale of intelligent robotic systems.

(2) Basis of Presentation

These consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Group will continue as a going concern.

Also, the accompanying consolidated financial statements include the accounts of Handa Lab Co., Ltd. and subsidiary in accordance with ASC 810-Consolidation. All intercompany balances and transactions have been eliminated in consolidation.

(3) Going Concern

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Group's ability to continue as a going concern exists.

Primarily due to a decline in sales associated with the business, the Group incurred a loss for the year of $488,778 and net cash outflows from operations of $311,257 for the year ended December 31, 2025. As of December 31, 2025, the Group had a net working capital deficit of $101,779 and cash and cash equivalents of $461,180. Absent any other action, the Group will require additional liquidity to continue its operations over the next 12 months.

The Group is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, given the economic environment and the Group's current capabilities, the Group may be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Group will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The consolidated financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Group were unable to continue as a going concern.

(4) Use of Estimates

The preparation of consolidated financial statements in conformity with 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of fixed assets; allowance for credit losses, deferred tax assets, inventory, lease liabilities and right-of-use assets, and income tax uncertainties, and other contingencies.

(5) Cash and Cash Equivalents

The Group considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(6) Financial Instruments

Financial instruments are classified based on the business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. The Group considers the contractual terms of the relevant financial instrument and assesses whether the contractual cash flows consist solely of payments of principal and interest on the principal amount outstanding. As of the end of the reporting period, the Group's short-term financial instruments are entirely composed of short-term deposits.

(7) Allowance for Credit Losses

The Group records an allowance for credit losses under Subtopic 326-20 Financial Instruments — Credit Losses — Measured at Amortized Cost for the current expected credit losses inherent in its financial assets measured at amortized cost and contract assets. Allowance for credit losses is a valuation account deducted from the amortized cost basis to present the net amount expected to be collected.

The estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written off. The estimate of expected credit losses is based on the Group's historical loss experience, adjusted for current and reasonable and supportable forecasts of economic conditions and other pertinent factors affecting the Group's customers such as known credit risk or industry trends.

The allowance is estimated over the contractual term of the financial asset adjusted for expected prepayments. The contractual term excludes any extensions, renewals and modifications, unless the borrower has a contractual option that provides it with the unilateral ability to extend the maturity date. The Group does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable) in expected credit losses each period are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense.

 

*Trade accounts receivable*

The Group uses an aging schedule to estimate the allowance for credit losses for trade accounts receivable. This method categorizes trade receivables into different groups based on industry and the number of days past due. Past due status is measured based on the number of days since the payment due date. Trade receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics. The Group determines that the receivables no longer share similar risk characteristic if they are past due balances over 90 days and over a specified amount. The Group evaluates the collectability of trade accounts receivables with payments that are more than 90 days past due on an individual basis to determine if any are deemed uncollectible. Trade accounts receivable balances are deemed uncollectible and written off as a deduction from the allowance after all means of collection have been exhausted (see Note 3).

(8) Trade Accounts Receivable

Trade accounts receivable is recorded at the invoiced amount, net of an allowance for credit losses and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows.

(9) Inventories

Inventories are stated at the lower of cost and net realizable value. The cost of inventories is determined by the specific identification method for raw materials, work in progress and finished goods.

(10) Revenue Recognition

The Group recognizes revenue when it satisfies performance obligations under the terms of its contracts and when control of its products is transferred to its customers, in an amount that reflects the consideration the Group expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identifiable in the contract. The Group considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from, the product.

Taxes assessed by a government authority that are imposed on and concurrent with a specific revenue-producing transaction and that are collected by the Group from customers are excluded from revenue.

The Group's primary source of revenue is product revenue from the sale of intelligent monitoring systems, machine vision and laser testing systems, and data gathering systems. The Group does not act as an agent in any of its revenue arrangements. Contracts with customers generally specify the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract; however, such contracts do not include a significant financing component. In addition, contracts typically do not include variable consideration, as prices are fixed and provisions such as rebates or discounts are not provided.

The Group provides assurance-type warranties on all of its products. These warranties are not separate performance obligations under ASC Topic 606. There were no loss contingencies related to warranties recorded as of December 31, 2025 and 2024.

 

*Contract Liabilities*

Contract liabilities consist of amounts invoiced or paid by the Group's customers for which the related performance obligations have not yet been satisfied and, accordingly, revenue has not yet been recognized in accordance with the Group's revenue recognition policy described above.

Contract liabilities are reported on an individual contract basis at the end of each reporting period. Contract liabilities are classified as current in the consolidated balance sheets when the related revenue is expected to be recognized within one year of the balance sheet date and as non-current when the related revenue is expected to be recognized more than one year after the balance sheet date.

(11) Property, Plant, and Equipment and Intangible Assets

Property, plant, and equipment are stated at cost. Plant and equipment under finance leases are stated at the present value of the lease payments. Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings is 40 years, while the estimated useful lives of machinery and equipment, vehicles, furniture and fixtures are 5 years.

Intangible assets are stated at cost. Amortization of intangible assets is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of patents is 7 years, while the estimated useful life of software is 5 years.

Once an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and a gain or loss is recorded.

(12) Government grants

The Group receives grants from local government agencies and public institutions in connection with asset acquisitions and research activities that are necessary for the Group's operating activities. Government grants are recognized when there is reasonable assurance that the Group will comply with the relevant conditions and that the grants will be received, and are accounted for either as a reduction of the carrying amount of the related assets or as income, depending on the nature of the grants.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

Government grants related to assets are presented in the consolidated balance sheets as a deduction from the carrying amount of the related assets. Government grants that are not related to the acquisition of assets are treated as income-related grants and are presented as other operating income in the consolidated statements of operations. Other operating income of the Group consists primarily of government support income.

For the years ended December 31, 2025 and 2024, the Group recognized asset-related grants of $11,460 and $37,846, respectively, which were netted against the carrying amounts of the related assets on the consolidated balance sheets, and income-related grants of $247,430 and $439,490, respectively, which were recognized in other operating income.

There is no comprehensive accounting standard under U.S. GAAP that specifically addresses government grants received by for-profit entities. In the absence of such guidance, the Group has elected to apply an accounting policy by analogy to IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, which is commonly accepted in practice under U.S. GAAP. The Group believes that this accounting policy appropriately reflects the economic substance of the transactions, enhances comparability with other industry participants, and is applied consistently to similar transactions.

(13) Leases

The Group has entered into various operating lease agreements for office space, transportation equipment, and office equipment. The Group determines whether an arrangement is a lease, or contains a lease, at inception and records the leases in its consolidated financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessee.

The Group has lease agreements that include both lease and non-lease components and has elected to apply the practical expedient to account for the lease and non-lease components together as a single combined lease component.

The Group has elected not to recognize short-term leases on the consolidated balance sheets if the lease term is 12 months or less at lease inception and the leases do not contain purchase options or renewal terms that the Group is reasonably certain to exercise. All other lease assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Because most of the Group's leases do not provide an implicit interest rate, the Group uses its incremental borrowing rate, based on information available at the lease commencement date, to determine the present value of lease payments.

The Group's leases, for which the Group is the lessee, often include options to extend the lease term for up to 10 years. Certain leases also include options to terminate the lease prior to the end of the agreed-upon lease term. For purposes of measuring lease liabilities, the lease term includes extension or termination options when it is reasonably certain that the Group will exercise such options.

Lease expenses for operating leases are recognized on a straight-line basis over the lease term and are classified as cost of sales or selling, general, and administrative expenses, depending on the nature of the leased asset. Depreciation expense for finance lease assets is recognized over the lease term and classified as cost of sales or selling, general, and administrative expenses, depending on the nature of the leased asset. Interest expense on finance lease liabilities is recognized as interest expense in the consolidated statements of operations over the lease term.

(14) Equipment Maintenance Activities

The Group incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(15) Other Assets

Other current assets and other assets consist of prepaid expenses, prepaid value added tax, advance payments, leasehold deposits, etc.

(16) Research and Development Costs

Research and development ("R&D") costs are expensed as incurred because the Group did not meet the criteria (technical feasibility, intention to complete and use or sell, ability to use or sell) for the capitalization of development costs. As of the end of the current period, the Group is conducting R&D on an autonomous driving monitoring system and an autonomous robot for electric vehicle automatic charging. Research and development costs include employee compensation and salary, utilities and administrative expenses directly related to Group's various ongoing R&D projects. Those R&D activities are also supported financially under government programs and other public projects. The government grants received under these programs and projects are recorded in other income. All research and development costs were included under selling general and administrative expenses and amounted to $236,728 and $324,320 for the years ended December 31, 2025 and 2024, respectively.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Research and development costs |  |  |
| &nbsp;&nbsp;&nbsp;Utilities and administrative expenses | $43453 | 2487 |
| &nbsp;&nbsp;&nbsp;Employee compensation, salary and others | 193275 | 492171 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $236728 | 494658 |

---

(17) Income Taxes

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are recognized to the extent that it is more likely than not that sufficient taxable income will be available to realize the related tax benefits. The Group recognizes and measures uncertain tax positions taken or expected to be taken in a tax return utilizing a two-step process. In the first step, recognition, we determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the largest amount of benefit that has a likelihood of greater than 50% of being realized upon ultimate settlement. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting Group's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU became effective on a prospective basis for the Group for the year-end December 31, 2025. The effect of ASU 2023-09 is reflected in Note 9. Management has concluded that the adoption of this standard will not have a material impact on the Company's financial statements.

(18) Pension and Other Post retirement Plans

The Group has a defined contribution plan in which the consolidated entity pays specified contributions into a separate entity, and the contribution is recognized as an expense when it is paid.

(19) Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for possible impairment, the Group first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**1. Summary of Significant Accounting Policies** (cont.)

(20) Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

(21) Fair Value Measurements

The Group uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Group determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

&nbsp;&nbsp;&nbsp;&nbsp;● Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement
date.

&nbsp;&nbsp;&nbsp;&nbsp;● Level 2: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for
substantially the full term of the asset or liability.

&nbsp;&nbsp;&nbsp;&nbsp;● Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby
allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

(22) Foreign Currency

The functional currency of Handa Lab Co., Ltd. and subsidiary is the Korean Won. Transactions in foreign currencies are translated into the functional currency of the Group at the exchange rates at the dates of the transactions. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the "effect of exchange rate changes on cash and cash equivalents" in the consolidated statements of cash flows.

Assets and liabilities of the Group are translated into US dollars, the reporting currency, at the exchange rate in effect at the end of each period. Revenue and expenses for the Group are translated into US dollars using average rates that approximate those in effect during the period. Foreign currency translation adjustments are included in "accumulated other comprehensive income (loss)", a separate component of Stockholders' equity.

(23) New Accounting Standards and Interpretations Not Yet Adopted

 

In November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income—Expense Disaggregation Disclosures, which becomes effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The standard requires to disclose disaggregated information about certain income statement expense line items. The Group has not yet completed its detailed assessment of the impact of this standard. Management is currently evaluating the potential effects of the new disclosure requirements on the Group's financial statement presentation and related disclosures. At this time, the Group has not identified any material impact on its financial statements; however, the evaluation remains ongoing.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions. ASU 2024-04 is effective for the Group's annual reporting periods beginning after December 15, 2025. Adoption is either with a prospective method of transition or a retrospective method of transition that is retrospective to the later of the beginning of earliest period presented and the date the entity adopted ASU 2020-06. Early adoption is permitted for all entities that have adopted ASU 2020-06. The Group does not expect the adoption of ASU 2024-04 to have a material effect on its financial statements.

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 a practical expedient that all entities can use when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim reporting periods in those years. Entities that elect the practical expedient and, if applicable, make the accounting policy election are required to apply the amendments prospectively.

The Group does not expect the standard to have a material effect on its financial statements.

 

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**2. Significant Risks and Uncertainties Including Business and Credit Concentrations**

The Group manufactures smart monitoring visual system and laser inspection systems. The specifications, functions, and delivery dates vary depending on the demand of customers. After receiving orders from customers, the Group manufactures and sells those products.

The Group's operating segment is a single segment and compose of equipment and machine manufacturing segment, and as of the end of the reporting period, assets and liabilities of the segment is the same as the attached financial statements. The manufacturing periods vary per project, ranging from as short as one month to over a year. For the year, sales amounted to approximately $457,569, all of which were generated domestically.

Sales to a small number of major customers account for all of the Group's total net revenue. The Group is making efforts to gain new customers by continuously expanding its sales activities. If orders from existing major customers decrease, there is a possibility of a loss of sales, which may adversely affect business results.

For the year ended December 31, 2025, the customers accounting for 10% or more of total revenue are Customer C, and Customer D, and Customer E, and Customer F, and Customer G, with revenues of $51,539, $114,188, $65,218, $56,644, and $100,124, respectively. For the year ended December 31, 2024, the customers accounting for 10% or more of total revenue are Customer H, and Customer C, and Customer I, and Customer D, with revenues of $84,606, $86,116, $52,054 and $194,284, respectively.

The following table disaggregates trade accounts receivable and contracts assets by major customers.

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Trade accounts receivable and contracts assets by customers |  |  |
| &nbsp;&nbsp;&nbsp;Customer A | $14106 | 8082 |
| &nbsp;&nbsp;&nbsp;Customer B |  | 5238 |
| &nbsp;&nbsp;&nbsp;Customer C | 56192 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $70298 | 13320 |

---

**3. Trade Accounts Receivable**

There was no allowance for credit losses related to trade accounts receivable recorded as of December 31, 2025 and 2024.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**4. Non-Trade Account Receivable**

Non-trade account receivables consist of accrued income and refundable tax. The Group disaggregates the non-trade account receivable by type of financing receivable when assessing and monitoring risk and performance of the entire portfolio.

Non-trade account receivables are unsecured and generally have terms of less than one year, requiring payments of principal at maturity.

The amortized cost basis of non-trade account receivable, net as of December 31, 2025 and December 31, 2024, respectively, was as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Non-trade account receivable, net: |  |  |
| &nbsp;&nbsp;&nbsp;Short-term loan receivable (Related party) | $17423 | 68027 |
| &nbsp;&nbsp;&nbsp;Other receivables | 183 | 34607 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $17606 | 102634 |

---

There were no allowances for credit losses related to non-trade account receivable recorded as of December 31, 2025 and 2024.

**5. Inventories**

Details of inventories as of December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| (**in US dollars**) | 2025 | 2024 |
| &nbsp;&nbsp;Work in process | $3974 | 16593 |
| &nbsp;&nbsp;Total | $3974 | 16593 |

---

There were no write-downs of inventories recorded for the years ended December 31, 2025 and 2024.

**6. Property, Plant and Equipment**

(1) Details of Property, plant and equipment as of December 31,
2025 and 2024 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Initial Cost** | **Initial Cost** | **Carrying Amount** | **Carrying Amount** |
| <br>**(in US dollars)** | **Useful**<br>**Lives** | **2025** | **2024** | **2025** | **2024** |
| Land |  | $26149 | 25525 | 26149 | 25525 |
| Buildings | 40 | 241670 | 235900 | 219517 | 220173 |
| Machinery and equipment<sup>(\*)</sup> | 5 | 99569 | 97191 | 928 | 1226 |
| Vehicles<sup>(\*)</sup> | 5 | 18849 | 18399 |  |  |
| Furniture and fixtures<sup>(\*)</sup> | 5 | 108376 | 78636 | 24780 | 22 |
| Finance lease right of use assets | 4 | 52194 | 50947 | 33921 | 45847 |
| &nbsp;&nbsp;&nbsp;Total |  | $546807 | 506598 | 305295 | 292793 |

---

(\*) The government grants related to assets have been deducted from the related asset accounts.

Total depreciation for the years ended December 31, 2025 and 2024 was $20,647 and $12,197, respectively.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**6. Property, Plant and Equipment** (cont.)

(2) As of December 31, 2025, the details of property, plant
and equipment pledged as collateral were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Collateral Provided Asset** | **Net Carrying <br> Value** | **Pledged <br> Amount** | **Relevant Debt <br> Amount** |
| Land | $26149 | $240853 Hana Bank | $200711 |
| Buildings | 219517 |  |  |

---

**7. Leases**

The Group has operating leases for corporate offices and certain office equipment. Operating lease assets and liabilities are included in operating lease right-of-use assets and operating lease liabilities, respectively, on the consolidated balance sheets.

Lease agreements of office space include renewal options for up to 10 years, renewable annually under the *Commercial Building Lease Protection Act* in Korea. Because the Group is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term, and associated potential option payments are excluded from lease payments.

The Group's leases generally do not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contracts include fixed payments.

(1) The components of lease expense for the years ended
December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating lease expense | $3798 | 3758 |
| Finance lease expense: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of right of use assets | 13165 | 5496 |
| &nbsp;&nbsp;&nbsp;Interest on lease liabilities | 1842 | 1087 |
| Short-term lease expense | 144 | 301 |
| &nbsp;&nbsp;&nbsp;Total | $18949 | 10642 |

---

(2) Amounts presented in the consolidated balance sheet as of
December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Operating Leases: |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease ROU assets | $— |  |
| &nbsp;&nbsp;&nbsp;Long-term operating lease liabilities | 529 | 182 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term and short-term operating lease liabilities | 1170 | 2534 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $1699 | 2716 |
| Finance Leases: |  |  |
| &nbsp;&nbsp;&nbsp;Finance lease ROU assets | $52194 | 50947 |
| &nbsp;&nbsp;&nbsp;Accumulated amortization assets | (18273) | (5100) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | 33921 | 45847 |
| &nbsp;&nbsp;&nbsp;Long-term finance lease liabilities | 8928 | 13753 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term finance lease liabilities | 6624 | 6465 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $15552 | 20218 |

---

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**7. Leases** (cont.)

(3) Other information related to leases as of December 31,
2025 and 2024 was as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Cash paid for amounts included in the measurement of lease liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Cash used in operations for operating leases | $3587 | 3465 |
| &nbsp;&nbsp;&nbsp;Cash used in operations for finance leases | 7049 | 25366 |
| ROU assets obtained in exchange for lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | $1873 |  |
| &nbsp;&nbsp;&nbsp;Finance leases | $— | 54907 |
| Reductions to ROU assets resulting from reductions to lease obligations: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | $(2965) | (3277) |
| &nbsp;&nbsp;&nbsp;Finance leases | $(13165) | (5496) |
| Weighted average remaining lease term: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 1.19 years | 0.93 years |
| &nbsp;&nbsp;&nbsp;Finance leases | 2.82 years | 3.56 years |
| Weighted average discount rate: |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 9.52% | 10.23% |
| &nbsp;&nbsp;&nbsp;Finance leases | 9.92% | 9.93% |

---

(4) Maturities of lease liabilities under noncancellable leases
as of December 31, 2025 are as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars) Maturities** | **Operating <br> leases** | **Finance <br> leases** |
| 2026 | 3824 | 6987 |
| 2027 | 2318 | 6987 |
| 2028 |  | 3696 |
| Undiscounted lease payments | 6142 | 17670 |
| Less: imputed interest | (4443) | (2117) |
| Lease liabilities | $1699 | 15552 |

---

**8. Debt**

(1) Long-Term Debt

Details of the carrying amounts of long-term debt as of December 31, 2025 and 2024 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars)<br> Description** | **Maturity Date** | **Interest <br> Rate (%)** | **Borrowing <br> Limit** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Facility loans<sup>(\*1)(\*2)</sup> | May 2027 | 1.06 ~ 2.04 | $200711 | $200711 | 195918 |
| Working capital loans<sup>(\*3)(\*4)</sup> | May 2029 | 0.46 ~ 0.51 | 209074 | 209074 | 204082 |
| Loan from the Company's CEO | Sep 2028 | 0 | 23242 | 23242 | 22687 |
| &nbsp;&nbsp;&nbsp;Less: current portion of long-term debt |  |  |  |  |  |
| Long-term debt |  |  |  | $433027 | 422687 |

---

(\*1) As of the end of the reporting period, the Group is providing its land and buildings as collateral to Hana Bank in connection with the facility loans, and the building is currently being used as the Group's research center (See note 6).

---

| | |
|:---|:---|
| (\*2) | The Group receives a 3% interest rate subsidy provided for loans by Cheongju City Government. |

---

(\*3) As of the end of the reporting period, the Group is provided with a payment guarantee from the Korea Technology Finance Corporation.

---

| | |
|:---|:---|
| (\*4) | The Group receives a 5.5% interest rate subsidy provided for loans by Korea Institute for Advancement of Technology. |

---

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**8. Debt** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;(2) Future principal payments for long-term debt as of December 31,
2025 are as follows:

---

| | |
|:---|:---|
| **(in US dollars)<br> Maturities** | **Long-term debt** |
| 2026 | $— |
| 2027 | 255252 |
| 2028 | 132324 |
| 2029 | 45451 |
| &nbsp;&nbsp;&nbsp;Total | $433027 |

---

**9. Income Taxes**

We are subject to income taxation through primarily in Republic of Korea.

&nbsp;&nbsp;&nbsp;&nbsp;(1) There was no income tax (benefit) expense recorded attributable
to current taxes and deferred taxes.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The components of loss before income taxes were
as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Korea | $(488778) | (150525) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(3) Differences between the provision at the local statutory
rate and the provision recorded at the consolidated level were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Taxes computed at the local statutory rate | $(53400) | (14902) |
| Differences resulting from: |  |  |
| &nbsp;&nbsp;&nbsp;Non-taxable income |  |  |
| &nbsp;&nbsp;&nbsp;Other non-deductible expense | (5785) | 394 |
| &nbsp;&nbsp;&nbsp;Tax credit | (135054) | (47553) |
| &nbsp;&nbsp;&nbsp;Change in valuation allowance | 194241 | 61658 |
| &nbsp;&nbsp;&nbsp;Other | (2) | 403 |
| Income tax (benefit) expense | $— |  |
| Effective tax rate |  |  |

---

The Group's primary business operations are conducted in Korea and are subject to Korea's corporate income tax law.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**9. Income Taxes** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;(4) The income tax effects of temporary differences that give
rise to significant portions of the deferred income tax assets and deferred income tax liabilities were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;Provision and allowances | $431 |  |
| &nbsp;&nbsp;&nbsp;Accrued vacation | 2496 | 1632 |
| &nbsp;&nbsp;&nbsp;Lease liabilities | 1898 | 2096 |
| &nbsp;&nbsp;&nbsp;Losses on valuation of derivatives | 8917 |  |
| &nbsp;&nbsp;&nbsp;Depreciation | 9641 | 5931 |
| &nbsp;&nbsp;&nbsp;Accrued expense | 888 | 423 |
| &nbsp;&nbsp;&nbsp;NOL(net operating loss) carry-forward<sup>(\*1)</sup> | 46542 | 31598 |
| &nbsp;&nbsp;&nbsp;Tax credit carry-forward<sup>(\*2)</sup> | 230049 | 93891 |
| &nbsp;&nbsp;&nbsp;Government subsidies<sup>(\*3)</sup> | 14451 | 16874 |
| &nbsp;&nbsp;&nbsp;Account receivable | 8163 |  |
| &nbsp;&nbsp;&nbsp;Contract liability | 4485 |  |
| &nbsp;&nbsp;&nbsp;Note receivable(prepaid Vat) |  | 13 |
| &nbsp;&nbsp;&nbsp;Accrued payable |  | 81 |
| &nbsp;&nbsp;&nbsp;Intangible asset<sup>(\*4)</sup> | 94046 | 61505 |
| &nbsp;&nbsp;&nbsp;Raw material | 1512 | 3603 |
| &nbsp;&nbsp;&nbsp;Advanced payments | 5627 | 4943 |
| &nbsp;&nbsp;&nbsp;Advanced received | 817 | 718 |
| &nbsp;&nbsp;&nbsp;Other deposit | 1626 | 1957 |
| &nbsp;&nbsp;&nbsp;Long-term borrowing | 2557 | 2246 |
| Deferred tax assets before Valuation Allowance | 434146 | 227511 |
| &nbsp;&nbsp;&nbsp;Valuation Allowance | (392216) | (184440) |
| Total deferred tax asset | 41930 | 43071 |
| Deferred tax liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued income | (20) | (426) |
| &nbsp;&nbsp;&nbsp;Right-of-use assets | (3918) | (4633) |
| &nbsp;&nbsp;&nbsp;Property, plant and equipment | (20495) | (17923) |
| &nbsp;&nbsp;&nbsp;Allowance for impairment | (14451) | (16874) |
| &nbsp;&nbsp;&nbsp;Note receivable (prepaid VAT) | (7) |  |
| &nbsp;&nbsp;&nbsp;Work in process | (437) | (1643) |
| &nbsp;&nbsp;&nbsp;Prepaid expense |  | (14) |
| &nbsp;&nbsp;&nbsp;Lease deposit | (650) | (1558) |
|  | (1952) |  |
| Total deferred tax liabilities | (41930) | (43071) |
| &nbsp;&nbsp;&nbsp;Net deferred tax assets | $— |  |

---

---

| | |
|:---|:---|
| (\*1) | Net operation loss carryover is available to be utilized for 15 years from the year of occurrence. The expiration years are as follows: $1,613 will expire in 2036, $15,879 will expire in 2037, $4,305 will expire in 2038, $14,171 will expire in 2039, and $10,574 will expire in 2040. |

---

---

| | |
|:---|:---|
| (\*2) | The tax credit carryover consists of the R&D tax credit and the integrated tax credit for employment, in the amounts of $93,156 and $136,893, respectively. The R&D tax credit will expire in the amounts of $4,366 in 2033,$$9,266 in 2034 and $79,524 in 2035, while the integrated tax credit for employment will expire in the amounts of $37,692 in 2033, $44,864 in 2034 and $54,337 in 2035. |

---

(\*3) It primarily resulted from a temporary difference in the tax treatment related to government grants for acquisition of assets.

(\*4) It resulted from a temporary difference in the tax treatment of capitalization of development costs.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**10. Uncertain Tax Positions**

There were no unrecognized tax benefits as of December 31, 2025 and 2024.

**11. Stockholder's Equity**

The Company has 1,500 thousand shares of authorized stock, consisting of common stock, par value KRW 5,000 (equivalent to $3.5) per share, all of which are issuable. As of December 31, 2025, there were 380,800 shares of common stock outstanding. In 2024, a total of 89,000 shares were issued through a paid-in capital increase.

 

*Common Stock*

Holders of common stock are entitled to one vote per share, and to receive dividends and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to stockholders. The holders have no pre-emptive or other subscription rights, and there is no redemption or sinking fund provisions with respect to such shares.

 

*Dissenting Shareholder Appraisal Rights*

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. As of December 31, 2025, the fair value of the contingent, freestanding financial instrument was immaterial.

**12. Pension (Defined Contribution Plan)**

The Group has a defined contribution plan. Under this plan, the Group pays specified amounts of contributions into a separate fund. These contributions are recognized as expenses when they are paid. The expenses related to post-retirement benefit plans under the defined contribution plans for the years ended December 31, 2025 and 2024 were as follows:

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Expense related to post-retirement benefit plans under defined contribution plans | $61728 | 50861 |

---

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**13. Supplemental Cash Flow Information**

---

| | | |
|:---|:---|:---|
| **(in US dollars)** | **2025** | **2024** |
| Supplemental disclosure of cash flow information: |  |  |
| &nbsp;&nbsp;&nbsp;Cash receipt during the period for interest | $10051 | 12767 |
| &nbsp;&nbsp;&nbsp;Cash paid during the period for interest | (5778) | (6224) |
| &nbsp;&nbsp;&nbsp;Income taxes paid | (71) | (1675) |
| &nbsp;&nbsp;&nbsp;Newly recognized right-of-use assets | 1873 | 54907 |

---

**14. Intangible Assets**

(1) Details of intangible assets for the year ended December 31,
2025 were summarized as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Useful lives** | **Initial value** | **Accumulated <br> Amortization** | **Government <br> grants** | **Book value** |
| Patents | 7 years | $166207 | (67813) | (16827) | 81567 |
| Software | 5 years | 67028 | (38322) | (28706) |  |
| Under construction |  | 11559 |  | (4339) | 7220 |
| &nbsp;&nbsp;&nbsp;Total |  | $244794 | (106135) | (49872) | 88787 |

---

(2) Details of intangible assets for the year ended December 31,
2024 were summarized as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Useful lives** | **Initial value** | **Accumulated <br> Amortization** | **Government <br> grants** | **Book value** |
| Patents | 7 years | $144896 | (44989) | (5794) | 94113 |
| Software | 5 years | 65011 | (24349) | (40662) |  |
| Under construction |  | 7866 |  | (7621) | 245 |
| &nbsp;&nbsp;&nbsp;Total |  | $217773 | (69338) | (54077) | 94358 |

---

**15. Related Party Transactions**

(1) The Group's list of related parties is as follows:

---

| | |
|:---|:---|
| **Relationship** | **Name of Related Party** |
| Primary owners with more than 10% of shares | CLEVER Co., LTD |
|  | Korea National University of Transportation Technology Holding Co., Ltd |
|  | SANG MIN KIM(CEO) |

---

(2) Related party transactions between companies' cost
of sales and interest income, which were included in the consolidated financial statements:

---

| | | | |
|:---|:---|:---|:---|
| **Related parties** | **Transactions** | **2025** | **2024** |
| CLEVER Co., LTD | Cost of sales | $— | 9794 |
|  | Interest income | 1378 | 1646 |

---

(3) Amounts of receivables and borrowings from related parties
were as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Related parties** | **Balances** | **2025** | **2024** |
| CLEVER Co., LTD | Non-trade account receivable<br> (Short-term loan receivable) | $— | 68027 |
| SANG MIN KIM (CEO) | Long-term debt | 23242 | 22687 |

---

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**15.** **Related Party Transactions** (cont.)

(4) Changes in the short-term loan receivable from the related
party for the year ended December 31, 2025 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars)** | **December 31, <br> 2024** | **Increase** | **Decrease** | **Others** | **December 31, <br> 2025** |
| Non-trade account receivable (Short-term loan receivable) | $68027 | – | (70313) | 2286 |  |

---

(5) Changes in the borrowings from the related party for the
year ended December 31, 2025 were as follows:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(in US dollars)** | **December 31, <br> 2024** | **Increase** | **Decrease** | **Others** | **December 31, <br> 2025** |
| Long-term debt (Loan from the Company's CEO) | $22687 | – |  | 555 | 23242 |

---

**16. Commitments and Contingencies**

As of December 31, 2025, the Group has evaluated its commitments and contingencies and determined that no material commitments or contingencies exist.

**17.** **Fair Value Measurements** 

**(1)** The following
 summarizes our financial liabilities that are measured at fair value on a recurring basis:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **(in US dollars)** | **Classification** | **Measurement Level** | **2025** | **2024** |
| Dissenting Shareholder Appraisal Rights | Financial liabilities | Level 3 | $81060 |  |

---

As of December 31, 2025, the Company's share repurchase liabilities related to dissenting shareholder appraisal rights ("DSAR put option") is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs.

The change in fair value of the DSAR put option resulted in a loss of $81,060 for the year ended December 31, 2025, which was recognized in the statements of operations within loss on share repurchase liabilities.

(2) Valuation of DSAR Put Option

The DSAR put option represents a freestanding financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined price, contingent on closing of the Share Exchange Agreement described in Note 11. The Company accounts for this instrument at fair value, with changes in fair value recognized in earnings, in accordance with ASC 480.

**Handa Lab Co., Ltd. and Subsidiary<br> Notes to the Consolidated Financial Statements**

**17.** **Fair Value Measurements** (cont.)

The fair value of the DSAR put option is determined using a valuation model based on the difference between:

(1) the present value of the expected cash settlement amount (including
statutory interest), and

(2) the present value of the underlying share value to be received
in a share exchange transaction

The valuation incorporates significant assumptions, including:

(1) expected cash settlement value based on contractual terms and
statutory interest rates

(2) estimated fair value of the Company's shares

(3) probability of occurrence of the underlying transaction

(4) discount rates reflecting the time value of money

Due to the use of significant unobservable inputs, the DSAR put option is classified as a Level 3 financial liability.

**18. Subsequent Events**

The Group has evaluated subsequent events from December 31, 2025 to the date the unaudited consolidated financial statements were available to be issued.

The Company incurred an obligation of approximately KRW 2,786,000,000 (approximately $1.85 million) to Clever Co., Ltd. ("Clever") following Clever's exercise of appraisal rights as a dissenting shareholder in connection with the 2025 share exchange. Clever obtained a court order in Korea attaching certain bank accounts of the Company; however, the Company does not dispute the obligation and expects to satisfy the payment in the near term, with the remaining matter relating solely to timing consistent with other similarly situated creditors. Management has determined that this matter is not material and does not expect any material litigation, costs, or long-term impact, and the obligation has been appropriately reflected in the Group's consolidated financial statements.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd.

Under the share exchange, all outstanding shares of Handa Lab were transferred to EMT Sub in exchange for equity interests of EMT Sub. Existing shareholders of Handa Lab received shares of EMT Sub at an exchange ratio of 0.004138 shares of EMT Sub for each share of Handa Lab common stock. No cash consideration was paid in connection with the share exchange, except for payments related to dissenting shareholders.

Certain shareholders exercised their appraisal rights under the Korean Commercial Law. Shareholders were entitled to exercise such rights from May 16, 2025, the date of the notice of the shareholders' meeting, through the closing of the shareholders' meeting on June 2, 2025. As a result, the Company recognized a payable to dissenting shareholders in 2025.

The obligation to settle the appraisal rights remains with the Company; however, the funding required to satisfy such obligation is expected to be provided by Evolution Metals & Technologies Corp.

Upon the closing of the share exchange transaction in January 2026, the Company obtained shares of its parent company, Evolution Metals and Technologies Corp. ("EMAT"), in exchange for its outstanding shares. The Company intends to liquidate such shares and use the proceeds to settle the obligation to dissenting shareholders.

The payment amount was approximately $4.8 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

## Exhibit 99.7

**Exhibit 99.7**

**UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

 

*Defined terms included below and not otherwise defined in this Exhibit 99.7 have the same meaning as terms defined and included elsewhere in the Current Report on Form 8-K (the "Form 8-K"), as amended, of which this exhibit forms a part. Unless otherwise stated or the context clearly indicates otherwise, the terms the "Registrant," "Company," "EMAT," "we," "us," and "our" refer to Evolution Metals & Technologies Corp., a Delaware corporation, and its subsidiaries at and after the Closing Date and giving effect to the consummation of the Business Combination, the term "WTMA" refers to Welsbach Technologies Metals Acquisition Corp., a Delaware corporation, prior to the Closing Date and without giving effect to the Closing, and the term "EM" refers to Evolution Metals LLC, a Delaware limited liability company, both prior to and after the Closing*

 

**Introduction**

The following unaudited pro forma condensed combined financial information provides additional information regarding the financial aspects of the Merger of EM and WTMA including the related transactions that fall within the scope of the Business Combination. The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release 33-10786 "Amendments to Financial Disclosures about Acquired and Disposed Businesses." Defined terms included below have the same meaning as terms defined and included elsewhere in the Form 8-K, as amended, of which this exhibit forms a part.

The unaudited pro forma condensed combined balance sheet as of December 31, 2025, assumes that the Business Combination and related transactions occurred on December 31, 2025. The unaudited pro forma combined statement of operations for the year ended December 31, 2025, gives pro forma effect to the Business Combination and related transactions as if they had occurred on January 1, 2025.

These unaudited pro forma condensed combined financial statements are for informational purposes only. They do not purport to indicate the results that would have been obtained had the Business Combination and related transactions actually been completed on the assumed date or for the periods presented, or which may be realized in the future. The pro forma adjustments are based on the information currently available and the assumptions and estimates underlying the pro forma adjustments are described in the accompanying notes. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.

**Description of the Business Combination**

On November 6, 2024, WTMA entered into the Merger Agreement with Merger Sub and EM. On January 5, 2026, the Merger Agreement was adopted and the Business Combination approved by WTMA's stockholders, EM's members and the equity holders of the other Target Companies (as defined below). The Business Combination was completed and at the Effective Time the Merger Sub merged with and into EM, with EM surviving the Merger as a wholly owned subsidiary of WTMA. In connection with the closing of the Business Combination (the "Closing"), WTMA has changed its name to Evolution Metals & Technologies Corp. (such post-Closing entity us referred to as "New EM").

In addition to the Merger, and as a material inducement to the parties to enter into the Merger Agreement, the parties to the Merger Agreement also entered into certain other agreements to consummate the Precedent Transactions, each of which were conditional to and made effective upon the Closing.

New EM plans to grant certain awards under the New EM Equity Incentive Plan, subject to approval by the compensation committee of the New EM Board of Directors as soon as reasonably practicable after the Business Combination and subject to the filing of an effective registration statement on Form S-8. This arrangement has not been reflected in the unaudited pro forma condensed combined financial statements but may have a material impact on the combined company's financial statements post-Closing.

**Accounting Treatment of the Business Combination**

Notwithstanding the legal form of the Business Combination pursuant to the Merger Agreement, the Merger between WTMA and EM will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, WTMA will be treated as the "accounting acquiree" and EM will be treated as the "accounting acquirer" for financial statement reporting purposes. EM has been determined to be the accounting acquirer as EM's existing majority shareholders are expected to have majority voting interest in the combined entity, indicating that EM has not undergone a change in control.

In connection with the Business Combination, Precedent Transactions representing the acquisitions of the Operating Companies will each be accounted for in accordance with ASC 805, using the acquisition method. For accounting purposes, the acquirer is the entity that has obtained control of another entity and, thus, consummated a business combination. The determination of whether control has been obtained begins with the evaluation of whether control should be evaluated based on the variable interest or voting interest model pursuant to ASC Topic 810, Consolidation ("ASC 810"). EM will be considered as the accounting acquirer of each Operating Company based on evaluation of the following factors:

● EM will hold 100% of the voting equity interest in each of the Operating Companies after acquisition.

● EM will have full and complete control over the Operating Companies. No substantive participating or kick out rights are present.

● Prior to consummation of the Precedent Transactions, EM did not have a controlling financial interest in any of the Operating Companies.

The factors discussed above support the conclusion that EM will acquire a controlling financial interest in each of the Operating Companies through ownership of the majority of voting rights and will be the accounting acquirer. Therefore, the Precedent Transactions entered in connection with the Business Combination will be accounted for using the acquisition method. Under this method of accounting, EM is treated as the acquirer and each Operating Company is treated as an acquired company for financial statement reporting purposes. Each Precedent Transaction will be effective on or about the Closing of the Business Combination and will be conditional upon the Closing. Upon Closing the assets and liabilities of each Operating Company will be recognized at fair value, and any consideration in excess of the fair value of the net assets acquired (including identifiable intangible assets) will be recognized as goodwill.

The Company has determined EM to be the predecessor entity to the Business Combination. Such determination is based on several considerations, each evaluated in the context of all relevant facts and circumstances of the transaction and applicable accounting guidance. Regulation C, Rule 405 under the Securities Act of 1933 defines "predecessor" as "a person the major portion of the business and assets of which another person acquired in a single succession, or in a series of related successions in each of which the acquiring person acquired the major portion of the business and assets of the acquired person." In the Business Combination, WTMA will acquire EM and the Operating Companies. As WTMA is a special purpose acquisition company with nominal operations, it should not be considered the predecessor.

In assessing which of the acquired companies represents the predecessor, EM has been identified as the predecessor entity based on an evaluation of the following factors:

● EM is expected to have significant influence in the ongoing management structure of the combined entity relative to the other Operating Companies, with EM's current sole managing member, David Wilcox, assuming the role of Global Chief Executive Officer and Executive President of the Board of Directors of New EM post-Business Combination. The management structure of the combined entity is not expected to consist of any members of the other Operating Companies. Such positioning will allow EM's legacy management to control and set long term strategic objectives, growth and funding strategies, and operational manufacturing plans.

● The historical asset base, operating expenses, and relative pre-merger fair value of EM is significantly larger compared to the other Operating Companies.

● The Operating Companies are viewed as complimentary, strategic components to EM management's plans to build a complete and integrated global supply chain for critical minerals and materials. Consequently, there is no distinct Operating Company that will constitute a major portion of the operations of the combined entity.

While no single factor is individually determinative, the considerations discussed above indicate that EM represents the "major portion" of the combined entity and is therefore deemed to be the predecessor entity, whose historical financial statements prior to the Business Combination will become those of the reporting registrant.

**Ownership after the Business Combination**

The following presents the post-Closing share ownership of EMAT excluding the dilutive effect of the convertible preferred units issued during the year-ended December 31, 2025, which will automatically convert into shares of New EM Common Stock, ninety days after Closing.

---

| | | |
|:---|:---|:---|
|  | **Ownership in <br> shares** | **Ownership <br> %** |
| WTMA Public Stockholders<sup>(1)</sup> | 909234 | 0.2% |
| WTMA Sponsor, current directors, officers and affiliates, and representatives<sup>(2)</sup> | 2369181 | 0.4% |
| EM Unitholders<sup>(3)</sup> | 588473653 | 99.1% |
| New EM Shares issued pursuant to WTMA extensions (Sept. 2023 and June 2024) | 1597784 | 0.3% |
| Total | 593349852 | 100.0% |

---

(1) After taking into effect redemptions in connection with the
September Special Meeting, whereby holders of 427,854 shares of WTMA Common Stock exercised their right to redeem their WTMA Common Stock
(which became EMAT Common Stock prior to the settlement of the redemptions) and received approximately $11.47 per share redeemed, or
approximately $5.0 million in the aggregate, from the trust account established at the consummation of WTMA's initial public offering
(the "Trust Account), which had a balance immediately prior to the Closing of approximately $6.5 million. Following the payment
of the redemptions, there was approximately $1.6 million of cash in the trust account available for disbursement in connection with the
Business Combination. Also includes the issuance of 772,768 shares of New EM Common Stock pursuant to public rights. On a percentage
basis, the effective underwriting fee of $4.2 million ($1.5 million of underwriting fees paid at the time of WTMA's IPO and $2.7
million of deferred underwriting fees which are payable at the time of Closing) is 268.9%.

(2) Includes the issuance of 35,205 shares of New EM Common Stock
pursuant to the private rights and the issuance of 50,000 shares of New EM Common Stock pursuant to compensation agreements entered into
with Andrew Switaj (former director of WTMA), Dominik Oggenfuss (director of WTMA), Matthew Rockett (director of WTMA), and Justin Werner
(director of WTMA).

(3) Includes the issuance of 475,962,290 shares of New EM Common
Stock to the EM Equity holder, 109,436,178 shares of New EM Common Stock to the holders of EM Convertible Preferred Units, and the following
numbers of shares of New EM Common Stock in respect of the EM Member Units expected to be issued to equity holders of the Korean Companies
immediately prior to the Effective Time: 542,342 shares of New EM Common Stock to KCM's stockholders, 1,614,129 shares of New EM
Common Stock to KMMI's stockholders, 648,497 shares of New EM Common Stock to NS World's stockholders, and 270,217 shares
of New EM Common Stock to Handa Lab's stockholders.

**UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET<br> AS OF DECEMBER 31, 2025**<br> *(in thousands, except share and per-share amounts)*

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **WTMA** | **EM** | **Handa Lab** | **KMMI** | **NS World** | **KCM** | **Transaction Accounting Adjustments** | **Notes** | **Pro forma Combined** |
| **ASSETS** | | | | | | | |  | |
| **Current assets:** | | | | | | | |  | |
| Cash and cash equivalents | $4 | $11685 | $461 | $110 | $794 | $48 | $1564 | A | $91961 |
|  |  |  |  |  |  |  | 80000 | B |  |
|  |  |  |  |  |  |  | (2705) | C |  |
| Restricted cash |  |  |  | 36 |  |  |  |  | 36 |
| Accounts receivable |  |  | 70 |  | 575 |  |  |  | 645 |
| Accounts receivable - related parties |  |  |  |  | 927 | 695 | (695) | Q | 927 |
| Non-trade accounts receivable |  | 1493 | 18 |  | 184 | 17 |  |  | 1712 |
| Non-trade accounts receivable - related parties |  | 4167 |  | 71 | 751 |  |  |  | 4989 |
| Inventory |  |  | 4 |  | 906 | 427 |  |  | 1337 |
| Prepaid expenses and other current assets | 141 | 59 | 4 | 16 | 109 | 3 | - |  | 332 |
| Total current assets | 145 | 17404 | 557 | 233 | 4246 | 1190 | 78164 |  | 101939 |
| Plant, property and equipment, net |  |  | 305 | 1974 | 1281 | 2698 | (396) | L | 5862 |
| Operating lease right-of-use assets |  |  | 2 | 31 |  |  |  |  | 33 |
| Intangible assets, net |  |  | 89 |  |  |  | 6881 | K | 6970 |
| Deferred transaction costs |  | 9265 |  |  |  |  | (9265) | D |  |
| Cash and investment held in Trust Account | 6465 |  |  |  |  |  | (1564) | A |  |
|  |  |  |  |  |  |  | (4901) | E |  |
| Goodwill |  |  |  |  |  |  | 75419 | M | 75419 |
| Other noncurrent assets | - | - | 41 | 148 | 51 | 6 | - |  | 246 |
| **Total assets** | $**6610** | $**26669** | $**994** | $**2386** | $**5578** | $**3894** | $**144338** |  | $**190469** |

---

**UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET<br> AS OF DECEMBER 31, 2025 — (Continued)**<br> *(in thousands, except share and per-share amounts)*

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **WTMA** | **EM** | **Handa Lab** | **KMMI** | **NS World** | **KCM** | **Transaction Accounting Adjustments** | **Notes** | **Pro forma Combined** |
| **LIABILITIES AND MEMBERS' DEFICIT** | | | | | | | | | |
| **Current liabilities:** |  |  |  |  |  |  |  |  |  |
| Accounts payable | $3627 | $4651 | $9 | $- | $412 | $48 | $- |  | $8747 |
| Accounts payable - related parties |  |  |  |  | 1428 |  | (695) | Q | 733 |
| Non-trade accounts payable |  |  | 33 | 67 | 118 | 109 |  |  | 327 |
| Non-trade accounts payable - related parties | 534 |  |  |  | 873 |  |  |  | 1407 |
| Short term debt |  | 482 |  | 300 | 368 | 301 | 48279 | S | 129730 |
|  |  |  |  |  |  |  | 80000 | B |  |
| Short term debt - related parties |  |  |  |  | 2130 | 576 |  |  | 2706 |
| Current portion of long-term debt |  |  |  | 46 |  | 368 |  |  | 414 |
| Current portion of long-term debt - related party |  |  |  |  | 138 |  |  |  | 138 |
| Current portion of finance lease liabilities |  |  | 7 | 16 | 29 | 23 |  |  | 75 |
| Current portion of operating lease liabilities |  |  | 1 | 13 |  |  |  |  | 14 |
| Derivative liabilities |  | 379205 | 81 | 471 | 109 | 152 | (379205) | F |  |
|  |  |  |  |  |  |  | (813) | S |  |
| Income taxes payable | 187 |  |  |  |  |  |  |  | 187 |
| Convertible promissory notes – related party | 2296 |  |  |  |  |  |  |  | 2296 |
| Working capital loans - related party | 2868 |  |  |  |  |  |  |  | 2868 |
| CPU Share Allocation Obligation |  | 292680 |  |  |  |  | (292680) | F |  |
| Accrued expenses and other current liabilities | - | 339 | 67 | 66 | 1032 | 154 | 20 | D | 1678 |
| **Total current liabilities** | 9512 | 677357 | 198 | 979 | 6637 | 1731 | (545094) |  | 151320 |
| Long term debt |  |  | 410 | 1310 |  | 1858 |  |  | 3578 |
| Long term debt - related parties |  |  | 23 |  | 246 |  |  |  | 269 |
| Finance lease liabilities, noncurrent |  |  | 9 |  | 37 | 47 |  |  | 93 |
| Operating lease liabilities, noncurrent |  |  | 1 |  |  |  |  |  | 1 |
| Deferred underwriting fee payable | 2705 |  |  |  |  |  | (2705) | C |  |
| Deferred tax liabilities |  |  |  |  |  |  | 1297 | R | 1297 |
| Other noncurrent liabilities | - | - | - | 155 | 368 | 127 | - |  | 650 |
| **Total liabilities** | $12217 | $677357 | $641 | $2444 | $7288 | $3763 | $(546502) |  | $157208 |
| **Commitments and contingencies** |  |  |  |  |  |  |  |  |  |

---

**UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET<br> AS OF DECEMBER 31, 2025 — (Continued)** 

*(in thousands, except share and per-share amounts)*

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **WTMA** | **EM** | **Handa Lab** | **KMMI** | **NS World** | **KCM** | **Transaction Accounting Adjustments** | **Notes** | **Pro forma Combined** |
| **TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)** | | | | | | | |  | |
| Common Stock subject to possible redemption | $6402 | $- | $- | $- | $- | $1107 | $(1548) | H | $- |
|  |  |  |  |  |  |  | (4854) | E |  |
|  |  |  |  |  |  |  | (1107) | P |  |
| **Stockholders' Equity (Deficit)** |  |  |  |  |  |  |  |  |  |
| New EM Common stock |  |  |  |  |  |  | 48 | J | 59 |
|  |  |  |  |  |  |  | 10 | F |  |
|  |  |  |  |  |  |  | 1 | I |  |
|  |  |  |  |  |  |  |  | N |  |
| Common stock |  |  | 1514 | 9 | 1266 | 73 | (2868) | O |  |
|  |  |  |  |  |  |  | 6 | P |  |
| Member units |  |  |  |  |  |  |  |  |  |
| Convertible preferred units |  | 26263 |  |  |  |  | (26263) | I |  |
| Additional paid-in capital |  |  | (3) | 3938 | 815 |  | (9285) | D | 710153 |
|  |  |  |  |  |  |  | 671875 | F |  |
|  |  |  |  |  |  |  | (12009) | G |  |
|  |  |  |  |  |  |  | 1548 | H |  |
|  |  |  |  |  |  |  | 26261 | I |  |
|  |  |  |  |  |  |  | (47) | J |  |
|  |  |  |  |  |  |  | 30751 | N |  |
|  |  |  |  |  |  |  | (4744) | O |  |
|  |  |  |  |  |  |  | 1101 | P |  |
|  |  |  |  |  |  |  | (48) | E |  |
| Accumulated deficit | (12009) | (676957) | (1035) | (3840) | (3240) | (924) | 12011 | G | (676957) |
|  |  |  |  |  |  |  | 9037 | O |  |
| Accumulated other comprehensive loss (income) | - | 6 | (134) | (165) | (551) | (125) | 975 | O | 6 |
| **Total stockholders' equity (deficit)** | (12009) | (650688) | 342 | (58) | (1710) | (976) | 698360 |  | 33261 |
| Noncontrolling interest | - | - | 11 | - | - | - | (11) | O | - |
| **Total equity (deficit)** | (12009) | (650688) | 353 | (58) | (1710) | (976) | 698349 |  | 33261 |
| **Total liabilities, temporary equity and stockholders' equity (deficit)** | $**6610** | $**26669** | $**994** | $**2386** | $**5578** | $**3894** | $**144338** |  | $**190469** |

---

**UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS<br> FOR THE YEAR ENDED DECEMBER 31, 2025**<br> *(in thousands)*

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **WTMA** | **EM** | **Handa<br> Lab** | **KMMI** | **NS World** | **KCM** | **Transaction<br> Accounting<br> Adjustments** | **Pro forma<br> Combined** |
| Revenues | $- | $- | $458 | $- | $6374 | $1300 | $(1299) 9A | $6833 |
| Cost of sales |  |  | (512) |  | (5144) | (1748) | 14 7A | (6091) |
|  |  |  |  |  |  |  | 1299 9A |  |
| Gross profit (loss) | - | - | (54) | - | 1230 | (448) | 14 | 742 |
| Operating expenses: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Other operating income, net |  |  | 247 | 3 | 61 |  |  | 311 |
| Selling, general and administrative | (1949) | (8291) | (603) | (1269) | (1620) | (361) | (20) 2A | (14613) |
|  |  |  |  |  |  |  | (500) 3A |  |
| Franchise tax | (92) | - | - | - | - | - | - | (92) |
| Total operating expenses | (2041) | (8291) | (356) | (1266) | (1559) | (361) | (520) | (14394) |
| Loss from operations | (2041) | (8291) | (410) | (1266) | (329) | (809) | (506) | (13632) |
| Other income (expense): |  |  |  |  |  |  |  |  |
| Interest expense |  |  | (6) | (30) | (179) | (134) | (94) 8A | (443) |
| Interest income |  | 118 | 8 | 21 | 7 | 3 |  | 157 |
| Interest income from investments held in Trust Account | 277 |  |  |  |  |  | (277) 1A |  |
| Other expense |  |  |  | (2) | (245) | (13) |  | (260) |
| Other income | 14 | 250 | 1 | 11 | 197 | 47 |  | 520 |
| Allowance for credit losses |  | (9418) |  |  |  |  |  | (9418) |
| Change in fair value of CPU Share Allocation Obligation variable share settlement |  | (274278) |  |  |  |  | 274278 4A |  |
| Change in fair value of July Investment Agreement DerivativeObligations |  | (325973) |  |  |  |  | 325973 4A |  |
| Day one loss on CPU Share Allocation Obligation |  | (404) |  |  |  |  | 404 4A |  |
| Gain (Loss) on fair value remeasurement of financial instruments |  |  | (82) | (471) | 4 | (333) | 265 6A | 196 |
|  |  |  |  |  |  |  | 813 5A |  |
| Provision for income taxes | (39) | - | - | - | - | (2) | - | (41) |
| Total other income (expense) | 252 | (609705) | (79) | (471) | (216) | (432) | 601362 | (9289) |
| **Net loss** | $(1789) | $(617996) | $(489) | $(1737) | $(545) | $(1241) | $600856 | $(22941) |
| **Net loss per share (Note 5)** |  |  |  |  |  |  |  |  |
| Weighted average shares outstanding - basic and diluted - redemption feature | 772839 |  |  |  |  |  |  |  |
| Net loss per share - basic and diluted - redemption feature | $(0.59) |  |  |  |  |  |  |  |
| Weighted average shares outstanding - basic and diluted - no redemption feature | 2283976 |  |  |  |  |  |  |  |
| Net loss per share - basic and diluted - no redemption feature | $(0.59) |  |  |  |  |  |  |  |
| Weighted average shares outstanding - basic and diluted |  | 1000000 |  |  |  |  |  | 593349852 |
| Net loss per share - basic and diluted - no redemption feature |  | $(618.00) |  |  |  |  |  | $(0.04) |

---

**NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION**

**Note 1. Basis of Presentation**

The unaudited pro forma condensed combined balance sheet as of December 31, 2025, gives pro forma effect to the Business Combination as if it had been consummated as of December 31, 2025. The unaudited pro forma combined statement of operations for the year ended December 31, 2025, gives pro forma effect to the Business Combination as if it had been consummated as of January 1, 2025, the first day of New EM's 2025 fiscal year. This information should be read together with the audited historical financial statements of each of WTMA, EM, and the Operating Companies, including the notes thereto, as well as other financial information included as exhibits to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

The unaudited pro forma condensed combined financial information has been prepared to illustrate the estimated effects of the Business Combination and any related transactions. It sets forth and is derived from the following:

● WTMA's audited financial statements as of and for the year ended December 31, 2025, incorporated by reference in an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

● EM's audited financial statements as of and for the year ended December 31, 2025, included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

● Each Operating Company's audited financial statements as of and for the year ended December 31, 2025, included as exhibits to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

The pro forma adjustments reflecting the consummation of the Business Combination are based on certain currently available information and certain assumptions and methodologies that EMAT believes are reasonable under the circumstances. The unaudited pro forma condensed combined adjustments, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. EMAT believes that these assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at the time, and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

Based on its initial analysis, management did not identify any differences in accounting policies between the combining entities that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies. Upon consummation of the Business Combination, New EM's management will perform a comprehensive review of the combining entities' accounting policies. As a result of the review, New EM's management may identify differences between the accounting policies of the combining entities which, when confirmed, could have a material impact on the financial statements of New EM.

The unaudited pro forma condensed combined financial information does not give effect to any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with the Business Combination. The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and balance sheet would have been had the Business Combination taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of New EM. They should be read in conjunction with the historical financial statements and notes thereto of all the combining entities included as exhibits to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

**Note 2. Reclassifications**

Certain reclassifications have been made to the historical presentation of the combining entities to conform to the preliminary financial statement presentation of the combined entity. Upon consummation of the Business Combination, New EM's management will perform a comprehensive review of the combining entities to further align the financial statement presentation of New EM.

---

| | | |
|:---|:---|:---|
| **<u>Unaudited Pro Forma Combined Balance Sheet<br> *In thousands*</u>** | **As of December 31, 2025** | **As of December 31, 2025** |
|  | **Reclassification<br> from** | **Reclassification<br> to** |
| **WTMA** | | |
| &nbsp;&nbsp;Non-trade accounts payable – related parties |  | $534 |
| &nbsp;&nbsp;Due to affiliates | $(534) |  |
| **EM** |  |  |
| &nbsp;&nbsp;Non-trade accounts receivable |  | $1493 |
| &nbsp;&nbsp;Notes receivable, current, net | $(1493) |  |
| &nbsp;&nbsp;Non-trade accounts receivable – related parties |  | $4167 |
| &nbsp;&nbsp;Notes receivable, related party, net | $(4167) |  |
| &nbsp;&nbsp;Derivative liabilities |  | $379205 |
| &nbsp;&nbsp;July Investment Agreement Derivative | $(379205) |  |
| &nbsp;&nbsp;Short term debt |  | $484 |
| &nbsp;&nbsp;Note payable | $(484) |  |
| **Handa Lab** |  |  |
| &nbsp;&nbsp;Accrued expenses and other current liabilities |  | $41 |
| &nbsp;&nbsp;Contract liabilities | $(41) |  |
| **KMMI** |  |  |
| &nbsp;&nbsp;Accrued expenses and other current liabilities |  | $31 |
| &nbsp;&nbsp;Withholdings | $(11) |  |
| &nbsp;&nbsp;Current portion of defined severance benefits | $(20) |  |
| &nbsp;&nbsp;Other noncurrent liabilities |  | $79 |
| &nbsp;&nbsp;Liability for pension benefits | $(79) |  |
| &nbsp;&nbsp;Derivative liabilities |  | $471 |
| &nbsp;&nbsp;Share repurchase liabilities | $(471) |  |
| **NS World** |  |  |
| &nbsp;&nbsp;Accrued expenses and other current liabilities |  | $718 |
| &nbsp;&nbsp;Accrued expenses | $(77) |  |
| &nbsp;&nbsp;Current portion of defined severance benefits | $(641) |  |
| &nbsp;&nbsp;Other noncurrent liabilities |  | $343 |
| &nbsp;&nbsp;Liability for pension benefits | $(343) |  |
| &nbsp;&nbsp;Derivative liabilities |  | $110 |
| &nbsp;&nbsp;Share repurchase liabilities | $(110) |  |
| **KCM** |  |  |
| &nbsp;&nbsp;Accrued expenses and other current liabilities |  | $109 |
| &nbsp;&nbsp;Current portion of defined severance benefits | $(109) |  |
| &nbsp;&nbsp;Other noncurrent liabilities |  | $126 |
| &nbsp;&nbsp;Long term taxes payable | $(33) |  |
| &nbsp;&nbsp;Defined severance benefits | $(93) |  |

---

---

| | | |
|:---|:---|:---|
| **<u>Unaudited Pro Forma Condensed Combined Statement of Operations<br> *In thousands*</u>** | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
|  | **Reclassification<br> from** | **Reclassification<br> to** |
| **WMTA** | | |
| &nbsp;&nbsp;&nbsp;Other income |  | $14 |
| &nbsp;&nbsp;&nbsp;Reversal of prior year interest and penalties on excise tax liability | $(14) |  |
| **EM** |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative |  | $(342) |
| &nbsp;&nbsp;&nbsp;Sales and marketing | $342 |  |
| &nbsp;&nbsp;&nbsp;**Handa Lab** |  |  |
| &nbsp;&nbsp;&nbsp;Interest income |  | $1 |
| &nbsp;&nbsp;&nbsp;Interest income – related parties | $(1) |  |
| **KMMI** |  |  |
| &nbsp;&nbsp;&nbsp;Other income |  | $7 |
| &nbsp;&nbsp;&nbsp;Gain on foreign currency | $(7) |  |
| &nbsp;&nbsp;&nbsp;Other expense |  | $- |
| &nbsp;&nbsp;&nbsp;Loss on foreign currency | $- |  |
| &nbsp;&nbsp;&nbsp;Interest income |  | $19 |
| &nbsp;&nbsp;&nbsp;Interest income – related parties | $(19) |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) on fair value remeasurement of other financial instruments |  | $(471) |
| &nbsp;&nbsp;&nbsp;Loss on share repurchase liabilities | $471 |  |
| **NS World** |  |  |
| &nbsp;&nbsp;&nbsp;Revenue |  | $457 |
| &nbsp;&nbsp;&nbsp;Revenue – related parties | $(457) |  |
| &nbsp;&nbsp;&nbsp;Other operating income, net |  | $38 |
| &nbsp;&nbsp;&nbsp;Other operating income – related parties | $(38) |  |
| &nbsp;&nbsp;&nbsp;Other income |  | $159 |
| &nbsp;&nbsp;&nbsp;Gain on foreign currency | $(159) |  |
| &nbsp;&nbsp;&nbsp;Other expense |  | $(178) |
| &nbsp;&nbsp;&nbsp;Loss on foreign currency | $178 |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | $(121) |
| &nbsp;&nbsp;&nbsp;Interest expense – related parties | $121 |  |
| &nbsp;&nbsp;&nbsp;Gain (loss) on fair value remeasurement of other financial instruments |  | $(111) |
| &nbsp;&nbsp;&nbsp;Loss on share repurchase liabilities | $111 |  |
| **KCM** |  |  |
| &nbsp;&nbsp;&nbsp;Revenue |  | $1299 |
| &nbsp;&nbsp;&nbsp;Revenue – related parties | $(1299) |  |
| &nbsp;&nbsp;&nbsp;Other income |  | $4 |
| &nbsp;&nbsp;&nbsp;Gain on foreign currency | $(4) |  |
| &nbsp;&nbsp;&nbsp;Interest expense |  | $(24) |
| &nbsp;&nbsp;&nbsp;Interest expense – related parties | $24 |  |
| &nbsp;&nbsp;&nbsp;Other expense |  | $(12) |
| &nbsp;&nbsp;&nbsp;Loss on foreign currency | $12 |  |

---

**Note 3. Calculation of estimated purchase consideration and preliminary purchase price allocation for the Precedent Transactions**

EM is the accounting acquirer of each Operating Company, which will be accounted for under the acquisition method of accounting for business combinations in accordance with ASC 805. The allocation of the preliminary estimated purchase price for each acquisition is based upon management's estimates of and assumptions related to the fair values of assets to be acquired and liabilities to be assumed as of December 31, 2025, using currently available information. Due to the fact that the unaudited pro forma combined condensed financial statements have been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on the combined company's financial position and results of operations may differ materially from the pro forma amounts included herein.

The final purchase price allocation for the Precedent Transactions will be performed as soon as practicable within the required measurement period and adjustments to estimated amounts or recognition of additional assets acquired or liabilities assumed may occur as more detailed analyses are completed and additional information is obtained about the facts and circumstances that existed as of the Closing.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***in thousands, except share data*** | **Handa Lab** | **KMMI** | **NS World** | **KCM** | **Total** |
| &nbsp;&nbsp;&nbsp;Estimated shares of common stock outstanding | 380800 | 22080 | 289055 | 21666 |  |
| &nbsp;&nbsp;&nbsp;Estimated shares attributable to assenting shareholders | 137200 | 8100 | 144527 | 8160 |  |
| &nbsp;&nbsp;&nbsp;Exchange ratio (per unit of EM Member Units) | 0.0041 | 0.4187 | 0.0094 | 0.1396 |  |
| &nbsp;&nbsp;&nbsp;Estimated total of EM Member Units due to assenting shareholders | 568 | 3391 | 1362 | 1139 |  |
| &nbsp;&nbsp;&nbsp;Estimated fair value of each EM Member Unit | $4760 | $4760 | $4760 | $4760 |  |
| **Equity portion of consideration** | $**2702** | $**16141** | $**6485** | $**5423** | $**30751** |
| Liabilities incurred to dissenting shareholders<sup>(1)</sup> | $4814 | $27951 | $6507 | $9006 |  |
| **Liabilities incurred to former owners' portion of consideration** | $**4814** | $**27951** | $**6507** | $**9006** | $**48278** |
| **Total estimated consideration** | $**7516** | $**44092** | $**12992** | $**14429** | $**79029** |

---

(1) As such liabilities will be settled in Korean Won (KRW), the
balances presented herein represent the United States Dollar (USD) value at January 5<sup>th</sup>, 2026, using the KRW to USD spot rate.

The following table presents the preliminary purchase price allocation of the assets acquired and the liabilities assumed as if the acquisitions of each Operating Company occurred on December 31, 2025 (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Handa Lab** | **KMMI** | **NS World** | **KCM** | **Total** |
| **Total estimated consideration** | $7516 | $44092 | $12992 | $14429 | $**79029** |
| Purchase price allocation: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Historical net assets | 353 | (58) | (1710) | (976) | **(2391)** |
| &nbsp;&nbsp;&nbsp;Plus: Liabilities settled and not assumed | 81 | 471 | 110 | 152 | **813** |
| &nbsp;&nbsp;&nbsp;Plus: Fair value step-up to intangibles | 3981 | 340 | 1620 | 940 | **6881** |
| &nbsp;&nbsp;&nbsp;Plus: Fair value step-up (reduction) to property, plant and equipment | 38 | (308) | 21 | (147) | **(396)** |
| &nbsp;&nbsp;&nbsp;Less: Deferred tax (liabilities) assets | (804) | (7) | (328) | (159) | **(1297)** |
| Total net assets acquired | 3649 | 439 | (287) | (190) | **3610** |
| **Goodwill** | $**3867** | $**43653** | $**13279** | $**14619** | $**75419** |

---

The acquisition method of accounting uses the fair value concepts defined in ASC Topic 820, *Fair Value Measurement* ("ASC 820"), which defines fair value as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." Fair value measurements can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.

Goodwill represents the excess of the estimated purchase price over the estimated fair value of each Operating Company's assets and liabilities, including the fair value of the estimated identifiable finite and indefinite lived intangible assets. Goodwill will not be amortized but will be subject to periodic impairment testing.

**Note 4. Pro Forma Adjustments**

The unaudited pro forma condensed combined financial information has been prepared to illustrate the effect of the Business Combination and related transactions and has been prepared for informational purposes only.

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 "*Amendments to Financial Disclosures about Acquired and Disposed Businesses*." Release No. 33-10786 replaces the existing pro forma adjustment criteria with simplified requirements to depict the accounting for the transaction ("Transaction Accounting Adjustments") and present the reasonably estimable synergies and other transaction effects that have occurred or are reasonably expected to occur ("Management's Adjustments"). EMAT has elected not to present Management's Adjustments and will only be presenting Transaction Accounting Adjustments in the unaudited pro forma condensed combined financial information. Certain of the Operating Companies have had historical relationships prior to the Business Combination. Accordingly, pro forma adjustments have been made to eliminate the activities between the companies.

The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma condensed combined statement of operations are based upon the number of shares of New EM Common Stock outstanding, assuming the Business Combination and related transactions occurred on January 1, 2025.

 ****

***Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet***

&nbsp;&nbsp;&nbsp;&nbsp;A. Reflects the reclassification of $1.6 million held in
the Trust Account that became available at the Closing of the Business Combination to cash and cash equivalents.

&nbsp;&nbsp;&nbsp;&nbsp;B. Reflects the $80.0 million of cash proceeds from a short-term
bridge loan that the Company incurred to facilitate the closing of the Business Combination. The loan is presented as a short-term liability
as it is expected to be repaid within five days of Closing.

&nbsp;&nbsp;&nbsp;&nbsp;C. Represents payment to settle the deferred underwriting fee
payable related to WMTA's initial public offering in the amount of $2.7 million.

&nbsp;&nbsp;&nbsp;&nbsp;D. Represents estimated transaction costs for legal, advisory, accounting
and other services expected to be incurred and accrued at or before Closing of the Business Combination by WTMA and EM. Estimated incremental
transaction costs of $0.02 million have been reflected as Accrued expenses and other current liabilities. These costs are expected to
be expensed and recognized in the respective entity's accumulated deficit and reclassified to additional paid-in capital at Closing
to reflect the reclassification of the respective entity's historical accumulated deficit. Further, EM deferred approximately $9.3 million
of transaction costs as of December 31, 2025, which have been reclassified to additional paid-in capital at Closing.

&nbsp;&nbsp;&nbsp;&nbsp;E. Represents the actual redemptions of 427,854 shares of WTMA
Common Stock for approximately $4.9 million.

&nbsp;&nbsp;&nbsp;&nbsp;F. Reflects the settlement of EM's obligations requiring
variable share settlement upon Closing pursuant to the terms and conditions of the EM Convertible Instruments and the terms and conditions
of the Investment Agreement between Springrock Management Inc. and EM, dated July 18, 2024. Together, the settlement reflects the issuance
of 96,796,178 shares of New EM Common Stock upon Closing. The shares of New EM Common Stock are allocated to New EM Common Stock and
additional paid-in capital using par value $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;G. Reflects the reclassification of WTMA's historical
accumulated deficit into additional paid-in capital as part of the reverse recapitalization.

&nbsp;&nbsp;&nbsp;&nbsp;H. Reflects the recapitalization of WTMA's Common Stock
subject to possible redemption into permanent equity of New EM Common Stock at a per share par value of $0.0001.

&nbsp;&nbsp;&nbsp;&nbsp;I. Reflects the conversion of EM Convertible Instruments issued
and outstanding as of December 31, 2025, into 12,640,000 shares of New EM Common Stock immediately upon Closing of the Business Combination.
The shares of New EM Common Stock are allocated to New EM Common Stock and additional paid-in capital using par value $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;J. Reflects the recapitalization of EM Common Stock and the
issuance of 475,962,290 shares of New EM Common Stock to EM Unitholders as consideration for the reverse recapitalization. The shares
of New EM Common Stock are allocated to New EM Common Stock and additional paid-in capital using par value $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;K. Reflects the adjustment of acquired intangible assets to
their estimated fair values. The preliminary valuation analysis identified intangible assets related to customer relationships and developed
technology. The calculation of fair value and estimate of useful lives is preliminary and subject to change.

&nbsp;&nbsp;&nbsp;&nbsp;L. Reflects the adjustment of acquired property, plant and equipment
to their estimated fair values. The calculation of fair value and estimate of useful lives is preliminary and subject to change.

&nbsp;&nbsp;&nbsp;&nbsp;M. Reflects the adjustment to record estimated goodwill resulting
from the preliminary purchase price allocation, as further described in Note 3 above.

&nbsp;&nbsp;&nbsp;&nbsp;N. Reflects the $30.8 million of New EM Common Stock issued
as a portion of consideration for the Operating Company acquisitions. The shares of New EM Common Stock are allocated to New EM Common
Stock and additional paid-in capital using par value $0.0001 per share.

&nbsp;&nbsp;&nbsp;&nbsp;O. Reflects the elimination of each Operating Company's
equity and non-controlling interest balance as part of the acquisition method of accounting prescribed under ASC 805.

&nbsp;&nbsp;&nbsp;&nbsp;P. Reflects the conversion of certain KCM redeemable preferred share instruments into KCM common
 shares. The KCM redeemable convertible preferred stock converted into
 1,666 common shares of KCM. The conversion of these instruments is expected to occur before EM acquires the Operating Companies and
 has been reflected in the estimated shares of common stock outstanding in the calculation of equity consideration within Note

&nbsp;&nbsp;&nbsp;&nbsp;Q. Reflects the elimination of intercompany balances between
the following entities on a combined basis (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| <br>**Company** | **Financial Statement Caption** | **Related Party** | **As of <br> December 31, <br> 2025** |
| KCM | Accounts receivable – related parties | NS World | $695 |
| NS World | Accounts payable – related parties | KCM | $695 |

---

&nbsp;&nbsp;&nbsp;&nbsp;R. Reflects the establishment of deferred tax liabilities related
to the acquisition of indefinite lived intangible assets and property, plant and equipment at their fair values in accordance with ASC
805, as further described in Note 3. An estimated statutory rate of 20% was used for the Korean Companies. The following table summarizes
the deferred tax liability (asset) by entity (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Handa <br> Lab** | **KMMI** | **NS World** | **KCM** | **Total** |
| Intangible asset fair value step-up | $3981 | $340 | $1620 | $940 | $6881 |
| Property, plant and equipment fair value step-up (reduction) | 38 | (308) | 21 | (147) | (396) |
| Total fair value step-up (reduction) | 4019 | 32 | 1641 | 793 | 6484 |
| &nbsp;&nbsp;&nbsp;Estimated statutory tax rate | 20% | 20% | 20% | 20% |  |
| Deferred tax liabilities (assets) | $804 | $6 | $328 | $159 | $1297 |

---

&nbsp;&nbsp;&nbsp;&nbsp;S. Reflects the elimination of the book value of the Korean
shareholder repurchase liabilities and recognition of a short-term liability of $48.3 million for the cash consideration payable to dissenting
shareholders of the Korean Operating Companies who elected to receive cash for their shares. The amount is classified as a current liability
as it is expected to be paid within one year of the acquisition date.

&nbsp;&nbsp;&nbsp;&nbsp;T. Upon consummation of the Business Combination, the capital
structure of New EM will consist of a single class of common stock and preferred stock. Authorized, issued and outstanding shares for
each class of common stock and preferred stock as of December 31, 2025, and on a pro forma basis are as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2025** | **As of December 31, 2025** | **As of December 31, 2025** | **Pro Forma Combined** | **Pro Forma Combined** | **Pro Forma Combined** |
|  | **Authorized** | **Issued** | **Outstanding** | **Authorized** | **Issued** | **Outstanding** |
| WTMA Preferred Stock | 1000000 |  |  |  |  |  |
| WTMA Common Stock | 100000000 | 2283976 | 2283976 |  |  |  |
| EM Member Units | 1000000 | 1000000 | 1000000 |  |  |  |
| EM Convertible Preferred Units | 59671021 | 59671021 | 59671021 |  |  |  |
| Handa Lab Common Stock | 1500000 | 291800 | 291800 |  |  |  |
| KMMI Common Stock | 20000000 | 22080 | 22080 |  |  |  |
| NS World Common Stock | 1006220 | 289055 | 289055 |  |  |  |
| KCM Common Stock | 1000000 | 21666 | 21666 |  |  |  |
| New EM Preferred Stock |  |  |  | 1000000 | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |
| New EM Common Stock |  |  |  | 1501000000 | 593349852 | 593349852 |

---

**Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations**

1A. Reflects the elimination of investment income on the Trust Account.

---

| | |
|:---|:---|
| 2A. | Reflects the estimated transaction costs of approximately $0.02 million as if incurred on January 1, 2025, the date the Business Combination occurred for the purposes of the unaudited pro forma condensed combined statement of operations. This is a non-recurring item. |

---

---

| | |
|:---|:---|
| 3A. | Represents the adjustment to increase amortization expense by $0.5 million for the year ended December 31, 2025, as a result of the fair value step-up for the Operating Companies' intangible assets, as further described in Note 3. Estimated useful lives used to calculate amortization expense over a straight-line basis ranged from 9 to 17 years. |

---

4A. Reflects the elimination of losses for the year ended December 31, 2025, related to the change in fair value of EM's CPU Share Allocation Obligation and July Investment Agreement derivative, which are settled upon Closing.

5A. Reflects the elimination of losses for the year ended December 31, 2025, related to the change in fair value of the dissenting shareholder appraisal right liability instruments, which are assumed to be replaced by the dissenting shareholder liability at Closing, as described in Note S.

6A. Reflects the elimination of losses for the year ended December 31, 2025, related to the change in fair value of the KCM liability instruments which are assumed to convert before Closing.

---

| | |
|:---|:---|
| 7A. | Reflects the adjustment to decrease depreciation expense by $0.014 million for the year ended December 31, 2025, as a result of the net fair value adjustment for the Operating Companies' property, plant and equipment, as further described in Note 3. |

---

---

| | |
|:---|:---|
| 8A. | Reflects interest expense of $0.09 million related to an $80.0 million short-term bridge loan used to finance the acquisition. This interest expense is a nonrecurring item, as the Company intends to repay the loan in full five days after the closing date from operating cash flows. The expense will not recur beyond this 5-day period. |

---

9A. Reflects the elimination of intercompany transactions between the following entities on a pro forma condensed combined basis (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| **Company** | **Financial Statement Caption** | **Related Party** | **Year ended <br> December 31,<br> 2025** |
| **KCM** | Revenue | NS World | $1299 |
| **NS World** | Cost of sales | KCM | $1299 |

---

**Note 5. 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 and the related transactions, assuming the shares were outstanding since January 1, 2025. As the Business Combination and the related transactions are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entirety of all periods presented.

---

| | |
|:---|:---|
| **in thousands, except share data** | **Year ended<br> December 31,<br> 2025 <sup>(1)</sup>** |
| Pro forma net loss | $(22941) |
| Basic and diluted weighted average shares outstanding<sup>(2)</sup> | 593349852 |
| Pro forma net loss per share – basic and diluted | $(0.04) |

---

*(1)* *Pro forma loss per share includes the related pro forma adjustments as referred to within the section "Unaudited Pro Forma Condensed Combined Financial Information."* 

*(2)* *Potentially dilutive outstanding securities were excluded from the computation of pro forma net loss per share, basic and diluted, because their effect would be anti-dilutive or vesting of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the periods presented.*

## Exhibit 99.9

**Exhibit 99.9**

**EVOLUTIONS METAL LLC'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF <br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2025 and as of December 31, 2024 and for the period from February 8, 2024 (inception) to December 31, 2024 and other information included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.*

 

*Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," "the Company" and "EM LLC" generally refer to Evolution Metals LLC.*

**Business Overview**

EM LLC was formed in Delaware in February 2024 to develop a secure, reliable global supply chain for critical minerals and materials ("CMM"), leveraging advanced technologies and strategic consolidation of midstream and downstream manufacturers. The Company will support key industries, such as automotive while driving a sustainable future through efficient processing and the application of cutting edge robotics and artificial intelligence ("AI").

To achieve this vision, the Company and Welsbach Technology Metals Acquisition Corp., a Delaware company ("WTMA or the "SPAC") acquired the Four Entities (as defined below) critical to the CMM supply chain in order to combine initial capabilities believed to serve as the foundation for the Company's growth — transforming raw materials into essential components for further manufacturing; recycling lithium batteries; producing materials that are essential feedstocks used in the production of advanced magnets, which include (a) bonded magnets that are vital components in various high-tech applications (including automotive, aerospace, and consumer electronics industries) and (b) sintered magnets that are crucial for high-performance applications (particularly in the defense and aerospace sectors where precision and durability are paramount); developing AI software and machines to drive automation, innovation, and efficiency to reduce labor costs, lower manufacturing reject rates, and automating the quality of control processes. The Operating Companies are expected to include Handa Lab Co., Ltd., a Korean company ("Handa Lab"), KCM Industry Co., Ltd., a Korean company ("KCM"), KMMI INC., a Korean company ("KMMI"), and NS World Co., Ltd., a Korean company (collectively with Handa Lab, KCM and KMMI, the "Four Entities" or the "Korean Companies"). The Company is expected to produce materials annually, including magnets and battery metals to meet the growing global demand driven by the electrification of transportation, the expansion of green energies, advancements in healthcare technologies, military and defense manufacturing, and consumer appliances, among others.

**Recent Developments**

Recent events impacting our business are as follows:

On January 5, 2026 (the "Closing Date"), following the approval at the special meeting of the shareholders of WTMA, held on September 2, 2025, WTMA Merger Subsidiary LLC, a Delaware limited liability company, and a wholly owned subsidiary of WTMA (the "Merger Sub") consummated a merger (the "Merger") with and into Evolution Metals LLC, a Delaware limited liability company, pursuant to an Amended and Restated Agreement and Plan of Merger, dated as of November 6, 2024, as amended by Amendment No. 1 to Amended and Restated Agreement and Plan of Merger, dated as of November 11, 2024, as amended by Amendment No. 2 to Amended and Restated Agreement and Plan of Merger, dated February 10, 2025, as amended by Amendment No. 3 to Amended and Restated Agreement and Plan of Merger, dated March 31, 2025, as amended by Amendment No. 4 to Amended and Restated Agreement and Plan of Merger, dated June 11, 2025, as amended by Amendment No. 5 to Amended and Restated Agreement and Plan of Merger, dated July 21, 2025, and as amended by Amendment No. 6 to Amended and Restated Agreement and Plan of Merger, dated January 5, 2026 (the "Merger Agreement"). Accordingly, the Merger Agreement was adopted, and the Merger and other transactions contemplated thereby (collectively, the "Business Combination") were approved and completed. At the closing of the Business Combination (the "Closing") on January 5, 2026, pursuant to the Merger Agreement, Merger Sub merged with and into EM, with EM surviving the Merger as a wholly owned subsidiary of WTMA. On the Closing Date, pursuant to the Business Combination, WTMA changed its name to Evolution Metals & Technologies Corp. As part of the Business Combination and prior to the closing of the Merger, EM acquired Handa Lab, KCM, KMMI, and NS World.

On January 5, 2026, WTMA, entered into Amendment No. 6 to the Amended and Restated Agreement and Plan of Merger, which amended the Amended and Restated Agreement and Plan of Merger, by among other things, amended the recitals of the Merger Agreement, as well as certain definitions under the Merger Agreement, and also

updated the list of minority equityholders.

On January 5, 2026, WTMA entered into that certain Agreement and Plan of Merger, dated as of January 5, 2026, by and among WTMA, EM, NewCo, Inc., a Delaware corporation ("NewCo"), and William David Wilcox Jr., as the sole stockholder of NewCo, as it may be amended or supplemented from time to time (the "Step 7 Merger Agreement"), pursuant to which Merger Sub will merge with and into NewCo (the Step 7 Merger), on the terms and subject to the conditions set forth in the Step 7 Merger Agreement, with NewCo continuing as the surviving corporation in the Step 7 Merger. Thereafter, on January 5, 2026, Merger Sub merged with and into EM, with EM surviving the Step 8 Merger as a wholly owned subsidiary of WTMA. On the Closing Date, pursuant to the Business Combination, WTMA changed its name to Evolution Metals & Technologies Corp.

***Precedent Transaction Agreements***

As contemplated by the Merger Agreement, EM and WTMA entered into the following transactions that were consummated in connection with the Closing (the "Precedent Transactions") in order to effectuate the Business Combination and which occurred prior to or at the Closing.

On January 5, 2026, in the first step of the Precedent Transactions, the EM Equityholder formed a wholly owned subsidiary and Delaware corporation ("US NewCo") and immediately thereafter contributed 13,000 of the limited liability company common member units of EM (the "EM Member Units") to US NewCo in exchange for 100 shares of common stock of US NewCo.

On January 5, 2026, in the second step of the Precedent Transactions, EM formed (i) a wholly owned subsidiary and Korean Chusik Hosea company ("Korea NewCo") and (ii) a wholly owned subsidiary and Korean non-Chusik Hosea company ("Korea DRE").

On January 5, 2026, in the third step of the Precedent Transactions, Korea DRE elected to be classified as a disregarded entity for U.S. federal income tax purposes.

On January 5, 2026, in the fourth step of the Precedent Transactions, EM contributed $78,870,000 (the "Capital Contribution") to the capital of, and assigned its rights under certain heads of agreement between EM and each of the Korean Companies to Korea NewCo.

On January 5, 2026, in the fifth step of the Precedent Transactions, EM caused Korea NewCo to distribute the Capital Contribution to EM in exchange for 16,571 EM Member Units.

On January 5, 2026, in Step 6-A of the Precedent Transactions, Korea NewCo acquired Korean DRE from EM in exchange for KRW 10,000,000, after which Korea DRE became a wholly owned subsidiary of Korea NewCo.

On January 5, 2026, in Step 6-B of the Precedent Transactions, each equity holder of each of the equityholders of each of the Korean Companies (collectively, the "Korean Equityholders") who did not exercise his, her or its appraisal rights with respect to all of his, her or its equity interests in the applicable Korean Company exchanged, pursuant to certain share exchange agreements, as amended (the "Korean Company Exchange Agreements"), those of his, her or its equity interests in the applicable Korean Company owned by such equityholder with respect to which such equityholder did not exercise the appraisal right for the respective portions of the EM Member Units and the remaining EM Member Units, which represented the fair market value of the shares of the Korean Companies with respect to which the appraisal rights are exercised, were transferred by Korea NewCo to each applicable Korean Company.

On January 5, 2026, in Step 6-C of the Precedent Transactions, Korea NewCo, pursuant to an agreement and plan of merger, merged with and into Korea DRE, such that the separate existence of Korea NewCo ceased and Korea DRE became the surviving company.

On January 5, 2026, EM and the applicable Korean Companies executed the Step 6-D transaction documents providing for EM's acquisition of all EM Member Units held by such Korean Companies for an aggregate purchase price of $48,118,084. The payment of Step 6-D is contractually required to occur on the earlier of (i) 14 calendar days following EM's consummation of a capital raise exceeding $50,000,000, or (ii) the third anniversary of the Korean Company Exchange Agreements, after which the Korean Companies will become wholly owned subsidiaries of Korea DRE following the required redemptions of interests subject to appraisal rights.

On January 5, 2026, in the seventh step of the Precedent Transactions, Merger Sub merged with and into US NewCo pursuant to Step 7 Merger Agreement, such that (i) the separate existence of Merger Sub ceased and US NewCo became the surviving corporation and a wholly owned subsidiary of WTMA and (ii) the EM Equityholder received $61,875,098 worth of WTMA Common Stock in consideration for such merger.

On January 5, 2026, the Merger and related transactions consummated under the Merger Agreement at the Closing were the eighth step of the Precedent Transactions and occurred immediately following the seventh step of the Precedent Transactions.

***Registration Rights Agreement***

In connection with the Closing, EMAT, WTMA's sponsor, Welsbach Acquisition Holdings LLC (the "Sponsor"), certain former holders of WTMA Common Stock, certain former members of EM and certain other entities (such holders, collectively, the "RRA Holders") entered into the Amended and Restated Registration Rights Agreement, dated as of the Closing Date (the "Registration Rights Agreement"), pursuant to which, among other things, EMAT is obligated to file, within 180 days following the Closing Date, a shelf registration statement to register the resale of certain securities of EMAT, including EMAT Common Stock, held by the RRA Holders after the Closing. The Registration Rights Agreement also provides the RRA Holders with certain demand and piggy-back registration rights, subject to certain requirements and customary conditions.

The Registration Rights Agreement will terminate on the earlier of (i) the tenth anniversary of the Closing Date and (b) with respect to any RRA Holder, on the date that such RRA Holder no longer holds any securities permitted to be registered pursuant to the Registration Rights Agreement.

**Lock-up Agreements**

In connection with the Business Combination, on the Closing Date, the stockholders of the Korean Equityholders, EM Convertible Preferred Unit holders, and holders of EM Member Units entered into lock-up agreements with respect to their equity interests and the shares of EMAT Common Stock that they received in the Business Combination pursuant to which they agreed to certain restrictions on transfer of their securities until seven calendar days following the Closing or until up to the third anniversary of the Closing.

***Issuance of Note Receivables and Note Receivables — Related Party***

During 2024 and 2025, the Company entered into unsecured promissory notes with the Sponsor in the amounts of $1,191,865 and $1,127,262, respectively (the "WTMA Sponsor Notes"). The WTMA Sponsor Notes are non-interest bearing and mature on the earlier of the (a) Closing or (b) liquidation of WTMA.

During 2025 the Company entered into nine unsecured promissory notes with the voting member of the Company in the aggregate amounts of $3,145,000 (the "2025 Related Party Notes"). The 2025 Related Party Notes are non-interest bearing and mature on the earlier of (a) the Closing or (b) December 31, 2025.

 ****

 ****

***Issuance of convertible preferred units***

During the year ended December 31, 2025, the Company issued 24,441,000 convertible preferred units in exchange for $1.00 per unit for gross proceeds of $24,441,000 (the "2025 Preferred Units").

All issuances of 2025 Preferred Units and Q4 2025 Preferred Units provide the investor an additional share allocation issuance equal to a pro rata percentage of 1.0% of the Company's fully diluted ownership in New EM at closing of the Business Combination equal to the percentage of the investor's investment into the Company's convertible preferred units the investors purchase divided by either (a) $2,000,000 or (ii) $4,000,000, as determined by the terms of each investor's convertible preferred unit agreement.

**Results of Operations**

As of December 31, 2025, the Company has not generated any revenue. Since inception, the Company's expenses are associated with start-up and costs related to the potential Business Combination as described above.

The following table summarizes our financial results for the following periods:

---

| | | |
|:---|:---|:---|
|  | **For the Year Ended <br> December 31,**<br>**2025** | **For the <br> Period from <br> February 8, <br> 2024 <br> (inception) <br> to <br> December 31,**<br>**2024** |
| **Operating Expenses:** |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | $7948985 | $3598833 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 341804 | 202641 |
| Loss from operations | (8290789) | (3801474) |
| &nbsp;&nbsp;&nbsp;Total other expense, net | (609705055) | (55160108) |
| Net loss | $**(617995844)** | $**(58961582)** |

---

*General and administrative*

For all periods presented, general and administrative expenses consist primarily of legal fees, consulting fees and travel expenses associated with start-up expenditures and costs related to the potential Business Combination.

 

*Sales and marketing*

For all periods presented, sales and marketing expenses consist mainly of costs of awareness and marketing efforts in anticipation of the Business Combination.

 

*Total other expenses, net*

For the year ended December 31, 2025, total other expense, net consisted primarily of a $325,973,158 loss from the change in fair value of the July Investment Agreement Derivative, a $274,278,481 loss from the change in fair value of the CPU Share Allocation Obligations, a $9,417,652 allowance for credit losses, and a $403,536 day one loss on CPU Share Allocation Obligations, partially offset by $117,772 of interest income and $250,000 of other income.

For the period from February 8, 2024 (inception) to December 31, 2024, total other expense, net consisted primarily of a $20,160,319 day one loss on July Investment Agreement Derivatives, a $18,118,830 allowance for credit losses, a $15,571,302 loss from the change in fair value of the July Investment Agreement Derivative, a $1,860,869 loss from the change in fair value of the CPU Share Allocation Obligations, and a $227,994 day one loss on CPU Share Allocation Obligations, partially offset by $779,206 of interest income.

**Liquidity and Going Concern**

Historically, the Company's primary sources of liquidity have been cash flows from issuance of convertible preferred units. The Company reported a net loss of $617,995,844 for the year ended December 31, 2025. As of December 31, 2025, the Company had an aggregate cash balance of $11,685,000 and a net working capital deficit of $659,955,000. These are indicators of substantial doubt as to the Company's ability to continue as a going concern for at least one year from issuance of the consolidated financial statements. The Company's ability to continue as a going concern is dependent upon the management of its expenses and its ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.

The Company's future capital requirements will depend on many factors, including the Company's timing and extent of its research, the acquisition of processing facilities and the consummation of a business combination. In order to finance these opportunities and associated costs, it is possible that the Company would need to raise additional financing if the proceeds received from the business combination and other equity financing are insufficient to support its business needs. While there can be no assurances, the Company intends to raise such capital through additional equity raises. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital on acceptable terms when needed, its product development business, results of operations and financial condition would be materially and adversely affected.

As a result of the above, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date the audited consolidated financial statements were available to be issued. The audited consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

**Cash flows**

The following table summarizes our cash flows from operating, investing and financing activities for the following periods:

---

| | | |
|:---|:---|:---|
|  | **For the <br> Year Ended <br> December 31, <br> 2025** | **For the <br> Period from <br> February 8, <br> 2024 <br> (inception) <br> to <br> December 31, <br> 2024** |
| Net cash used in operating activities | $(8612478) | $(3138108) |
| Net cash used in investing activities | $(6014463) | $(26473350) |
| Net cash provided by financing activities | $23697000 | $32226168 |

---

 ****

 ****

***Net cash flows used in operating activities***

For the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024, net cash used in operating activities of $8,612,478 and $3,138,108, respectively, was a result of expenditure for the day-to-day operations of the Company. Included within this net cash used in operating activities for both periods are the non-cash expenses associated with recording derivative liabilities at fair value at issuance and re-measuring these derivative liabilities to fair value at the reporting period end as well as the allowance for credit losses.

 ****

***Net cash flows used in investing activities***

For the year ended December 31, 2025, net cash used in investing activities was $6,014,463 as a result of the Company's issuance of note receivable and notes receivable, related party totaling $5,085,201, and acquisition of notes receivable of $2,000, partially offset by collection on a note receivables of $200,000.

For the period from February 8, 2024 (inception) to December 31, 2024, net cash used in investing activities was $26,473,350 as a result of the Company's issuance of notes receivable of $10,723,650, issuance of notes receivable, related party of $3,249,700, and issuance of convertible notes receivable of $12,500,000.

 ****

***Net cash flows provided by financing activities***

For the year ended December 31, 2025, net cash provided by financing activities was $23,697,000 as a result of proceeds from issuance of convertible preferred units of $24,441,000 and proceeds from notes payable, related party of $489,737, partially offset by payments for deferred transaction costs of $1,233,737.

For the period from February 8, 2024 (inception) to December 31, 2024, net cash provided by financing activities was $32,226,168 as a result of proceeds from issuance of convertible preferred units of $17,730,005, proceeds from the July Investment Agreement of $17,500,017, and proceeds from issuance of member units of $100, partially offset by payments for deferred transaction costs of $3,003,954.

**Off balance sheet arrangements**

We did not have any off-balance sheet arrangements as of December 31, 2025.

**Critical Accounting Estimates**

 ****

***Basis of Presentation:*** The accompanying audited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP. The accompanying audited consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of the Company's management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. References to GAAP issued by the FASB in the accompanying notes to the audited consolidated financial statements are to the FASB Accounting Standards Codification ("ASC"). The audited consolidated financial statements have been prepared assuming the Company will continue as a going concern. The accompanying audited consolidated financial statements are presented in US dollars and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

 ****

***Fair Value of Financial Instruments:*** The Company's financial instruments with a carrying value that approximates fair value consist of cash and cash equivalents, prepaid and other current assets, notes receivable, convertible notes receivable, accounts payable and accrued expenses because of the short-term nature or expected settlement dates of these instruments. The Company's financial instruments that are measured at fair value on a recurring basis consist of money market funds, the July Investment Agreement Derivative, and the CPU Share Allocation Obligations.

 ****

 ****

***Convertible Notes Receivable:*** Convertible notes receivable consists of convertible promissory notes that can convert into a privately held company's equity securities at the Company's election and was accounted for as receivables in the scope of ASC 310, "Receivables", which was initially recorded at present value and subsequently re-measured at amortized cost. The notes did not meet the definition of a debt security in the scope of ASC 320, "Investments — Debt Securities" ("ASC 320"). Convertible notes receivable is reported net of allowances for credit losses on the accompanying consolidated balance sheets.

 ****

***Allowance for Credit Losses:*** The Company recognizes an allowance for credit losses on notes receivable, convertible notes receivable and notes receivable, related party (collectively, the "Outstanding Receivables") in an amount equal to the estimated probable losses net of recoveries. The Company currently monitors financial conditions of the companies from which it has Outstanding Receivables on a continuing basis. After considering current economic conditions and financial stability of its Outstanding Receivables counterparties, an allowance for credit losses is maintained in the consolidated balance sheets at a level which management believes is sufficient to cover all probable future credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions that might impact collectability. The Company's policy is to write off past-due accrued interest receivable by measuring an allowance for credit losses for accrued interest receivable on Outstanding Receivables balance. Outstanding Receivable are carried at amortized cost, net of allowances for credit losses. Amortized cost approximated book value as December 31, 2025 and December 31, 2024. After all reasonable attempts to collect a receivable have failed, the amount of the receivable is written off against the allowance.

 ****

***Convertible Preferred Units:*** EM Convertible Preferred Units consist of preferred units issued with either (i) an option to convert into New EM Common Stock at the option of the holders or (ii) automatic conversion into New EM Common Stock ninety days after closing of the Business Combination. The EM Convertible Preferred Units are accounted for as permanent equity in the scope of ASC 815, "Derivatives and Hedging" ("ASC 815") and recorded at fair value which is representative of the proceeds received.

 ****

***Derivative Liabilities:*** Certain agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of shares of New EM Common Stock to certain investors and vendors. The Company applies ASC 480, "Distinguishing Liabilities and Equity" ("ASC 480"), ASC 815, and ASC 718, "Compensation — Stock Compensation" ("ASC 718") in its evaluation of the terms of each agreement. Financial instruments that were identified in each agreement and

● meet the criteria to be accounted for as a liability in accordance with ASC 480 were reported at fair value at issuance and re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations;

● do not meet the criteria to be accounted for as a liability in accordance with ASC 480 and do not meet the criteria to be accounted for as equity in accordance with ASC 815 are accounted for as a liability and were reported at fair value at issuance and re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations;

● meet the criteria of a liability-classified share-based payment transaction in accordance with ASC 718 were measured based on the fair value of the transaction on the date of grant and remeasured to fair value each reporting period until settlement.

Agreements where multiple financial instruments are identified that would individually warrant separate accounting as a derivative instrument are bundled together as a single, compound embedded derivative that is bifurcated and accounted for separately from the host contract in accordance with ASC 815.

## Exhibit 99.10

**Exhibit 99.10**

**KCM'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*Unless the context otherwise requires, references in this section to "we", "us", "our" and "the Company" refer to the business and operations of KCM prior to the Business Combination. Unless otherwise indicated, all dollar amounts ("$") are expressed in thousands.*

 

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below in this section and those discussed in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" included elsewhere in the Form 8-K, as amended, of which this exhibit forms a part. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

**Overview**

KCM, established in 2021, specializes in the manufacture and sale of NdFeb powder for NdFeb permanent magnets. The Company is one of the companies operating NdFeb powder manufacture in South Korea. The Company offers diverse type of NdFeb powder with different magnetic characteristics. The Company is headquartered in Gunsan, South Korea and production takes place at headquarter.

KCM specializes in the production and supply of NdFeB powder derived from rare earth elements. Neodymium is recognized as one of the ten strategic critical minerals designated by the South Korean Ministry of Trade, Industry and Energy, playing a crucial role in advanced industries.

The Company utilizes rare earth NdPr Oxide as its primary raw material and maintains an annual production capacity of approximately 192 tonnes. KCM's products serve as essential components in permanent magnets used in electric vehicles, wind turbines, and various household appliances. These products are supplied to a diverse range of domestic and international manufacturers. Notably, the Company provides neodymium permanent magnet components to customers which supplies to major automotive companies such as Hyundai and Kia for their electric vehicles, as well as to LG Electronics and other global home appliance manufacturers.

By supplying materials based on neodymium, a critical mineral, KCM plays a vital role in the global industrial ecosystem. The Company contributes significantly to the stable supply of this strategically important resource, thereby supporting the sustainability and growth of various high-tech industries.

 

*Segments*

Although there are no sector managers who are held accountable for operating and financial results or the product and service mix by sector, the Company offers multiple products, and the Chief Executive Officer of the Company, who has been determined to be the CODM, manages the Company as a whole and makes decisions at the top level.

**Components of Results of Operations**

 

*Revenue*

The Company manufactures Neodymium powder ("NdFeb Powder") for Neodymium magnets which are used in manufacturing of household appliances and cars. The Company's main products are NdFeb bonded powders with different types of magnetic characteristics. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

*Cost of sales*

Costs of sales represent all direct and indirect costs associated with the manufacture of our products. Cost of goods sold consists primarily of direct costs associated with inventory and delivery of the Company's goods, including freight costs. Cost of sales also includes inventory impairment, allocated personnel-related expenses and allocated facilities and overhead costs.

 

*Other operating income and expense*

Other operating income primarily consists of government grants and other operating expense primarily includes loss on disposal of assets.

 

*Selling, general, and administrative expenses*

Selling, general and administrative expenses consist of corporate service functions such as finance expense, legal, human resources and information technology, as well as rent, utilities, depreciation, amortization and insurance costs.

 

*Other non-operating income and expenses*

 

*Interest income*

Interest income include realized gains from short-term financial instruments and plan assets of the defined severance plan.

 

*Interest expense*

Interest expense consists of interest incurred on debts, finance lease liabilities and defined severance benefit obligations.

 

*Gain (loss) on foreign currency*

It consists of gain (loss) on translation and transaction of monetary assets and liabilities denominated in foreign currencies.

 

*Gain (loss) on financial instruments*

The Company adopted a fair value option to measure the convertible debt and its changes in fair value is recognized as gain (loss) on financial instruments.

**Results of Operations for the Year Ended December 31, 2025 and 2024 (in thousands, except as otherwise noted)**

The following table provides our operating results for the periods indicated and percentage of revenue for each line item.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
| <br>***($ in thousands)*** | **($)** | **(%)** | **($)** | **(%)** | **($)** | **(%)** |
| Net revenues | 1300 | 100.0 | 116 | 100.0 | 1184 | 1020.7 |
| Cost of Sales | (1748) | (134.5) | (962) | (829.2) | (786) | 81.7 |
| Other operating income and expenses, net |  |  | 54 | 46.2 | (54) | (100.0) |
| Selling, general and administrative expenses | (361) | (27.7) | (493) | (425.4) | 132 | (26.9) |
| Operating loss | (809) | (62.2) | (1285) | (1108.4) | 478 | (37.1) |
| Other non-operating income and losses, net | (430) | (33.1) | (243) | (209.8) | (187) | 76.8 |
| Income taxes expenses | 2 | 0.2 | 2 | 1.5 |  | 16.7 |
| Net loss from operations | (1241) | (95.4) | (1530) | (1319.7) | 290 | (19.0) |

---

 

 

*Overall Operating result*

The Company generated total revenues of $1,300 for the year ended December 31, 2025, reflecting an increase compared to the corresponding period in 2024. The Company incurred an operating loss of $809 for the year ended December 31, 2025, primarily due to the nature of the Company's current cost structure in manufacturing. The cost of sales and selling, general, and administrative expenses largely consist of fixed-cost items such as labor-related expenses and depreciation. Operating loss decreased by approximately 37.1% due to the resumption of operations during current period. While business performance in 2024 and 2025 has been temporarily subdued, the Company expects a recovery in the near term.

 

*Net revenues*

Net revenues were $1,300 for the year ended December 31, 2025, and $116 for the year ended December 31, 2024 (all are either merchandise & others revenues**)**. Due to increased demand for NdFeb Powder, sales for the year of 2025 rose by approximately $1,184 compared to 2024.

 

*Cost of sales*

This was primarily due to an increase in product sales for the year ended December 31, 2025. The product sale for the year ended December 31, 2025 is 46,000kg while there was no sale for the year ended December 31, 2024. The cost of goods sold for the year ended December 31, 2024 increased primarily due to higher product sales.

 

*Other operating income and losses, net*

Other operating income and losses, net, were nil for the year ended December 31, 2025, as compared to $54 for the year ended December 31, 2024. The other operating income for the year ended December 31, 2024 consists of a gain from government grants, and a loss from the disposal of a vehicle. For the year ended December 31, 2025, no such income and losses occurred.

 

*Selling, general and administrative expenses*

Selling, general and administrative ("SG&A") expenses were $361 for the year ended December 31, 2025, as compared to $493 for the corresponding period in 2024, a decrease of $132 or 26.9%. Company's SG&A expenses mostly consist of fixed cost items such as labor costs, depreciation and taxes and due. The actual SG&A expenses for the year ended December 31, 2025 decreased compared to the corresponding period in 2024, due to decrease in salary payments, and also service fees to accounting firms for the preparation for the IPO were not yet incurred for the year ended December 31, 2025, compared to the corresponding period in 2024, resulting in a slight decrease in SG&A expenses.

 

*Interest expense*

Interest expense was $134 for the year ended December 31, 2025, as compared to $127 for the year ended December 31, 2024, an increase of $7, or 15%. The increase in interest expenses is attributable to the rise in outstanding borrowings. During the year ended December 31, 2025, average borrowings increased by $29 compared to the year ended December 31, 2024.

 

*Loss on financial instruments*

Loss on financial instruments was $179 for the year ended December 31, 2025. This occurred entirely due to changes in the fair value of the convertible debt.

 

*Loss on financial derivatives*

Loss on derivatives was $153 for the year ended December 31, 2025. This occurred entirely due to the fair value measurement of the put option granted to dissenting shareholders in connection with the stock purchase right.

**Liquidity and Capital Resources (in thousands, except as otherwise noted)**

 ****

***Sources of Liquidity***

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our business is capital intensive and requires substantial expenditure for, among other things, the purchase and maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, including expansion projects and principal and interest payments related to our outstanding indebtedness. The Company plans to continue to fund its operations through its existing cash and cash equivalents, as well as through future equity offerings, debt financing, other third-party funding, and operational cash flow. Our liquidity as of December 31, 2025, and December 31, 2024, is as follows:

---

| | | |
|:---|:---|:---|
| ***($ in thousands)*** | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Cash and cash equivalents | 48 | 5 |
| Working capital | (587) | 750 |

---

Our future liquidity requirements will depend on many factors, including funding needed to support other business opportunities and expenditures, and funding for working capital and general corporate purposes. We expect to satisfy our liquidity requirements through cash on hand, cash generated from the operations and additional financings. During the year ended December 31, 2025, we raised approximately $272 in additional capital financing.

 ****

***Cash Flows***

Cash flows associated with operating, investing, and financing activities for the year ended December 31, 2025 and 2024, are summarized as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Change** | **Change** |
| <br>***($ in thousands)*** | **2025** | **2024** | **($)** | **(%)** |
| Net cash provided by (used in) operating activities | 56 | (735) | 791 | (108) |
| Net cash (used in) provided by investing activities | (1) | 151 | (152) | (101) |
| Net cash (used in) provided by financing activities | (12) | 483 | (495) | (102) |
| Net increase (decrease) in cash and cash equivalents | 43 | (101) | 144 | (143) |

---

*Net Cash Provided *by (Used in) Operating Activities*

Cash flows provided by operating activities were $56 for the year ended December 31, 2025, as compared to ($735) for the year ended December 31, 2024, an increase of cash inflows amounting to $791.

 

The change is primarily related to an decrease in net loss, which decreased from $1,530 in 2024 to $1,240 in 2025. In addition, changes in operating assets and liabilities increased from $(410) in 2024 to $522 in 2025, further contributing to the increase in cash inflows. However, this was partially offset by a decrease in non-cash adjustment, which declined from 1,206 in 2024 to 774 in 2025*.* 

 

*Net Cash (Used in) Provided by Investing Activities*

Cash flows used in investing activities were $1 for the year ended December 31, 2025, as compared to $151 cash inflows for the year ended December 31, 2024, a decreased inflows of $152.

 

In 2025, investing cash outflows were solely attributable to $1 of acquisitions of property, plant and equipment. In contrast, in 2024, investing cash flows reflected $169 of cash inflows from the disposal of short-term financial instruments, $59 of cash inflows for the disposal of property, plant and equipment, $29 of cash outflows for the acquisition of short-term financial instruments, and $47 of cash outflows for the acquisition of property, plant and equipment. 

 

*Net Cash (Used in) Provided by Financing Activities*

Cash flows used in financing activities were $12 for the year ended December 31, 2025, as compared to $483 cash inflows for the year ended December 31, 2024, an decrease of $495 cash inflows.

The change is primarily related to a decrease in proceeds from short-term borrowings related party, which decreased from $540 in 2024 to $257 in 2025. In addition, change in repayment of long-term borrowings, which increased from ($6) in 2024 to ($139) in 2025.

Cash flows associated with operating, investing, and financing activities for the year ended December 31, 2024 and 2023, are summarized as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Change** | **Change** |
| <br>***($ in thousands)*** | **2024** | **2023** | **($)** | **(%)** |
| Net cash (used in) operating activities | (735) | (1839) | 1104 | (60.0) |
| Net cash provided by investing activities | 151 | 855 | (704) | (82.3) |
| Net cash provided by financing activities | 483 | 680 | (197) | (29.0) |
| Net (decrease)/increase in cash and cash equivalents | (101) | (304) | 203 | (66.8) |

---

 

*Net Cash Used in Operating Activities*

Cash flows used in operating activities were $735 for the year ended December 31, 2024, as compared to $1,839 for the year ended December 31, 2023, a decrease of outflows amounting to $1,104. The change is primarily related to a decrease in net income of $1,095 and an increase in net cash inflow from changes in operating assets of $918. That net cash inflow from changes is primarily related to an increase in inventory assets of $348 and a decrease in accounts payable of $364.

 

*Net Cash Provided by Investing Activities*

Cash flows provided by investing activities were $151 for the year ended December 31, 2024, as compared to $855 for the year ended December 31, 2023, a decreased cash inflows of $704. The decrease is primarily related to a decrease in cash inflows of $1,068 from property, plant and equipment disposal, an increase in cash inflows of $169 from short-term financial instruments disposal and a decrease in cash outflows of $116 from acquisition of short-term financial instruments and a decrease in cash outflows of $79 from acquisition of property, plant and equipment.

 

*Net Cash Provided by Financing Activities*

Cash flows provided by financing activities were $483 for the year ended December 31, 2024, as compared to $680 for the year ended December 31, 2023, a decrease of $197. The decrease is primarily related to a decrease in cash inflows of $766 from convertible debt, a decrease in cash inflows of $536 from long-term borrowings, an increase in cash inflows of $584 from short-term borrowings and a decrease in cash outflows of $377 from long-term borrowings.

***Debt***

 

*Redeemable Convertible Preferred Stock*

On April 14, 2025, Convertible bonds were converted into 1,666 shares of RCPS upon the exercise of conversion rights by the holder, Korea SMEs and Startups Agency. The redeemable convertible preferred stock bears a fixed interest rate of 3% per annum, and matures in 2035. As part of the issuance terms, the conversion ratio of the redeemable convertible preferred stock is subject to adjustment upon the occurrence of certain events by refixing at 70 percent of the initial convertible price as a minimum level. Therefore, the Company classified the redeemable convertible preferred stock as a liability together with separating the conversion option.

 ****

Dissenting Shareholder Appraisal Rights

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In connection with the transaction, the Company recognized a derivative liability of $151,661 and a corresponding loss on derivative as of December 31, 2025.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd. The payment amount was approximately $9.0 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

***Contractual Obligations***

The following table presents a summary of our contractual obligations, including payments due by period, as of December 31, 2025:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ***($ in thousands)*** | **2026** | **2027** | **2028** | **2029** | **2030** | **Thereafter** | **Total** |
| Finance lease<sup>(1)</sup> | 29 | 25 | 16 | 8 | 3 |  | 81 |
| Debt obligations<sup>(2)</sup> | 1245 | 525 | 411 | 392 | 320 | 210 | 3103 |
| Total | 1274 | 550 | 427 | 400 | 323 | 210 | 3184 |

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(1) Future lease payment obligations for operating and finance lease
liabilities.

(2) Short-term and long-term debt principal repayment obligations, $2,470
to the banks and $632 to the Company's CEO and the others.

As of December 31, 2025, there have been no material changes to our contractual obligations and commitments since December 31, 2024.

 ****

***Going Concern***

These financial statements have been prepared in accordance with GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, there is substantial doubt about the Company's ability to continue as a going concern exists.

Primarily due to a decline in sales associated with the business, the Company incurred losses of $1,241 and net cash inflows from operations of $56 for the year ended December 31, 2025. The Company incurred losses of $1,531 and net cash outflows from operations of $735 for the year ended December 31, 2024. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering other financing arrangements, and the restructuring of operations to grow revenues and decrease expenses. However, upon the economic environment and the Company's current capability, the Company may be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

**Quantitative and Qualitative Disclosures about Market Risk**

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primary the result of fluctuations in interest rates and foreign currency exchange rates.

*Interest Rate Risk*

Our cash and cash equivalents primarily consist of cash on hand and short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and fair market value of our investments. However, due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of our portfolio. We therefore do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

**Off-Balance Sheet Arrangements**

During the period presented, the Company did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

**Critical Accounting Policies and Use of Estimates**

The above discussion and analysis of our financial condition and results of operations is based upon our financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. Our significant accounting policies are described in Note 1. Summary of Significant Accounting Policies of the accompanying financial statements of the Company included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing the financial statements.

 ****

***Allowance for Credit Losses***

The allowance is estimated over the contractual term of the financial asset and adjusted for expected prepayments. The contractual term excludes any extensions, renewals, and modifications, unless the borrower has a contractual option that provides it with the unilateral ability to extend the maturity date. The Company does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable) in expected credit losses each period is recognized immediately in net income as a credit loss expense or a reversal of credit loss expense.

 ****

***Revenue Recognition***

The Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and the control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer, and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

The Company's primary source of revenue is product revenues of NdFeb powder for NdFeb magnets which are used in manufacturing of household appliances and cars. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices, as such, rebates or discounts are not provided. The Company provides an assurance type warranty on all of its products, which are not separate performance obligations and are outside the scope of ASC 606. There were no loss contingencies related to warranties recorded as of December 31, 2025 and December 31, 2024.

 ****

***Foreign Currency***

The functional currency of the Company is the Korean Won. Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in Gain/Loss on foreign currency in the statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the Effect of exchange rate changes on cash and cash equivalents in the statements of cash flows.

Assets and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end of each period. Revenue and expenses for the Company are translated into U.S. dollars using average rates that approximate those in effect during the period. Currency translation adjustments are included in Accumulated other comprehensive loss, a separate component of Stockholders' deficit.

**Recent Accounting Pronouncement**

See Note 1.(22) to the audited annual financial statements for the years ended December 31, 2025 and 2024 included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part, for recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

## Exhibit 99.11

**Exhibit 99.11**

**KMMI'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*Unless the context otherwise requires, references in this section to "we", "us", "our" and "the Company" refer to the business and operations of KMMI prior to the Business Combination. Unless otherwise indicated, all dollar amounts ("$") are expressed in thousands.*

 

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below in this section and those discussed in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" included elsewhere in the Form 8-K, as amended, of which this exhibit forms a part. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

**Overview**

KMMI was established in 2021 and specializes in the manufacture and sales of NdPr block magnets and magnets for traction motors that are used in aerospace and defense, automotive, energy plants and various other industries. The Company manufactures NdPr block magnets and magnets for traction motors that are used in aerospace and defense, automobile, energy plant and other various industries.

The Company has been preparing its operation by purchasing related equipment and machines since 2021, thus, revenue from contracts with the customers has not yet been occurred as of the end of the reporting period. With the successful completion of prototype production during the first half of 2024, the Company has been making efforts to secure end-users and prepare for the commencement of operations. The Company is currently targeting to initiate commercial operations in the second half of 2026, subject to various factors, including customer qualification processes, operational readiness, and market conditions.

KMMI is strategically positioned in the rare earth magnet industry, with a focus on NdFeb magnets. Our manufacturing process encompasses state-of-the-art facilities for hydrogen decrepitation, jet milling, pressing and shaping, and sintering and heat treating, enabling us to produce high-performance magnets with controlled orientation and specific strength.

Looking ahead to 2026, the Company plans to expand its capabilities to include NdFeB alloy production, further integrating our supply chain. Our products cater to diverse markets including Aerospace and Defense, Automotive, Energy, Industrials, Consumer Appliances, and Healthcare Technology. This diversified market presence positions the Company to capitalize on the growing demand for rare earth magnets across multiple industries.

Our strategic focus on these sectors, combined with our technological expertise, ensures that we are well-positioned to meet the global demand for high-performance magnets in the years to come.

 

*Segments*

Although there are no sector managers who are held accountable for operating and financial results or the product and service mix by sector, the Company now plans to offer multiple products and the Chief Executive Officer of the Company, who has been determined to be the CODM, manages the Company as a whole and makes decisions at the top level.

**Components of Results of Operations**

 

*Selling, general and administrative expenses*

SG&A expenses primarily consist of employee-related costs, depreciation on buildings and equipment, amortization of right-of-use assets, professional and service fees, lease and utilities expenses.

*Other operating income*

Other income includes government grants.

 

*Other non-operating income and expense*

Other income includes miscellaneous income and other expense primarily includes other costs consist of miscellaneous loss and amortization of accumulated actuarial loss and loss on disposal of tangible assets and loss from shares repurchase liability.

 

*Interest income*

Interest income primarily includes realized gain on cash equivalent and unrealized gain on short-term loan.

 

*Interest expense*

Interest expense primarily consists of interest incurred on our finance leases and outstanding debts.

 

*Gain (loss) on foreign currency*

It consists of gain (loss) on translation and transaction of monetary assets and liabilities in foreign currencies.

**Results of Operations for the Years Ended December 31, 2025 and 2024 (in thousands, except as otherwise noted)**

The following table provides our operating results for the periods indicated and percentage of revenue for each line item.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
| <br>***($ in thousands)*** | **($)** | **(%)** | **($)** | **(%)** | **($)** | **(%)** |
| Revenues |  |  |  |  |  |  |
| Cost of Sales |  |  |  |  |  |  |
| Other operating income | 3 |  |  |  |  |  |
| Selling, general and administrative expenses | (1270) |  | (869) |  | (401) | 46.1 |
| Operating loss | (1267) |  | (869) |  | (398) | 45.8 |
| Other non-operating income and losses, net | (470) |  | 16 |  | (486) | (3037.5) |
| Income taxes(benefit)\* |  |  |  |  |  |  |
| Net loss from operations | (1737) |  | (853) |  | (884) | 103.6 |

---

\* *not meaningful*

 

*Selling, general and administrative expenses*

Selling, general and administrative expenses were $1,270 thousand for the year ended December 31, 2025, as compared to $869 thousand for the year ended December 31, 2024, an increase of $401 thousand, or 46.1%. This was primarily due to the increased number of employees and an increase in electricity expenses associated with factory operational preparation and an increase in depreciation expenses with the acquisition of property, plant, and equipment.

 

 

*Other Income*

Interest income consisting of other income was $20 thousand for the year ended December 31, 2025, which was similar with $21 thousand for the years ended December 31, 2024. The amount of change is not material and was primarily due to the impact of translation adjustments.

In addition, gain on foreign currency consisting of other income was $7 thousand for the year ended December 31, 2025, as compared to $61 thousand for the year ended December 31, 2024, a decrease of $54 thousand, or 88.6%. This was primarily due to decreased balance of monetary assets in foreign currencies and a decrease in gain on foreign exchange transactions incurred by equipment purchases in foreign currencies.

 

*Other expenses*

Interest expense consisting of other expense was $29,651 for the year ended December 31, 2025, as compared to $30,490 for the year ended December 31, 2024, a decrease of $839, or 2.8%. This was primarily due to a decrease in interest expense resulting from lease amortization.

Loss on foreign currency consisting of other expense was not incurred for the year ended December 31, 2025, as compared to $37,089 for the year ended December 31, 2024, a decrease of $37,089, or 100%. This was primarily due to exchange rate increases on foreign currency monetary assets, resulting in translation gains rather than losses.

Loss on share repurchase liabilities consisting of other expense was $470,679 for the year ended December 31, 2025, as compared to no such loss incurred for the year ended December 31, 2024, representing an increase of $470,679. This was primarily due to valuation losses recognized on derivative instruments related to the settlement obligation arising from appraisal rights by dissenting shareholders.

**Liquidity and Capital Resources (in thousands, except as otherwise noted)**

 ****

***Sources of Liquidity***

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our business requires expenditures for, among other things, maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements and principal and interest payments related to our outstanding indebtedness. The Company plans to continue to fund its operations through its existing cash and cash equivalents, operational cash flow and additional financing. Our liquidity as of December 31, 2025, is as follows (in thousands):

---

| | | |
|:---|:---|:---|
| ***($ in thousands)*** | **December 31,<br> 2025** | **December 31,<br> 2024** |
| Cash and cash equivalents | 110 | 493 |
| Restricted cash | 36 | 34 |
| Working capital (deficit), excluding cash, cash equivalents, and restricted cash | (893) | 334 |
| Accumulated deficit | (3841) | (2105) |

---

Our future liquidity requirements will depend on many factors, including funding needed to support other business opportunities and expenditures, and funding for working capital and general corporate purposes. We expect to satisfy our liquidity requirements through cash on hand, cash generated from the operations and additional financings.

 ****

***Cash Flows (in thousands, except as otherwise noted)***

Cash flows associated with operating, investing, and financing activities for the year ended December 31, 2025, and 2024 are summarized as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Twelve Months Ended<br> December 31,** | **Twelve Months Ended<br> December 31,** | **Change** | **Change** |
| <br>***($ in thousands)*** | **2025** | **2024** | **($)** | **(%)** |
| Net cash used in operating activities | (999) | (585) | (414) | 70.8 |
| Net cash provided by (used in) investing activities | 355 | (44) | 399 | (906.8) |
| Net cash provided by financing activities | 246 | 95 | 151 | 158.9 |
| Net decrease in cash and cash equivalents | (398) | (534) | 136 | (25.5) |

---

 

*Net Cash Used in Operating Activities*

Cash flows used in operating activities were $999 thousand for the year ended December 31, 2025, primarily related to a net loss of $1,737 thousand, partially offset by $718 thousand in adjustments reconciling net loss to net cash used in operating activities of continuing operations.

Cash flows used in operating activities were $585 thousand for the year ended December 31, 2024, primarily related to a net loss of $853 thousand, partially offset by $267 thousand in adjustments reconciling net loss to net cash used in operating activities of continuing operations.

*Net Cash Provided by Investing Activities*

Cash flows provided by investing activities were $355 thousand for the year ended December 31, 2025, primarily due to cash inflows for collection of loans.

Cash flows used in investing activities were $44 thousand for the year ended December 31, 2024, with cash outflows of acquisitions of property, plant and equipment.

*Net Cash Provided by Financing Activities*

Cash flows provided by financing activities were $246 thousand for the year ended December 31, 2025, primarily due to proceeds from short-term debt of $302 thousand and repayments of long-term debt of $39 thousand.

Cash flows provided by financing activities were $95 thousand for the year ended December 31, 2024, primarily related to $110 thousand in proceeds from short-term debts.

**Dissenting Shareholder Appraisal Rights**

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

 

 

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In connection with the transaction, the Company recognized a share repurchase liability of $470,679 and a corresponding loss on share repurchase liability valuation as of December 31, 2025.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd. The payment amount was approximately $27.95 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

 ****

***Contractual Obligations***

The following table presents a summary of our contractual obligations, including payments due by period, as of December 31, 2025:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| ***($ in thousands)*** | **2026** | **2027** | **2028** | **2029** | **Thereafter** | **Total** |
| Operating lease<sup>(1)</sup> | 15 |  |  |  |  | 15 |
| Finance lease<sup>(1)</sup> | 18 |  |  |  |  | 18 |
| Debt obligations<sup>(2)</sup> | 46 | 983 | 66 | 58 | 203 | 1356 |
| Total | 79 | 983 | 66 | 58 | 203 | 1389 |

---

(1) Future lease payment obligations for operating and finance lease
liabilities.

(2) Long-term debt principal repayment obligations for individual
cash loans, our bank loans, and loans provided by Korea Small and Medium-sized Enterprises and Startups Agency and Industrial bank of
Korea.

As of December 31, 2025, there have been no material changes to our contractual obligations and commitments since December 31, 2024.

 ****

***Going Concern***

These financial statements have been prepared in accordance with GAAP assuming the Company will continue as a going concern. The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, there is substantial doubt about the Company's ability to continue as a going concern exists.

Primarily due to the absence of revenue sources and a focus on fixed asset investments as a newly established entity, the Company incurred losses of $1,737,251and $852,520 for the years ended December 31, 2025 and 2024, respectively, and net cash outflows from operating activities of $999,047 and $585,205 for the years 2025 and 2024, respectively. As of December 31, 2025, the Company reported no revenues and had negative working capital of $893,107, which excludes cash and cash equivalents of $109,646 and restricted cash of $35,802. As of December 31, 2024, the Company had positive working capital of $333,730, which excludes cash and cash equivalents of $492,984 and restricted cash of $34,014. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months and to support its business development objectives, the attainment of which is not assured.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. In addition, subsequent to the reporting period, the Company completed a share exchange transaction and became a wholly owned subsidiary of EMT Sub Co., Ltd. As a result, the Company expects to have access to financial and operational support from its parent company. However, the Company's ability to obtain sufficient funding remains dependent on various factors, including the overall economic environment and the Company's operating performance. While management expects that the Company will be able to meet its obligations through a combination of external financing and support from its parent company, there can be no assurance that such funding will be available on acceptable terms, or at all. The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

**Quantitative and Qualitative Disclosures about Market Risk**

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact on our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates and foreign currency exchange rates.

 

*Interest Rate Risk*

The Company's cash and cash equivalents primarily consist of cash on hand and short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. As of December 31, 2025 and December 31, 2024, the Company had $145 thousand and $527 thousand of cash and cash equivalents, including restricted cash, respectively. The Company's investments are exposed to market risk due to fluctuations in interest rates, which may affect its interest income and fair market value of its investments. However, due to the short-term nature of the Company's investment portfolio, the Company does not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of its portfolio. The Company therefore does not expect its operating results or cash flows to be materially affected by a sudden change in market interest rates.

 

*Foreign Currency Exchange Risk*

The Company expects that its future revenue will be generated globally in multiple currencies, primarily the Korean won and U.S. dollar. Accordingly, the results of future operations and cash flows may be subject to fluctuations due to changes in foreign currency exchange rates. As the Company has not generated revenue to date and the impact of foreign currency exchange rates has not been material to its historical financial position, the Company has not entered into derivative or hedging transactions. The Company may consider such transactions in the future if its exposure to foreign currency becomes more significant.

 

*Tariff and Trade Policy Risk*

Recent and potential future changes to U.S. trade policy, including the implementation and potentially further expansion of tariffs under the Trump administration, may materially impact global supply chains and trade dynamics that are relevant to the Company's operations. In particular, the imposition of new or increased tariffs on imports from manufacturing economies — including the Republic of Korea, where the Company's operations are currently based — could have a direct impact on the Company's financial condition and results of operations.

Such tariffs may result in either favorable or adverse effects. For example, tariffs imposed on Chinese-manufactured magnets could enhance the competitiveness of the Company's products in the U.S. market by positioning the Company as a non-China supplier. Conversely, tariffs on raw materials or intermediate goods sourced from impacted regions could increase the Company's input costs or limit access to critical materials necessary for production.

In response to the imposition of tariffs by the United States, China has enacted export controls on rare earth elements — materials that are essential to the Company's sintered magnet production and are currently dominated by Chinese supply. If tariff conflicts between the United States and China were to escalate further, such export controls may become even more restrictive, not only with respect to direct U.S. buyers, but also potentially to companies with affiliations or commercial ties to the United States. As a result, the Company may experience increasing difficulty in procuring rare earth materials at competitive prices or in adequate volumes.

While the Company may seek to secure alternative sources of rare earth materials from suppliers outside of China, such alternative suppliers may also raise their prices due to tightening global supply and increased demand. These developments could adversely affect the Company's cost structure and financial performance. However, given that rare earth elements are widely recognized as strategic and critical materials for the U.S. defense industry and European economies, the Company expects that any increase in raw material procurement costs would likely be reflected in selling prices to customers over time, thereby partially offsetting the financial impact.

Due to the uncertainty surrounding the scope, timing, and implementation of any such trade measures — as well as the complexity of global supply chain responses — the Company is currently unable to reasonably quantify the potential impact of these developments on its prospective financial statements included herein. The Company will continue to monitor developments in international trade policy and evaluate appropriate risk mitigation strategies as circumstances evolve.

**Off-Balance Sheet Arrangements**

During the period presented, the Company did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

**Critical Accounting Policies and Use of Estimates**

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses, as well as disclosures of contingent assets and liabilities. Significant estimates include, among others, the useful lives of property, plant and equipment, allowance for credit losses, valuation of deferred tax assets, lease liabilities and right-of-use assets, defined severance benefits, income tax uncertainties, and other contingencies. Certain of these estimates require significant judgment and are considered critical to understanding the Company's financial condition and results of operations. The Company has identified the following areas as involving critical accounting estimates, which are discussed below.

 ****

***Property, Plant and Equipment***

Property, plant and equipment are stated at cost. Property, plant and equipment under finance leases are stated at the present value of the lease payments.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company evaluates long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing this assessment, management considers factors such as the Company's current operating status, future production plans, and expected cash flows. As of December 31, 2025, management performed an impairment assessment and concluded that no impairment charge was necessary.

**Defined Severance Benefits**

The Company maintains a defined benefit pension plan covering substantially all employees in accordance with the applicable laws and regulations in Korea. The related obligations are measured based on actuarial valuations using various assumptions, including discount rates, salary growth rates, and employee turnover.

These assumptions require management's judgment and may have a significant impact on the measurement of the defined benefit obligation. As of December 31, 2025, management evaluated the key assumptions and concluded that the recorded obligation appropriately reflects the Company's expected future payments.

**Share Repurchase Liabilities**

The Company accounts for dissenting shareholder appraisal rights as a liability measured at fair value. The measurement of this liability requires significant judgment, including the estimation of expected settlement amounts and the assessment of relevant contractual terms and conditions.

Changes in key assumptions, including expected settlement timing and statutory interest, may have a material impact on the valuation of the liability.

**Recent Accounting Pronouncements**

See Note 1.(20) to audited annual financial statements for the years ended December 31, 2025 and 2024 included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part, for recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

## Exhibit 99.12

**Exhibit 99.12**

**NS WORLD'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*Unless the context otherwise requires, references in this section to "we", "us", "our" and "the Company" refer to the business and operations of NS World prior to the Business Combination. Unless otherwise indicated, all dollar amounts ("$") are expressed in thousands.*

 

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below in this section and those discussed in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" included elsewhere in the Form 8-K, as amended, of which this exhibit forms a part. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

**Overview**

NS World was incorporated in 2013 and the Company's registered office is located at 99, Naechuoksu-gil, Bugi-myeon, Cheongwon-gu, Cheongju-si, Chungcheongbuk-do, Republic of Korea. The Company specializes in the manufacturing and sale of magnetic components for automobiles and electronic appliances. The Company has operations located throughout Korea. The Company owns one building and one plot of land, both of which are pledged as collateral with the Industrial Bank of Korea.

The Company specializes in manufacturing magnetic components required across rapidly evolving automotive and home appliance industries, which can be divided into three key sectors: automotive, home appliances, and other industries.

In the automotive sector, the Company provides magnetic components designed to meet the performance demands of magnets required in extreme operating conditions for automotive parts. The Company offers a wide range of magnet products, from motor drive magnets to advanced magnets for various magnetic sensors, ensuring seamless integration with surrounding components through material diversification and insert molding.

In the home appliances sector, the Company supplies a variety of magnets used in low-noise, high-efficiency BLDC motors. These magnets are combined with mold design technology to achieve maximum efficiency from complex shapes using the same raw materials. The product range includes ferrite magnets and magnets made from NdFeB materials, designed to meet diverse customer specifications.

In other industries, the Company produces ferrite sintered magnets for large-capacity AC motors, meeting a wide range of customer requirements. Additionally, the Company manufactures ferrite magnet resins by compounding anisotropic or isotropic ferrite powder with binders, enabling injection molding for various applications.

The Company has made significant advancements since 2013, starting with the patent acquisition for a resin composition and manufacturing method for bonded magnets. In 2014, it obtained the IATF 16949 certification, and in 2015, successfully localized permanent magnet materials through a three-year, 2.4 billion KRW project. Since 2015, the Company has actively participated in government-led technology innovation and development projects under the Ministry of Trade, Industry and Energy and the Ministry of SMEs and Startups. In 2020, it was designated as a specialized company for materials, parts, and equipment, and in 2023, it received the Root Enterprise Certification from the Korea Institute of Industrial Technology.

 

*Segments*

Although there are no sector managers who are held accountable for operating and financial results or the product and service mix by sector, the Company offers multiple products and the Chief Executive Officer of the Company, who has been determined to be the CODM, manages the Company as a whole and makes decisions at the top level.

**Components of Results of Operations**

 

*Revenue*

The Company derives revenue from the sale of products, which are components for automotive and home appliance magnets. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

 

*Cost of sales*

Cost of sales represents all direct and indirect costs associated with the manufacture of our products. Cost of goods sold primarily consists of direct costs associated with inventory and delivery of the Company's goods, including freight costs. Cost of sales also includes inventory impairment, allocated personnel-related expenses and allocated facilities and overhead costs.

 

*Other operating income*

Other operating income consists of government grant income, rental income, income from the provision of technical services, gain on the disposal of tangible assets, and brokerage income.

 

*Selling, general, and administrative expenses*

SG&A expenses consist of corporate service functions such as finance, legal, human resources and information technology expenses, as well as rent, utilities, depreciation, amortization and insurance costs.

 

*Other non-operating income*

Other non-operating income includes interest income, gain on foreign currency and other income.

Gain on foreign currency includes gain on translation and transaction of monetary assets and liabilities denominated in foreign currencies.

Interest income primarily includes realized gains from bank deposits and investments with financial instruments.

 

*Other non-operating expenses*

Other non-operating expenses include interest expense, loss on foreign currency and other expenses*.*

Interest expense primarily consists of interest incurred on our finance leases, financing obligations and outstanding loans.

Loss on foreign currency includes loss on translation and transaction of monetary assets and liabilities denominated in foreign currencies.

Other expenses, other than interest expense and loss on foreign currency, primarily include amortization of accumulated actuarial loss.

 

*Gain (loss) on financial instruments*

The Company measures a fair value of redeemable convertible preferred stock and its changes in fair value is recognized as gain (loss) on financial instruments.

The Company measures the fair value of share repurchase liabilities, and any changes in its fair value are reorganized as gain (loss) on share repurchase liabilities

**Results of Operations for the year ended December 31, 2025 and 2024 (in thousands, except as otherwise noted)**

The following table provides our operating results for the periods indicated and percentage of revenue for each line item.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | | |
| | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
| <br>***($ in thousands)*** | **($)** | **(%)** | **($)** | **(%)** | **($)** | **(%)** |
| Revenues | 6374 | 100 | 6051 | 100 | 323 | 5.3 |
| Cost of Sales | (5144) | (80.7) | (5218) | (86.2) | 74 | (1.4) |
| Other operating income | 61 | 1 | 147 | 2.4 | (86) | (58.5) |
| Selling, general and administrative expenses | (1621) | (25.4) | (1224) | (20.2) | (397) | 32.4 |
| Operating income (loss) | (330) | (5.2) | (244) | (4.1) | (86) | 35.2 |
| Other non-operating income and losses, net | (215) | (3.4) | (128) | (2.1) | (87) | 68 |
| Income taxes (benefit)\* |  |  |  |  |  |  |
| Net loss from operations | (545) | (8.6) | (372) | (6.1) | (173) | 46.5 |

---

\* *not meaningful*

 

*Overall operating results*

The Company generated total revenues of $6.4 million, reflecting a slight increase compared to the corresponding period in 2024. The Company continued to incur an operating loss of $330 thousand for the year ended December 31, 2025. Additionally, the operating margin declined from (-) 4.1% in 2024 to (-) 5.2% in 2025, primarily due to the increase in selling, general and administrative expenses.

 

*Revenues*

Revenues were $6.4 million for the year ended December 31, 2025 as compared to $6.1 million for the year ended December 31, 2024, an increase of $323 thousand, or 5.3%. This was primarily due to the increase in domestic sales.

 

*Cost of sales*

Cost of sales were $5.1 million for the year ended December 31, 2025 as compared to $5.2 million for the year ended December 31, 2024, a decrease of $74 thousand, or 1.4%. The Company's cost of sales for the year ended December 31, 2025 decreased compared to the year ended December 31, 2024, mainly as a result of improved margin rates in merchandise sales.

 

*Other operating income*

Other operating income was $61 thousand for the year ended December 31, 2025 as compared to $147 thousand for the year ended December 31, 2024, a decrease of $86 thousand, or 58.5%. This was primarily due to the decrease in income from the government grant income.

 

*Selling, general and administrative expenses*

Selling, general and administrative expenses were $1.6 million for the year ended December 31, 2025 as compared to $1.2 million for the year ended December 31, 2024, an increase of $0.4 million, or 32.4%. This was primarily due to the increase in salaries, retirement benefits expense, and commission fees.

 

*Other non-operating income*

Gains on foreign currency mainly consisting of non-operating income was $159 thousand for the year ended December 31, 2025 as compared to $258 thousand for the year ended December 31, 2024, a decrease of $99 thousand, or 38.1%. This was primarily due to the weakened KRW/USD exchange rate.

Gain on valuation of redeemable convertible preferred stock was $115 thousand for the year ended December 31, 2025, as compared to a gain of $75 thousand for the year ended December 31, 2024, representing an increase in gain of $40 thousand, or 53.1%. This was primarily due to a decrease in the fair value of the liability because the value of the conversion rights declined.

 

*Other non-operating losses*

Interest expense was $179 for the year ended December 31, 2025, compared to $144 thousand for the year ended December 31, 2024, a increase of $35 thousand, or 24.3%. This increase was primarily due to an increase in the installment amount for long-term debt repayment.

Loss on foreign currency was $178 thousand for the year ended December 31, 2025, as compared to $229 thousand for the year ended December 31, 2024, a decrease of $51 thousand, or 22.2%. This was primarily due to decrease in monetary instrument and the weakened KRW/USD exchange rate.

Loss on share repurchase liability consisting of other non-operating expense was $111 thousand for the year ended December 31, 2025, as compared to no such loss incurred for the year ended December 31, 2024, representing an increase of $111 thousand. This was due to valuation losses recognized on the share repurchase liabilities for the year ended December 31, 2025.

**Liquidity and Capital Resources (in thousands, except as otherwise noted)**

 ****

***Sources of Liquidity***

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our business is capital intensive and requires substantial expenditures for, among other things, the purchase and maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements and capital expenditures, including expansion projects and principal and interest payments related to our outstanding indebtedness. The Company plans to continue to fund its operations through its existing cash and cash equivalents, as well as through future equity offerings, debt financing, other third-party funding, and operational cash flow. Our liquidity as of December 31, 2025 is as follows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Cash and cash equivalents | 794 | 359 |
| Working capital deficit excluding cash and cash equivalents | (3185) | (3132) |
| Accumulated deficit | (3241) | (2695) |

---

Our future liquidity requirements will depend on many factors, including funding needed to support other business opportunities and expenditures, and funding for working capital and general corporate purposes. We expect to satisfy our liquidity requirements through cash on hand, cash generated from operations and additional financings.

***Cash Flows***

Cash flows associated with operating, investing, and financing activities for the years ended December 31, 2025 and December 31, 2024 are summarized as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31,** | **Year Ended December 31,** | **Change** | **Change** |
| <br>***($ in thousands)*** | **2025** | **2024** | **($)** | **(%)** |
| Net cash provided by operating activities | 580 | 401 | 181 | 45.1 |
| Net cash used in investing activities | (40) | (138) | 100 | (72.5) |
| Net cash used in financing activities | (111) | (252) | 141 | (56.0) |
| Net increase in cash and cash equivalents | 429 | 11 | 422 | 3836.4 |

---

 

*Net Cash Provided by Operating Activities*

Cash flows provided by operating activities were $580,081 for the year ended December 31, 2025, as compared to $400,682 for the year ended December 31, 2024, an increase of $179,399, or 44.8%. The increase is primarily related to decrease in non-trade accounts receivable (net of allowance) and increase in trade accounts payable.

For the year ended December 31, 2025, net cash provided by operating activities was $580,081, which primarily consisted of net loss of $545,212, adjusted for certain non-cash items of $655,545 and net cash inflow from changes in operating assets and liabilities of $737,643. The non-cash items primarily consisted of depreciation and amortization expense of $178,793, interest expenses of $178,666, pension benefits provision of $180,316 and loss on valuation of share repurchase liabilities of $110,543. The net cash inflow from changes in our operating assets and liabilities were primarily due to a $2,277,412 increase in non-trade accounts payable, a $192,384 increase in trade accounts receivable (net of allowance), partially offset by a $1,174,631 increase in trade accounts payable, and a $107,846 decrease in inventories, and a $1,818,971 decrease in non-trade accounts receivable (net of allowance).

For the year ended December 31, 2024, net cash provided by operating activities was $400,682, which primarily consisted of net loss of $372,026, adjusted for certain non-cash items of $247,740, and net cash inflow from changes in operating assets and liabilities of $524,968. The non-cash items primarily consisted of depreciation and amortization expense of $183,557, interest expenses of $144,300 and pension benefits provision of $157,547. The net cash inflow from changes in operating assets and liabilities were primarily due to a $1,200,482 increase in non-trade accounts payable, a $503,346 decrease in inventories, $376,352 decrease in trade accounts receivable (net of allowance), partially offset by a $1,149,252 increase in non-trade accounts receivable (net of allowance).

 

*Net Cash Used in Investing Activities*

Cash flows used in investing activities were $39,526 for the year ended December 31, 2025 as compared to $137,956 for the year ended December 31, 2024, a decrease of $98,430, or 71.4%. The decrease is primarily related to a $129,284 decrease in acquisitions of property, plant and equipment, partially offset by a $30,854 decrease in other investing activities.

For the year ended December 31, 2025, net cash used in investing activities was $39,526, consisting primarily of acquisitions of property, plant and equipment of $89,746 and increase in loans of $74,531, partially offset by decrease in loans of $43,584 and proceeds from sale of short-term financial instruments of $29,531.

For the year ended December 31, 2024, net cash used in investing activities was $137,956, primarily consisting of acquisitions of property, plant and equipment of $219,030, partially offset by receipt of government grants of $60,999 and proceeds from disposal of property, plant and equipment of $38,181.

 

*Net Cash Used in Financing Activities*

Cash flows used in financing activities were $111,102 for the year ended December 31, 2025 as compared to $251,935 for the year ended December 31, 2024, a decrease of $140,833, or 55.9%. The decrease is primarily related to a $1,219,333 increase in proceeds from short-term debt, partially offset by a $1,086,857 increase in repayments of short-term debt.

For the year ended December 31, 2025, net cash used in financing activities was $111,102, comprised primarily of repayments of short-term debt of $1,306,710, repayments of current portion of long-term debt of $214,798 and repayments of lease liabilities of $40,172, partially offset by $1,450,578 proceeds from short-term debt.

For the year ended December 31, 2024, net cash used in financing activities was $251,935, comprised primarily of repayments of short-term debt of $219,853, repayments of current portion of long-term debt of $222,423 and repayments of lease liabilities of $40,904, partially offset by $231,245 proceeds from short-term debt.

 ****

***Debt***

 

*Redeemable convertible preferred stock*

In May 2015, the Company issued 37,500 shares of redeemable convertible preferred stock with a principal amount of KRW 750 million. The redeemable convertible preferred stock bears a fixed interest rate of 5.8% per annum, and matures in 2025. In May 2025, 37,500 shares of redeemable convertible preferred stock were automatically converted into common stock upon maturity.

 

*Dissenting Shareholder Appraisal Rights*

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In connection with the transaction, the Company recognized a share repurchase liability of $109,566 and a corresponding loss on share repurchase liability valuation as of December 31, 2025.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd. The payment amount was approximately $6.50 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

 ****

***Contractual Obligations***

The following table presents a summary of our contractual obligations, including payments due by period, as of December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ***($ in thousands)*** | **2026** | **2027** | **2028** | **2029** | **2030** | **Thereafter** | **Total** |
| Finance lease<sup>(1)</sup> | 34 | 25 | 6 | 6 | 3 |  | 74 |
| Debt obligations<sup>(2)</sup> | 2636 | 178 | 23 | 18 | 18 | 9 | 2882 |
| Total | 2670 | 203 | 29 | 24 | 21 | 9 | 2956 |

---

(1) Future lease payment obligations for finance
lease liabilities.

(2) Short-term and long-term debt principal repayment obligations
for loans provided by Industrial Bank of Korea, Korea Small and Medium-sized Enterprises and Startups Agency, and EMT Asia Co., Ltd.

As of December 31, 2025, there have been no material changes to our contractual obligations and commitments since December 31, 2024.

***Going Concern***

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However, substantial doubt about the Company's ability to continue as a going concern exists.

Primarily due to a recent operating loss associated with the business, the Company incurred losses of $545,212 and $372,026 for the years ended December 31, 2025 and 2024, respectively. The Company had negative working capital of $3,185,094 and $3,131,924 which excludes the cash and cash equivalents of $793,843 and $359,394, and accumulated deficits of $3,240,547 and $2,695,335 as of December 31, 2025 and 2024, respectively. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering other financing arrangements, and restructuring of operations to grow revenues and decrease expenses. However, upon the economic environment and the Company's current capability, the Company may be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or under acceptable terms, if at all.

The financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses that may be necessary if the Company were unable to continue as a going concern.

**Quantitative and Qualitative Disclosures about Market Risk**

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primary the result of fluctuations in interest rates.

 

*Interest Rate Risk*

Our cash and cash equivalents primarily consist of cash on hand and short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. As of December 31, 2025 and December 31, 2024, we had $793,843 and $359,394 of cash and cash equivalents, respectively. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and fair market value of our investments. However, due to the short-term nature of our investment portfolio, we do not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of our portfolio. We therefore do not expect our operating results or cash flows to be materially affected by a sudden change in market interest rates.

*Foreign Currency Risk*

We maintain our ledgers in our functional local currency and translate them into USD for financial reporting purposes. As a result, we are exposed to fluctuations in the exchange rates of various currencies against the USD and other currencies, predominantly the KRW.

**Off-Balance Sheet Arrangements**

During the period presented, the Company did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

**Critical Accounting Policies and Use of Estimates**

The above discussion and analysis of our financial condition and results of operations is based upon our financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. Our significant accounting policies are described in Note 1. Summary of Significant Accounting Policies of the accompanying financial statements of the Company included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing the financial statements.

***Revenue Recognition***

The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

If the Company is principal in the revenue transactions, the Company recognizes revenue as gross, otherwise the Company recognizes on a net basis.

The Company engages in resale transactions where it purchases raw materials from specific parties, processes them, and resells them to the same counterparties. The Company provides a tolling manufacturing service for the counterparties in these arrangements, in which the counterparty retains control of the inventory throughout the process. The Company's performance obligation under these arrangements is the delivery of tolling services. Accordingly, the net transaction amount is recognized as revenue upon completion of these services. The toll process revenue recognized for the year ended December 31, 2025 was $7,985. The Company also engages in repurchase transactions where it sells raw materials to specific parties and repurchases them after they have been processed. The Company has an obligation to repurchase the inventory in these transactions. The Company maintains control of the inventory throughout the process as the Company retains legal title to the inventory and bears inventory risk throughout the process. The processing period is typically 15 to 60 days, and the pricing is determined based on the counterparties' processing costs. The Company accounts for these transactions as receiving toll manufacturing services rather than as distinct sales/purchases or product financing. As a result, the net transaction amount is recognized as processing fees (cost of goods manufactured). As of December 31, 2025, and 2024, the Company recognized non-trade accounts receivables of $802,237 and $2,555,265, respectively, and non-trade accounts payables of $914,930 and $3,114,212, respectively, related to repurchase transactions.

The Company's primary source of revenue is product and merchandise sales of components for automotive and home appliance magnets. Revenue from product and merchandise sales is recognized when control of the goods is transferred to the customer, which is typically at the point of delivery, at which time the significant risks and rewards of ownership also pass to the customer. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices, as such, no such provision – e.g. rebates or discounts - is provided.

 ****

***Property, Plant, and Equipment***

Property, plant and equipment are stated at cost. Property, plant and equipment under finance leases are stated at the present value of the lease payments.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company evaluates long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In performing this assessment, management considers factors such as the Company's current operating status, future production plans, and expected cash flows. As of December 31, 2025, management performed an impairment assessment and concluded that no impairment charge was necessary.

***Defined Severance Benefits***

The Company has a defined benefit pension plan covers substantially all employees in accordance with the Retirement Benefit Security Act of Korea. Eligible employees with one or more years of service are entitled to severance payments upon the termination of their employment based on their length of service and pay rate.

The Company recognizes the net funded status of its pension plans in the balance sheets, measured as the difference between the projected benefit obligation and the fair value of plan assets, with corresponding changes recognized in earning or other comprehensive income. Under ASC 715, service cost, interest cost, expected return on plan assets, and the amortization of actuarial gains or losses and prior service cost are recognized in Net Income. Actuarial gains and losses and prior service cost arising from plan amendments are initially recorded in Other Comprehensive Income and subsequently amortized into Net Income in accordance with ASC 715.

The obligations are measured annually, or more frequently if there is a remeasurement event, based on our measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of relevant corporate bonds in the market.

***Fair Value Measurements***

The Company measures the redeemable convertible preferred stock and dissenting shareholder appraisal rights at fair value. The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market.

The Company estimated the fair value of redeemable convertible preferred stock using the Tsiveriotis-Fernandes model with strip and bootstrapping method. The fair value is estimated using unobservable inputs based on stock price volatility of similar listed companies. The Company measured fair value of the redeemable convertible preferred shares upon conversion in May 2025, resulting in a reclassification from liabilities to equity of $950,189. The fair value gain recognized during the year ended 2025 was $114,768.

The share repurchase liability represents a freestanding financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined price, contingent on closing of the Share Exchange Agreement. The Company accounts for this instrument at fair value, with changes in fair value recognized in earnings. The fair value of the share repurchase liability is determined using a valuation model based on the difference between:

1) the present value of the expected cash settlement amount (including statutory interest), and

2) the present value of the underlying share value to be received in a share exchange transaction

Due to the use of significant unobservable inputs, the share repurchase liabilities are classified as a Level 3 fair value measurement.

***Recent Accounting Pronouncements***

See Note 1.(24) to the audited annual financial statements for the years ended December 31, 2025 and 2024 included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part, for recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.

## Exhibit 99.13

**Exhibit 99.13**

**HANDA LAB'S MANAGEMENT'S DISCUSSION AND ANALYSIS OF<br> FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

*Unless the context otherwise requires, references in this section to "we", "us", "our" and "the Company" refer to the business and operations of Handa Lab Co., Ltd. and its consolidated subsidiaries prior to the Business Combination. Unless otherwise indicated, all dollar amounts ("$") are expressed in thousands.*

 

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below in this section and those discussed in the sections titled "Risk Factors" and "Cautionary Statement Regarding Forward-Looking Statements" included elsewhere in the Form 8-K, as amended, of which this exhibit forms a part. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

**Overview**

Handa Lab was established in 2021 and specializes in the manufacture and sale of intelligent monitoring systems, machine vision and laser testing systems, and data gathering systems. The Company offers a diverse range of equipment and software, tailored to meet specific customer requirements in terms of specifications, functions, standards, and delivery timelines. Handa Corporation Co., Ltd., in which the Company holds a 60% stake, was established in 2023 and specializes in the manufacture and sale of intelligent robotic systems.

The Company specializes in providing customized solutions across various industries, leveraging AI and vision technologies. The Company offers intelligent monitoring systems, machine vision systems, autonomous driving systems, and collaborative robot systems, all tailored to meet specific industry needs, showcasing the Company's versatility and technological expertise. The primary focus is on two types of products and two research and development projects: the Intelligent Monitoring System, Machine Vision and Laser Inspection Systems, Collaborative Robot Control System, and Electric Vehicle Autonomous Charging Robot System.

The Intelligent Monitoring System utilizes IP and CCTV cameras for real-time monitoring of factories, offices, and farms. By integrating deep learning-based intelligent solutions, it helps prevent product defects, accidents, and theft while providing comprehensive video data. Key features include real-time monitoring of production and assembly lines, rapid and accurate inspections using proprietary deep learning models, quantitative recording of inspection results, and the ability to mark and review specific events in recorded footage.

The Machine Vision and Laser Inspection Systems employ industrial cameras and laser displacement sensors to enhance product quality inspections and alignment processes. The Company offers machine vision solutions compatible with Cognex and Keyence systems, laser-based inspection solutions using Keyence and Gocator sensors, as well as data collection and analysis solutions. These systems improve efficiency through optimized optical design and can be integrated with various software platforms, including Python, C#, LabVIEW, and VB.NET.

The Collaborative Robot Control System provides control systems for industrial and collaborative robots, focusing on automated piece picking, palletization, and autonomous mobile robots for logistics. The Company is also developing robotic vision and intelligence solutions using platforms such as Ubuntu, ROS, Python, and C/C++, reflecting the Company's commitment to advancing automation technologies in industrial applications.

The Electric Vehicle Autonomous Charging Robot System integrates cooperative autonomous navigation, precise robot control for automatic charging, and high-safety mobile secondary batteries. A key innovation is the development of an autonomous charging robot system for electric vehicles, which includes charging connector docking technology, a charging application, and a control system to manage the autonomous EV charging robot, movable battery system, and user applications.

To date, the Company holds six patents related to its technological innovations, covering areas such as autonomous towing devices for EV charging, autonomous navigation systems, pickup systems for EV charging robots, real-time road map generation, cooperative autonomous driving systems, and improved positioning accuracy using environmental sensors and precise maps. This patent portfolio highlights the Company's commitment to innovation and strengthens its position in the autonomous systems and electric vehicle charging markets.

*Segments*

Although the Company offers multiple products, the Chief Executive Officer of the Company, who has been determined to be the CODM, manages the Company as a whole and makes decisions at the consolidated level. There are no segment managers who are held accountable for operating and financial results or the product and service mix offered by the Company.

**Components of Results of Operations**

 

*Revenue*

The Company manufactures smart monitoring visual systems and laser inspection systems. The specifications, functions, and delivery dates vary depending on the demand of customers. The Company recognizes revenue at a point in time or over time when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

 

*Cost of sales*

Cost of sales represent all direct and indirect costs associated with the manufacturing of our products. Cost of goods sold consists primarily of direct costs associated with inventory. Cost of sales also includes inventory allocated personnel-related expenses and allocated facilities and overhead costs.

 

*Other operating income*

All other operating income consists of government support income. The Company receives grants from local government agencies and public institutions in relation to asset acquisition and research activity that are necessary for the Company's operating activities. Government grants are either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received.

 

*Selling, general, and administrative expenses*

Selling, general and administrative expenses consist of corporate service functions such as finance expense, legal, human resources and information technology, as well as rent, utilities, depreciation, amortization and insurance costs.

 

*Other non-operating income and expense*

Other non-operating income primarily includes miscellaneous income, and other expenses primarily includes miscellaneous losses of a small amount.

 

*Finance income*

Finance income primarily includes realized gain on deposit or loan.

 

*Finance expense*

Finance expense primarily consists of interest incurred on our finance leases, financing obligations and outstanding loans, as well as losses on derivatives.

 

*Gain (loss) on foreign currency*

Gain (loss) on foreign currency primarily consists of the translation of monetary assets and liabilities denominated in foreign currencies.

**Results of Operations for the Years Ended December 31, 2025 and 2024 (in thousands, except as otherwise noted)**

The following table provides our consolidated operating results for the periods indicated and percentage of revenue for each line item.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** | **Year Ended December 31** | | |
|  | **2025** | **2025** | **2024** | **2024** | **Change** | **Change** |
|  | **($)** | **(%)** | **($)** | **(%)** | **($)** | **(%)** |
| Revenues | 458 | 100.0 | 488 | 100.0 | (30) | (6.1) |
| Cost of sales | (512) | (111.8) | (344) | (70.5) | (168) | 48.8 |
| Other operating income | 247 | 53.9 | 439 | 90.0 | (192) | (43.7) |
| Selling, general and administrative expenses | (603) | (131.7) | (737) | (151.0) | 134 | (18.2) |
| Operating loss | (410) | (89.6) | (154) | (31.5) | (256) | 166.2 |
| Other non-operating income and losses, net | (80) | (17.5) | 3 | 0.6 | (83) | (2766.7) |
| Income taxes (benefit)\* |  |  |  |  |  |  |
| Net loss from operations | (490) | (107.1) | (151) | (30.9) | (339) | 224.5 |

---

 

*\** *not meaningful*

 

*Overall Operating results*

The Company generated total revenues of $458, representing a decrease compared to $488 in 2024. The Company continued to incur an operating loss of $410 for the twelve months ended December 31, 2025. The operating margin deteriorated from (31.5)% in 2024 to (89.6)% in 2025, primarily attributable to an increase in cost of sales and a significant decline in other operating income, partially offset by a reduction in selling, general and administrative expenses.

 

*Revenues*

Revenues were $458 for the twelve months ended December 31, 2025, compared to $488 for the twelve months ended December 31, 2024, a decrease of $30, or 6.1%. This decrease was primarily attributable to a lower number of projects completed and delivered during 2025 compared to 2024.

 

*Cost of sales*

Cost of sales were $512 for the twelve months ended December 31, 2025, compared to $344 for the twelve months ended December 31, 2024, an increase of $168, or 48.8%. This increase was primarily attributable to higher production costs and a less favorable project mix compared to the prior year.

 

*Other operating income*

Other operating income was $247 for the twelve months ended December 31, 2025, compared to $439 for the twelve months ended December 31, 2024, a decrease of $192, or (43.7)%. This decrease was primarily attributable to a reduction in government subsidies compared to the prior year.

 

*Selling, general and administrative expenses*

Selling, general and administrative expenses were $603 for the twelve months ended December 31, 2025, compared to $737 for the twelve months ended December 31, 2024, a decrease of $134, or 18.2%. The decrease in SG&A expenses was primarily attributable to a reduction in research and development expenses compared to the prior year.

*Other non-operating income*

Other non-operating income and losses, net was a loss of $80 for the twelve months ended December 31, 2025, compared to income of $3 for the twelve months ended December 31, 2024, representing a decrease of $83. This change was primarily driven by changes in other non-operating items.

Interest income was $6 for the twelve months ended December 31, 2025, compared to $9 for the twelve months ended December 31, 2024, representing a decrease of $3.

Interest expense was $6 for the twelve months ended December 31, 2025, compared to $6 for the twelve months ended December 31, 2024, with no material change. Interest expenses are incurred from long-term borrowings and finance lease liabilities.

Other non-operating expenses also included a loss on derivatives of $81 for the year ended December 31, 2025.

**Liquidity and Capital Resources (in thousands, except as otherwise noted)**

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***Sources of Liquidity***

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our business is capital intensive and requires expenditures for, among other things, the purchase and maintenance of equipment used in our operations. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, including expansion projects and principal and interest payments related to our outstanding indebtedness. The Company plans to continue to fund its operations through its existing cash and cash equivalents, as well as through future equity offerings, debt financing, other third-party funding, and operational cash flow. Our liquidity as of December 31, 2025 and 2024 is as follows (in thousands):

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| | | |
|:---|:---|:---|
|  | **December 31, <br> 2025** | **December 31, <br> 2024** |
| Cash and cash equivalents | $461 | $554 |
| Working capital | $(102) | $295 |
| Accumulated deficit | $(1034) | $(547) |

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Our future liquidity requirements will depend on many factors, including funding needed to support other business opportunities and expenditures, and funding for working capital and general corporate purposes. We expect to satisfy our liquidity requirements through cash on hand, cash generated from operations and additional financing. During the twelve months ended December 31, 2024, we raised $338 of additional capital financing through a paid-in capital increase.

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***Cash Flows***

Cash flows associated with operating, investing, and financing activities for the twelve months ended December 31, 2025 and December 31, 2024 are summarized as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Change** | **Change** |
|  | **2025** | **2024** | **($)** | **(%)** |
| Net cash (used in) operating activities | $(312) | $(88) | (224) | 254.5 |
| Net cash provided by (used in) investing activities | 209 | (136) | 345 | 253.7 |
| Net cash (used in) provided by financing activities | (5) | 555 | (560) | 100.9 |
| Decrease (increase) in cash and cash equivalents | $(108) | $331 | (439) | 132.6 |

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*Net Cash Used in Operating Activities*

Cash flows used in operating activities were $312 for the year ended December 31, 2025, compared to $88 for the year ended December 31, 2024, representing an increase in cash outflows of $224, or 254.5%.

The increase in cash outflows was primarily attributable to a higher net loss, which increased from $151 in 2024 to $489 in 2025. This was partially offset by an increase in non-cash adjustments, which rose from $34 in 2024 to $125 in 2025. In addition, changes in operating assets and liabilities increased from $28 in 2024 to $52 in 2025, further contributing to the increase in cash outflows.

 

*Net Cash Provided by (Used in) Investing Activities*

Cash flows provided by investing activities were $209 for the year ended December 31, 2025, compared to cash flows used in investing activities of $136 for the year ended December 31, 2024, representing an improvement of $345.

This change was primarily attributable to net cash inflows from short-term financial instruments, including proceeds of $211 from dispositions, as well as increased cash inflows from the collection of loans of $70. These inflows were partially offset by cash outflows related to acquisitions of property, plant and equipment of $28, acquisitions of intangible assets of $22, increases in leasehold deposits of $16, and increases in loans of $18. Additionally, repayments of government grants contributed $11 to investing cash inflows.

 

*Net Cash (Used in) provided by Financing Activities*

Cash flows used in financing activities were $5 for the year ended December 31, 2025, compared to cash flows provided by financing activities of $555 for the year ended December 31, 2024.

The decrease was primarily attributable to the absence of financing inflows such as proceeds from long-term borrowings and capital increases that were recognized in the prior year. In 2025, financing activities mainly consisted of cash outflows of $5 related to the repayment of finance lease liabilities.

Cash flows associated with operating, investing, and financing activities for the twelve months ended December 31, 2024 and December 31, 2023 are summarized as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Change** | **Change** |
|  | **2024** | **2023** | **($)** | **(%)** |
| Net cash used in operating activities | $(88) | $(191) | 103 | 53.9 |
| Net cash used in investing activities | (136) | (200) | 64 | 32.0 |
| Net cash provided by financing activities | 555 | 15 | 540 | 3600.0 |
| Net increase(decrease) in cash and cash equivalents | $331 | $(376) | 707 | 188.0 |

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*Net Cash Used in Operating Activities*

Cash flows used in operating activities were $88 for the year ended December 31, 2024 compared to $191 for the year ended December 31, 2023, representing a decrease in cash outflows of $103, or 53.9%. The decrease is related to several factors. There was a reduction in net loss from $172 for the year ended December 31, 2023 to $151 for the corresponding period in 2024. Additionally, there was an increase in adjustments for non-cash items, rising from $20 in 2023 to $34 in 2024, and a change in assets and liabilities from a decrease of $39 to an increase of $28.

 

*Net Cash Used in Investing Activities*

Cash flows used in investing activities were $136 for the year ended December 31, 2024 compared to $200 for the year ended December 31, 2023, a decrease of $64, or 32.0%. The decrease was primarily attributable to several factors. Cash outflows related to the purchase of property, plant, and equipment decreased by $14, while cash outflows increased by $140 due to the acquisition of short-term financial instruments. At the same time, cash inflows of $291 were generated from the disposition of short-term financial instruments. Additionally, cash inflows increased by $53 due to the repayment of government grants, and cash outflows related to acquisitions of intangible assets and increases in leasehold deposits decreased by $23. Furthermore, cash outflows of $462 were incurred due to an increase in loans, partially offset by cash inflows of $389 from the collection of loans.

*Net Cash Provided by Financing Activities*

Cash flows provided by financing activities were $555 for the year ended December 31, 2024, primarily due to a cash inflow of $338 from a capital increase through the issuance of new shares, a cash outflow of $2 related to share issuance costs, a cash outflow of $25 from the repayment of finance lease liabilities, and a cash inflow of $244 from proceeds from long-term borrowings.

Cash flows associated with operating, investing, and financing activities for the years ended December 31, 2023 and December 31, 2022 are summarized as follows:

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***Debt***

The Company borrowed $218 from Hana Bank in South Korea in May 2022. The loan matures in May 2027 and is subject to an interest rate ranging from 1.06% to 2.04%. The Company is providing its building and attached land as collateral to the lender in connection with a facility loan, and the building is currently being used as the Company's research center. Additionally, the Company borrowed $227 from Hana Bank in South Korea in July 2024. The loan matures in May 2029 and is subject to an interest rate of 0.46% to 0.51%. The Company benefits from a 5.5% interest rate subsidy provided for loans by the Korea Institute for Advancement of Technology.

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*Dissenting Shareholder Appraisal Rights*

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co., Ltd. ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In connection with the transaction, the Company recognized a derivative liability of $81,060 and a corresponding loss on derivative as of December 31, 2025.

In January 2026, the Company completed a comprehensive share exchange transaction pursuant to the approved share exchange agreement and became a wholly owned subsidiary of EMT Sub Co., Ltd. The payment amount was approximately $4.80 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date.

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***Contractual Obligations***

The following table presents a summary of our contractual obligations, including payments due by period, as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***($ in thousands)*** | **2026** | **2027** | **2028** | **2029** | **Total** |
| Operating lease<sup>(1)</sup> | 4 | 2 |  |  | 6 |
| Finance lease<sup>(1)</sup> | 7 | 7 | 4 |  | 18 |
| Debt obligations<sup>(2)</sup> |  | 255 | 132 | 45 | 432 |
| Total | 11 | 264 | 136 | 45 | 456 |

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(1) Future lease payment obligations for operating and finance
lease liabilities.

(2) Long-term debt principal repayment obligations for Hana bank
loans and the loan from the Company's CEO.

As of December 31 2025, there have been no material changes to our contractual obligations and commitments since December 31, 2025.

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***Going Concern***

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

However, substantial doubt about the Company's ability to continue as a going concern exists. Primarily due to a decline in sales associated with the business, the Company incurred losses of $489 and net cash outflows from operating activities of $312 for the year ended December 31, 2025. In addition, the Company reported negative working capital of $102 and cash and cash equivalents of $461 as of December 31, 2025.

Furthermore, the Company incurred losses of $151, $172, and $188 for the years ended December 31, 2024, 2023, and 2022, respectively, and net cash outflows from operating activities of $88, $191, and $223 for the same periods. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are not limited to, obtaining equity financing, issuing debt or entering into other financing arrangements, and restructuring operations to increase revenues and reduce expenses. However, based on the current economic environment and the Company's financial condition, the Company may be unable to access additional equity or debt financing when needed. As such, there can be no assurance that the Company will be able to obtain additional liquidity when needed or on acceptable terms, if at all.

The consolidated financial statements included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part, have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

**Quantitative and Qualitative Disclosures about Market Risk**

We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates.

 

*Interest Rate Risk*

The Company's cash and cash equivalents primarily consist of cash on hand and short-term, highly liquid investments with original maturities of three months or less from the date of purchase and are mainly comprised of bank deposits. As of December 31, 2025 and December 31, 2024, the Company had $461 and $554 of cash and cash equivalents, respectively. The Company's investments are exposed to market risk due to fluctuations in interest rates, which may affect its interest income and fair market value of its investments. However, due to the short-term nature of the Company's investment portfolio, the Company does not believe an immediate 10% increase or decrease in interest rates would have a material effect on the fair value of its portfolio. The Company therefore does not expect its operating results or cash flows to be materially affected by a sudden change in market interest rates.

**Off-Balance Sheet Arrangements**

During the period presented, the Company did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

**Critical Accounting Policies and Use of Estimates**

The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements. The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures of contingent assets and liabilities. Our significant accounting policies are described in Note 1. Summary of Significant Accounting Policies of the accompanying consolidated financial statements of the Company included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing the consolidated financial statements.

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***Revenue Recognition***

The Company recognizes revenue at a point in time or over time when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.

***Inventories***

Inventories are stated at the lower of cost and net realizable value. The cost of inventories is determined by the specific identification method for raw materials, work in progress and finished goods.

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***Property, Plant and Equipment and Intangible Assets***

Property, plant, and equipment are stated at cost. Plant and equipment under finance leases are stated at the present value of the lease payments. Depreciation on property, plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of buildings is 40 years, while the estimated useful life of machinery and equipment, vehicles, furniture and fixtures is 5 years.

Intangible assets are stated at cost. Amortization on intangible assets is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful life of patent is 7 years, while the estimated useful life of software is 5 years.

The Company also receives grants from local government agencies and public institutions in relation to research activity. Government grants are either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received.

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***Foreign Currency***

The functional currency of Handa Lab is the Korean won. Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in "Gain/Loss on foreign currency" in the consolidated statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date, which are included in the "Effect of exchange rate changes on cash and cash equivalents, and restricted cash" in the consolidated statements of cash flows.

Assets and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end of each period. Revenue and expenses for the Company are translated into U.S. dollars using average rates that approximate those in effect during the period. Currency translation adjustments are included in "accumulated other comprehensive income (loss)," a separate component of stockholders' equity.

**Recent Accounting Pronouncements**

See Note 1.(24) to the audited annual consolidated financial statements for the years ended December 31, 2025 and 2024 included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part, for recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included as an exhibit to Amendment No. 2 to Form 8-K, of which this exhibit forms a part.