Evolution Metals & Technologies Corp.
For the period ended Jun 30, 2026. Filed Aug 17, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 17, 2026
EMAT$1.96+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-22.
0001213900-26-060654
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-17.
0001213900-26-090427
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 183 current paragraphs.
107 unchanged; 28 reworded; 44 added; 45 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 14 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Subsequent to June 30, 2026, YA II PN, Ltd. (“Yorkville”) converted portions of the Company’s second convertible debenture, which was issued on July 14, 2026 in the original principal amount of $5.775 million. From July 29, 2026 through August 13, 2026, Yorkville converted an aggregate of $550,000 of principal and approximately $23,195 of accrued interest into an aggregate of 210,191 shares of the Company’s common stock. The conversions were effected at conversion prices ranging from approximately $2.14 to $4.59 per share in accordance with the terms of the convertible debenture. Following these conversions, approximately $5.225 million of principal remained outstanding under the second convertible debenture.
Current report
Nasdaq Delinquency Notice and Regained Compliance
Current report
On May 21, 2026, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC notifying the Company that as it had not yet filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”), the Company no longer complied with Nasdaq Listing Rule 5250(c)(1). Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. The Company filed the Form 10-Q on May 22, 2026, thereby curing the deficiency described in the Notice. On May 26, 2026, the Company received notice from Nasdaq that the Company had regained compliance with Nasdaq Listing Rule 5250(c)(1) and that the matter is now closed.
Current report
Share Issuances to Advisors, Consultants and Marketing Service Providers
Current report
Subsequent to March 31, 2026, the Company entered into certain advisory, consulting, marketing and related services agreements and amendments pursuant to which the Company issued or agreed to issue an aggregate of 674,768 shares of its common stock, par value $0.0001 per share, of which 650,189 shares have been issued as of August 17, 2026, as compensation for services rendered or to be rendered to the Company. The shares include issuances or agreed issuances to certain advisors, consultants and marketing service providers, including for capital markets advisory services, shareholder base expansion and marketing services, and sourcing and origination services related to rare earth magnets and related critical materials derived from end-of-life electronic scrap components. The Company did not receive any cash proceeds from these issuances or agreed issuances. The shares have been or will be issued in exempt private transactions as compensation for services. The issuances were made, or are expected to be made, in reliance upon exemptions from the registration requirements of the Securities Act of 1933, as amended.
Current report
Agreement with Senri Trading Co., Ltd.
Current report
On May 29, 2026, the Company executed an agreement with Senri Trading Co., Ltd. (“Senri”) to purchase bulk quantities of NdPr metal from SRE Vietnam (“SRE”), a wholly-owned subsidiary of Tokai Trading Co., Ltd. (“Tokai”) in Japan. Obtained entirely from a non-China source, we believe that NdPr metal are essential in the Company’s intended increase of magnet production to approximately 10,000 tons per annum of rare earth magnets in 2026. Tokai has been operating as a specialized trading company for rare earths and rare metals since its founding in 1981 and began investing in its wholly owned Vietnamese subsidiary, SRE, in 2008. As of January 2025, SRE began tripling its rare earth processing capacity of mid-stream materials to 3,929 metric tons per annum.
Current report
As of July 22, 2026, the Company has taken delivery of the first shipment of 4 metric tons of NdPr metals from SRE for the manufacture of high performance magnets that are compliant with new federal regulations requiring U.S. defense systems to exclude magnets that are sourced or originated from certain prohibited countries. The Company views this development as directly aligned with the Trump administration’s July 20, 2026 Executive Order “Securing America’s Defense Supply Chains and Ensuring Domestic Acquisition of Critical Materials”, as well as with the existing January 1, 2027 DFARS 252.225-7052 sourcing deadline for rare earth permanent magnets in U.S. defense systems. The deliveries of compliant NdPr metal allows the Company produce high-performance magnets that are compliant with DFARS 252.225-7052. The initial delivery of five tons of NdPr metals is the first stage of an agreement for SRE to scale deliveries to support the Company’s increased production capacity, expected to reach approximately 10,000 metric tons per annum by November 2026.
Current report
Under DFARS 252.225-7052, effective January 1, 2027, U.S. defense contractors will be prohibited from delivering to the Department of War rare earth magnets containing materials mined, refined, separated, melted, or produced in China, Russia, North Korea, or Iran. Because the People’s Republic of China appropriates most of the world’s NdPr metal, the majority of globally available magnet supply is expected to become non-compliant absent qualified ex-China feedstock and manufacturing. The July 20, 2026 Executive Order sharply tightens enforcement by ending routine waivers, requiring a formal mitigation plan for any exception, and eliminating the “non-availability” argument unless a contractor demonstrates active, adequately funded, and ongoing efforts to qualify a domestic or allied source. The Executive Order follows the Trump administration’s January 2026 Section 232 Proclamation identifying rare earth permanent magnets as “vital to nearly all electronics and vehicles” and also follows the February 2026 launch of the $12 billion Project Vault critical minerals reserve.
Current report
Interest expense (income), net
Current report
Provision for credit losses
Current report
Provision for credit losses primarily consists of expected credit losses recognized on the Company’s financial assets, including notes receivable and other receivables.
Current report
Other expense (income)
Current report
Income taxes
Current report
Income taxes consist of current and deferred income tax expense or benefit recognized in the applicable period.
Current report
Three Months Ended June 30, 2026
Current report
Six Months Ended June 30, 2026
Current report
Cost of sales was $3.2 million for the six months ended June 30, 2026, compared to $0 for the six months ended June 30, 2025, representing an increase of $3.2 million. The percentage change is not meaningful because the Company did not incur cost of sales during the prior-year period. The increase was primarily attributable to the commencement of revenue-generating product sales activities through the Korean operating companies acquired in connection with the Business Combination.
Current report
Operating loss was $12.2 million for the three months ended June 30, 2026, compared to $2.9 million for the three months ended June 30, 2025, representing an increase in operating loss of $9.3 million, or 320.2%. The increase was primarily attributable to the increase in selling, general and administrative expenses discussed above, together with a gross loss of approximately $0.1 million recognized during the three months ended June 30, 2026.
Current report
Other non-operating income, net was $0.2 million for the three months ended June 30, 2026, compared to other non-operating loss, net of $38.0 million for the three months ended June 30, 2025, representing an improvement of approximately $38.2 million, or 100.6%. The improvement was primarily attributable to a $1.7 million gain from the change in fair value of financial instruments during the three months ended June 30, 2026, compared to a $33.5 million loss from the change in fair value of financial instruments and a $5.1 million provision for credit losses during the three months ended June 30, 2025. The improvement was partially offset by $0.8 million of net interest expense and a $0.5 million foreign currency loss during the three months ended June 30, 2026.
Current report
Other non-operating loss, net was $424.4 million for the six months ended June 30, 2026, compared to $53.2 million for the six months ended June 30, 2025, representing an increase in loss of approximately $371.2 million, or 698.0%. The increase was primarily attributable to a $423.6 million loss from changes in the fair value of financial instruments during the six months ended June 30, 2026, primarily associated with the July Investment Agreement Derivative and the CPU Share Allocation Obligations, compared to a $48.9 million loss from changes in the fair value of financial instruments during the six months ended June 30, 2025. The increase was also affected by $1.5 million of net interest expense and a $0.5 million foreign currency loss during the six months ended June 30, 2026, compared to $1.0 million of net interest income and no foreign currency loss during the six months ended June 30, 2025. These unfavorable changes were partially offset by the absence of the $5.5 million provision for credit losses recognized during the six months ended June 30, 2025.
Current report
Income tax benefit
Current report
The Company recognized an income tax benefit of approximately $0.1 million for the three months ended June 30, 2026, compared to no income tax expense or benefit for the three months ended June 30, 2025, representing an increase in income tax benefit of approximately $0.1 million. The percentage change is not meaningful because no income tax expense or benefit was recognized during the prior-year period.
Current report
The Company recognized an income tax benefit of approximately $0.1 million for the six months ended June 30, 2026, compared to no income tax expense or benefit for the six months ended June 30, 2025, representing an increase in income tax benefit of approximately $0.1 million. The percentage change is not meaningful because no income tax expense or benefit was recognized during the prior-year period.
Current report
The Company operates as a single operating and reportable segment. Accordingly, the Company’s segment revenue and gross profit (loss) are the same as the corresponding consolidated amounts presented above.
Current report
For the three months ended June 30, 2026, segment revenue was $1.6 million, compared to $0 for the three months ended June 30, 2025, representing an increase of $1.6 million. The percentage change is not meaningful because the Company did not generate revenue in the prior-year period. The increase was primarily attributable to the inclusion of the Korean operating companies acquired in connection with the Business Combination.
Current report
The Company reported a segment gross loss of $0.1 million for the three months ended June 30, 2026, compared to no gross profit or loss for the three months ended June 30, 2025. The gross loss resulted from cost of sales of approximately $1.8 million exceeding revenue of approximately $1.6 million during the period.
Current report
Six Months Ended June 30, 2026 and 2025
Current report
For the six months ended June 30, 2026, segment revenue was $3.5 million, compared to $0 for the six months ended June 30, 2025, representing an increase of $3.5 million. The percentage change is not meaningful because the Company did not generate revenue in the prior-year period. The increase was primarily attributable to the inclusion of the Korean operating companies acquired in connection with the Business Combination.
Current report
The Company reported segment gross profit of $0.3 million for the six months ended June 30, 2026, compared to no gross profit or loss for the six months ended June 30, 2025. Gross profit for the 2026 period reflected revenue of approximately $3.5 million, partially offset by cost of sales of approximately $3.2 million.
Current report
Following the completion of the Business Combination on January 5, 2026, the Company is focused on integrating and scaling the operations of its acquired Korean operating companies and executing its broader growth strategy. The Company’s current and future capital requirements are expected to include funding for working capital, feedstock and raw material purchases, capital expenditures, equipment purchases, integration activities, facility expansion, public company costs and other operating and strategic initiatives. The Company expects that additional financing will be required to support these activities and its planned growth. While there can be no assurances, the Company intends to seek additional capital through equity, debt, strategic financing or other financing arrangements. The Company may not be able to raise additional capital on terms acceptable to it or at all. If the Company is unable to obtain sufficient financing when needed, it may be required to delay, reduce or abandon certain operating or expansion initiatives, which could materially and adversely affect its business, results of operations and financial condition.
Current report
Restricted cash was $33 thousand as of June 30, 2026 and December 31, 2025. The Company’s total working capital deficit, including cash and cash equivalents, was $78.8 million as of June 30, 2026.
Current report
On May 13, 2026, the Company entered into binding purchase orders with ULVAC Korea, Ltd., a subsidiary of ULVAC, Inc., for the purchase of thirteen high-performance rare earth sintered magnet manufacturing machines.
Current report
On May 29, 2026, the Company entered into an agreement with Senri Trading Co., Ltd. (“Senri”) to purchase bulk quantities of NdPr metal supplied by SRE Vietnam (“SRE”), a wholly owned subsidiary of Tokai Trading Co., Ltd. The agreement is intended to provide the Company with a non-China source of NdPr metal to support the planned expansion of its rare earth magnet production. Subsequent to June 30, 2026, the Company received an initial shipment of 4 metric tons of NdPr metal from SRE on July 22, 2026. As deliveries under the agreement scale in connection with the Company’s planned production expansion, purchases of NdPr metal are expected to require additional working capital and therefore represent an additional consideration in the Company’s ongoing liquidity and capital requirements.
Current report
In May and June 2026, NS World extended four existing IBK loan facilities totaling KRW 1.044 billion. Three facilities totaling KRW 644 million were extended on May 22, 2026 and one facility totaling KRW 400 million was extended on June 5, 2026, with maturities extended through May and June 2027, respectively.
Current report
For the six months ended June 30, 2026, net cash used in investing activities was $7.4 million, as compared to net cash used in investing activities of $0.6 million for the six months ended June 30, 2025, representing an increase in cash used in investing activities of approximately $6.8 million. The increase in cash used in investing activities was primarily attributable to $7.7 million of purchases of property, plant and equipment, $0.7 million of issuances of notes receivable, and $0.4 million of payments related to the acquisition of a business during the six months ended June 30, 2026, partially offset by $1.4 million of net cash acquired in connection with the Business Combination. During the six months ended June 30, 2025, investing cash flows primarily consisted of $0.8 million of issuances of notes receivable, partially offset by $0.2 million of proceeds from notes receivable.*** ***
Current report
For the six months ended June 30, 2026, net cash provided by financing activities was $16.4 million, as compared to $4.0 million for the six months ended June 30, 2025, representing an increase of $12.4 million. Financing cash inflows during the six months ended June 30, 2026 primarily included $19.4 million of proceeds from issuance of the convertible debentures and $1.7 million of proceeds from short-term debt. These inflows were partially offset by $1.4 million of repayments of short-term debt, $0.6 million of repayments of the current portion of long-term debt, $1.4 million of constructive disbursements to a related party, $0.9 million of payments for appraisal rights, $0.4 million of repayments of short-term debt to the Sponsor, and other financing-related payments. During the six months ended June 30, 2025, financing activities included $7.1 million of proceeds from the issuance of convertible preferred units.
Current report
As of June 30, 2026, our contractual obligations and commitments increased materially from December 31, 2025, primarily due to approximately $15.9 million of equipment purchase commitments with ULVAC Korea, Ltd., approximately $45.1 million of obligations related to dissenting shareholder appraisal rights, and $20.0 million of principal outstanding under the Company’s convertible debenture issued to Yorkville.
Current report
During 2026, the Company advanced approximately $0.5 million to David Wilcox, the Company’s sole managing and voting member prior to the Business Combination and majority shareholder following the Business Combination, pursuant to an unsecured, non-interest-bearing promissory note arrangement (the “2026 Related Party Advances”). The advances were used to fund EMT Asia Co., Ltd., a related-party entity wholly owned by Mr. Wilcox, including certain 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.
Current report
As described in Note 17 – Related Party Transactions to the Company’s unaudited condensed consolidated financial statements for the six months ended June 30, 2026, management determined that the 2026 Related Party Advances should be accounted for as equity transactions and presented as a reduction to additional paid-in capital, rather than as a note receivable or non-trade accounts receivable — related party. In addition, certain expenses incurred by EMT Asia on behalf of the Company were recognized as expenses of the Company in the appropriate periods. Accordingly, as of June 30, 2026, no balance related to the 2026 Related Party Advances was included in non-trade accounts receivable — related parties on the Company’s condensed consolidated balance sheets.
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (45)
Previous report
On January 5, 2026 (the “Closing Date”), following the approval at the special meeting of the shareholders of WTMA, held on September 2, 2025, WTMA Merger Subsidiary LLC, a Delaware limited liability company, and a wholly owned subsidiary of EM&T (the “Merger Sub”) consummated a merger (the “Merger”) with and into Evolution Metals LLC (“EM”), a Delaware limited liability company, pursuant to an Amended and Restated Agreement and Plan of Merger, dated as of November 6, 2024, as amended by Amendment No. 1 to Amended and Restated Agreement and Plan of Merger, dated as of November 11, 2024, as amended by Amendment No. 2 to Amended and Restated Agreement and Plan of Merger, dated February 10, 2025, as amended by Amendment No. 3 to Amended and Restated Agreement and Plan of Merger, dated March 31, 2025, as amended by Amendment No. 4 to Amended and Restated Agreement and Plan of Merger, dated June 11, 2025, as amended by Amendment No. 5 to Amended and Restated Agreement and Plan of Merger, dated July 21, 2025, and as amended by Amendment No. 6 to Amended and Restated Agreement and Plan of Merger, dated January 5, 2026 (the “Merger Agreement”). Accordingly, the Merger Agreement was adopted, and the Merger and other transactions contemplated thereby (collectively, the “Business Combination”) were approved and completed. At the closing of the Business Combination (the “Closing”) on January 5, 2026, pursuant to the Merger Agreement, Merger Sub merged with and into EM, with EM surviving the Merger as a wholly owned subsidiary of WTMA. On the Closing Date, pursuant to the Business Combination, WTMA changed its name to Evolution Metals & Technologies Corp. As part of the Business Combination and prior to the closing of the Merger, EM acquired Handa Lab, KCM, KMMI, and NS World.
Previous report
On January 5, 2026, WTMA, entered into Amendment No. 6 to the Amended and Restated Agreement and Plan of Merger, which amended the Amended and Restated Agreement and Plan of Merger, by among other things, amended the recitals of the Merger Agreement, as well as certain definitions under the Merger Agreement, and also
Previous report
updated the list of minority equityholders.
Previous report
On January 5, 2026, WTMA entered into that certain Agreement and Plan of Merger, dated as of January 5, 2026, by and among WTMA, EM, NewCo, Inc., Inc., a Delaware corporation (“NewCo”), and William David Wilcox Jr., as the sole stockholder of NewCo, as it may be amended or supplemented from time to time (the “Step 7 Merger Agreement”), pursuant to which Merger Sub merged with and into NewCo (the Step 7 Merger), on the terms and subject to the conditions set forth in the Step 7 Merger Agreement, with NewCo continuing as the surviving corporation in the Step 7 Merger. Thereafter, on January 5, 2026, Merger Sub merged with and into EM, with EM surviving the Step 8 Merger as a wholly owned subsidiary of WTMA. On the Closing Date, pursuant to the Business Combination, WTMA changed its name to Evolution Metals & Technologies Corp.
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Precedent Transaction Agreements
Previous report
As contemplated by the Merger Agreement, EM and WTMA entered into the following transactions that were consummated in connection with the Closing (the “Precedent Transactions”) in order to effectuate the Business Combination and which occurred prior to or at the Closing.
Previous report
On January 5, 2026, in the first step of the Precedent Transactions, the EM Equityholder formed a wholly owned subsidiary and Delaware corporation (“US NewCo”) and immediately thereafter contributed 13,000 of the limited liability company common member units of EM (the “EM Member Units”) to US NewCo in exchange for 100 shares of common stock of US NewCo.
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On January 5, 2026, in the second step of the Precedent Transactions, EM formed (i) a wholly owned subsidiary and Korean Chusik Hosea company (“Korea NewCo”) and (ii) a wholly owned subsidiary and Korean non-Chusik Hosea company (“Korea DRE”).
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On January 5, 2026, in the third step of the Precedent Transactions, Korea DRE elected to be classified as a disregarded entity for U.S. federal income tax purposes.
Previous report
On January 5, 2026, in the fourth step of the Precedent Transactions, EM contributed $78,870,000 (the “Capital Contribution”) to the capital of, and assigned its rights under certain heads of agreement between EM and each of the Korean Companies to Korea NewCo.
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On January 5, 2026, in the fifth step of the Precedent Transactions, EM caused Korea NewCo to distribute the Capital Contribution to EM in exchange for 16,571 EM Member Units.
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On January 5, 2026, in Step 6-A of the Precedent Transactions, Korea NewCo acquired Korean DRE from EM in exchange for KRW 10,000,000, after which Korea DRE became a wholly owned subsidiary of Korea NewCo.
Previous report
On January 5, 2026, in Step 6-B of the Precedent Transactions, each equity holder of each of the equityholders of each of the Korean Companies (collectively, the “Korean Equityholders”) who did not exercise his, her or its appraisal rights with respect to all of his, her or its equity interests in the applicable Korean Company exchanged, pursuant to certain share exchange agreements, as amended (the “Korean Company Exchange Agreements”), those of his, her or its equity interests in the applicable Korean Company owned by such equityholder with respect to which such equityholder did not exercise the appraisal right for the respective portions of the EM Member Units and the remaining EM Member Units, which represented the fair market value of the shares of the Korean Companies with respect to which the appraisal rights are exercised, were transferred by Korea NewCo to each applicable Korean Company.
Previous report
On January 5, 2026, in Step 6-C of the Precedent Transactions, Korea NewCo, pursuant to an agreement and plan of merger, merged with and into Korea DRE, such that the separate existence of Korea NewCo ceased and Korea DRE became the surviving company.
Previous report
On January 5, 2026, EM and the applicable Korean Companies executed the Step 6-D transaction documents providing for EM’s acquisition of all EM Member Units held by such Korean Companies for an aggregate purchase price of $48,118,084. The payment of Step 6-D is contractually required to occur on the earlier of (i) 14 calendar days following EM’s consummation of a capital raise exceeding $50,000,000, or (ii) the third anniversary of the Korean Company Exchange Agreements, after which the Korean Companies will become wholly owned subsidiaries of Korea DRE following the required redemptions of interests subject to appraisal rights.
Previous report
On January 5, 2026, in the seventh step of the Precedent Transactions, Merger Sub merged with and into US NewCo pursuant to Step 7 Merger Agreement, such that (i) the separate existence of Merger Sub ceased and US NewCo became the surviving corporation and a wholly owned subsidiary of WTMA and (ii) the EM Equityholder received $61,875,098 worth of WTMA Common Stock in consideration for such merger.
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On January 5, 2026, the Merger and related transactions consummated under the Merger Agreement at the Closing were the eighth step of the Precedent Transactions and occurred immediately following the seventh step of the Precedent Transactions.
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Registration Rights Agreement
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In connection with the Closing, EMAT, WTMA’s sponsor, Welsbach Acquisition Holdings LLC (the “Sponsor”), certain former holders of WTMA Common Stock, certain former members of EM and certain other entities (such holders, collectively, the “RRA Holders”) entered into the Amended and Restated Registration Rights Agreement, dated as of the Closing Date (the “Registration Rights Agreement”), pursuant to which, among other things, EMAT is obligated to file, within 180 days following the Closing Date, a shelf registration statement to register the resale of certain securities of EMAT, including EMAT Common Stock, held by the RRA Holders after the Closing. The Registration Rights Agreement also provides the RRA Holders with certain demand and piggy-back registration rights, subject to certain requirements and customary conditions.
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The Registration Rights Agreement will terminate on the earlier of (i) the tenth anniversary of the Closing Date and (b) with respect to any RRA Holder, on the date that such RRA Holder no longer holds any securities permitted to be registered pursuant to the Registration Rights Agreement.
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Lock-up Agreements
Previous report
In connection with the Business Combination, on the Closing Date, the stockholders of the Korean Companies, EM Convertible Preferred Unit holders, and holders of EM Member Units entered into lock-up agreements with respect to their equity interests and the shares of EMAT Common Stock that they received in the Business Combination pursuant to which they agreed to certain restrictions on transfer of their securities until seven calendar days following the Closing or until up to the third anniversary of the Closing.
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Other operating income and expense
Previous report
Other operating income primarily consists of government grants, rental income, income from the provision of technical services, gain on the disposal of tangible assets, and brokerage income. Other operating expense primarily consists of loss on disposal of asset.
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Other non-operating income and expenses
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Interest income and expenses
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Finance income
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Finance income primarily includes realized gain on deposit or loan.
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Finance expense
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Finance expense primarily consists of interest incurred on our finance leases, financing obligations and outstanding loans, as well as losses on derivatives.
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Gain (loss) on foreign currency
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Gain (loss) on foreign currency primarily consists of the translation of monetary assets and liabilities denominated in foreign currencies.
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Gain (loss) on financial instruments
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Income taxes (benefit)
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Income tax expense was $0.0 million for each of the three months ended March 31, 2026 and 2025. There was no income tax expense or benefit recognized during either period, and therefore there was no period-over-period increase or decrease.
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The following table presents our revenue by segment as well as the dollar and percentage change from the prior year (dollars in thousands):
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The following table presents our gross profit by segment as well as the dollar and percentage change from the prior year (dollars in thousands):
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We are an early-stage company. Our future capital requirements will depend on many factors, including the timing and extent of our research and the acquisition of processing facilities. In order to finance these opportunities and associated costs, it is possible that the Company would need to raise additional financing if the proceeds received from other equity financing are insufficient to support its business needs. While there can be no assurances, the Company intends to raise such capital through additional equity raises. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital on acceptable terms when needed, its product development business, results of operations and financial condition would be materially and adversely affected.
Previous report
For the Three Months Ended March 31, 2026 (unaudited), net cash provided in investing activities was $1.0 million as compared to net cash used by investing activities of $0.5 million for the three months ended March 31, 2025. The difference was a result of net cash acquired in the Business Combination, partially offset by increases in loans, acquisitions of property, plant and equipment and leasehold deposits.
Previous report
For the Three Months Ended March 31, 2026 (unaudited), net cash provided by financing activities was $1.7 million as compared to $3.7 million for the three months ended March 31, 2025. The difference was a result of payments made to effectuate the reverse recapitalization, constructive disbursements to related parties, repayments of debt and lease liabilities, and payments for appraisal rights during the three months ended March 31, 2026. In the prior-year period, net cash provided by financing activities primarily reflected proceeds from the issuance of convertible preferred units.
Showing the first 40 of 45 passages. Open the source sections for the rest.
Reworded paragraphs (28)
Previous wording
The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our unaudited Unaudited Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q (“Form 10-Q”) as of and for the three months ended March 31, 2026 and 2025. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those set forth in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included in this Form 10-Q. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.
Current wording
The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q (“Form 10-Q”) as of and for the three and six months ended June 30, 2026 and 2025. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those set forth in the section titled “Cautionary Note Regarding Forward-Looking Statements” included in this Form 10-Q, as well as in “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as the same may be amended from time to time. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.
Previous wording
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” “the Company”, “EMAT” and “EM&T” generally refer to Evolution Metals & Technologies Corp.
Current wording
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” the “Company,” “EMAT” and “EM&T” generally refer to Evolution Metals & Technologies Corp. and its consolidated subsidiaries.
Previous wording
The first Convertible Debenture (the “First Debenture”) in the principal amount of $20,000,000 was issued on May 7, 2026. The second Convertible Debenture in the principal amount of $5,775,000 is expected to be issued upon effectiveness of the Registration Statement on Form S-1, which the Company has agreed to file pursuant to the Registration Rights Agreement, as such term is defined below. Additionally, pursuant to the Securities Purchase Agreement, up to $74,225,000 in Convertible Debentures shall be purchased in subsequent tranches from time to time upon the mutual agreement of the Company and Yorkville.
Current wording
The first Convertible Debenture (the “First Debenture”) in the principal amount of $20,000,000 was issued on May 7, 2026. The second Convertible Debenture in the principal amount of $5,775,000 was issued on July 14, 2026 upon effectiveness of a resale registration statement on Form S-1 on July 10, 2026. Additionally, pursuant to the Securities Purchase Agreement, up to $74,225,000 in Convertible Debentures shall be purchased in subsequent tranches from time to time upon the mutual agreement of the Company and Yorkville.
Previous wording
On May 7, 2026, pursuant to the Securities Purchase Agreement, the Company and Yorkville entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which Yorkville is entitled to certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Registration Rights Agreement, the Company is required to, on the 30th calendar day following the date of the Securities Purchase Agreement, file with the Securities and Exchange Commission a registration statement (the “Registration Statement”) registering the resale by Yorkville of 5.4 million Conversion Shares. Under the Registration Rights Agreement, Yorkville was also granted piggyback registration rights under certain conditions as described in the Registration Rights Agreement.
Current wording
On May 7, 2026, pursuant to the Securities Purchase Agreement, the Company and Yorkville entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which Yorkville is entitled to certain registration rights under the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to the Registration Rights Agreement, the Company was required to, on the 30th calendar day following the date of the Securities Purchase Agreement, file with the Securities and Exchange Commission a registration statement (the “Registration Statement”) registering the resale by Yorkville of 5.4 million Conversion Shares. Under the Registration Rights Agreement, Yorkville was also granted piggyback registration rights under certain conditions as described in the Registration Rights Agreement.
Previous wording
Payment Structure.** **Each Contract provides for payment in four installments tied to project milestones: a first installment due in May or July 2026; a second installment due in July or August 2026; a third installment due within five (5) days of shipment ex Dalian; and a final installment due within thirty (30) days of arrival at destination.
Current wording
Payment Structure.** **Each Contract provides for payment in four installments: a first installment due in May or July 2026; a second installment due in July or August 2026; a third installment due within five (5) days of shipment ex Dalian; and a final installment due within thirty (30) days of arrival at destination.
Previous wording
Our historical results of operations may not be comparable to our future results of operations, and our results for the three months ended March 31, 2026 may not be comparable to the three months ended March 31, 2025, primarily due to the consummation of the Business Combination, the acquisition of the Korean operating companies, the inclusion of post-combination public company costs, changes in the fair value of financial instruments, and the Company’s change in tax status, as described below.
Current wording
Our historical results of operations may not be comparable to our future results of operations, and our results for the six months ended June 30, 2026 may not be comparable to the six months ended June 30, 2025, primarily due to the consummation of the Business Combination, the acquisition of the Korean operating companies, the inclusion of post-combination public company costs, changes in the fair value of financial instruments, and the Company’s change in tax status, as described below.
Previous wording
On January 5, 2026, the Company consummated the Business Combination. In connection with the Business Combination, the Company incurred significant transaction-related, professional, accounting, legal, valuation, advisory, public company readiness and other corporate costs. In addition, the Company recognized significant non-cash losses from changes in the fair value of financial instruments, including the July Investment Agreement derivative and CPU Share Allocation Obligations. These fair value changes and transaction-related costs materially affected the Company’s results of operations for the three months ended March 31, 2026 and may limit comparability to prior periods.
Current wording
On January 5, 2026, the Company consummated the Business Combination. In connection with the Business Combination, the Company incurred significant transaction-related, professional, accounting, legal, valuation, advisory, public company readiness and other corporate costs. In addition, the Company recognized significant non-cash losses from changes in the fair value of financial instruments, including the July Investment Agreement derivative and CPU Share Allocation Obligations. These fair value changes and transaction-related costs materially affected the Company’s results of operations for the six months ended June 30, 2026 and may limit comparability to prior periods.
Previous wording
Immediately prior to the consummation of the Business Combination, the Company acquired controlling interests in the Korean operating companies. As a result, the Company’s results of operations for the three months ended March 31, 2026 include revenues, cost of sales, operating expenses, assets and liabilities of the Korean operating companies following the acquisition date, while the comparable prior-year period primarily reflects the historical results of EM LLC before the acquisition of such operating businesses. Accordingly, the Company’s results of operations for the periods presented are not directly comparable. The Company may continue to pursue acquisitions as part of its growth strategy, which could further affect comparability of future periods.
Current wording
As part of the consummation of the Business Combination, the Company acquired controlling interests in the Korean operating companies. As a result, the Company’s results of operations for the six months ended June 30, 2026 include revenues, cost of sales, operating expenses, assets and liabilities of the Korean operating companies following the acquisition date, while the comparable prior-year period primarily reflects the historical results of EM LLC before the acquisition of such operating businesses. Accordingly, the Company’s results of operations for the periods presented are not directly comparable. The Company may continue to pursue acquisitions as part of its growth strategy, which could further affect comparability of future periods.
Previous wording
Our future results of operations may not be comparable to the historical results of operations for the periods presented, primarily for the reasons described below.
Current wording
Our future results of operations may not be comparable to the historical results of operations for the periods presented.
Previous wording
Interest expense primarily consists of interest incurred on the Company’s debt obligations, including short-term debt, related-party debt, long-term debt, and assumed obligations in connection with the Business Combination.
Current wording
Interest expense (income), net consists primarily of interest incurred on the Company’s debt obligations, including short-term debt, related-party debt, long-term debt, and assumed obligations in connection with the Business Combination, offset by interest earned on the Company’s notes receivable and other non-trade receivables, including related-party receivables.
Previous wording
Other non-operating income and losses, net were a loss of $424.7 million for the three months ended March 31, 2026 as compared to a loss of $15.2 million for the three months ended March 31, 2025, an increase in net loss of $409.5 million, or 2,695%. This increase was primarily due to a $425.2 million non-cash loss from the change in fair value of financial instruments during the three months ended March 31, 2026, compared to a $15.5 million non-cash loss from the change in fair value of financial instruments during the three months ended March 31, 2025. The increase was partially offset by other income of $1.3 million recognized during the three months ended March 31, 2026, compared to other income of $0.3 million during the three months ended March 31, 2025, and the absence of provision for credit losses during the three months ended March 31, 2026, compared to provision for credit losses of $0.5 million during the three months ended March 31, 2025.
Current wording
Change in fair value of financial instruments
Previous wording
Gain (loss) on financial instruments primarily consists of non-cash changes in the fair value of the Company’s financial instruments that are measured at fair value each reporting period.
Current wording
Change in fair value of financial instruments primarily consists of non-cash changes in the fair value of the Company’s financial instruments that are measured at fair value each reporting period.
Previous wording
Other non-operating income includes miscellaneous income. Other non-operating expense primarily includes other costs consist of miscellaneous loss and amortization of accumulated actuarial loss and loss on disposal of tangible assets and loss from shares repurchase liability.
Current wording
Other expense (income) primarily consists of miscellaneous income and expense, amortization of accumulated actuarial loss, gain or loss on disposal of tangible assets, foreign currency transaction gains or losses, and other non-operating items.
Previous wording
Revenues were $1.9 million for the three months ended March 31, 2026 as compared to $0.0 million for the three months ended March 31, 2025, an increase of $1.9 million. The percentage change is not meaningful because the Company did not generate revenues during the prior-year period. This increase was primarily due to the Company’s acquisition of the Korean operating companies in connection with the Business Combination, which resulted in the Company recognizing product sales generated in Korea during the three months ended March 31, 2026.
Current wording
Revenues were $1.6 million for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025, representing an increase of $1.6 million. The percentage change is not meaningful because the Company did not generate revenues during the prior-year period. The increase was primarily due to the Company’s acquisition of the Korean operating companies in connection with the Business Combination, which resulted in the Company recognizing product sales generated in Korea during the three months ended June 30, 2026.
Previous wording
Cost of sales were $1.4 million for the three months ended March 31, 2026 as compared to $0.0 million for the three months ended March 31, 2025, an increase of $1.4 million. The percentage change is not meaningful because the Company did not incur cost of sales during the prior-year period. The Company’s cost of sales for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025, mainly as a result of the commencement of revenue-generating product sales activities through the Korean operating companies acquired in connection with the Business Combination.
Current wording
Cost of sales was $1.8 million for the three months ended June 30, 2026, compared to $0 for the three months ended June 30, 2025, representing an increase of $1.8 million. The percentage change is not meaningful because the Company did not incur cost of sales during the prior-year period. The increase was primarily attributable to the commencement of revenue-generating product sales activities through the Korean operating companies acquired in connection with the Business Combination.
Previous wording
Selling, general and administrative expenses were $16.1 million for the three months ended March 31, 2026 as compared to $2.8 million for the three months ended March 31, 2025, an increase of $13.3 million, or 475%. This increase was primarily due to higher corporate, professional, transaction-related and public company costs incurred in connection with the Business Combination and post-combination operations, together with the inclusion of selling, general and administrative expenses of the Korean operating companies acquired in connection with the Business Combination.
Current wording
Selling, general and administrative expenses were $12.1 million for the three months ended June 30, 2026, compared to $2.9 million for the three months ended June 30, 2025, representing an increase of $9.2 million, or 316.3%. The increase was primarily due to higher corporate, professional, transaction-related and public company costs incurred in connection with the Business Combination and post-combination operations, together with the inclusion of selling, general and administrative expenses of the Korean operating companies acquired in connection with the Business Combination.
Previous wording
Operating loss was $15.7 million for the three months ended March 31, 2026 as compared to $2.8 million for the three months ended March 31, 2025, an increase of $12.9 million, or 459%. This increase was primarily due to the increase in selling, general and administrative expenses, partially offset by gross profit generated from the Korean operating companies during the three months ended March 31, 2026.
Current wording
Operating loss was $27.8 million for the six months ended June 30, 2026, compared to $5.7 million for the six months ended June 30, 2025, representing an increase in operating loss of $22.1 million, or 388.3%. The increase was primarily attributable to the increase in selling, general and administrative expenses discussed above, partially offset by gross profit of approximately $0.3 million generated by the Korean operating companies during the six months ended June 30, 2026.
Previous wording
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 the unaudited condensed consolidated financial statements. The Company’s ability to continue as a going concern is dependent upon the management of its expenses and its ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.
Current wording
Historically, the Company’s primary sources of liquidity have included proceeds from the issuance of convertible preferred units and, more recently, debt financing, including the issuance of convertible debentures. The Company reported a net loss of $452.2 million for the six months ended June 30, 2026. As of June 30, 2026, the Company had an aggregate cash balance of $5.3 million and a net working capital deficit of $78.8 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 the unaudited condensed consolidated financial statements. The Company’s ability to continue as a going concern is dependent upon its ability to manage operating expenditures, fund its working capital and other obligations, obtain additional financing when needed and improve the operating performance of its businesses.
Previous wording
As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date the unaudited condensed consolidated financial statements were available to be issued. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Current wording
As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with ASC 205-40, “Presentation of Financial Statements—Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date the unaudited condensed consolidated financial statements were available to be issued. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
Previous wording
During the three months ended March 31, 2026, we did not raise a significant amount of additional external financing in connection with the Business Combination. The Business Combination did not include significant external financing at closing, and management is actively pursuing additional sources of capital, including equity and strategic financing arrangements, to support the Company’s operations and growth initiatives.
Current wording
The Business Combination did not include significant external financing at closing, and management is actively pursuing additional sources of capital, including equity and strategic financing arrangements, to support the Company’s operations and growth initiatives.
Previous wording
Subsequent to March 31, 2026, on May 7, 2026, the Company entered into a Securities Purchase Agreement with YA II PN, Ltd., a fund managed by Yorkville Advisors Global, LP, pursuant to which the Company agreed to issue and sell convertible debentures in an aggregate principal amount of up to $100.0 million. 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.
Current wording
On May 7, 2026, the Company entered into a Securities Purchase Agreement with YA II PN, Ltd., a fund managed by Yorkville Advisors Global, LP, pursuant to which the Company agreed to issue and sell convertible debentures in an aggregate principal amount of up to $100.0 million. 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 $5,775,000 was issued upon effectiveness of a resale registration statement on Form S-1 on July 10, 2026, 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.
Previous wording
For the Three Months Ended March 31, 2026 (unaudited) net cash used in operating activities of $5.6 million as compared to $2.1 million for the three months ended March 31, 2025. The difference was a result of higher operating expenditures following the Business Combination and the inclusion of the Korean operating companies.
Current wording
For the six months ended June 30, 2026, net cash used in operating activities was $14.8 million, as compared to $4.5 million for the six months ended June 30, 2025, representing an increase in cash used in operating activities of $10.3 million. The increase was primarily attributable to higher operating expenditures following the Business Combination and the inclusion of the Korean operating companies, together with changes in operating assets and liabilities. The Company’s $452.2 million net loss for the six months ended June 30, 2026 included substantial non-cash fair value adjustments, including $190.5 million and $234.7 million of losses related to changes in the fair value of the CPU Share Allocation Obligations and July Investment Agreement Derivative, respectively, partially offset by a $1.7 million gain from the change in fair value of the convertible debentures. Accordingly, these fair value changes did not result in corresponding operating cash outflows during the period.
Previous wording
Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In January 2026, the Company completed the Business Combinations. This event legally obligates the Company to repurchase the Appraisal Shares in accordance with the terms above. The payment amount was approximately $48.3 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date. Because the appraisal rights obligation is denominated in Korean Won, the U.S. dollar carrying amount of the liability is affected by changes in the USD/KRW exchange rate. As a result of changes in the exchange rate between the closing date and March 31, 2026, the U.S. dollar-equivalent carrying amount of the liability decreased from the initial obligation amount. As of March 31, 2026, a liability of $46.2 million was recorded in non-trade accounts payable on the condensed consolidated balance sheets.
Current wording
Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In January 2026, the Company completed the Business Combinations. This event legally obligates the Company to repurchase the Appraisal Shares in accordance with the terms above. The payment amount was approximately $48.2 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date. Because the appraisal rights obligation is denominated in Korean Won, the U.S. dollar carrying amount of the liability is affected by changes in the USD/KRW exchange rate. As a result of changes in the exchange rate between the closing date and June 30, 2026, the U.S. dollar-equivalent carrying amount of the liability decreased from the initial obligation amount. As of June 30, 2026, a liability of $45.1 million was recorded in non-trade accounts payable on the condensed consolidated balance sheets.
Previous wording
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 millionwas included innon-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 inother income (expense), net, due to the difference between the Company’s carrying value of the notes and the settlement amount recorded by WTMA.
Current wording
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.
Previous wording
We did not have any off-balance sheet arrangements as of March 31, 2026.
Current wording
Other than the foregoing, the Company did not have any material off-balance sheet arrangements as of June 30, 2026.
Previous wording
The above discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported. Our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies of the accompanying Notes to Unaudited Condensed Consolidated Financial Statements of the Company in Part I, Item 1 of this Form 10-Q, of which this exhibit forms a part. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. During the three months ended March 31, 2026, the only significant changes to our critical accounting estimates are as follows:
Current wording
The above discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported. Our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies of the accompanying Notes to Unaudited Condensed Consolidated Financial Statements of the Company in Part I, Item 1 of this Form 10-Q. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. During the six months ended June 30, 2026, the only significant changes to our critical accounting estimates are as follows:
Previous wording
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of the Company’s management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. References to GAAP issued by the FASB in the accompanying notes to the 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 are presented in US dollars and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Current wording
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of the Company’s management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. References to GAAP issued by the FASB in the accompanying notes to the 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 are presented in US dollars and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Previous wording
Certain agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of shares of New EM Common Stock to certain investors and vendors. The Company applies ASC 480, “Distinguishing Liabilities and Equity” (“ASC 480”), ASC 815, and ASC 718, “Compensation — Stock Compensation” (“ASC 718”) in its evaluation of the terms of each agreement. Financial instruments that were identified in each agreement and
Current wording
Certain agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of shares of New EM Common Stock to certain investors and vendors. The Company applies ASC 480, “Distinguishing Liabilities and Equity” (“ASC 480”), ASC 815, and ASC 718, “Compensation — Stock Compensation” (“ASC 718”) in its evaluation of the terms of each agreement. In addition, for certain eligible financial instruments, the Company may elect the fair value option under ASC 825, “Financial Instruments” (“ASC 825”).
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Revenues were $3.5 million for the six months ended June 30, 2026, compared to $0 for the six months ended June 30, 2025, representing an increase of $3.5 million. The percentage change is not meaningful because the Company did not generate revenues during the prior-year period. The increase was primarily due to the Company’s acquisition of the Korean operating companies in connection with the Business Combination, which resulted in the Company recognizing product sales generated in Korea during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Selling, general and administrative expenses were $28.2 million for the six months ended June 30, 2026, compared to $5.7 million for the six months ended June 30, 2025, representing an increase of $22.5 million, or 394.1%. The increase was primarily due to higher corporate, professional, transaction-related and public company costs incurred in connection with the Business Combination and post-combination operations, together with the inclusion of selling, general and administrative expenses of the Korean operating companies acquired in connection with the Business Combination.
Current report — wording carried from elsewhere
Three Months Ended June 30, 2026 and 2025
Current report — wording carried from elsewhere
Financial instruments that were identified in each agreement and
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Interest income primarily consists of interest earned on the Company’s notes receivable and other non-trade receivables, including related-party receivables.