Evolution Metals & Technologies Corp.

Note 1 - Description of Organization and Business Operations

Evolution Metals & Technologies Corp. (formerly known as Welsbach Technology Metals Acquisition Corp. or “WTMA”), a Delaware corporation, and collectively with its subsidiaries (the “Company,” “EM&T,” or “New EM”) is developing 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 and aerospace, while driving a sustainable future through efficient processing and the application of cutting edge autonomous and smart robotics. The Company has two direct wholly owned subsidiaries: NewCo Inc. (“NewCo”), incorporated in Delaware on January 5, 2026, and Evolution Metals LLC (“EM LLC”), incorporated in Delaware on February 9, 2024.

To achieve this vision, on January 5, 2026, EM LLC acquired a controlling equity interest in four separate Korean entities (collectively, the “Four Entities”). The Four Entities are 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. For further discussion on EM LLC’s acquisition of the Four Entities and the related accounting, refer to Note 4 - Acquisitions.

WTMA Merger Agreement

On January 5, 2026 (the “Closing Date”), immediately following the acquisition of the Four Entities, WTMA, a special purpose acquisition company, consummated the business combination pursuant to the terms of the Agreement and Plan of Merger entered into on April 1, 2024 and as amended on November 6, 2024, November 11, 2024, February 10, 2025, March 31, 2025, June 11, 2025, July 21, 2025, and January 5, 2026 (collectively, the “Amended Merger Agreement”), by and among EM LLC, WTMA, WTMA Merger Subsidiary LLC, a Delaware limited liability company and direct wholly owned subsidiary of WTMA (“Merger Sub”), NewCo Inc. (“NewCo”), a Delaware limited liability company, and David Wilcox, as the sole stockholder of NewCo. Pursuant to the Amended Merger Agreement, Merger Sub merged with and into EM LLC, with EM LLC 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”).

As discussed in Note 3 - Reverse Recapitalization, the Business Combination was accounted for as a reverse recapitalization under which the historical financial statements of the Company prior to the Business Combination are those of EM LLC. All information related to the common stock of EM LLC prior to the Closing Date and presented in the financial statements and notes thereto has been retroactively adjusted to reflect the exchange ratio established in the Amended Merger Agreement. For further discussion on the reverse recapitalization and the related accounting, refer to Note 3 - Reverse Recapitalization.

To facilitate the closing of the Business Combination, the Company entered into a short-term bridge loan with cash proceeds of $80.0 million with a stated, fixed interest rate per annum of 6.0% and a stated maturity date of five business days following the Closing Date. The bridge loan was repaid prior to the maturity date and the related interest expense incurred by the Company was de minimis.

Immediately following the Closing Date, EM&T operates as a holding company and owns 100% of EM LLC, which in turn owns 100% of Evolution Metals LLC (Korea) (“Korea DRE”). Korea DRE owns 100% of the Four Entities, KCM Industry Co., Ltd., KMMI Inc., Handa Lab Co., Ltd., and NS World Co., Ltd.

Although WTMA was the legal acquirer, for accounting purposes the Business Combination is treated as a reverse recapitalization in accordance with U.S. GAAP, with EM LLC deemed to be the accounting acquirer and WTMA treated as the acquired company. Accordingly, the unaudited condensed consolidated financial statements of EM&T subsequent to the Closing Date will represent a continuation of the financial statements of EM LLC, with the net assets of WTMA recorded at historical cost. No goodwill or other intangible assets were recorded as a result of the transaction. All outstanding equity interests of EM LLC were converted into shares of EM&T common stock in accordance with the exchange ratio established in the Merger Agreement.

In connection with the closing of the Business Combination, WTMA changed its corporate name to Evolution Metals & Technologies Corp. and on January 6, 2026, the Company’s common stock began to trade on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “EMAT”. As a result of the business combination, EM&T became a publicly traded operating company focused on midstream processing of critical materials, including precious metals, battery metals, magnets & rare earth elements, and its related products.

Note 2 - Summary of Significant Accounting Policies

***Basis of Presentation and Principles of Consolidation:***The accompanying unaudited condensed 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 unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”). The unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The accompanying unaudited condensed 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.

Principles of Consolidation and Variable Interest Entities: The accompanying unaudited condensed consolidated financial statements include the accounts of Evolution Metals & Technologies Corp. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company evaluates all legal entities in which it holds an ownership or economic interest in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation, to determine whether consolidation is required under either the voting interest entity (“VOE”) model or the variable interest entity (“VIE”) model.

A legal entity is considered a VIE when, by design, (i) the entity lacks sufficient equity at risk to finance its activities without additional subordinated financial support, (ii) the holders of the equity investment at risk lack the characteristics of a controlling financial interest, or (iii) the equity holders do not possess substantive voting or participating rights.

The Company consolidates a VIE when it is determined to be the primary beneficiary of the entity. The primary beneficiary is the party that both (i) has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE.

The Company evaluates loans, advances, notes receivable, and other arrangements involving shareholders, affiliates, and related parties to determine whether such arrangements represent variable interests under ASC 810. In performing this assessment, management considers the substance of the arrangement, including contractual rights and obligations, governance rights, exposure to economic variability, and whether the Company has direct or indirect recourse to the assets, operations, or economics of the legal entity.

The application of ASC 810 requires management to exercise significant judgment in determining whether a legal entity is a VIE and whether the Company is the primary beneficiary of that entity. Such judgments include evaluating contractual arrangements, governance rights, related party relationships, and the nature of the Company’s economic interests. Changes in facts and circumstances could result in changes to the Company’s consolidation conclusions in future reporting periods.

Liabilities Paid by Principal Shareholders: The Company complies with SEC Staff Accounting Bulletin Topic 5.T (“SAB Topic 5.T”),Accounting for Expenses or Liabilities Paid by Principal Stockholder(s). Expenses paid by shareholders or related parties on behalf of the Company are recognized in the unaudited condensed consolidated financial statements when incurred if the Company receives the primary economic benefit of the expenditure, with a corresponding credit recognized within equity, as appropriate. See Note 17 - Related Party Transactions for additional detail regarding such arrangements.

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 $440.3 million for the three months ended March 31, 2026. As of March 31, 2026, the Company had an aggregate cash balance of $5.4 million and a net working capital deficit of $81.8 million. 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 Unaudited condensed 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, see Note 4 - Acquisitions. 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 and debt financing. 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.

***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 unaudited condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company consummated its initial public offering on December 30, 2021. Accordingly, the fifth anniversary of The Company’s initial public offering will occur on December 30, 2026. Based on the foregoing, the Company expects to remain an emerging growth company until at least December 30, 2026, unless it earlier ceases to qualify as an emerging growth company under the applicable provisions of the JOBS Act.

***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 Unaudited condensed 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 Unaudited condensed 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 provision for credit losses, the useful lives of property, plant and equipment, the change in fair value of financial instruments. 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. In connection with business combinations, management is required to make significant estimates and assumptions to allocate the purchase consideration to the assets acquired and liabilities assumed based on their respective estimated fair values as of the acquisition date. These estimates include, among others, assumptions regarding projected future cash flows, discount rates, royalty rates, customer attrition, useful lives, replacement costs, market participant assumptions, and other valuation inputs used to determine the fair value of identifiable intangible assets, property, plant and equipment, and other acquired assets and assumed liabilities. Any excess of purchase consideration over the fair value of net assets acquired is recorded as goodwill. Goodwill represents the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company’s accounting for business combinations may be preliminary during the measurement period, which may extend up to one year from the acquisition date. During the measurement period, the Company may record adjustments to the assets acquired, liabilities assumed, identifiable intangible assets, goodwill, and related income tax effects if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. Income taxes also require significant judgment, including estimates related to the realizability of deferred tax assets, the measurement of deferred tax liabilities, the assessment of valuation allowances, the interpretation of tax laws and regulations, and the evaluation of uncertain tax positions. Changes in tax laws, statutory tax rates, future taxable income, valuation allowance assessments, tax planning strategies, or the outcome of tax audits and examinations could materially affect the Company’s income tax provision and related tax balances.

***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. The functional currency of the Company’s Korean subsidiaries, KCM Industry Co., Ltd. (“KCM”), KMMI Inc. (“KMMI”), NS World Co., Ltd. (“NSW”), and Handa Lab Co., Ltd. (“Handa Lab”), is the Korean Won (“KRW”). 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.

(UNAUDITED)

Assets and liabilities are translated using the exchange rate in effect as of the balance sheet date. Revenues and expenses are translated using the average exchange rates in effect for the periods presented. The effects of translating these Unaudited condensed consolidated financial statements from functional currency to reporting currency are recorded in accumulated other comprehensive income as a component of stockholders’ equity (deficit).

Gains and losses resulting from transactions denominated in a currency other than the functional currency of the entity are included in other income (expense), net in the Unaudited condensed consolidated statements of operations 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 Executive Chairman of the Board of Directors, David Wilcox, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM manages the business as a single operating and reportable segment. The CODM uses unaudited condensed consolidated financial statements to allocate resources and assess performance on a consolidated basis. Accordingly, all required financial segment information is presented on a consolidated basis. See Note 15 - Segments for further detail.

***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.

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 in cash and cash equivalents in the Condensed consolidated balance sheets. As of March 31, 2026 and December 31, 2025, restricted cash included in cash and cash equivalents was de minimis.

***Concentration of Credit Risk:***Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts held with financial institutions, including U.S. and Korean financial institutions, and notes receivable. Cash accounts held with U.S. financial institutions may at times exceed the Federal Depository Insurance Corporation limit. Cash accounts held by the Company’s Korean subsidiaries may at times exceed the applicable deposit protection limits under Korean banking regulations. Effective September 1, 2025, the maximum deposit protection coverage in Korea was increased from KRW 50 million to KRW 100 million per depositor per covered financial institution. The amount over these insured limits as of March 31, 2026 and December 31, 2025 was $5.1 million and $11.4 million respectively. As of March 31, 2026 and December 31, 2025, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant credit risk with respect to such accounts, based on the credit quality of the financial institutions at which the deposits are held.

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.

***Concentration of Customer Risk:***The concentration of customer risk arises when a significant portion of the Company’s revenue is generated from a small group of customers. Reduction of orders, delay of payments, or termination of contracts by these key customers could have a significant negative effect on the Company’s results of operations and cash flows. The Company’s revenue is historically derived from a small number of customers.

For the three months ended March 31, 2026, the customers accounting for 10% or more of total revenue are Customer A and Customer B, with revenues of $0.7 million (or 38% of total net revenue) and $0.4 million (or 19% of total net revenue), respectively.

As of March 31, 2026, the customers accounting for 10% or more of accounts receivable are Customer A, Customer B and Customer C, with accounts receivables of $0.3 million (or 14% of total accounts receivable), $0.3 million (or 11% of total accounts receivable), and $1.0 million (or 44% of total accounts receivable), respectively.

***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:

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:

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 expenses and other current assets, other noncurrent assets, accounts payable and accrued expenses and other current liabilities 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 are discussed in Note 11 - Fair Value Measurements.

Non-trade Accounts Receivable: Non-trade accounts receivable consists of secured and unsecured promissory notes with no conversion features and toll processing receivables 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 or, in the case of toll processing receivables, at the amount expected to be collected for toll processing services provided (see Note 5 - Non-trade Accounts Receivable and Payable). Non-trade accounts receivable is reported net of an allowance for credit losses on the accompanying Condensed consolidated balance sheets.

***Convertible Promissory Notes:***Convertible promissory notes consist of convertible promissory notes that were issued by WTMA and were acquired by the Company as part of the Business Combination. The convertible promissory notes bear no interest and were to be repaid upon consummation of a Business Combination or, at the lender’s discretion, convertible into private units of the post-Business Combination entity at a price of $10.00 per unit. As of March 31, 2026, the outstanding balance of $2.3 million is in maturity default.

***Provision for Credit Losses:***The Company recognizes a provision for credit losses on convertible notes receivable, 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 provision 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 also evaluates trade accounts receivable, including trade accounts receivable of its Korean subsidiaries, for expected credit losses in accordance with ASC 326, Financial Instruments — Credit Losses. The Company estimates the allowance for credit losses for trade accounts receivable primarily using an aging schedule, which categorizes receivables based on the number of days past due. Past due status is generally measured based on the number of days since the contractual payment due date. The Company considers historical collection experience, current customer-specific facts and circumstances, the aging of outstanding balances, current economic conditions, and reasonable and supportable forecasts, as applicable, in estimating expected credit losses.

Trade accounts receivable are generally evaluated on a collective basis when they share similar risk characteristics. The Company evaluates receivables individually when such receivables no longer share similar risk characteristics, including when balances are more than 90 days past due and exceed a specified amount, or when management becomes aware of customer-specific collectability concerns, including bankruptcy, financial distress, disputes, or other adverse information. Receivables are deemed uncollectible and written off against the allowance for credit losses after all reasonable collection efforts have been exhausted.

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 March 31, 2026 and December 31, 2025, the convertible notes receivable were classified as non-accrual.

Outstanding Receivables and trade accounts receivable are carried at amortized cost, net of provision for credit losses. Amortized cost approximated book value as of March 31, 2026 and December 31, 2025. After all reasonable attempts to collect a receivable have failed, the amount of the receivable is written off against the allowance.

***July Investment Agreement Derivative:***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:

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.

The Company reassesses the classification of a contract over its own equity under the guidance above at each balance sheet date. If classification changes as a result of events during the reporting period, the Company reclassifies the contract as of the date of the event that caused the reclassification. When a contract over own equity is reclassified from a liability to equity, gains or losses recorded to account for the contract at fair value during the period that the contract was classified as a liability are not reversed, and the contract is marked to fair value immediately before the reclassification.

***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 three months ended March 31, 2026 and three months ended March 31, 2025.

***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.

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 reverse capitalization transaction. The costs were capitalized as deferred transaction costs until the consummation of the transaction on January 5, 2026. The costs were expensed upon the closing of the transaction. As of March 31, 2026 and December 31, 2025, deferred transaction costs totaling$0.0 million and $9.3 million, respectively, were recorded on the accompanying Condensed consolidated balance sheets related to the reverse capitalization (see Note 4 - Acquisitions).

***Net Loss Per Share:***Basic net loss per share is computed by dividing net loss for the period by the weighted average number of common shares 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 share because their inclusion would have an anti-dilutive effect. Thus, basic net loss per share is the same as diluted net loss per share.

Diluted net loss per share is computed similar to basic net loss per share except that the denominator is increased to include the potential dilutive effect of common stock equivalents on the average number of common shares outstanding during the period. As of March 31, 2026 and December 31, 2025, there are no potentially dilutive securities currently issued and outstanding.

Income Taxes: The Company files income tax returns in the U.S. federal jurisdictions, various state jurisdictions, and Korea. The Company accounts for income taxes under ASC 740, “Income Taxes.” ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the unaudited condensed consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carryforwards. ASC 740 requires a valuation allowance to be established when it is more likely than not that all or a portion of the deferred tax assets will not be realized. ASC 740 also prescribes a recognition threshold and measurement process for accounting for uncertain tax positions, as well as related matters such as derecognition, interest, penalties and disclosures. The Company’s accounting policy is to recognize accrued interest and penalties related to unrecognized tax benefits as income tax expense.

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

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

The Company evaluates whether it acts as principal or agent in its revenue transactions. If the Company controls the specified goods or services before they are transferred to the customer, the Company recognizes revenue on a gross basis. If the Company arranges for another party to transfer goods or services to a customer and does not control the specified goods or services before transfer, the Company recognizes revenue on a net basis. Certain arrangements in which the Company arranges for another party to transfer goods to a customer, does not maintain pricing discretion, and does not retain control over the underlying assets are accounted for on a net basis. In such arrangements, the Company does not retain the substantive risks and rewards associated with the underlying raw materials, and the counterparty retains control of the materials in a manner consistent with a tolling or agency arrangement. Accordingly, the Company recognizes only the net amount retained as revenue or other operating income, as applicable.

The Company engages in certain resale and tolling arrangements in which it purchases raw materials from specific counterparties, processes the materials, and resells the processed materials to the same counterparties. The Company evaluates these arrangements based on their substance, including whether the counterparty retains control of the inventory throughout the processing period. When the counterparty retains control of the inventory, the Company does not account for the arrangement as separate purchases and sales of inventory. Instead, the Company accounts for the arrangement as the provision of toll manufacturing or processing services to the counterparty. Under these arrangements, the Company’s performance obligation is the delivery of tolling or processing services, and the net transaction amount is recognized as revenue upon completion of the related services.

The Company also engages in certain repurchase transactions in which it sells raw materials to specific counterparties and repurchases the materials after processing. In these transactions, the Company has an obligation to repurchase the inventory and maintains control of the inventory throughout the processing period because the Company retains legal title to the inventory and bears inventory risk. The processing period is typically 15 to 60 days, and pricing is generally determined based on the counterparty’s processing costs. The Company accounts for these arrangements as the receipt of toll manufacturing or processing services rather than as distinct sales and purchases or product financing transactions. Accordingly, the net transaction amount is recognized as processing fees within cost of goods manufactured or cost of revenues, as applicable. Related amounts due from or due to counterparties under these arrangements are recorded as non-trade accounts receivable or non-trade accounts payable, as applicable.

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

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

The Company’s primary source of revenue is product and merchandise sales of magnets. Revenue from product and merchandise sales is recognized when control of the goods is transferred to the customer, which is typically at the point of delivery, at which time the significant risks and rewards of ownership also pass to the customer. Contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition, contracts typically do not contain variable consideration as the contracts include stated prices, as such, no such provision — e.g. rebates or discounts — is provided. The Company provides assurance type warranties on all of its products, which are not separate performance obligations and are outside the scope of Topic 606. There was no loss contingencies related to warranties recorded as of March 31, 2026 and December 31, 2025.

Property, Plant and Equipment, net: 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. 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.

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

Asset Retirement Obligation: The Company has an asset retirement obligation (“ARO”) arising from contractual requirements associated with the retirement of an 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. The value of the ARO liability is de minimis.

***Intangible Assets, Net:***Intangible assets obtained through acquisitions are recorded at the estimated fair value as of the acquisition date. Amortization of intangible assets with finite useful lives is calculated using the straight-line method over the estimated useful lives of the assets. The Company evaluates finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset group to the estimated undiscounted future cash flows expected to be generated by the asset group. If the carrying amount of the asset group exceeds the estimated undiscounted future cash flows, an impairment loss is recognized to the extent the carrying amount exceeds the estimated fair value of the asset group.

Goodwill: Goodwill represents the excess of purchase consideration transferred over the estimated fair value of net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The Company may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, or elects not to perform the qualitative assessment, the Company performs a quantitative impairment test. Under the quantitative impairment test, goodwill impairment is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value, limited to the amount of goodwill allocated to that reporting unit.

The Company determines the fair value of reporting units using market-based, income-based, or other valuation approaches, as appropriate. Significant assumptions used in impairment testing may include projected revenues, gross margins, operating expenses, capital expenditures, working capital requirements, discount rates, terminal growth rates, market multiples, and other market participant assumptions.

***Government Grants:***The Company receives grants from local government agencies and public institutions in relation to asset acquisition and research activity that are necessary for the Company’s business activities. Government grants are either deducted from the carrying amount of the related assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that the grant will be received. Government grants related to assets are presented in the Condensed consolidated 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 within other income (expense), net in the Unaudited condensed consolidated statements of operations.

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.

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

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

The Company also elected the short-term lease exception, except for real estate, and therefore only recognizes right-of-use assets and lease liabilities for leases with a term greater than one year. When determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company will exercise that option.

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

Lease expenses for operating leases are recognized on a straight-line basis over the lease term and classified as cost of sales or selling, general and administrative expenses depending on the nature of the leased asset. Depreciation 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 Unaudited condensed consolidated statements of operations over the lease term.

***Other Assets:***Other assets (prepaid expenses and other current assets and other noncurrent assets) primarily consist of prepaid expenses, value added tax, income tax assets advance payments and leasehold deposits.

***Cost of Goods Sold:***Cost of goods sold primarily consists of direct material costs, direct labor costs, manufacturing overhead, subcontracting and processing costs, depreciation of manufacturing equipment, inventory write-downs, freight-in and other costs directly attributable to the production or acquisition of products sold. Manufacturing overhead includes indirect labor, utilities, facility costs, repair and maintenance costs, supplies, and other production-related costs.

For inventory manufactured by the Company, cost of goods sold is recognized when the related finished goods are sold and revenue is recognized. For merchandise or raw materials purchased for resale, cost of goods sold is recognized when control of the related goods is transferred to the customer. The Company includes in cost of goods sold normal production costs incurred to bring inventory to its existing condition and location.

The Company may also incur tolling, subcontracting, or third-party processing costs in connection with certain manufacturing or repurchase arrangements. When the Company retains control of the underlying inventory and obtains processing services from a counterparty, the related net processing fees are recognized as part of cost of goods sold or cost of goods manufactured, as applicable. When the Company provides tolling or processing services to a counterparty and the counterparty retains control of the underlying inventory, the Company recognizes the related costs incurred to provide such services as cost of goods sold or cost of services.

Abnormal costs, including abnormal waste, idle facility costs, excess spoilage, and other costs that do not contribute to bringing inventory to its intended condition and location, are expensed as incurred and are not capitalized into inventory. Cost of goods sold may also include lower of cost or net realizable value adjustments, inventory obsolescence charges, and write-offs of inventory when such amounts are identified.

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

***Defined Severance Benefits:***The Company has a defined benefit pension plan covering KCM Industry Co., Ltd, KMMI Inc., and NS World Co., Ltd. employees upon their retirement in accordance with the Retirement Benefit Security Act of Korea. For executives, the retirement allowance is applied in accordance with the Company’s Articles of Incorporation. Eligible employees and executives with one or more years of service are entitled to severance payments upon termination of employment, based on their length of service and pay rate.

The Company recognizes the net funded status of its pension plans in the Condensed consolidated balance sheets, measured as the difference between the projected benefit obligation and the fair value of plan assets, with corresponding changes recognized in Unaudited consolidated statements of operations and comprehensive loss. Under ASC 715, service cost, interest cost, expected return on plan assets, and the amortization of actuarial gains or losses and prior service cost are recognized in net loss. Actuarial gains and losses and prior service cost arising from plan amendments are initially recorded in other comprehensive income (“OCI”) and subsequently amortized into net loss in accordance with ASC 715.

The obligations are measured quarterly, or more frequently if there is a remeasurement event, based on our measurement date utilizing various actuarial assumptions and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of relevant corporate bonds in the market. As of March 31, 2026, the Company had pension obligations of $1.5 million, consisting of current obligations of $0.8 million recorded in Accrued expenses and other current liabilities and noncurrent obligations of $0.7 million recorded in Other noncurrent liabilities. The Company did not have any pension obligations as of December 31, 2025.

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.

The Company recognizes the components of net periodic benefit cost for its defined severance benefits in net loss (generally within operating (expense) or other income (expense), as applicable). Actuarial gains and losses and prior service cost or credit arising from plan amendments are initially recognized in OCI and accumulated in accumulated other comprehensive income (“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.

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.

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 unaudited condensed consolidated financial statements and disclosures.

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 unaudited condensed 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 unaudited condensed consolidated financial statements and disclosures.

ASU 2025-10, “Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities” (“ASU 2025-10”) establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants received by business entities. The update aims to reduce diversity in practice and align US GAAP more closely with international standards by leveraging principles from International Accounting Standard 20 (IAS 20). ASU 2025-10 requires entities to recognize government grants only when it is probable that they will comply with the grant conditions and the grant will be received. ASU 2025-10 is effective for public business entities for annual reporting periods beginning after December 15, 2028, including interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its unaudited condensed 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 Condensed consolidated balance sheets, Unaudited consolidated statements of operations and comprehensive loss and consolidated statements of cash flow

Note 3 - Reverse Recapitalization

As described in Note 1 - Description of Organization and Business Operations, on January 5, 2026, the Company consummated the Business Combination contemplated by the Amended Merger Agreement. Pursuant to the Amended Merger Agreement, Merger Sub merged with and into EM LLC, with EM LLC being the surviving corporation and resulting in EM LLC being a wholly owned subsidiary of WTMA.

Although WTMA was the legal acquirer, for accounting purposes the Business Combination is treated as a reverse recapitalization in accordance with U.S. GAAP, with EM LLC deemed to be the accounting acquirer and WTMA treated as the acquired company. WTMA did not meet the definition of a business and had nominal assets, thereby meeting the definition of a public shell company. Accordingly, the accounting treatment is the equivalent of EM LLC issuing stock for the net assets of WTMA, accompanied by a recapitalization whereby neither goodwill nor intangible assets are recognized.

As a result of the Business Combination and upon the Closing Date:

(a) Each issued and outstanding common unit and convertible preferred unit of EM LLC outstanding immediately prior to the Merger was automatically cancelled and converted into the right to receive shares of New EM common stock in accordance with the applicable exchange ratio set forth in the Amended Merger Agreement. In addition, the assenting shareholders of KCM Industry Co., Ltd. (“KCM”), KMMI Inc. (“KMMI”), NS World Co., Ltd. (“NS World”), and Handa Lab Co., Ltd. (“Handa Lab” and, together with KCM, KMMI and NS World, the “Korean Companies”) received shares of New EM common stock in connection with the acquisition of the Korean Companies.

(b) In total,588,473,653 shares of New EM common stock were issued to EM LLC unitholders and the assenting shareholders of the Korean Companies in connection with the Business Combination, consisting of (i)475,962,290 shares issued in exchange for EM LLC common units, (ii)109,436,178 shares issued in exchange for EM LLC convertible preferred units, and (iii)3,075,185 shares issued to the assenting shareholders of the Korean Companies. The remaining 17,391,000 of EM LLC convertible preferred units will convert into 2,898,499 New EM common shares ninety days after the Closing Date.

(c) Each WTMA Unit issued and outstanding as of immediately prior to the Closing Date was, to the extent not detached, automatically detached into the underlying stock of WTMA, par value $0.0001 per share (“WTMA Common Stock”), andone public right, and public units will no longer trade as separate securities;

(d) Every ten (10) rights to acquire one-tenth ofone share of WTMA Common Stock that were offered and sold by WTMA in its initial public offering and registered pursuant to the IPO registration statement (the “WTMA Rights”) were canceled and converted intoone share of WTMA Common Stock free and clear of all liens (other than any restrictions on resale or other transfer under applicable securities laws and, in the case of Welsbach Acquisition Holdings LLC, a Delaware limited liability company (the “Sponsor”), and certain officers and directors of WTMA (“Sponsor Persons”), the Sponsor Support and Lock-up Agreement) and the holders of such WTMA Rights immediately prior to the Effective Time ceased to have any rights with respect to such WTMA Rights, except as provided by the terms and conditions of the Amended Merger Agreement or by law; and

(e) WTMA changed its name to “Evolution Metals & Technologies Corp.,” and each share of WTMA Common Stock outstanding immediately prior to the Business Combination that was not redeemed remained outstanding as a share of EM&T Common Stock.

The following table presents the share ownership of EM&T common stock immediately following the Business Combination:

The following table presents the net liabilities acquired in the Merger, reconciling the activity located in the Unaudited condensed consolidated statements of changes in stockholders’ equity and Unaudited condensed consolidated statements of cash flows.

In connection with the Business Combination, the Company effectively settled a preexisting relationship with WTMA through its prior note receivable. As of December 31, 2025, $1.2 million was included in non-trade accounts receivable related to loans made to WTMA. As of the Closing Date, the loan receivable amount was $2.7 million. In connection with the settlement of the preexisting relationship, the Company recognized a gain of $1.2 million included in other income (expense), net, due to the difference between the Company’s carrying value of the notes and the settlement amount recorded by WTMA.

Total transaction costs of $9.4 million were incurred in relation to the Merger through the Closing Date. Due to the fact that no meaningful cash proceeds were obtained through the Merger, the full amount of previously deferred transaction costs was recognized as expense within selling, general and administrative for the three months ended March 31, 2026.

Lock-up agreements

In connection with the Amended Merger Agreement, the Company entered into a Sponsor Support and Lock-Up Agreement with WTMA, the Sponsor and 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 received 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 received 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 equity holders 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 - Acquisitions

Acquisition of Korean Operating Companies

Concurrent with the reverse recapitalization, on January 5, 2026, in exchange for 6,461 non-voting membership units of EM LLC and $48.2 million of purchase consideration payable to dissenting shareholders, EM LLC acquired 100% of the voting equity interests in four Korean operating companies: Handa Lab Co., Ltd. (“Handa”), KMMI Inc. (“KMMI”), NS World Co., Ltd. (“NS World” or “NSW”), 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:

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

EM LLC issued 6,461 non-voting membership units of EM LLC to assenting shareholders, which immediately converted into 3,075,185 shares of the Company’s common stock in connection with the Business Combination, with a total fair value of $23.1 million. The fair value of the equity consideration was determined based on the closing market price of the Company’s shares of common stock on the date of acquisition.

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, and liabilities assumed. 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.

Finite-lived intangible assets that are being amortized using the straight-line method over their estimated useful lives as of January 5, 2026 consist of the following:

Goodwill represents the excess of consideration transferred over the fair value of identifiable assets acquired and liabilities assumed and is primarily attributable to strategic synergies, future growth opportunities, the assembled workforce and other intangible assets that do not qualify for separate recognition.

Valuation Methodologies

The fair values of assets acquired and liabilities assumed were determined in accordance with ASC 820,Fair Value Measurement, using market participant assumptions. The Company applied a combination of income, market and cost approaches, as appropriate, based on the nature of the respective assets acquired and liabilities assumed.

Acquisition-related costs

During the three months ended March 31, 2026, and the three months ended March 31, 2025, the Company incurred $0.0 million and $0.6 million, respectively, in acquisition-related costs for the Operating Companies. These are recorded in selling, general and administrative.

Pro forma financial information

The following unaudited pro forma financial information presents the combined results of the Company and the Operating Companies as if the acquisitions of the Operating Companies had 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.

These pro forma combined historical results were adjusted for: an increase in interest expense for liabilities incurred by the Company for deferred payments to dissenting shareholders, increased depreciation and amortization expense due to the fair value of fixed assets and intangible assets, and the reclassification of transaction expenses to the beginning of the respective pro forma period.

Note 5 - Non-trade Accounts Receivable and Payable

Non-trade accounts receivable consisted of the following as of March 31, 2026 and December 31, 2025:

The change in short-term loan receivable was primarily due to the effective extinguishment of receivables in connection with the Business Combination.

The remaining amount of gross short-term loan receivable primarily relates to a fully reserved, $9.0 million note with a former acquisition target, Critical Mineral Recovery, Inc. (“CMR”). 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 funds to CMR in connection with the contemplated acquisition. As of December 31, 2025, $9.0 million was outstanding under the CMR Advance Agreement. In light of the termination of the contemplated acquisition, effective in July 2025, the Company determined a full allowance for credit losses was necessary for the funds advanced under the CMR Advance Agreement.

Non-trade Accounts Payable

Non-trade accounts payable consisted of the following as of March 31, 2026:

There were no non-trade accounts payable as of December 31, 2025, prior to the Business Combination.

During the three months ended March 31, 2026, the Company recognized $0.6 million for interest expense for the purchase consideration payable related to the dissenting shareholder appraisal right liabilities, recorded in interest (expense) income, net.

Note 6 - Inventories

As of March 31, 2026, inventories consisted of the following:

There wereno inventories as of December 31, 2025, prior to the Business Combination.

Note 7 - Property, Plant and Equipment, Net

Details of property, plant and equipment, net as of March 31, 2026, consisted of the following:

Total depreciation for the three months ended March 31, 2026 was $0.1 million. There wasno property, plant and equipment, net at December 31, 2025, prior to the Business Combination.

As of March 31, 2026, the details of property, plant and equipment, net pledged as collateral is as follows:

Note 8 - Goodwill and Intangible Assets

The changes in the carrying value of goodwill were as follows:

There was no accumulated goodwill impairment as of March 31, 2026.

Identifiable intangible assets as of March 31, 2026 and consisted of the following:

Total amortization for the three months ended March 31, 2026, was $0.1 million. The estimated future amortization expense for the remainder of the current fiscal year is $0.4 million. Over the next five years, the Company expects to recognize annual amortization of $0.5 million in each year, respectively.

There wereno identifiable intangible assets as of December 31, 2025, prior to the Business Combination.

Note 9 - Debt

Convertible Promissory Notes

Prior to the consummation of the Business Combination, WTMA issued certain convertible promissory notes to the Sponsor to fund amounts required in connection with extensions of the deadline to consummate its initial business combination. On September 30, 2022 and December 30, 2022, WTMA issued two promissory notes, each in the principal amount of $0.8 million, to the Sponsor. On March 30, 2023, April 30, 2023, May 30, 2023, June 30, 2023, July 30, 2023 and August 30, 2023, WTMA issued six additional promissory notes to the Sponsor, each in the principal amount of $0.1 million. Collectively, these promissory notes are referred to as the “Convertible Promissory Notes.”

The Convertible Promissory Notes are non-interest bearing and unsecured. Prior to the Business Combination, the Convertible Promissory Notes were payable upon the earlier of (i) the consummation of WTMA’s initial business combination, out of the proceeds of the trust account released to WTMA, or (ii) at the Sponsor’s discretion, conversion, in whole or in part, upon consummation of the initial business combination into additional private units at a price of $10.00 per unit.

In connection with the Business Combination, the Company assumed the obligations under the Convertible Promissory Notes. The Convertible Promissory Notes were not converted in connection with the Business Combination and remain outstanding as of March 31, 2026. No principal or interest payments have been made under the Convertible Promissory Notes.

The conversion feature was analyzed under ASC 470-20, “Debt with Conversion or Other Options”, the note did not include any premium or discounts. The conversion option did not include elements that would require bifurcation under ASC 815-40, “Derivatives and Hedging.” The convertible note payable and conversion feature does not meet the requirements for classification under ASC 480 and as a result is not required to be accounted for as a liability under ASC 480. In this case, the conversion feature embedded within the convertible promissory note does not require bifurcation and as a result remains embedded within the debt instrument because the convertible promissory note conversion feature does not meet the definition of a derivative as it fails the net settlement requirement. The embedded conversion feature does qualify as equity under ASC 815-40 as the exercise contingency is not based on an observable market or index unrelated to the issuer, the instrument meets the fixed-for-fixed criteria under ASC 815-40-15, meets the requirements for equity classification pursuant to ASC 815-40-25-1 and 25-2 and does not meet the definition of a derivative as it fails the net settlement requirement. Based on this analysis, the scope exception would apply, and the embedded conversion feature would fail to satisfy the third bifurcation condition within ASC 815-15-25-1.

No principal or interest payments have been made under the Convertible Promissory Notes. As of March 31, 2026, $2.3 million was outstanding under the Convertible Promissory Notes and were reported as convertible promissory notes — related party in the accompanying condensed consolidated balance sheets. There wereno Convertible Promissory Notes outstanding as of December 31, 2025.

Short Term Debt

Details of carrying amounts of short-term debt as of March 31, 2026 are as follows (in thousands):

Related Party

Others

Long Term Debt

Details of carrying amounts of long-term debt as of March 31, 2026 are as follows:

The Company did not have long-term debt as of December 31, 2025.

Future principal payments for long-term debt as of March 31, 2026 are as follows:

Note 10 - Derivative Liabilities

July Investment Agreement Derivative

The single, compound embedded derivative relating to the financial instruments provided pursuant to the July 2024 investment agreement with a prior holder of the Company’s convertible preferred units (the “July Investment Agreement Derivative”) was remeasured at fair value on a recurring basis until the Business Combination. As of December 31, 2025, the fair value was $379.2 million.

As of the Closing Date, the uncertainty was removed regarding the variable number of common shares to be issued and the $25.0 million cash obligation. Therefore, the Company concluded that the July Investment Agreement Derivative should no longer be accounted for as a derivative. As of March 31, 2026, the amount recognized for the July Investment Agreement Derivative was $0 in the Condensed consolidated balance sheets; however, the $25.0 million cash obligation was recorded to accrued expenses and other current liabilities. Refer to Note 11 - Fair Value Measurements for further information regarding the rollforward of activity recognized in the period.

Convertible Preferred Unit Issuance

Certain convertible preferred unit issuances (see Note 13 - Equity) provided investors with additional share allocation issuance equal to a pro rata percentage of 1.0% of the Company’s fully diluted ownership in New EM at closing of the Business Combination equal to the percentage of the investor’s investment into the Company’s convertible preferred units the investors purchase divided by either (a) $2.0 million or (ii) $4.0 million, as determined by the terms of each investor’s convertible preferred unit agreement.

The additional share allocation issuances were collectively referred to as the “CPU Share Allocation Obligations” (and together with the July Investment Agreement Derivative, the “EM Share Obligations”) and 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. The CPU Share Allocation Obligations were remeasured at fair value on a recurring basis until the Business Combination. As of December 31, 2025, the fair value was $292.7 million.

As of the Closing Date, the uncertainty was removed regarding the variable number of common shares to be issued. Therefore, the Company concluded that the CPU Share Allocation Obligations should no longer be accounted for as a derivative and was reclassified to equity. As of March 31, 2026, the amount recognized for the CPU Share Allocation Obligations was $0 in the Condensed consolidated balance sheets. Refer to Note 11 - Fair Value Measurements for further information regarding the rollforward of activity recognized in the period.

Note 11 - Fair Value Measurements

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

The availability of observable inputs can vary depending on the financial asset and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument has recently been issued, whether the instrument is traded on an active exchange or in the secondary market, and current market conditions. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires additional judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level III. The variability and availability of the observable inputs affected by the factors described above may cause transfers between Levels I, II, and III, as discussed further below.

Transfers to and from Level I, II and III are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs. During the three months ended March 31, 2026, certain amounts from the July Investment Agreement Derivative and the CPU Share Allocation Obligation were reclassified out of Level III on the Closing Date.

Reconciliation of Fair Value Measurements Categorized within Level III

The following table provides a reconciliation of the beginning and ending balance associated with the liabilities measured at Level III fair value using significant unobservable inputs for the three months ended March 31, 2026:

In settlement of certain obligations to issue shares under the July Investment Agreement and the CPU Share Allocation Obligation, during the three months ended March 31, 2026, the Company issued 78,525,847 common shares and 39,520,335 common shares, respectively. The settlements were valued using the Company’s closing share price as of the Closing Date.

Additionally, during the three months ended March 31, 2026, $25.0 million of the July Investment Agreement Derivative payable to the Anchor Investor was reclassified out of Level III as a result of the completion of the Business Combination, removing the uncertainty related to the liability. As of March 31, 2026, $25.0 million is included in accrued expenses and other current liabilities.

Separately, $186.8 million related to the CPU Share Allocation Obligation was reclassified out of Level III and recognized as equity-classified CPU share allocation. This reclassification was due to the number of shares issuable under the CPU Share Allocation Obligation becoming fixed upon the Closing Date, and was valued using the Company’s closing share price as of the Closing Date. For further information, refer to Note 13 - Equity.

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 July investment agreement derivative 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.

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.

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:

CPU Share Allocation Obligations:

The CPU Share Allocation Obligations were contingent on the closing of the Business Combination and certain convertible preferred unit holders entering into additional convertible preferred unit agreements in increments of $2.0 million or $4.0 million, as defined in an investor’s specific convertible preferred unit agreement.

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

Note 12 - Income Tax

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. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained on examination by the taxing authorities. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest and penalties related to unrecognized tax benefits in the income tax provision.

The effective tax rate for the three months ended March 31, 2026, was 0%. The difference between the effective tax rate and the statutory tax rate of 21% for the three months ended March 31, 2026, is primarily due to the impact of the valuation allowance.

For the three months ended March 31, 2026, there was no tax expense recognized by the Company.

Note 13 - Equity

As of March 31, 2026, the Company had authorized and issued 593,349,852 common shares. Common stock entitles the holder toone vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors. As of March 31, 2026, no common stock dividends have been declared.

Additionally, as of March 31, 2026, the Company had recognized $13.9 million of noncontrolling interest. This relates to the 17,391,000 of EM LLC convertible preferred units that did not convert to New EM common shares as of the Closing Date and were still outstanding as of March 31, 2026. See the discussion below under Convertible Preferred Units for further information regarding these units. The CPU’s recognized in noncontrolling interest will automatically convert to 2,898,499 shares of common stock ninety days after the Closing Date. The noncontrolling interests were not entitled to earnings or losses of the Company during the three months ended March 31, 2026, nor entitled to dividends.

Upon the consummation of the Business Combination, the Company recognized $186.8 million for equity-classified CPU share allocation, as discussed in Note 11 - Fair Value Measurements. This equity amount represents the Company’s future obligation to issue 24,902,106 shares of common stock ninety days after the Closing Date.

As of December 31, 2025, prior to the Business Combination, the Company’s equity structure included participating member units, member non-voting units, and convertible preferred units. The pertinent issuances, rights and privileges of the prior units are discussed below.

Due to the treatment of the Business Combination as a reverse recapitalization (see Note 3 - Reverse Recapitalization), the member units have been retrospectively restated as common shares in the Unaudited condensed consolidated statements of changes in stockholders’ equity. The convertible preferred units have not been retrospectively restated, however, due to the fact these units were non-participating prior to the Business Combination, and upon the Closing Date, the convertible preferred units converted to common shares. Therefore, due to the difference in presentation, the convertible preferred units are presented separately from the remaining equity structure, separated by the blackline on the Unaudited condensed consolidated statements of changes in stockholders’ equity.

***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 could issue an unlimited number of non-voting member units and any voting member units can be converted into non-voting member units. As of December 31, 2025, there were 100,000 voting member units and 900,000 non-voting member units issued and outstanding. For further information regarding the retrospective restatement of member units as common shares, refer to Note 3 - Reverse Recapitalization.

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

***Convertible Preferred Units:***Since its inception on February 8, 2024, EM LLC authorized and issued convertible preferred units. The convertible preferred units were accounted for as permanent equity. Certain issuances of convertible preferred units provide the investor an additional share allocation issuance (see Note 10 - Derivative Liabilities). As of December 31, 2025,59,671,021 convertible preferred units were outstanding. Upon the consummation of the Business Combination,42,280,021 convertible preferred units converted into 12,640,008 shares of common stock.

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

*Dividends:*No dividends for the first 36 months after issuance. Thereafter, non-cumulative, simple dividend of 5% per annum accrues on the principal amount, payable annually.

*Liquidation preference:*None

*Conversion:*Convertible preferred units issued through March 31, 2025 were convertible into 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. 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 Date.

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

*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 14 - Revenue

The Company derives revenue by product and merchandise sales of components for automotive and home appliance magnets. The Company did not have revenue for the three months ended March 31, 2025. For the three months ended March 31, 2026, all revenue recognized was product sales at a point in time and generated in the Republic of Korea. The destination of revenue for three months ended March 31, 2025 was as follows:

For three months ended March 31, 2026, all export sales were to China.

Note 15 - Segments

The Company operates in asingle reportable operating segment. Because the Company operates in a single segment and the CODM uses the consolidated net loss and the total assets as the primary measures, no reconciliation is required between segment measures and the unaudited condensed consolidated financial statement amounts.

Performance is reviewed on a consolidated basis and the measure of segment assets is reported on the Condensed consolidated balance sheets as total assets and segment assets are consistent with total assets presented on the face of the accompanying Condensed consolidated balance sheets.

The CODM assesses performance for the single segment and decides how to allocate resources based on the Company’s net loss, which is reported on the Unaudited condensed consolidated statements of operations. Net loss is used to monitor budget versus actual results. The categories of net loss, as reported on the Unaudited condensed consolidated statements of operations, are the significant segment expenses provided to the CODM on a regular basis. The following table sets forth information about the Company’s single reportable segment and the expenses reviewed by the CODM, including a reconciliation to the consolidated net loss:

Entity-wide information

As of March 31, 2026, the Company’s property, plant, and equipment of $7.4 million is domiciled entirely in the Republic of Korea. As of December 31, 2025, the Company didnot own any property, plant, and equipment.

Refer to Note 14 - Revenue for geographic information regarding the Company’s revenues.

Note 16 - Loss Per Share

The Company computes loss per share in accordance with ASC 260-10-45 “Earnings per Share,” which requires presentation of both basic and diluted loss per share on the face of the statement of operations. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of outstanding shares of common stock during the period. The EM LLC convertible preferred units did not participate in the earning (or losses) of the Company. Further, the conversion of the convertible preferred units prior to the Business Combination was contingent on the execution of the event, and therefore the potential common shares were not included in the calculation of outstanding shares prior to conversion.

The EM Share Obligations (see Note 10 - Derivative Liabilities) prior to the Closing Date were contingently issuable common shares; however, the contingency was subject to the execution of the Business Combination. Therefore, prior to the Closing Date, the EM Share Obligations were not included in the calculation of outstanding shares of common stock.

Upon the Closing Date, certain EM Share Obligations converted into the Company’s common stock (see Note 3 - Reverse Recapitalization) and are included in outstanding shares thereafter. Other instruments included in outstanding shares after the Closing Date are the 24,902,106 contingently issuable shares of common stock recorded in equity-classified CPU share allocation and 2,898,499 contingently issuable shares of common stock related to noncontrolling interest (see Note 13 - Equity). These instruments are only contingent upon the passage of time, beginning on the Closing Date.

Diluted loss per share gives effect to all dilutive potential shares of common stock outstanding during the period. Dilutive loss per share excludes all potential shares of common stock if their effect is anti-dilutive. For the three months ended March 31, 2026 and three months ended March 31, 2025, there were no additional potential shares of common stock to consider within diluted loss per share, as the contingencies discussed above in basic loss per share also preclude consideration of these instruments in diluted loss per share. Therefore, basic and diluted loss per share are equivalent for the periods presented.

The basic and diluted net loss per share are as follows:

Note 17 - Related Party Transactions

Shareholder Loan Advances

During 2024 and 2025, the Company advanced funds to its majority shareholder, David Wilcox (“DW”), pursuant to a series of unsecured promissory notes (the “DW Notes”). In addition, on November 26, 2025, the Company advanced approximately $1.9 million to EMT Asia Co., Ltd. (“EMT Asia”) pursuant to an unsecured promissory note (the “Direct Note”). EMT Asia is wholly owned and controlled by DW. Collectively, the DW Notes and the Direct Note are referred to herein as the “Shareholder Loan Advances.”

The proceeds from the Shareholder Loan Advances were utilized primarily to fund general and administrative expenditures incurred on behalf of the Company, including costs associated with the acquisition, integration, development, capitalization, structuring, and ongoing support of the Company’s operating entities and strategic initiatives. Such expenditures included transaction-related costs, professional fees, operational support activities, business development expenditures, organizational expenses, and other expenditures incurred in furtherance of the Company’s business activities and strategic objectives.

As of December 31, 2025, the aggregate outstanding balance under the Shareholder Loan Advances was approximately $8.3 million, consisting of approximately $6.4 million advanced directly to DW and approximately $1.9 million advanced to EMT Asia. Because the Shareholder Loan Advances were made to the majority shareholder for a business purpose, but without substantial evidence of ability and intent of the counterparty to pay the notes within the stated maturity, the Company accounted for these notes as contra-equity adjustment to additional paid-in capital, pursuant to ASC 505 -Equity.

As discussed in Note 20 - Restatement of Prior Period Financial Statements, the Shareholder Loan Advances are reflected as a reduction of additional paid-in capital within stockholders’ equity in the accompanying Condensed consolidated balance sheets. Further, pursuant to SAB Topic 5.T, expenditures incurred by EMT Asia or funded through the Shareholder Loan Advances for the benefit of the Company were recognized as selling, general and administrative expenses within the Company’s unaudited condensed consolidated statements of operations when incurred. Such expenditures are accounted for as deemed capital contributions from the majority shareholder because the expenditures were incurred for the operational and strategic benefit of the Company. Accordingly, additional paid-in capital is reduced as funds are advanced and subsequently increased as qualifying expenditures are recognized in the Company’s financial statements.

During the three months ended March 31, 2026, the Company recognized approximately $1.5 million of selling, general and administrative expenses associated with expenditures funded through the Shareholder Loan Advances and incurred for the benefit of the Company pursuant to SAB Topic 5.T. In addition, during the three months ended March 31, 2026, the Company advanced an additional approximately $0.5 million under the same arrangement. Such advances are presented within financing activities in the accompanying unaudited condensed consolidated statements of cash flows.

As of March 31, 2026, the net balance associated with the Shareholder Loan Advances reflected as contra-equity within additional paid-in capital was approximately $1.2 million.

Other Related Party Transactions

Additional related parties include officers and key management of the Company and its subsidiaries, The Zeus Trust, The NYX Trust, Good Earth 1000, LLC, EMT Asia Co., Ltd., ADE Metals Inc., JNS Industry Inc., Beacon Advisory Co. Ltd, N&P Co. Ltd., and Hi-Q MAG Co. Ltd.

Transactions included in financial statements with related party companies in the normal course of business include $0.2 million for purchases of raw materials, $0.2 million in non-trade accounts receivable - related parties generated from repurchase/resale transactions.

Further, related party transactions between the Company, its officers, employees, and significant shareholders comprise various loan arrangements for the ongoing activities and financing of the Company’s operations. Amounts due from or to its officers, employees, and significant shareholders included $1.2 million recorded in Short term debt - related parties. $0.7 million of proceeds were received from new loans during the three months ended March 31, 2026.

Last, the Company provides a guarantee for borrowing to entities under common control and related parties (individuals) of its subsidiaries. As of March 31, 2026, the Company guaranteed joint and several borrowings in the amount of $0.4 million for N&P Co. Ltd. and $0.2 million for one of its subsidiary executives. Additionally, the Company received a guarantee of $0.5 million from the same subsidiary executive for borrowings.

NOTE 18 - NON-CONSOLIDATED VARIABLE INTEREST ENTITIES

The enterprise with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE. The Company determines whether it is the primary beneficiary of a VIE by performing an analysis that principally considers: (a) which variable interest holder has the power to direct activities of the VIE that most significantly impact the VIE’s economic performance; (b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE; (c) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (d) the VIE’s capital structure; (e) the terms between the VIE and its variable interest holders and other parties involved with the VIE; and (f) related-party relationships. We reassess our evaluation of whether an entity is a VIE when certain reconsideration events occur. We reassess our determination of whether we are the primary beneficiary of a VIE on an ongoing basis based on current facts and circumstances.

Nonconsolidated VIEs

The Company has evaluated its relationship with EMT Asia Co., Ltd. (“EMT Asia”), an entity owned and controlled by the Company’s majority shareholder, under the guidance of ASC 810. As of March 31, 2026, and December 31, 2025, the Company had an unsecured promissory note receivable from EMT Asia. Management determined that EMT Asia is a VIE because it does not have sufficient equity at risk to finance its activities without additional subordinated financial support. The Company further determined that it is not the primary beneficiary of EMT Asia because the Company does not possess the power to direct the activities of EMT Asia that most significantly impact EMT Asia’s economic performance. Such power is held by the sole equity owner of EMT Asia through governance and operational control rights. Accordingly, EMT Asia is not consolidated in the accompanying unaudited condensed consolidated financial statements.

During the three months ended March 31, 2026, and the year ended December 31, 2025, EMT Asia incurred certain operating and acquisition-related expenditures on behalf of the Company that were funded through the Shareholder Loan Advances as described in Note 17 - Related Party Transactions. Such amounts were recognized within selling, general and administrative expenses, with corresponding credits recognized within additional paid-in capital in accordance with SAB Topic 5.T.

As of December 31, 2025, the Company had made cumulative distributions to EMT Asia of $1.9 million. As discussed in Note 17 - Related Party Transactions, the Company recognized this amount as a contra-equity within additional paid-in capital. Consequently, as of December 31, 2025, the carrying amount of the Company’s interest in the VIE recorded on the balance sheet is de minimis. The Company’s maximum exposure to loss as a result of its involvement with the entity is the cumulative amount of the $1.9 million distribution. As further discussed in Note 17 - Related Party Transactions, the distributions to EMT Asia are directed by DW for the furtherance of the Company’s business objectives.

As of March 31, 2026, the Company’s general relationship and direct economic exposure with EMT Asia remained unchanged.

Note 19 - 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 unaudited condensed 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.

Guarantees and Warranties:

The list of payment guarantees provided by third parties to the Company as of March 31, 2026, are as follows:

The main commitments with financial institutions as of March 31, 2026, are as follows:

Note 20 - Restatement of Prior Period Financial Statements

Subsequent to the issuance of the Company’s previously issued financial statements, the Company identified errors related to the accounting presentation of certain advances made to David Wilcox, the Company’s sole managing and voting member prior to the Business Combination and majority shareholder following the Business Combination, which were used to fund EMT Asia Co., Ltd., a related-party entity wholly owned by Mr. Wilcox. Management determined that such advances were incorrectly presented as Note receivable — related party and should have been presented as contra-equity within additional paid-in capital. Management also determined that certain expenses incurred by EMT Asia on behalf of the Company should have been recognized as expenses of the Company. The Company had previously recorded an allowance for credit losses in connection with the collection uncertainty concerning the Note receivable — related party, thereby recognizing expense in the periods of issuance.

The following tables reflect the effects of the corrections on all affected line items of the Company’s previously reported financial amounts presented in the these Condensed consolidated financial statements. The correction did not impact cash and cash equivalents, total liabilities, or total net cash used in operating activities for the periods presented.

Note 21 - Subsequent Events

Yorkville Convertible Debenture Financing

On May 7, 2026, the Company entered into a Securities Purchase Agreement with YA II PN, Ltd. (“Yorkville”), a fund managed by Yorkville Advisors Global, LP, pursuant to which the Company agreed to issue and sell to Yorkville convertible debentures in an aggregate principal amount of up to $100.0 million. The convertible debentures are convertible into shares of the Company’s common stock, par value $0.0001 per share. The Company issued the first convertible debenture in the principal amount of $20.0 million on May 7, 2026. A second convertible debenture in the principal amount of $5.8 million is expected to be issued upon effectiveness of a resale registration statement on Form S-1, and up to an additional $74.2 million in convertible debentures may be purchased in subsequent tranches from time to time upon the mutual agreement of the Company and Yorkville. Each convertible debenture will have a purchase price equal to 97% of its principal amount.

The convertible debentures are convertible at a conversion price equal to the lower of $12.09 per share or 95% of the lowest daily volume-weighted average price of the Company’s common stock during thefive consecutive trading days immediately preceding the conversion date, subject to certain limitations, including Nasdaq exchange cap limitations and a 4.99% beneficial ownership limitation. The first convertible debenture bears interest at an annual rate of 5.0%, which increases to 18.0% upon the occurrence and continuation of an event of default, and matures on November 7, 2027.

The Company will not be required to make monthly cash payments under the convertible debentures unless an amortization event occurs. Upon an amortization event, the Company will be required to make monthly cash payments equal to one-fifth of the original principal amount, or the outstanding principal amount if lower, plus a 5% payment premium and all accrued and unpaid interest. The Securities Purchase Agreement includes customary registration rights, investor protections, and provisions governing trading activity, including limitations on short selling. The Company intends to use the proceeds from the facility for general corporate purposes, including supporting the expansion of its operations and development initiatives.

In connection with the Securities Purchase Agreement, the Company entered into a Registration Rights Agreement with Yorkville, pursuant to which the Company is required to file, within 30 calendar days following the date of the Securities Purchase Agreement, a registration statement registering the resale by Yorkville of 5.4 million shares of the Company’s common stock issuable upon conversion of the convertible debentures. Yorkville was also granted certain piggyback registration rights. In addition, the Company and Yorkville entered into a Global Guarantee Agreement, pursuant to which the Company and its subsidiaries agreed to guarantee all of the Company’s obligations under the convertible debentures.