What did Evolution Metals & Technologies Corp. (EMAT) add in this 8-K/A amendment?

The amendment adds audited 2025 financial statements for EMAT, Evolution Metals LLC and four Korean subsidiaries, plus MD&A and unaudited pro forma combined 2025 financials . These materials show how the post-merger group would have looked for the full year 2025.

How much did Evolution Metals LLC lose in 2025 before combining with EMAT (EMAT)?

Evolution Metals LLC reported a net loss of about $617,995,844 for 2025. Most of this loss came from fair value changes and day-one losses on derivative-linked financing and credit loss allowances, rather than from operating expenses alone.

What is EMAT’s going concern status based on the newly filed 2025 financials?

Management and auditors state there is substantial doubt about the company’s ability to continue as a going concern. EM LLC ended 2025 with $11.7M in cash and a working capital deficit near $659.955M , and the business plan depends on securing additional capital.

How large are the derivative liabilities affecting EMAT’s 2025 results?

At December 31, 2025, the July Investment Agreement Derivative was valued at about $379,204,796 , and CPU Share Allocation Obligations totaled roughly $292,679,981 . These Level III fair value liabilities generated large non-cash expenses in 2025.

What cash and financing activity did Evolution Metals LLC report for 2025?

EM LLC finished 2025 with $11,684,923 in cash , after $23,697,000 of net cash provided by financing activities, mainly from issuing convertible preferred units, and $8,612,478 of net cash used in operations plus $6,014,463 used in investing activities.

How does the EMAT business combination relate to Evolution Metals LLC’s 2025 statements?

EM LLC closed its business combination with Welsbach Technology Metals Acquisition Corp. on January 5, 2026, forming EMAT. The 2025 EM LLC financials and unaudited pro forma information show performance and capital structure prior to and as if combined for that year.

Evolution Metals adds 2025 EM LLC results

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-2
Balance Sheet as of December 31, 2025 and 2024		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-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-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-6
Notes to Financial Statements		F-7

F-1

Report of Independent Auditors

To the Board of Directors of and
Stockholders of Evolution Metals and
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

F-2

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31, 2025			December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	11,684,923		$	2,614,710
Prepaid expenses and other current assets		58,679			23,191
Notes receivable, current, net		1,493,348			957,717
Notes receivable, related party, net		4,167,451			1,624,850
Convertible notes receivable, net		—			1,981,420
Total current assets		17,404,401			7,201,888
Deferred transaction costs		9,265,298			3,994,751
Notes receivable, net of current portion, net		—			4,500,000
TOTAL ASSETS	$	26,669,699		$	15,696,639

LIABILITIES AND MEMBERS’ DEFICIT
Current liabilities
Accounts payable	$	4,651,165		$	1,523,278
Accrued expenses		339,471			84,337
Notes payable, related party		483,582			—
July Investment Agreement Derivative (Note 8)		379,204,796			53,231,638
CPU Share Allocation Obligations (Note 8)		292,679,981			10,231,516
Total current liabilities		677,358,995			65,070,769
TOTAL LIABILITIES		677,358,995			65,070,769

COMMITMENTS AND CONTINGENCIES (NOTE 13)

MEMBERS’ DEFICIT
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
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			—
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		26,261,904			9,587,352
Accumulated deficit		(676,957,426	)		(58,961,582	)
Accumulated other comprehensive income		6,126			—
TOTAL MEMBERS’ DEFICIT		(650,689,296	)		(49,374,130	)
TOTAL LIABILITIES AND MEMBERS’ DEFICIT	$	26,669,699		$	15,696,639

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

F-3

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	For the Year Ended December 31, 2025			For the Period from February 8, 2024 (inception) to December 31, 2024
Operating expenses:
General and administrative expenses	$	7,948,985		$	3,598,833
Sales and marketing		341,804			202,641
Loss from operations		(8,290,789	)		(3,801,474	)

Other income (expense):
Change in fair value of CPU Share Allocation Obligations		(274,278,481	)		(1,860,869	)
Change in fair value of July Investment Agreement Derivative		(325,973,158	)		(15,571,302	)
Day one loss on CPU Share Allocation Obligations		(403,536	)		(227,994	)
Day one loss on July Investment Agreement Derivatives		—			(20,160,319	)
Interest income		117,772			779,206
Allowance for credit losses		(9,417,652	)		(18,118,830	)
Other income		250,000			—
Total other expense, net		(609,705,055	)		(55,160,108	)

Net loss	$	(617,995,844	)	$	(58,961,582	)
Other comprehensive income (loss):
Foreign currency translation adjustment		6,126			—
Total other comprehensive income		6,126			—
Comprehensive loss	$	(617,989,718	)	$	(58,961,582	)

Weighted average participating member units, basic and diluted		1,000,000			1,000,000
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.

F-4

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, Voting						Member Units, Non-Voting				Convertible Preferred Units				Accumulated			Accumulated Other Comprehensive		Members’
	Units			Amount			Units		Amount		Units		Amount		Deficit			Income		Deficit
Balance, February 8, 2024 (inception)		—		$	—			—	$	—		—	$	—	$	—		$	—	$	—
Issuance of member units		1,000,000			100			—		—		—		—		—			—		100
Issuance of convertible preferred units		—			—			—		—		35,230,021		9,587,352		—			—		9,587,352
Net loss		—			—			—		—		—		—		(58,961,582	)		—		(58,961,582	)
Balance, December 31, 2024		1,000,000			100			—		—		35,230,021		9,587,352		(58,961,582	)		—		(49,374,130	)
Issuance of convertible preferred units		—			—			—		—		24,441,000		16,674,552		—			—		16,674,552
Conversion of member units, voting to member units non-voting		(900,000	)		(90	)		900,000		90		—		—		—			—		—
Foreign currency translation adjustment		—			—			—		—		—		—		—			6,126		6,126
Net loss		—			—			—		—		—		—		(617,995,844	)		—		(617,995,844	)
Balance, December 31, 2025		100,000		$	10			900,000	$	90		59,671,021	$	26,261,904	$	(676,957,426	)	$	6,126	$	(650,689,296	)

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

F-5

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended December 31, 2025			For the Period from February 8, 2024 (inception) to December 31, 2024
Cash flows from operating activities
Net loss	$	(617,995,844	)	$	(58,961,582	)
Adjustments to reconcile net loss to net cash used in operating activities
Allowances for credit losses		9,417,651			18,118,830
Day one loss on CPU Share Allocation Obligations		403,536			227,994
Day one loss on July Investment Agreement Derivatives		—			20,160,319
Change in fair value of CPU Share Allocation Obligations		274,278,481			1,860,869
Change in fair value of July Investment Agreement Derivative		325,973,158			15,571,302
Share-based compensation		—			40,000
Paid in kind – interest		—			(709,467	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(35,527	)		(23,191	)
Accounts payable		(909,067	)		576,731
Accrued expenses		255,134			87
Net cash used in operating activities		(8,612,478	)		(3,138,108	)

Cash flows from investing activities
Collection of notes receivable		200,000			—
Issuance of notes receivable, related party		(5,085,201	)		(3,249,700	)
Issuance of notes receivable		(1,127,262	)		(10,723,650	)
Acquisition of notes receivable		(2,000	)		—
Issuance of convertible notes receivable		—			(12,500,000	)
Net cash used in investing activities		(6,014,463	)		(26,473,350	)

Cash flows from financing activities
Proceeds from issuance of convertible preferred units		24,441,000			17,730,005
Proceeds from notes payable, related party		489,737			—
Proceeds from July Investment Agreement		—			17,500,017
Proceeds from issuance of member units		—			100
Payments for deferred transaction costs		(1,233,737	)		(3,003,954	)
Net cash provided by financing activities		23,697,000			32,226,168
Effect of exchange rate changes on cash		154			—
Net change in cash		9,070,213			2,614,710
Cash, beginning of period		2,614,710			—
Cash, end of period	$	11,684,923		$	2,614,710

Supplemental cash flow information:
Taxes paid	$	—		$	—
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	$	8,169,984		$	8,370,647
Fair value of July Investment Agreement Derivative issued in connection with issuance of certain convertible preferred units	$	—		$	37,660,336
Deferred transaction costs included within accounts payable and accrued expenses	$	4,036,954		$	990,797

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

F-6

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).

F-7

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.

F-8

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.

F-9

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).

F-10

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.

F-11

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 receivable		Convertible notes receivable		Notes receivable – related party
Allowance Balance, February 8, 2024 (Inception)	$	—	$	—	$	—
Provision		5,265,933		11,228,047		1,624,850
Write offs		—		—		—
Recoveries and other		—		—		—
Allowance Balance, December 31, 2024	$	5,265,933	$	11,228,047	$	1,624,850
Provision		4,893,632		1,981,420		2,542,600
Write offs		—		—		—
Recoveries and other		—		—		—
Allowance Balance, December 31, 2025	$	10,159,565	$	13,209,467	$	4,167,450

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

	1-30 Days Past Due		31-60 Days Past Due		Greater than 61 Days Past Due		Total
December 31, 2025
Notes Receivable	$	—	$	9,000,000	$	331,785	$	9,331,785
Convertible Notes Receivable (not accruing interest)		—		—		13,209,467		13,209,467
Notes Receivable, Related Party		—		—		—		—
	$	—	$	9,000,000	$	13,541,252	$	22,541,252

	1-30 Days Past Due		31-60 Days Past Due		Greater than 61 Days Past Due		Total
December 31, 2024
Notes Receivable	$	—	$	—	$	—	$	—
Convertible Notes Receivable		13,209,467		—		—		13,209,467
Notes Receivable, Related Party		—		—		—		—
	$	13,209,467	$	—	$	—	$	13,209,467

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).

F-12

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.

F-13

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.

F-14

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.

F-15

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.

F-16

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:

F-17

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Target	Shares of Target’s common stock		Exchange Ratio		EM Units		Value
NS World, Co., Ltd. (“NSW”)		289,055		0.009427		2,725	$	12,970,000
Handa Lab Co., Ltd. (“Handa”)		380,800		0.004138		1,576	$	7,500,000
KCM Industry Co., Ltd. (“KCM”)		21,666		0.1396		3,026	$	14,400,000
KMMI, Inc.(“KMMI”)		22,080		0.4187		9,244	$	44,000,000

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.

F-18

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.

F-19

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, 2025			December 31, 2024
CMR Advances (see Note 4)	$	9,000,000		$	9,000,000
WTMA Sponsor Notes		2,319,128			1,191,865
WTMA Co-Sponsor Note		331,785			331,785
Acquired Notes		2,000			—
Clever Note		—			200,000
Notes Receivable		11,652,913			10,723,650
Less: Allowance for credit losses		(10,159,565	)		(5,265,933	)
Less: Notes receivable, current portion, net of allowance for credit losses		(1,493,348	)		(957,717	)
Notes Receivable, net of current portion, net of allowance for credit losses	$	—		$	4,500,000

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.

F-20

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.

F-21

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.

F-22

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.

F-23

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 Preferred Units		Conversion Ratio		New EM common shares
March 2024		1,100,003		1:1		1,100,003
April 2024		864,655		1:1		864,655
May 2024		1,265,347		1:1		1,265,347
June 2024		2,500,000		5:1		500,000
July 2024		19,500,016		5:1		3,900,003
August 2024		100,000		5:1		20,000
October 2024		5,700,000		5:1		1,140,000
November 2024		500,000		5:1		100,000
December 2024		3,700,000		5:1		740,000
January 2025		500,000		5:1		100,000

F-24

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Members’ Deficit (cont.)

	Convertible Preferred Units		Conversion Ratio		New EM common shares
February 2025		2,700,000		5:1		540,000
March 2025		1,850,000		5:1		370,000
March 2025		2,000,000		1:1		2,000,000
September 2025		16,550,000		6:1		2,758,333
October 2025		620,000		6:1		103,333
December 2025		221,000		6:1		36,833
Total		59,671,021				15,538,507

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
Money Market Funds	$	11,671,467	$	—	$	—	$	11,671,467
Total assets	$	11,671,467	$	—	$	—	$	11,671,467
Liabilities
July Investment Agreement Derivative	$	—	$	—	$	379,204,796	$	379,204,796
CPU Share Allocation Obligation		—		—		292,679,981		292,679,981
Total liabilities	$	—	$	—	$	671,884,777	$	671,884,777

F-25

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
Money Market Funds	$	2,588,289	$	—	$	—	$	2,588,289
Total assets	$	2,588,289	$	—	$	—	$	2,588,289
Liabilities
July Investment Agreement Derivative	$	—	$	—	$	53,231,638	$	53,231,638
CPU Share Allocation Obligation		—		—		10,231,516		10,231,516
Total liabilities	$	—	$	—	$	63,463,154	$	63,463,154

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 Investment Agreement Derivative (Level III)		CPU Share Allocation Obligation (Level III)
Balance, February 8, 2024 (inception)	$	—	$	—
Additions		37,660,336		8,370,647
Change in fair value		15,571,302		1,860,869
Balance, December 31, 2024		53,231,638		10,231,516
Additions		—		8,169,984
Change in fair value		325,973,158		274,278,481
Balance, December 31, 2025	$	379,204,796	$	292,679,981

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.

F-26

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.

July Investment Agreement Derivative:

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

	December 31, 2025	December 31, 2024	July 18, 2024 (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⁽¹⁾	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.

CPU Share Allocation Obligations:

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.

F-27

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, 2025	December 31, 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⁽¹⁾	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 (issuances)	October 2025 (issuances)	September 2025 (issuances)	March 2025 (issuances)	February 2025 (issuances)	December 2024 (issuances)	October 2024 (issuances)	July 2024 (issuance)
Expected Business Combination date	December 30, 2025	December 30, 2025	December 30, 2025	June 30, 2025	June 30, 2025	June 30, 2025	June 30, 2025	June 30, 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, 2024 (cancellation)	September 20, 2024 (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%

F-28

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).

F-29

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 Lab		KMMI		NS World		KCM		Total
Equity	$	2,702	$	16,141	$	6,485	$	5,423	$	30,751
Liabilities incurred to dissenting shareholders		4,814		27,951		6,507		9,006		48,278
Total estimated consideration	$	7,516	$	44,092	$	12,992	$	14,429	$	79,029

F-30

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 Lab			KMMI			NS World			KCM			Total
Total estimated consideration	$	7,516		$	44,092		$	12,992		$	14,429		$	79,029
Less: Net assets acquired
Historical net assets (liabilities)		353			(58	)		(1,710	)		(976	)		(2,391	)
Liabilities not assumed		81			471			110			152			813
Intangible assets (FV Step-up)		3,981			340			1,620			940			6,881
Property, plant and equipment (FV Step-up)		38			(308	)		21			(147	)		(396	)
Deferred tax liabilities (assets)		(804	)		(7	)		(328	)		(159	)		(1,297	)
Total identifiable net assets		3,649			439			(287	)		(190	)		3,610
Preliminary goodwill	$	3,867		$	43,653		$	13,279		$	14,619		$	75,419

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 December 31, (Unaudited)
in thousands	2025			2024
Pro Forma Revenue	$	6,833		$	6,581
Pro Forma Net Loss	$	(22,941	)	$	(63,642	)

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.

F-31

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-2
Report of Independent Auditors for the Year Ended December 31, 2024		F-3
Balance Sheets		F-5
Statements of Operations		F-7
Statements of Comprehensive Loss		F-8
Statements of Changes in Stockholders’ (Deficit) Equity		F-9
Statements of Cash Flows		F-10
Notes to the Financial Statements		F-11

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
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

F-2

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.

F-3

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

F-4

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

	Notes	December 31, 2025		December 31, 2024
Assets:
Cash and cash equivalents	1	$	47,964		4,541
Trade accounts receivable (Related party)	2,3,19		694,885		295,000
Non-trade account receivable	4		17,423		—
Non-trade account receivable (Related party)	4,19		—		153,000
Inventories	5		427,433		1,494,851
Prepaids and other current assets	1		3,362		10,022
Total current assets			1,191,067		1,957,414

Property, plant and equipment, net	7,8,9		2,698,298		2,599,386
Other non-current assets	1		5,874		17,007
Total non-current assets			2,704,172		2,616,393
Total assets		$	3,895,239		4,573,807

Liabilities and Stockholders’ (deficit) equity

Liabilities:
Trade accounts payable		$	47,535		53,700
Non-trade accounts payable			109,468		95,920
Short-term debt	9		300,718		278,911
Short-term debt (Related party)	9,19		575,650		436,055
Current portion of long-term debt	9		368,074		253,306
Derivative liabilities	6		151,661		—
Current portion of finance lease liabilities	8		22,663		13,948
Current portion of defined severance benefits	16		109,184		55,218
Other current liabilities			44,823		15,955
Total current liabilities			1,729,776		1,203,013

Long-term debt	9		1,857,899		2,053,776
Convertible debt	6,10		—		882,236
Defined severance benefits	16		93,466		64,972
Long-term taxes payable	13		33,135		30,378
Finance lease liabilities	8		47,011		45,200
Total non-current liabilities			2,031,511		3,076,562
Total liabilities			3,761,287		4,279,575

F-5

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

	Notes	December 31, 2025			December 31, 2024
Mezzanine equity:
Redeemable convertible preferred stock			1,106,583			—
Total mezzanine equity			1,106,583			—

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		73,174			73,174
Retained earnings (Accumulated deficit)			(921,048	)		303,915
Accumulated other comprehensive loss			(124,757	)		(82,857	)
Total (deficit) equity			(972,631	)		294,232
Total Liabilities and Stockholders’ (deficit) equity		$	3,895,239			4,573,807

See accompanying notes to financial statements.

F-6

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

	Notes	2025			2024
Net revenues	2	$	995			672
Net revenues (Related party)	2,19		1,298,956			115,324
Total net revenues			1,299,951			115,996
Cost of sales			(1,747,812	)		(961,893	)

Gross loss			(447,861	)		(845,897	)

Other operating income	14		—			61,718
Other operating expense	14		—			(8,092	)
Selling, general, and administrative expenses			(360,540	)		(493,427	)
Operating loss			(808,401	)		(1,285,698	)

Other income	19		43,359			4,539
Other expense	19		(733	)		(2,359	)
Interest income			2,586			2,016
Interest expense			(110,205	)		(116,486	)
Interest expense(Related party)	19		(24,050	)		(10,159	)
Gain on foreign currency			4,024			20,258
Loss on foreign currency			(12,221	)		—
Loss on derivatives			(153,013	)		—
Gain on financial instruments			72,536			—
Loss on financial instruments	6,10		(252,390	)		(141,146	)
Loss before tax			(1,238,508	)		(1,529,035	)
Income tax expense	11		2,032			1,741
Loss for the year		$	(1,240,540	)		(1,530,776	)

See accompanying notes to financial statements.

F-7

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

	Notes	2025			2024
Loss for the year		$	(1,240,540	)		(1,530,776	)

Other comprehensive loss:
Foreign currency translation adjustments, net of tax			(22,020	)		(126,360	)
Actuarial (loss) gain on defined severance benefits, net of tax	16		(19,880	)		58,646
Total other comprehensive loss			(41,900	)		(67,714	)
Total comprehensive loss		$	(1,282,440	)		(1,598,490	)

See accompanying notes to financial statements.

F-8

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

	Common stock		Additional paid-in capital		Accumulated other comprehensive income (loss)			Retained earnings			Total stockholders’ equity
Balances at January 1, 2024	$	73,174		—		(15,143	)		1,834,691			1,892,722
Loss for the year		—		—		—			(1,530,776	)		(1,530,776	)
Foreign currency translation adjustments, net of tax		—		—		(126,360	)		—			(126,360	)
Actuarial gain on defined severance benefits, net of tax		—		—		58,646			—			58,646
Balances at December 31, 2024	$	73,174		—		(82,857	)		303,915			294,232

Balances at January 1, 2025	$	73,174		—		(82,857	)		303,915			294,232
Loss for the year		—		—		—			(1,240,540	)		(1,240,540	)
Accretion of redeemable preferred stock to redemption value		—		—		—			15,577			15,577
Foreign currency translation adjustments, net of tax		—		—		(22,020	)		—			(22,020	)
Actuarial loss on defined severance benefits, net of tax		—		—		(19,880	)		—			(19,880	)
Balances at December 31, 2025	$	73,174		—		(124,757	)		(921,048	)		(972,631	)

See accompanying notes to financial statements.

F-9

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

		2025			2024
Cash flows from operating activities
Loss for the year		$	(1,240,540	)		(1,530,776	)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Inventory write-down adjustment			219,010			827,538
Depreciation and amortization			140,965			141,471
Interest expenses			4,272			10,145
Income taxes			2,032			1,741
Pension benefits provision			72,040			96,791
Loss on derivatives			153,013			—
Loss on valuation of financial instrument			252,390			141,146
Miscellaneous Loss			—			813
Loss on Foreign Exchange Translation			12,221			—
Gain on Disposal of Financial Instrument			(72,536	)		—
Gain on Foreign Exchange Translation			—			(20,258	)
Interest Income			(2,542	)		(1,967	)
Non-cash others			(6,389	)		8,771
Change in operating assets and liabilities:
Trade accounts receivable			(396,169	)		351,911
Non-trade account receivable			(3,754	)		(5,613	)
Inventories			895,794			(730,418	)
Prepaids and other current assets			1,081			(827	)
Trade accounts payable			(7,545	)		20,977
Non-trade accounts payable			11,301			(13,269	)
Defined severance benefits and other			(7,031	)		(35,924	)
Income taxes payable			45			18,420
Other current liabilities			28,731			(15,678	)
Net cash provided by (used in) operating activities:			56,389			(735,006	)

Cash flows from investing activities
Proceeds from Short-term financial instruments			—			168,624
Proceeds from disposal of property, plant, and equipment	7		—			59,238
Acquisitions of property, plant, and equipment			(1,020	)		(47,655	)
Acquisition of Short-term financial instruments			—			(29,326	)
Net cash (used in) provided by investing activities:			(1,020	)		150,881

Cash flows from financing activities
Proceeds from short-term borrowings			15,117			43,989
Proceeds from short-term borrowings (Related party)			256,641			539,597
Repayment of short-term borrowings (Related party)			(126,563	)		(69,649	)
Repayment of long-term borrowings			(138,769	)		(6,298	)
Payment of lease liabilities			(17,817	)		(25,017	)
Repayment of convertible bonds			(281	)		—
Net cash (used in) provided by financing activities:		$	(11,672	)		482,622

Effect of exchange rate changes on cash and cash equivalents			(274	)		(6,506	)
Net increase (decrease) in cash and cash equivalents			43,697			(101,503	)
Cash and cash equivalents at beginning of year			4,541			112,550
Cash and cash equivalents at end of year		$	47,964			4,541

See accompanying notes to financial statements.

F-10

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-11

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-12

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-13

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-14

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-15

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-16

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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
Finished goods^(*1)	$	1,298,956		72,582
Merchandise & Others^(*2)		995		43,414

(*1)	Revenue from sales of NdFeb Powder

(*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
NS World Co., Ltd.	$	694,885		295,000

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.

F-17

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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	$	23,619			22,109
Raw materials		74,907			87,879
Work in process		518,128			349,210
Write-down of work in process		(365,715	)		(156,832	)
Work in process, net		152,413			192,378
Finished goods		363,007			1,810,909
Write-down of finished goods		(186,513	)		(618,424	)
Finished goods, net		176,494			1,192,485
Total	$	427,433			1,494,851

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 Level	2025		2024
Convertible debt	Financial liabilities	Level 3	$	—		882,236
Dissenting shareholder appraisal rights	Derivative liabilities	Level 3		151,661		—

F-18

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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						Dissenting shareholder appraisal rights
(in US dollars)	2025			2024			2025			2024

Balance as of January 1	$	882,236			856,497			-			-
Loss in fair value		252,390			141,146			153,013			-
Gain on extinguishment of Debt		(72,536	)		-			-			-
Repayment		(281	)		-			-			-
Conversion to redeemable convertible preferred stocks		(1,091,448	)		-			-			-
Changes in foreign currency translation		29,639			(115,407	)		(1,352	)		-

Balance as of December 31		-			882,236			151,661			-

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				2024
(in US dollars)	Increase		Decrease		Increase			Decrease

Volatility of underlying stock price (+/-10%p)	$	-		-		(45,574	)		31,791
Underlying stock price (+/- 5%p)		-		-		(33,422	)		42,079

F-19

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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:

	Useful	Initial Cost				Carrying Amount
(in US dollars)	Lives	2025		2024		2025		2024
Land^(*1)	—	$	1,143,914		1,116,600		1,143,914		1,116,600
Buildings, structures and related equipment^(*1)	40		991,073		967,409		908,482		910,975
Machinery and equipment^(*1)	8		550,979		537,823		310,221		370,041
Vehicles	5		30,901		30,163		11,411		17,172
Furniture and fixtures	8		117,813		114,014		77,354		88,896
Construction in progress			168,204		20,408		168,205		20,408
Finance lease right-of-use assets	2 – 5		131,410		104,319		78,711		75,294
Total		$	3,134,294		2,890,736		2,698,298		2,599,386

(*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.

F-20

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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:
Depreciation of right-of-use assets	$	25,388		19,645
Interest on lease liabilities		6,981		6,188
Sub-total		32,369		25,833
Short-term lease expense		6,218		12,898
Total	$	38,587		38,731

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

(in US dollars)	2025			2024
Finance Leases:
Finance lease right-of-use assets	$	131,410			104,319
Less: Accumulated amortization assets		(52,699	)		(29,025	)
Property, plant and equipment, net	$	78,711			75,294
Long-term finance lease liabilities	$	47,011			45,200
Current portion of finance lease liabilities		22,663			13,948
Total	$	69,674			59,148

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:
Cash used in operations for finance leases	$	24,798		25,017
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	24,539		35,360
Weighted average remaining lease term:
Finance leases		3.14 years		2.78 years

F-21

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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 Finance leases
2026	$	28,676
2027		25,274
2028		16,262
2029		8,101
2030		2,215
Total undiscounted lease payments		80,528
Less imputed interest		(10,854	)
Total lease liabilities	$	69,674

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) Maturity Date	Interest rate (%)		Borrowing Limit			2025		2024
Sep. 2026		4.6		436,267	^(*1)	$	436,267		436,055
Jun. 2026		4.6		41,815			41,815		40,816
Mar. 2026		0.0		14,984			14,984		—
May. 2026		6.0		139,383			139,383		—
Oct. 2026		9.5		243,919			243,919		238,095
Total short-term debt						$	876,368		714,966

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

F-22

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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) Description(*1)	Maturity Date	Interest Rate (%)		Borrowing Limit		2025		2024
Operating Funds Loan	Oct. 2026		12.0	$	139,383	$	121,960		136,054
Operating Funds Loan	Jan. 2026 – Dec. 2026		2.87		69,691		23,165		22,612
Operating Funds Loan	Jan. 2026 – Dec. 2026		2.92		348,456		116,077		94,640
Facility Funds Loan	Aug. 2026 – Dec. 2026		2.54 – 3.61		1,533,208		106,872		—
Total current portion of long-term debt							368,074		253,306

(*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) Description	Maturity Date	Interest Rate (%)		Borrowing Limit		2025			2024
Facility Funds Loan^{(*1, 2, 3)}	Sep. 2027 – Jul. 2030		3.61	$	1,533,208	$	1,184,752			1,156,463
Facility Funds Loan^{(*1, 2, 3)}	Mar. 2027 – Sep. 2032		2.54		627,221		627,221			612,245
Operating Funds Loan^(*1)	Oct. 2026		12.0		139,383		121,960			136,054
Operating Funds Loan	Sep. 2027		2.87		69,691		40,539			62,184
Operating Funds Loan	Feb. 2028		2.92		348,456		251,501			340,136
Total principal long-term debt						$	2,225,973			2,307,082
Less: current portion of long-term debt							(368,074	)		(253,306	)
Total long-term debt						$	1,857,899			2,053,776

(*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).

F-23

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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	$	368,073
2027		525,423
2028		411,318
2029		391,972
2030		320,113
Thereafter		209,074
Total	$	2,225,973

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) Maturity Date		Interest rate (%)				2025				2024
Sep. 2027 – Jun. 2030			0.25				—				882,236

(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.

F-24

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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%

F-25

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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
Korea	$	2,032		1,741

Deferred taxes
Korea		—		—
Income tax expense	$	2,032		1,741

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

(in US dollars)		2025				2024
Korea		$	(1,238,508	)			(1,529,035	)

(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	$	(136,236	)		(151,374	)
Differences resulting from:
Other non-deductible expense		(79,130	)		5,967
Tax credit		4,407			(9,661	)
Change in valuation allowance		212,270			135,178
Provision for uncertain tax position		2,032			1,716
True-up		—			19,890
Other		(1,311	)		25
Income tax (benefit) expense	$	2,032			1,741
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:
Accrued vacation	$	2,489			2,705
Lease liabilities		7,664			5,856
Accrued payable		3,660			1,188
Prepaids and other current assets		1,588			1,772
Convertible debt		—			19,995
Defined severance benefits		29,605			18,344
Write-downs of Inventories		60,727			80,688
Derivative liabilities		135,681			—
Net operating loss		199,476			43,232
Tax credit carry-forward		28,108			31,700
Valuation allowance		(411,372	)		(179,731	)
Total		57,644			25,749

F-26

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

12. Income Taxes (cont.)

(in US dollars)	2025			2024
Deferred tax liabilities:
Non-trade account receivable		—			(1,861	)
Right-of-use assets		(8,658	)		(7,454	)
Property, plant and equipment		(11,372	)		(9,988	)
Inventory		(30,281	)
Pension plan asset		(7,314	)		(6,446	)
Total		(57,644	)		(25,749	)
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	$	30,378		32,818
Increases in balances related to prior year tax positions^(*1)		2,032		2,124
Foreign currency translation adjustment		725		(4,156	)
Other		—		(408	)
Balance as of December 31	$	33,135		30,378

(*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.

F-27

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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	$	175,909			120,543
Plan assets		(66,725	)		(65,325	)
Defined severance benefits		93,466			64,972
Funded Status	$	202,650			120,190

(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:
Benefit obligation at beginning of year	$	185,515			169,469
Service costs		72,040			96,791
Interest costs		4,272			3,957
Actual benefit paid		(8,975	)		(3,021	)
Actuarial loss (gain)		12,692			(57,994	)
Foreign currency exchange rate changes		3,831			(23,687	)
Benefit obligation at end of year	$	269,375			185,515

F-28

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

16. Defined Severance Benefits (cont.)

(in US dollars)	2025			2024
Changes in plan assets:
Fair value of plan assets at beginning of year	$	65,325			37,617
Contribution by the employer		7,031			35,924
Return on plan assets		2,542			1,967
Actual benefit paid		(8,975	)		(3,021	)
Actuarial gain		(421	)		157
Administrative cost		(377	)		(183	)
Foreign currency exchange rate changes		1,600			(7,136	)
Fair value of plan assets at end of year	$	66,725			65,325

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	$	72,040			96,791
Interest costs		4,272			3,957
Expected return on plan assets		(2,542	)		(1,967	)
Administrative cost		377			183
Amortization of net actuarial loss		(6,767	)		495
Net periodic benefit costs recognized	$	67,380			99,459

(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	$	37,415			(21,231	)
Net actuarial (loss) gain, net of tax		(13,113	)		58,151
Amortization of accumulated net actuarial (loss) gain		(6,767	)		495
Balance at the end of the year	$	17,535			37,415

(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	$	123,491		120,543
Between 1 – 2 years		7,529		7,349
Between 2 – 5 years		11,324		11,053
Over 5 years		78,296		76,427
Total	$	220,640		215,372

F-29

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

17. Supplemental Cash Flow Information

(in US dollars)	2025			2024
Supplemental disclosure of cash flow information:
Cash receipt during the period for interest	$	44			526
Cash paid during the period for interest		(105,459	)		(115,509	)
Income taxes paid		45			18,420

Non-cash investing and financing activities:
Reclassification of long-term borrowings to current liabilities	$	246,115			253,306
Finance lease right-of-use assets		26,739			43,832

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) Provider		Type		Guaranteed Amount				Beneficiary
Seoul Guarantee Insurance		Payment Guarantee		$	70,737			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) Financial Institution	Type	Credit Line		Used Amount
Industrial Bank of Korea^(*1)	Facility Funds Loan^(*2)	$	1,533,208		1,184,752
	Facility Funds Loan^(*2)		627,221		627,221
	Operating Funds Loan		243,919		243,919
Shinhan Bank^(*1)	Operating Funds Loan		139,383		121,960
Korea SMEs and	Operating Funds Loan		69,691		40,539
Startups Agency	Operating Funds Loan		348,456		251,501
Total		$	2,961,878		2,469,892

(*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).

F-30

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.^(*1)
		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	$	1,299,951		115,324
Purchase of raw materials		—		44,350
Interest expense		24,050		10,159

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

(in US dollars)	2025		2024
Trade accounts receivable	$	694,885		295,000
Non-trade account receivable		—		153,000

(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	$	436,055			—
Borrowings		256,641			539,597
Repayments		(126,653	)		(69,649	)
Gain/Loss on foreign currency translation		(9,517	)		33,893

Ending Short-term debt balance	$	575,650			436,055

(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		$	373,765

F-31

KCM INDUSTRY Co., Ltd.
Notes to the Financial Statements
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.

F-32

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-2
Report of Independent Auditors for the Year Ended December 31, 2024		F-3
Balance Sheets		F-5
Statements of Operations		F-6
Statements of Comprehensive Loss		F-7
Statements of Changes in Stockholders’ Equity		F-8
Statements of Cash Flows		F-9
Notes to the Financial Statements		F-10

F-1

Report of Independent Auditors

To the Board of Directors of Evolution Metals & Technologies Corp.
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

F-2

Report of Independent Auditors

The Shareholders and Board of Directors
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.

F-3

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

F-4

KMMI INC.
Balance Sheets
(in US dollars)

	Notes	December 31, 2025			December 31, 2024
Assets:
Cash and cash equivalents	1(5)	$	109,646			492,984
Restricted cash	1(5)		35,802			34,014
Short-term loan (Related parties)	14		—			408,163
Non-trade account receivable (Related parties)	14		70,842			50,783
Prepaids and other current assets			15,378			14,476
Total current assets			231,668			1,000,420

Property, plant and equipment, net	3		1,973,509			2,110,588
Operating lease right-of-use assets	5		31,757			72,311
Other non-current assets			148,473			97,717
Total non-current assets			2,153,739			2,280,616
Total assets		$	2,385,407			3,281,036

Liabilities and Stockholders’ Equity
Liabilities:
Non-trade accounts payables		$	67,492			43,680
Short-term debt	7		299,672			—
Current portion of long-term debt	7		46,414			37,891
Current portion of finance lease liabilities	5		16,487			16,811
Current portion of operating lease liabilities	5		12,959			33,597
Withholdings	1(10)		11,367			2,871
Current portion of defined severance benefits	11		20,387			5,795
Share repurchase liabilities	6		470,679			—
Other current liabilities	13		33,870			33,061
Total current liabilities			979,327			173,706

Long-term debt	7		1,309,828			1,330,544
Finance lease liabilities	5		—			16,093
Operating lease liabilities	5		—			12,649
Other non-current liabilities	4		76,919			62,400
Defined severance benefits	11		78,523			40,588
Total non-current liabilities			1,465,270			1,462,274
Total liabilities			2,444,597			1,635,980

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		9,337			9,337
Additional paid-in capital			3,937,986			3,937,986
Accumulated deficit			(3,841,835	)		(2,104,584	)
Accumulated other comprehensive income (loss)			(164,678	)		(197,683	)
Total equity			(59,190	)		1,645,056
Total liabilities and stockholders’ equity		$	2,385,407			3,281,036

See accompanying notes to financial statements.

F-5

KMMI INC.
Statements of Operations
(in US dollars)

	Notes	For the year ended December 31, 2025			For the year ended December 31, 2024
Net revenues		$	—			—
Cost of sales			—			—
Gross profit			—			—

Other operating income	1(19)		2,529			—
Selling, general, and administrative expenses	1(16)		(1,269,677	)		(868,400	)
Operating loss			(1,267,148	)		(868,400	)
Other income			4,518			3,187
Other expense			(1,592	)		(1,474	)
Interest income (Related parties)	14		18,984			19,795
Interest income			1,407			1,301
Interest expense			(29,651	)		(30,490	)
Gain on foreign currency			6,910			60,650
Loss on foreign currency			—			(37,089	)
Loss on share repurchase liabilities	6		(470,679	)		—
Loss before tax			(1,737,251	)		(852,520	)
Income tax expense	8		—			—
Loss for the year		$	(1,737,251	)		(852,520	)

See accompanying notes to financial statements.

F-6

KMMI INC.
Statements of Comprehensive Loss
(in US dollars)

	Notes	For the year ended December 31, 2025			For the year ended December 31, 2024
Loss for the year		$	(1,737,251	)		(852,520	)

Other comprehensive income (loss):
Foreign currency translation adjustments			51,598			(279,955	)
Actuarial loss on defined severance benefits, net of tax	11		(18,593	)		(3,956	)
Total other comprehensive income (loss)			33,005			(283,911	)
Total comprehensive loss		$	(1,704,246	)		(1,136,431	)

See accompanying notes to financial statements.

F-7

KMMI INC.
Statements of Changes in Stockholders’ Equity (Deficit)
(in US dollars)

	Common stock		Additional paid-in capital		Accumulated other comprehensive income (loss)			Accumulated deficit			Total stockholders’ equity
Balances at January 1, 2024	$	9,337		3,937,986		86,228			(1,252,064	)		2,781,487
Loss for the year		—		—		—			(852,520	)		(852,520	)
Foreign currency translation adjustments		—		—		(279,955	)		—			(279,955	)
Actuarial loss on defined severance benefits, net of tax		—		—		(3,956	)		—			(3,956	)
Balances at December 31, 2024	$	9,337		3,937,986		(197,683	)		(2,104,584	)		1,645,056

Balances at December 31, 2024	$	9,337		3,937,986		(197,683	)		(2,104,584	)		1,645,056
Loss for the year		—		—		—			(1,737,251	)		(1,737,251	)
Foreign currency translation adjustments		—		—		51,598			—			51,598
Actuarial loss on defined severance benefits, net of tax		—		—		(18,593	)		—			(18,593	)
Balances at December 31, 2025	$	9,337		3,937,986		(164,678	)		(3,841,835	)		(59,190	)

See accompanying notes to financial statements.

F-8

KMMI INC.
Statements of Cash Flows
(In US dollars)

	For the year ended December 31, 2025			For the year ended December 31, 2024
Cash flows from operating activities
Loss for the year	$	(1,737,251	)		(852,520	)

Adjustments to reconcile loss for the year to net cash used in operating activities:
Depreciation and amortization		207,690			201,706
Interest expense		29,651			30,490
Pension Benefits Provision		40,686			22,375
Loss on foreign currency		—			37,074
Gain on foreign currency		(6,910	)		—
Accretion expense		5,429			5,122
Loss on share repurchase liabilities		470,679			—
Others		(28,526	)		(39,872	)
Changes in operating assets and liabilities:
Prepaids and other current assets		(573	)		(4,420	)
Non-trade accounts payables		20,793			14,246
Withholdings		8,500			594
Payment of retirement benefits		(9,215	)		—
Net cash used in operating activities		(999,047	)		(585,205	)

Cash flows from investing activities
Acquisitions of property, plant and equipment		(18,176	)		(43,826	)
Increase in leasehold deposits		(65,672	)		—
Collection of loans		421,876			—
Other investing activities		17,259			—
Net cash provided by (used in) investing activities		355,287			(43,826	)

Cash flows from financing activities
Proceeds from short-term debt		302,344			109,972
Repayment from long-term debt		(39,164	)		—
Payment of finance lease liabilities		(17,376	)		(15,214	)
Net cash provided by financing activities	$	245,804			94,758
Effect of exchange rate changes on cash and cash equivalents, and restricted cash		16,406			(104,717	)
Net decrease in cash and cash equivalents, and restricted cash		(397,956	)		(534,273	)
Cash and cash equivalents, and restricted cash, at beginning of year		526,998			1,165,988
Cash and cash equivalents, and restricted cash, at end of year	$	145,448			526,998

See accompanying notes to financial statements.

F-9

KMMI INC.
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.

F-10

KMMI INC.
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.

F-11

KMMI INC.
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	$	11,367		2,871
	$	11,367		2,871

(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.

F-12

KMMI INC.
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.

F-13

KMMI INC.
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	$	—		1,317
Interest expense		29,651		30,490
Total	$	29,651		31,807

(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.

F-14

KMMI INC.
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.

F-15

KMMI INC.
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:

	Useful	Initial Cost				Accumulated depreciation						Net Carrying Value
(in US dollars)	Life Years	2025		2024		2025			2024			2025		2024
Buildings	30 to 40	$	970,652		947,475		(87,944	)		(54,370	)		882,708		893,105
Machinery	10		1,158,255		1,130,599		(275,674	)		(156,032	)		882,581		974,567
Vehicles	5		89,185		88,552		(49,475	)		(31,506	)		39,710		57,046
Facility equipment and fixtures	5 to 10		216,816		194,053		(60,115	)		(33,891	)		156,701		160,162
Finance lease right-of-use assets			71,209		69,509		(59,400	)		(43,801	)		11,809		25,708
Total		$	2,506,117		2,430,188		(532,608	)		(319,600	)		1,973,509		2,110,588

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
Carrying
Value

Pledged
Amount

Creditor

Relevant
Debt
Amount

Collateral Provided Asset:

Buildings

$

882,708

418,148

Industrial Bank of Korea

348,456

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.

F-16

KMMI INC.
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	$	49,952		51,530
Accretion expense		5,429		5,122
Foreign currency translation adjustments		1,174		(6,700	)
Ending balance	$	56,555		49,952

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	$	37,848		40,843
Finance lease expense:
Depreciation of right-of-use assets		14,657		15,283
Interest on lease liabilities		4,660		7,763
Sub-total		19,317		23,046
Short-term lease expense		670		3,299
Variable lease expense		317		205
Total	$	58,152		67,393

F-17

KMMI INC.
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:
Operating lease right-of-use assets	$	31,757			72,311
Non-current		—			12,649
Current portion of operating lease liabilities		12,959			33,597
Total	$	12,959			46,246

Finance leases:
Finance lease right-of-use assets	$	71,209			69,509
Less: Accumulated depreciation		(59,400	)		(43,801	)
Total	$	11,809			25,708

Non-current	$	—			16,093
Current portion of finance lease liabilities		16,487			16,811
Total	$	16,487			32,904

(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:
Operating cash flows from operating leases	$	29,873			34,110
Operating cash flows from finance leases		4,660			7,763
Financing cash flows from finance leases		17,376			15,214

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	—			14,673
Finance leases		—			—

Weighted average remaining lease term:
Operating leases		1.42 years			1.98 years
Finance leases		0.82 years			1.82 years

Weighted average discount rate:
Operating leases		10.04	%		9.02	%
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) Maturity	Operating leases			Finance leases
2026		15,198			17,853
Total undiscounted lease payments		15,198			17,853
Less imputed interest		(2,239	)		(1,366	)
Total	$	12,959			16,487

F-18

KMMI INC.
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 Level	2025		2024
Dissenting Shareholder Appraisal Rights	Financial liabilities	Level 3	$	470,679		—

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.

F-19

KMMI INC.
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^(1)**	Period	Interest rate (%)	2025		2024
Working capital loan	November 2025 – May 2026	6	$	160,290		—
Working capital loan	December 2025 – June 2026	6		69,691		—
Working capital loan	December 2025 – June 2026	6		69,691		—
Total			$	299,672		—

^(*1)

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^(1)**	Interest rate (%)	2025		2024
Individual cash loan	December 2022 – January 2027	1	$	278,765		272,109
Individual cash loan	March 2023 – January 2027	1		99,691		98,027
Individual cash loan	January 2023 – January 2027	1		250,000		250,000
Individual cash loan	January 2024 – January 2027	1		278,765		272,109
Total			$	907,221		892,245

^(*1)

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) Financial Institution	Description	Period	Interest rate (%)	Borrowing Limit		2025		2024
Korea SMEs and Startups Agency	Working capital loans	February 2023 – February 2028	2.97	$	139,383	$	100,564		136,054
Industrial Bank of Korea	Facility loans	April 2023 – April 2033	2.54		348,456		348,456		340,136
Total principal long-term debt						$	449,020		476,190
Less: current portion of long-term debt							46,414		37,891
Total						$	402,606		438,299

F-20

KMMI INC.
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 debt
2026	$	46,414
2027		982,679
2028		65,811
2029		58,075
2030		58,075
Thereafter		145,188
Total	$	1,356,242

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	$	(1,737,251	)		(852,520	)

(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	$	(191,098	)		(84,400	)
Differences resulting from:
Other non-deductible expenses		3,726			(364	)
Tax credits		(64,564	)		(51,577	)
Change in valuation allowance		248,834			131,820
Other		3,102			4,521
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.

F-21

KMMI INC.
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:
Provision	$	3,726			3,273
Property, plant and equipment		12,299			10,791
Accrued vacation		2,592			1,396
Asset retirement obligation		6,221			4,945
Share repurchase liabilities		51,317			—
Lease liabilities		3,239			7,836
Accrued expense		4,655			1,691
Short-term debt		—			—
Long-term debt		7,988			3,406
Defined severance benefits		6,289			4,592
Prepaids and other current assets		94			128
Net operating loss carry-forwards^(*1)		298,724			149,041
Tax credit carry-forwards^(*2)		279,014			209,680
Total deferred tax assets before valuation allowance		676,158			396,779
Valuation allowance		(657,303	)		(381,559	)
Total deferred tax assets		18,855			15,220

Deferred tax liabilities:
Other non-current assets		(13,515	)		(5,027	)
Right-of-use assets		(4,792	)		(9,704	)
Withholdings		(8	)		(7	)
Prepaids and other current assets		(540	)		(482	)
Construction in progress		—			—
Total deferred tax liabilities		(18,855	)		(15,220	)
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.

F-22

KMMI INC.
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		(98,910	)		(46,383	)
Funded Status	$	(98,910	)		(46,383	)

F-23

KMMI INC.
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	$	46,383			24,122
Service cost		40,686			22,296
Interest cost		1,528			853
Benefits paid		(9,215	)		—
Actuarial loss		18,852			4,036
Foreign currency translation adjustments		676			(4,924	)
Ending balance	$	98,910			46,383

Classification:
Current	$	20,387			5,795
Non-current		78,523			40,588

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	$	40,686		22,296
Interest cost		1,528		853
Amortization of net actuarial loss		259		80
Net periodic benefit cost recognized	$	42,473		23,229

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	$	(6,989	)		(3,033	)
Actuarial loss, net of tax		(18,852	)		(4,036	)
Amortization of net actuarial loss		259			80
Ending balance	$	(25,582	)		(6,989	)

(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	%

F-24

KMMI INC.
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	$	20,387		6,245
Between 1 – 2 years		12,324		4,487
Between 2 – 5 years		23,493		14,663
Over 5 years		64,808		36,628
Total	$	121,012		62,023

12.

Supplemental Cash Flow Information

(in US dollars)	2025			2024
Supplemental disclosure of cash flow information:
Cash receipt during the period for interest	$	1,407			1,301
Cash paid during the period for interest		(18,291	)		(20,203	)
Income taxes received(paid)		21			(197	)

Non-cash investing and financing activities:
Transferred from construction in progress to the appropriate property, plant and equipment		—			277,916
Reclassification of long-term loan(related parties) to short-term loan(related parties)		—			439,889
Reclassification of other non-current assets(related parties) to non-trade account receivable(related parties)		—			54,730
Transferred from withholdings to long-term debt		—			293,259
Reclassification of short-term debt to long-term debt		—			668,338

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:

(in US dollars)

Guaranteed Amount

Provider

Type

2025

2024

Beneficiary

Seoul Guarantee Insurance

Payment guarantee for trade payables

$

35,124

34,286

Air First Co., Ltd

Seoul Guarantee Insurance

Performance guarantee A for ARO

62,840

61,340

Korea Land and Housing Corp.

Seoul Guarantee Insurance

Performance guarantee B for ARO

1,610

1,571

Korea Land and
Housing Corp

Seoul Guarantee Insurance

Payment guarantee for subsidiary refund

2,507

—

Korea Occupational Safety and Health Agency

F-25

KMMI INC.
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 Kyung Won Moon

Other parties that can significantly influence the management or operating policies		ADE METALS INC. JNS INDUSTRY INC.

Management of the entity and members of their immediate families		Sun Mi Yu Young Hun Kim Hyuck Soo Lee Annabeth Chun Matthew Jiwon Chun Emily Yewon Chun Allen Chun Daren Chun Elin Chun Tae Hwan Yu Ji Hwan Yu Sin Ja Park Chang Soo Chun Yoo Heon Chun

(2)

Related party transactions are as follows:

Related parties	Transactions	2025		2024
ADE METALS INC.	Interest income	$	15,820		16,496
JNS INDUSTRY INC.	Interest income		3,164		3,299
ADE METALS INC.	Purchase of property, plant and equipment		3,934		—
JNS INDUSTRY INC.	Purchase of property, plant and equipment		—		24,798
JNS INDUSTRY INC.	Commission fee		844		—
Shareholders	Loss on share repurchase liabilities		470,679		—

F-26

KMMI INC.
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	$	—		340,136
ADE METALS INC.	Non-trade account receivable^(*1)		59,156		42,438
JNS INDUSTRY INC.	Short-term loan		—		68,027
JNS INDUSTRY INC.	Non-trade account receivable^(*1)		11,685		8,345
Shareholders	Share repurchase liabilities		470,679		—

^(*1)

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.

F-27

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-2
Report of Independent Auditors for the Year Ended December 31, 2024		F-4
Balance Sheets		F-6
Statements of Operations		F-7
Statements of Comprehensive Loss		F-8
Statements of Changes in Stockholders’ Deficit		F-9
Statements of Cash Flows		F-10
Notes to the Financial Statements		F-11

F-1

Report of Independent Auditors

To the Board of Directors of Evolution Metals & Technologies Corp. and
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.

F-2

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:

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Exercise professional judgment and maintain professional skepticism throughout the audit.

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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.

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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.

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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.

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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

F-3

Report of Independent Auditors

The Shareholders and Board of Directors
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.