Form 8-K/A

8-K/A — Evolution Metals & Technologies Corp.

Accession: 0001213900-26-036749

Filed: 2026-03-31

Period: 2026-01-05

CIK: 0001866226

SIC: 3690 (MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES)

Item: Completion of Acquisition or Disposition of Assets

Item: Financial Statements and Exhibits

Documents

8-K/A — ea0283549-8ka2_evolution.htm (Primary)

EX-23.1 — CONSENT OF UHY LLP FOR EMAT (FORMERLY WELSBACH TECHNOLOGY METALS ACQUISITION CORP.) FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex23-1.htm)

EX-23.2 — CONSENT OF UHY LLP FOR EM FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex23-2.htm)

EX-23.3 — CONSENT OF GRASSI & CO., CPAS, P.C. FOR KCM FOR THE YEAR ENDED DECEMBER 31, 2025 (ea028354901ex23-3.htm)

EX-23.4 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR KCM FOR THE YEAR ENDED DECEMBER 31, 2024 (ea028354901ex23-4.htm)

EX-23.5 — CONSENT OF UHY LLP FOR KMMI FOR THE YEAR ENDED DECEMBER 31, 2025 (ea028354901ex23-5.htm)

EX-23.6 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR KMMI FOR THE YEAR ENDED DECEMBER 31, 2024 (ea028354901ex23-6.htm)

EX-23.7 — CONSENT OF UHY LLP FOR NS WORLD FOR THE YEAR ENDED DECEMBER 31, 2025 (ea028354901ex23-7.htm)

EX-23.8 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR NS WORLD FOR THE YEAR ENDED DECEMBER 31, 2024 (ea028354901ex23-8.htm)

EX-23.9 — CONSENT GRASSI & CO., CPAS, P.C. FOR HANDA LAB FOR THE YEAR ENDED DECEMBER 31, 2025 (ea028354901ex23-9.htm)

EX-23.10 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR HANDA LAB THE YEAR ENDED DECEMBER 31, 2024 (ea028354901ex23-10.htm)

EX-99.2 — AUDITED FINANCIAL STATEMENTS OF EM THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-2.htm)

EX-99.3 — AUDITED FINANCIAL STATEMENTS OF KCM FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-3.htm)

EX-99.4 — AUDITED FINANCIAL STATEMENTS OF KMMI FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-4.htm)

EX-99.5 — AUDITED FINANCIAL STATEMENTS OF NS WORLD FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-5.htm)

EX-99.6 — AUDITED FINANCIAL STATEMENTS OF HANDA LAB FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-6.htm)

EX-99.7 — UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF THE COMPANY AS OF DECEMBER 31, 2025, AND THE UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2025 (ea028354901ex99-7.htm)

EX-99.9 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF EM FOR THE YEAR ENDED DECEMBER 31, 2025 AND THE PERIOD FROM FEBRUARY 8, 2024 (INCEPTION) TO DECEMBER 31, 2024 (ea028354901ex99-9.htm)

EX-99.10 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF KCM FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-10.htm)

EX-99.11 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF KMMI FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-11.htm)

EX-99.12 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF NS WORLD FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-12.htm)

EX-99.13 — MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF HANDA LAB FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (ea028354901ex99-13.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K/A — AMENDMENT NO. 2 TO FORM 8-K

8-K/A (Primary)

Filename: ea0283549-8ka2_evolution.htm · Sequence: 1

true

0001866226

2026-01-05

iso4217:USD

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UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

WASHINGTON,

D.C. 20549

FORM

8-K/A

(Amendment

No. 2)

CURRENT

REPORT

Pursuant

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

Date

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

Evolution

Metals & Technologies Corp.

(Exact

name of registrant as specified in its charter)

Delaware

001-41183

87-1006702

(State or other jurisdiction

incorporation or organization)

(Commission File Number)

(IRS Employer

Identification No.)

4040

NE 2nd Ave, Ste 349

Miami,

Florida 33137

(Address

and zip code of principal executive offices)

561-225-3205

(Registrant’s

telephone number, including area code)

Check

the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under

any of the following provisions:

☐

Written communications

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

☐

Soliciting material pursuant

to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications

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

☐

Pre-commencement communications

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

Securities

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

Title

of each class

Trading

Symbol(s)

Name

of each exchange on which registered

Common

Stock, $0.0001 par value per share

EMAT

The

Nasdaq Stock Market LLC

Indicate

by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405

of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging

growth company ☒

an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying

with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY

NOTE

January 9, 2026, Evolution Metals & Technologies Corp. (the “Company” or “EMAT”) filed a Current Report on

Form 8-K (the “Original Report”) as amended by Amendment No. 1 to the Original Report (“Amendment No. 1”) filed

on January 9, 2026 (the Original Report together with Amendment No. 1, referred to herein as the “Original Form 8-K”), to

report, among other events, the completion of its previously announced acquisition of Evolution Metals LLC, a Delaware limited liability

company (“EM”) on January 5, 2026 (the “Business Combination”). Also as reported in the Original Form 8-K, as

part of the Business Combination, EM acquired KCM Industry Co., Ltd., a Korean company (“KCM”), KMMI INC., a Korean company

(“KMMI”), NS World Co., Ltd., a Korean company (“NS World”) and Handa Lab Co., Ltd., a Korean company (“Handa

Lab”).

This Current Report on Form 8-K/A amends the Original Form 8-K to include the audited financial statements of EMAT, EM,

KCM, KMMI, NS World and Handa Lab for the year ended December 31, 2025, and the Management’s Discussion and Analysis of Financial

Condition and Results of Operations of EM for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December

31, 2024 and of EMAT, KCM, KMMI, NS World and Handa Lab for the years ended December 31, 2025 and 2024, as well as including the Unaudited

Pro Forma Financial Statements of the Company and EM as of and for the year ended December 31, 2025, giving effect to the acquisition

of EM.

Except as described above, this Current Report on Form 8-K/A does not amend, update, or change any other items or disclosures in

the Original Form 8-K and does not purport to reflect any information or events subsequent to the filing date of the Original Form 8-K.

Capitalized terms used but not defined herein have the meanings assigned to them in the Original Form 8-K. This Current Report on Form

8-K/A should be read in conjunction with the Original Form 8-K.

Item

2.01 Completion of Acquisition or Disposition of Assets.

Financial

Information

The

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

by reference.

The

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

by reference.

The

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

by reference.

The

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

by reference.

The

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

by reference.

The

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

herein by reference.

The

unaudited pro forma condensed combined financial information of EMAT (formerly Welsbach Technology Metals Acquisition Corp.), EM, KCM,

KMMI, NS World, and Handa Lab for the year ended December 31, 2025, is filed as Exhibit 99.7 and incorporated herein by reference.

Management’s

Discussion and Analysis of Financial Condition and Results of Operations

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations for EMAT (formerly Welsbach Technology Metals

Acquisition Corp.) for the years ended December 31, 2025 and 2024, is filed as Exhibit 99.8 and incorporated herein by reference.

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations of EM for the year ended December 31, 2025

and the period from February 8, 2024 (inception) to December 31, 2024 is filed as Exhibit 99.9 and incorporated herein by reference.

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations for KCM for the years ended December 31,

2025 and 2024, is filed as Exhibit 99.10 and incorporated herein by reference.

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations for KMMI for the years ended December 31,

2025 and 2024, is filed as Exhibit 99.11 and incorporated herein by reference.

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations for NS World for the years ended December

31, 2025 and 2024, is filed as Exhibit 99.12 and incorporated herein by reference.

The

Management’s Discussion and Analysis of Financial Condition and Results of Operations for Handa Lab for the years ended December

31, 2025 and 2024, is filed as Exhibit 99.13 and incorporated herein by reference.

Item

9.01 Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

The

audited financial statements of EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and

2024, are filed as Exhibit 99.1 and incorporated herein by reference.

The

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

by reference.

The

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

by reference.

The

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

by reference.

The

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

by reference.

The

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

herein by reference.

(b)

Pro Forma Financial Information.

The

unaudited pro forma condensed combined financial information of EMAT (formerly Welsbach Technology Metals Acquisition Corp.), EM, KCM,

KMMI, NS World, and Handa Lab for the year ended December 31, 2025, is filed as Exhibit 99.7 and incorporated herein by reference.

(d)

Exhibits.

The

following exhibits are being filed herewith:

Exhibit No.

Description

23.1*

Consent of UHY LLP for EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024.

23.2*

Consent of UHY LLP for EM for the years ended December 31, 2025 and 2024.

23.3*

Consent of Grassi & Co., CPAs, P.C. for KCM for the year ended December 31, 2025.

23.4*

Consent of Ernst & Young Han Young for KCM for the year ended December 31, 2024.

23.5*

Consent of UHY LLP for KMMI for the year ended December 31, 2025.

23.6*

Consent of Ernst & Young Han Young for KMMI for the year ended December 31, 2024.

23.7*

Consent of UHY LLP for NS World for the year ended December 31, 2025.

23.8*

Consent of Ernst & Young Han Young for NS World for the year ended December 31, 2024.

23.9*

Consent Grassi & Co., CPAs, P.C. for Handa Lab for the year ended December 31, 2025.

23.10*

Consent of Ernst & Young Han Young for Handa Lab the year ended December 31, 2024.

99.1

Audited financial statements of Evolution Metals & Technologies Corp. (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and 2024 (incorporated by reference to WTMA’s Annual Report on Form 10-K (File No. 001-41183) filed with the SEC on February 20, 2026).

99.2*

Audited financial statements of EM the years ended December 31, 2025 and 2024.

99.3*

Audited financial statements of KCM for the years ended December 31, 2025 and 2024.

99.4*

Audited financial statements of KMMI for the years ended December 31, 2025 and 2024.

99.5*

Audited financial statements of NS World for the years ended December 31, 2025 and 2024.

99.6*

Audited financial statements of Handa Lab for the years ended December 31, 2025 and 2024.

99.7*

Unaudited pro forma condensed combined balance sheet of the Company as of December 31, 2025, and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2025.

99.8

Management’s discussion and analysis of financial condition and results of operations of EMAT (formerly Welsbach Technology Metals Acquisition Corp.) for the years ended December 31, 2025 and December 31, 2024 (incorporated by reference to WTMA’s Annual Report on Form 10-K (File No. 001-41183) filed with the SEC on February 20, 2026).

99.9*

Management’s discussion and analysis of financial condition and results of operations of EM for the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024.

99.10*

Management’s discussion and analysis of financial condition and results of operations of KCM for the years ended December 31, 2025 and 2024.

99.11*

Management’s discussion and analysis of financial condition and results of operations of KMMI for the years ended December 31, 2025 and 2024.

99.12*

Management’s discussion and analysis of financial condition and results of operations of NS World for the years ended December 31, 2025 and 2024.

99.13*

Management’s discussion and analysis of financial condition and results of operations of Handa Lab for the years ended December 31, 2025 and 2024.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Filed herewith.

SIGNATURES

Pursuant

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

the undersigned hereunto duly authorized.

Dated:

March 31, 2026

Evolution Metals & Technologies

Corp.

By:

/s/

Christopher Clower

Name:

Christopher Clower

Title:

Chief Financial Officer and Chief Operating Officer

EX-23.1 — CONSENT OF UHY LLP FOR EMAT (FORMERLY WELSBACH TECHNOLOGY METALS ACQUISITION CORP.) FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

EX-23.1

Filename: ea028354901ex23-1.htm · Sequence: 2

Exhibit

23.1

Independent

Registered Public Accounting Firm’s Consent

We hereby consent to the incorporation by reference our report dated

February 20, 2026, with respect to our audits of Evolution Metals & Technologies Corp.'s (formerly, Welsbach Technology Metals Acquisition

Corp.) consolidated financial statements as of and for the years ended December 31, 2025 and 2024, that appears in this Amendment No.2

to Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial doubt about

Evolution Metals & Technologies Corp.'s ability to continue as a going concern.

/s/

UHY LLP

New

York, New York

March

31, 2026

EX-23.2 — CONSENT OF UHY LLP FOR EM FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

EX-23.2

Filename: ea028354901ex23-2.htm · Sequence: 3

Exhibit

23.2

Independent

Registered Public Accounting Firm’s Consent

We hereby consent to the inclusion of our report dated March 31, 2026,

with respect to our audits of Evolution Metals LLC's consolidated financial statements as of December 31, 2025 and 2024 and for the year

ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, that appears in this Amendment No.2 to

Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial doubt about

Evolution Metals LLC’s ability to continue as a going concern.

/s/

UHY LLP

New

York, New York

March

31, 2026

EX-23.3 — CONSENT OF GRASSI & CO., CPAS, P.C. FOR KCM FOR THE YEAR ENDED DECEMBER 31, 2025

EX-23.3

Filename: ea028354901ex23-3.htm · Sequence: 4

Exhibit

23.3

Independent

Registered Public Accounting Firm’s Consent

consent to the inclusion in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated March 31,

2026, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audit

of the financial statements of KCM Industry Co., Ltd. as of December 31, 2025 and for the year then ended, which report appears in such

Amendment No. 2 to Form 8-K.

/s/ Grassi & Co., CPAs, P.C.

Grassi & Co., CPAs, P.C.

Glastonbury, Connecticut

March 31, 2026

EX-23.4 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR KCM FOR THE YEAR ENDED DECEMBER 31, 2024

EX-23.4

Filename: ea028354901ex23-4.htm · Sequence: 5

Exhibit

23.4

Consent

of Independent Auditor

hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April

21, 2025 relating to the financial statements of KCM Industry Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment

No. 2 to Form 8-K.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

EX-23.5 — CONSENT OF UHY LLP FOR KMMI FOR THE YEAR ENDED DECEMBER 31, 2025

EX-23.5

Filename: ea028354901ex23-5.htm · Sequence: 6

Exhibit

23.5

Independent

Registered Public Accounting Firm’s Consent

We hereby consent to the inclusion of our report dated March 31, 2026,

with respect to our audit of KMMI Inc.'s financial statements as of December 31, 2025 and for the year then ended that appears in this

Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained an explanatory paragraph regarding substantial

doubt about KMMI Inc.'s ability to continue as a going concern.

/s/

UHY LLP

New

York, New York

March

31, 2026

EX-23.6 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR KMMI FOR THE YEAR ENDED DECEMBER 31, 2024

EX-23.6

Filename: ea028354901ex23-6.htm · Sequence: 7

Exhibit

23.6

CONSENT

OF INDEPENDENT AUDITOR

hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April

21, 2025 relating to the financial statements of KMMI Inc. for the year ended December 31, 2024, which appears in such Amendment No.

2 to Form 8-K.

/s/

Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

EX-23.7 — CONSENT OF UHY LLP FOR NS WORLD FOR THE YEAR ENDED DECEMBER 31, 2025

EX-23.7

Filename: ea028354901ex23-7.htm · Sequence: 8

Exhibit

23.7

Independent

Registered Public Accounting Firm’s Consent

We hereby consent to the inclusion of our report dated March 31, 2026,

with respect to our audit of NS World Co. Ltd.'s financial statements as of December 31, 2025 and for the year then ended that appears

in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. Our report contained explanatory paragraphs regarding

substantial doubt about NS World Co. Ltd.'s ability to continue as a going concern and regarding related party transactions.

/s/

UHY LLP

New

York, New York

March

31, 2026

EX-23.8 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR NS WORLD FOR THE YEAR ENDED DECEMBER 31, 2024

EX-23.8

Filename: ea028354901ex23-8.htm · Sequence: 9

Exhibit

23.8

CONSENT

OF INDEPENDENT AUDITOR

hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April

21, 2025 relating to the financial statements of NS World Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment

No. 2 to Form 8-K.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

EX-23.9 — CONSENT GRASSI & CO., CPAS, P.C. FOR HANDA LAB FOR THE YEAR ENDED DECEMBER 31, 2025

EX-23.9

Filename: ea028354901ex23-9.htm · Sequence: 10

Exhibit

23.9

Independent

Registered Public Accounting Firm’s Consent

consent to the inclusion in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated March 31,

2026, which includes an explanatory paragraph as to the Company’s ability to continue as a going concern, with respect to our audit

of the financial statements of Handa Lab Co., Ltd. as of December 31, 2025 and for the year then ended, which report appears in such

Amendment No. 2 to Form 8-K.

/s/ Grassi & Co., CPAs, P.C.

Grassi & Co., CPAs, P.C.

Glastonbury, Connecticut

March 31, 2026

EX-23.10 — CONSENT OF ERNST & YOUNG HAN YOUNG FOR HANDA LAB THE YEAR ENDED DECEMBER 31, 2024

EX-23.10

Filename: ea028354901ex23-10.htm · Sequence: 11

Exhibit

23.10

CONSENT

OF INDEPENDENT AUDITOR

hereby consent to the use, in this Amendment No. 2 to Form 8-K of Evolution Metals & Technologies Corp. of our report dated April

21, 2025 relating to the financial statements of Handa Lab Co., Ltd. for the year ended December 31, 2024, which appears in such Amendment

No. 2 to Form 8-K.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

March 31, 2026

EX-99.2 — AUDITED FINANCIAL STATEMENTS OF EM THE YEARS ENDED DECEMBER 31, 2025 AND 2024

EX-99.2

Filename: ea028354901ex99-2.htm · Sequence: 12

Exhibit 99.2

EVOLUTION METALS LLC

FINANCIAL STATEMENTS

Page

Audited Financial Statements of Evolution Metals LLC as of December 31, 2025 and 2024 and for

the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024

Report of Independent Registered Public Accounting Firm PCAOB ID 1195

F-2

Balance Sheet as of December 31, 2025 and 2024

F-3

Statement of Operations for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024

F-4

Statement of Changes in Member’s Deficit for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024

F-5

Statement of Cash Flows for the Year Ended December 31, 2025 and for the Period from February 8, 2024 (inception) to December 31, 2024

F-6

Notes to Financial Statements

F-7

F-1

Report

of Independent Auditors

To the Board of Directors of and

Stockholders of Evolution

Metals and

Technologies Corp.

Opinion on the Consolidated financial statements

We have audited the accompanying consolidated

balance sheets of Evolution Metals LLC (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements

of operations, member’s deficit, and cash flows for the year ended December 31, 2025 and the period from February 8, 2024 (Inception)

to December 31, 2024, and the related notes to the consolidated financial statements (collectively referred to as the “consolidated

financial statements”).

In our opinion, the consolidated financial

statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and

2024, and the results of its operations and its cash flows for the year ended December 31, 2025 and the period from February 8, 2024 (Inception)

to December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company’s

Ability to Continue as a Going Concern

The accompanying consolidated financial

statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial

statements, the Company consummated its business combination subsequent to December 31, 2025. However, the Company’s business plan

is dependent on future financing, and the Company’s working capital is not sufficient to complete its planned activities for the

upcoming year. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s

evaluation of the events, conditions and plans regarding these matters are also described in Note 2 to the consolidated financial statements.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, and our opinion

is not modified with respect to that matter.

Basis for Opinion

These consolidated financial statements

are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated

financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether

the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required

to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness

of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide

a reasonable basis for our opinion.

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

/s/ UHY LLP

New York, New York

March 31, 2026

F-2

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2025

December 31,

2024

ASSETS

Current assets

Cash and cash equivalents

$ 11,684,923

$ 2,614,710

Prepaid expenses and other current assets

58,679

23,191

Notes receivable, current, net

1,493,348

957,717

Notes receivable, related party, net

4,167,451

1,624,850

Convertible notes receivable, net

—

1,981,420

Total current assets

17,404,401

7,201,888

Deferred transaction costs

9,265,298

3,994,751

Notes receivable, net of current portion, net

—

4,500,000

TOTAL ASSETS

$ 26,669,699

$ 15,696,639

LIABILITIES AND MEMBERS’ DEFICIT

Current liabilities

Accounts payable

$ 4,651,165

$ 1,523,278

Accrued expenses

339,471

84,337

Notes payable, related party

483,582

—

July Investment Agreement Derivative (Note 8)

379,204,796

53,231,638

CPU Share Allocation Obligations (Note 8)

292,679,981

10,231,516

Total current liabilities

677,358,995

65,070,769

TOTAL LIABILITIES

677,358,995

65,070,769

COMMITMENTS AND CONTINGENCIES (NOTE 13)

MEMBERS’ DEFICIT

Member units, voting, $0.0001 par value; unlimited units authorized as of December 31, 2025 and 2024; 100,000 and 1,000,000 units issued and outstanding as of December 31, 2025 and 2024, respectively

100

Member units, non-voting, $0.0001 par value; unlimited units authorized as of December 31, 2025; 900,000 units issued and outstanding as of December 31, 2025; No units authorized, issued and outstanding as of December 31, 2024

—

Convertible preferred units, $0.0001 par value; unlimited units authorized as of December 31, 2025 and 2024, 59,671,021 and 35,230,021 units issued and outstanding as of December 31, 2025 and 2024, respectively

26,261,904

9,587,352

Accumulated deficit

(676,957,426 )

(58,961,582 )

Accumulated other comprehensive income

6,126

—

TOTAL MEMBERS’ DEFICIT

(650,689,296 )

(49,374,130 )

TOTAL LIABILITIES AND MEMBERS’ DEFICIT

$ 26,669,699

$ 15,696,639

The accompanying notes are an integral part

of these consolidated financial statements.

F-3

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

LOSS

For the

Year Ended

December 31,

2025

For the

Period from

February 8,

2024

(inception) to

December 31,

2024

Operating expenses:

General and administrative expenses

$ 7,948,985

$ 3,598,833

Sales and marketing

341,804

202,641

Loss from operations

(8,290,789 )

(3,801,474 )

Other income (expense):

Change in fair value of CPU Share Allocation Obligations

(274,278,481 )

(1,860,869 )

Change in fair value of July Investment Agreement Derivative

(325,973,158 )

(15,571,302 )

Day one loss on CPU Share Allocation Obligations

(403,536 )

(227,994 )

Day one loss on July Investment Agreement Derivatives

—

(20,160,319 )

Interest income

117,772

779,206

Allowance for credit losses

(9,417,652 )

(18,118,830 )

Other income

250,000

—

Total other expense, net

(609,705,055 )

(55,160,108 )

Net loss

$ (617,995,844 )

$ (58,961,582 )

Other comprehensive income (loss):

Foreign currency translation adjustment

6,126

—

Total other comprehensive income

6,126

—

Comprehensive loss

$ (617,989,718 )

$ (58,961,582 )

Weighted average participating member units, basic and diluted

1,000,000

Net loss per participating member units, basic and diluted

$ (618.00 )

$ (58.96 )

The accompanying notes are an integral part

of these consolidated financial statements.

F-4

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER’S

DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 2025 AND FOR

THE PERIOD FROM

FEBRUARY 8, 2024 (INCEPTION) TO DECEMBER 31,

2024

Member Units,

Voting

Member Units,

Non-Voting

Convertible

Preferred Units

Accumulated

Other

Comprehensive

Members’

Units

Amount

Units

Amount

Units

Amount

Deficit

Income

Deficit

Balance, February 8, 2024 (inception)

—

$ —

—

$ —

—

$ —

Issuance of member units

1,000,000

100

—

100

Issuance of convertible preferred units

—

35,230,021

9,587,352

—

9,587,352

Net loss

—

(58,961,582 )

—

(58,961,582 )

Balance, December 31, 2024

1,000,000

100

—

35,230,021

9,587,352

(58,961,582 )

—

(49,374,130 )

Issuance of convertible preferred units

—

24,441,000

16,674,552

—

16,674,552

Conversion of member units, voting to member units

non-voting

(900,000 )

(90 )

900,000

—

Foreign currency translation adjustment

—

6,126

Net loss

—

(617,995,844 )

—

(617,995,844 )

Balance, December 31, 2025

100,000

$ 10

900,000

$ 90

59,671,021

$ 26,261,904

$ (676,957,426 )

$ 6,126

$ (650,689,296 )

The accompanying notes are an integral part

of these consolidated financial statements.

F-5

EVOLUTION METALS LLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the

Year Ended

December 31,

2025

For the

Period from

February 8,

2024

(inception) to

December 31,

2024

Cash flows from operating activities

Net loss

$ (617,995,844 )

$ (58,961,582 )

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

Allowances for credit losses

9,417,651

18,118,830

Day one loss on CPU Share Allocation Obligations

403,536

227,994

Day one loss on July Investment Agreement Derivatives

—

20,160,319

Change in fair value of CPU Share Allocation Obligations

274,278,481

1,860,869

Change in fair value of July Investment Agreement Derivative

325,973,158

15,571,302

Share-based compensation

—

40,000

Paid in kind – interest

—

(709,467 )

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

(35,527 )

(23,191 )

Accounts payable

(909,067 )

576,731

Accrued expenses

255,134

Net cash used in operating activities

(8,612,478 )

(3,138,108 )

Cash flows from investing activities

Collection of notes receivable

200,000

—

Issuance of notes receivable, related party

(5,085,201 )

(3,249,700 )

Issuance of notes receivable

(1,127,262 )

(10,723,650 )

Acquisition of notes receivable

(2,000 )

—

Issuance of convertible notes receivable

—

(12,500,000 )

Net cash used in investing activities

(6,014,463 )

(26,473,350 )

Cash flows from financing activities

Proceeds from issuance of convertible preferred units

24,441,000

17,730,005

Proceeds from notes payable, related party

489,737

—

Proceeds from July Investment Agreement

—

17,500,017

Proceeds from issuance of member units

—

100

Payments for deferred transaction costs

(1,233,737 )

(3,003,954 )

Net cash provided by financing activities

23,697,000

32,226,168

Effect of exchange rate changes on cash

154

—

Net change in cash

9,070,213

2,614,710

Cash, beginning of period

2,614,710

—

Cash, end of period

$ 11,684,923

$ 2,614,710

Supplemental cash flow information:

Taxes paid

$ —

Interest paid

$ —

Supplemental disclosure of noncash investing and financing activities:

Fair value of CPU Share Allocation Obligations issued in connection with issuance of certain convertible preferred units

$ 8,169,984

$ 8,370,647

Fair value of July Investment Agreement Derivative issued in connection with issuance of certain convertible preferred units

$ —

$ 37,660,336

Deferred transaction costs included within accounts payable and accrued expenses

$ 4,036,954

$ 990,797

The accompanying notes are an integral part

of these consolidated financial statements.

F-6

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Description of Organization and Business

Operations

Evolution Metals LLC (the “Company”

or “EM LLC”) was formed in Delaware in February 2024 to develop a secure, reliable global supply chain for critical minerals

and materials (“CMM”), leveraging advanced technologies and strategic consolidation of midstream and downstream manufacturers.

The Company will support key industries, such as automotive while driving a sustainable future through efficient processing and the application

of cutting edge robotics and artificial intelligence (“AI”). The Company has two wholly owned subsidiaries: EM LLC (Korea),

incorporated in South Korea on January 10, 2025, and EMT Sub Co. Ltd (“EMT Sub”) incorporated in South Korea on January 21,

2025.

To achieve this vision, the Company entered into

equity purchase agreements during 2024 to acquire a controlling equity interest in four separate Korean entities (collectively, the “Four

Entities”) critical to the CMM supply chain in order to combine initial capabilities believed to serve as the foundation for

the Company’s growth — transforming raw materials into essential components for further manufacturing; recycling

lithium batteries; producing materials that are essential feedstocks used in the production of advanced magnets, which include (a) bonded

magnets that are vital components in various high-tech applications (including automotive, aerospace, and consumer electronics industries)

and (b) sintered magnets that are crucial for high-performance applications (particularly in the defense and aerospace sectors where

precision and durability are paramount); developing AI software and machines to drive automation, innovation, and efficiency to reduce

labor costs, lower manufacturing reject rates, and automating the quality of control processes.

Upon completion of the acquisition of the Four Entities,

the Company is expected to produce materials annually, including magnets and battery metals to meet the growing global demand driven by

the electrification of transportation, the expansion of green energies, advancements in healthcare technologies, military and defense

manufacturing, and consumer appliances, among others.

On April 1, 2024, the Company entered into

an Agreement and Plan of Merger (the “Merger Agreement”) with Welsbach Technology Metals Acquisition Corp., a Delaware corporation

(“WTMA”), WTMA Merger Subsidiary LLC, a Delaware limited liability company and direct wholly owned subsidiary of WTMA (“Merger

Sub”), and NewCo Inc., a Delaware corporation (“NewCo”) and William David Wilcox Jr., as the sole stockholders of NewCo.

On November 6, 2024, the Company, WTMA and Merger Sub entered into an Amended and Restated Agreement and Plan of Merger, as amended

by the November 11, 2024 Amendment No 1 to Amended and Restated Agreement and Plan of Merger, the February 10, 2025 Amendment

No 2 to Amended and Restated Agreement and Plan of Merger, the March 31, 2025 Amendment No 3 to Amended and Restated Agreement and

Plan of Merger, the June 11, 2025 Amendment No. 4 to Amended and Restated Agreement and Plan of Merger, the July 21, 2025 Amendment

No. 5 to Amended and Restated Agreement and Plan of Merger, and the January 5, 2026 Amendment No. 6 to Amended and Restated Agreement

and Plan of Merger (collectively, the “Amended Merger Agreement”). The Amended Merger Agreement provides that Merger Sub will

be merged with and into the Company, with the Company being the surviving corporation and resulting in EM LLC being a wholly owned subsidiary

of WTMA (the “Merger” and, collectively with the other transactions contemplated by the Amended Merger Agreement, the “Business

Combination”). The consummation of the transactions contemplated by the Amended Merger Agreement are conditioned on the consummation

of the acquisition of the Four Entities.

On May 14, 2025, the initial Registration Statement

on Form S-4 relating to the Business Combination was declared effective by the SEC. On July 29, 2025 and August 7,

2025, WTMA filed Post-Effective Amendments to its Registration Statement on Form S-4 relating to the Business Combination. The Registration

Statement, as amended, was declared effective by the SEC on August 8, 2025.

On January 5, 2026, the Company completed the

acquisitions of the Four Entities and then subsequently consummated the Business Combination contemplated by the Amended Merger Agreement

(the “Closing”). After consummation of the Business Combination, WTMA changed its name to Evolution Metals & Technologies

Corp. (such post-closing entity is referred to as “New EM”). On January 6, 2026, New EM’s common stock began to

trade on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbol “EMAT” (see Note 4).

F-7

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Liquidity and Going Concern

Historically, the Company’s primary sources

of liquidity have been cash flows from issuance of convertible preferred units. The Company reported a net loss of approximately $617,996,000

for the year ended December 31, 2025. As of December 31, 2025, the Company had an aggregate cash balance of approximately $11,685,000

and a net working capital deficit of approximately $659,955,000. These are indicators of substantial doubt as to the Company’s ability

to continue as a going concern for at least one year from issuance of these consolidated financial statements.

On January 5, 2026, the Company consummated

the Business Combination and is now focused on executing its post-combination operating plan and capital formation strategy. The Business

Combination did not include significant external financing at closing, and the Company expects to require additional capital to support

its operations and growth initiatives. Management is actively pursuing additional sources of capital, including equity and strategic financing

arrangements.

Based on the Company’s current liquidity position

and expected operating needs, management has concluded that substantial doubt about the Company’s ability to continue as a going

concern has not been alleviated. The Company expects to address its liquidity requirements through the execution of its capital-raising

plans and the continued development of its operating business.

The Company’s future capital requirements

will depend on many factors, including the Company’s timing and extent of its research and the acquisition of processing facilities.

In order to finance these opportunities and associated costs, the Company would need to raise additional financing. While there can be

no assurances, the Company intends to raise such capital through additional equity raises. If additional financing is required from outside

sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital

on acceptable terms when needed, its product development business, results of operations and financial condition would be materially and

adversely affected.

As a result of the above, in connection with the

Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”)

Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue

as a Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s

ability to continue as a going concern through twelve months from the date these financial statements are available to be issued.

These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the

liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 — Summary of Significant Accounting Policies

Basis of Presentation

and Principles of Consolidation: The accompanying consolidated financial statements have been prepared in

accordance with U.S. generally accepted accounting principles (“GAAP”), expressed in U.S. dollars. References

to GAAP issued by the FASB in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards

Codification (“ASC”). The consolidated financial statements have been prepared assuming the Company will continue as a going

concern.

The accompanying consolidated financial statements

include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been

eliminated in consolidation.

Emerging Growth Company: The

Company is an emerging growth company, as defined in the Jumpstart Our Business Startups (“JOBS”) Act. Under the JOBS Act,

emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until

such time as to those standards apply to private companies. The Company has elected to use this extended transition period for complying

with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth

company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these

consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as

of public company effective dates.

F-8

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

Use of Estimates: The

preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated

financial statements. Making estimates requires management to exercise significant judgment. Such estimates may be subject to change as

more current information becomes available and accordingly the actual results could differ significantly from those estimates. It is at

least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of

the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one

or more future confirming events. The Company’s most significant assumptions and estimates relate to the estimation of

the allowance for credit losses, fair value of the July Investment Agreement Derivative, and the fair value of the CPU Share Allocation

Obligations, which includes the post-money valuation of the Company, (see Note 8 and Note 12). These estimates are based on

assumptions which management believes are reasonable. The Company evaluates its estimates on an ongoing basis and makes revisions to these

estimates.

Foreign Currency Translation and Transactions: The

Company’s reporting currency is the U.S. dollar. The functional currency of each entity in the group is the currency of the

primary economic environment in which it operates. Transactions in foreign currencies are initially recorded into functional currency

at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies

are remeasured into functional currency at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and

liabilities are remeasured to the functional currency at exchange rates that prevailed on the date of inception of the transaction.

Assets and liabilities are translated using the

exchange rate in effect as of the balance sheet date. Expenses are translated using the average exchange rates in effect for the periods

presented. The effects of translating these consolidated financial statements from functional currency to reporting currency are recorded

in accumulated other comprehensive income or loss as a component of member’s equity. For the year ended December 31, 2025 a

translation gain of approximately $6,000 was recognized and for the period from February 8, 2024 (inception) to December 31,

2024, no translation gain was recognized.

Gains and losses resulting from transactions denominated

in a currency other than the functional currency of the entity are included in other (expense) income, net in the consolidated statements

of operations and comprehensive loss using the average exchange rates in effect during the period.

Segment Information: ASC 280,

“Segment Reporting” (“ASC 280”), defines operating segments as components of an enterprise where discrete

financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding

how to allocate resources and in assessing performance. The Company’s CODM is the manager, who has ultimate responsibility for the

operating performance of the Company and the allocation of resources. The CODM reviews the assets, operating results, and financial metrics

for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has

determined that there is only one reportable segment. When evaluating the Company’s performance and making key decisions

regarding resource allocation, the CODM reviews several key metrics including operating expenses and cash and cash equivalents. The measure

of segment assets is reported on the consolidated balance sheets as total assets.

Operating expenses, inclusive of general and administrative

costs and sales and marketing costs, are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available

to fund operations until the Business Combination closes. The CODM also reviews operating expenses to manage, maintain and enforce all contractual agreements to ensure costs are aligned with

all agreements and budget. The categories of operating expenses, as reported on the consolidated statements of operations and comprehensive

loss, are the significant segment expenses provided to the CODM on a regular basis.

F-9

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

Cash and Cash Equivalents: The

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Concentration of Credit Risk: Financial

instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution

and notes receivable. Cash accounts in a financial institution may at times exceed the Federal Depository Insurance Corporation limit.

The amount over these insured limits as of December 31, 2025 was approximately $11,425,000. As of December 31, 2025, the Company

has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such account.

The Company is subject to potential credit risk

related to business, economic and financial market conditions that affect entities it has advanced amounts to which has been heightened

as a result of recent economic and financial market conditions, including in connection with the uncertainties and challenges in the overall

economy, including, among other things, inflationary pressure and increased interest rates. Certain entities that have received advances

from the Company have experienced significant financial difficulties (including bankruptcy), and others may experience financial

difficulties in the future. These difficulties expose the Company to increased risk related to collectability.

Fair Value of Financial Instruments: ASC 820,

“Fair Value Measurements and Disclosures” (“ASC 820”), clarifies that fair value is an exit price, representing

the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use

in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy,

which prioritizes the inputs used in measuring fair value as follows:

Level 1: Inputs based on unadjusted

quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement

date.

Level 2: Observable inputs other than

quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical

or similar instruments in markets that are not active or for which all significant inputs are observable or can be corroborated by observable

market data.

Level 3: Inputs reflect management’s

best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable

for the asset and liability in the market and significant to the overall fair value measurement.

An asset’s or liability’s fair value

measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Assets and liabilities measured at fair value are

based on one or more of the following techniques noted in ASC 820:

● Market approach: Prices and

other relevant information generated by market transactions involving identical or comparable assets or liabilities.

● Cost approach: Amount that

would be required to replace the service capacity of an asset (replacement cost).

● Income approach: Techniques

to convert future amounts to a single present value amount based upon market expectations (including present value techniques, option

pricing, and excess earnings models).

F-10

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

The Company believes its valuation methods are appropriate

and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of

certain financial instruments could result in a different fair value measurement at the reporting date.

The Company’s financial instruments with a

carrying value that approximates fair value consist of cash and cash equivalents, prepaid and other current assets, notes receivable,

convertible notes receivable, accounts payable and accrued expenses because of the short-term nature or expected settlement dates of these

instruments. The Company’s financial instruments that are measured at fair value on a recurring basis consist of money market funds,

the July Investment Agreement Derivative (see Note 8 and Note 12) and the CPU Share Allocation Obligations (see Note 8

and Note 12).

Notes Receivable: Notes

receivable consists of secured and unsecured promissory notes with no conversion features and was accounted for as receivables in the

scope of ASC 310, “Receivables” (“ASC 310”), which was initially recorded at present value and subsequently

re-measured at amortized cost (see Note 5). Notes receivable is reported net of an allowance for credit losses on the accompanying

consolidated balance sheets.

Convertible Notes Receivable: Convertible

notes receivable consists of convertible promissory notes that can convert into a privately held company’s equity securities at

the Company’s election and was accounted for as receivables in the scope of ASC 310, which was initially recorded at present

value and subsequently re-measured at amortized cost (see Note 6). The notes did not meet the definition of a debt security in the

scope of ASC 320, “Investments — Debt Securities” (“ASC 320”). Convertible notes receivable

were reported net of an allowance for credit losses on the accompanying consolidated balance sheets.

Allowance for Credit Losses: The

Company recognizes an allowance for credit losses on notes receivable, convertible notes receivable and notes receivable — related

party (collectively, the “Outstanding Receivables”) in an amount equal to the estimated probable losses net of recoveries.

The Company currently monitors financial conditions of the companies it has Outstanding Receivables owed from on a continuing basis. After

considering current economic conditions and financial stability of its Outstanding Receivables counterparties, an allowance for credit

losses is maintained in the consolidated balance sheets at a level which management believes is sufficient to cover all probable future

credit losses as of the balance sheet date based on specific reserves and an expectation of future economic conditions that might impact

collectability.

The Company classifies loans as non-accrual and

recognizes income only to the extent cash is received when there is reasonable doubt about collectability of principal and interest. Management

used judgment in reaching this determination for all Outstanding Receivables. When a loan is placed on non-accrual status, all previously

accrued but uncollected interest is reversed or charged off as a provision for credit losses and the accrual of interest income is discontinued.

If a payment is received when a loan is non-accrual, the payment is applied to the principal balance. Loans are returned to accrual status

when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. As of December 31,

2025, the convertible notes receivable were classified as non-accrual (see Note 6). As of December 31, 2024, there were no Outstanding

Receivables classified as non-accrual.

Outstanding Receivables are carried at amortized

cost, net of allowances for credit losses. Amortized cost approximated book value as of December 31, 2025 and 2024. After all reasonable

attempts to collect a receivable have failed, the amount of the receivable is written off against the allowance.

F-11

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

The following table represents a roll forward of

the allowance for credit losses for the year ended December 31, 2025 and for the period from February 8, 2024 (inception) to

December 31, 2024:

Notes

receivable

Convertible

notes

receivable

Notes

receivable –

related party

Allowance Balance, February 8, 2024 (Inception)

$ —

Provision

5,265,933

11,228,047

1,624,850

Write offs

—

Recoveries and other

—

Allowance Balance, December 31, 2024

$ 5,265,933

$ 11,228,047

$ 1,624,850

Provision

4,893,632

1,981,420

2,542,600

Write offs

—

Recoveries and other

—

Allowance Balance, December 31, 2025

$ 10,159,565

$ 13,209,467

$ 4,167,450

An aging analysis of the Company’s past due

Outstanding Receivables was as follows:

1-30 Days

Past Due

31-60 Days

Past Due

Greater than

61 Days

Past Due

Total

December 31, 2025

Notes Receivable

$ —

$ 9,000,000

$ 331,785

$ 9,331,785

Convertible Notes Receivable (not accruing interest)

—

13,209,467

Notes Receivable, Related Party

—

$ —

$ 9,000,000

$ 13,541,252

$ 22,541,252

1-30 Days

Past Due

31-60 Days

Past Due

Greater than

61 Days

Past Due

Total

December 31, 2024

Notes Receivable

$ —

Convertible Notes Receivable

13,209,467

—

13,209,467

Notes Receivable, Related Party

—

$ 13,209,467

$ —

$ 13,209,467

For the year ended December 31, 2025, the interest

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

received in cash was $0. For the year ended December 31, 2025, the interest income forgone was $2,008,969.

Convertible Preferred Units: Convertible

preferred units consist of preferred units issued with either (i) an option to convert into New EM common shares at the option of

the holders or (ii) automatic conversion into New EM Common Stock ninety days after closing of the Business Combination. (see

Note 4). The convertible preferred units are accounted for as permanent equity in the scope of ASC 815, “Derivatives and

Hedging” (“ASC 815”) and recorded at fair value which is representative of the proceeds received (see Note 10).

F-12

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

Derivative Liabilities: Certain

agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of

shares of New EM common shares to certain investors and vendors. The Company applies ASC 480, “Distinguishing Liabilities and

Equity” (“ASC 480”), ASC 815, and ASC 718, “Compensation — Stock Compensation”

(“ASC 718”) in its evaluation of the terms of each agreement. Financial instruments that were identified in each agreement

and

● meet the criteria to be accounted for as a liability in accordance

with ASC 480 were reported at fair value at issuance and were re-measured to fair value each reporting period with changes in the

estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations

and comprehensive loss;

● do not meet the criteria to be accounted for as a liability

in accordance with ASC 480 and do not meet the criteria to be accounted for as equity in accordance with ASC 815 are accounted

for as a liability and were reported at fair value at issuance and were re-measured to fair value each reporting period with changes

in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations

and comprehensive loss;

● meet the criteria of a liability-classified share-based payment

transaction in accordance with ASC 718 were measured based on the fair value of the transaction on the date of grant and remeasured

to fair value each reporting period until settlement or cancellation.

Agreements where multiple financial instruments

are identified that would individually warrant separate accounting as a derivative instrument are bundled together as a single, compound

embedded derivative that is bifurcated and accounted for separately from the host contract in accordance with ASC 815.

Impairment of Long-Lived Assets: The

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that an asset group’s carrying

amount may not be recoverable. The Company conducts its long-lived asset impairment analysis in accordance with ASC 360-10, “Impairment

or Disposal of Long-Lived Assets” (“ASC 360-10”), which requires the Company to group assets and liabilities

at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate

the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount

of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds

its fair value. The Company did not record impairment losses during the year ended December 31, 2025 and the period from February 8,

2024 (inception) to December 31, 2024.

Business Combinations and Asset Acquisitions: The

Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business and therefore

should be accounted for as a business combination, or if the transaction should be accounted for as an asset acquisition. Under ASC 805, “Business

Combinations” (“ASC 805”), an acquisition does not qualify as a business when substantially all of the

fair value is concentrated in a single identifiable asset or group of similar identifiable assets. If the Company determines that the

screen test is met, the transaction is accounted for as an asset acquisition. If the screen test is not met, the Company

further considers whether the acquisition includes, at a minimum, inputs and processes that have the ability to create outputs in the

form of revenue. If the assets acquired meet this criteria, the transaction is accounted for as a business combination.

The Company accounts for acquisitions that qualify

as asset acquisitions utilizing a cost accumulation model whereby the purchase price of the acquisition is allocated to the assets acquired

on a relative fair value basis on the date of acquisition. Inputs used to determine such fair values are primarily based upon internally

developed models, publicly-available information, a risk-adjusted discount rate and/or publicly-available data regarding transactions

consummated by other market participants, as applicable.

F-13

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

The Company accounts for business combinations under

the acquisition method of accounting under ASC 805, whereby identifiable assets acquired, liabilities assumed and any noncontrolling

interest in the acquiree are recognized and measured as of the acquisition date at fair value. Goodwill is recognized to the extent by

which the aggregate of the acquisition-date fair value of the consideration transferred and any noncontrolling interest in the acquiree

exceeds the recognized basis of the identifiable assets acquired, net of assumed liabilities. Determining the fair value of assets acquired,

liabilities assumed, and noncontrolling interest requires management’s judgment and often involves the use of significant estimates

and assumptions, including assumptions with respect to future cash flows, discount rates and asset lives among other items.

Transaction-related costs related to asset acquisitions

are capitalized as part of the cost basis of the acquired assets. Transaction-related expenses and restructuring costs that are deemed

to be part of an acquisition of a business are expensed as incurred.

Deferred Transaction Costs: Commissions,

legal fees and other costs that are direct and incremental costs directly related to the contemplated reverse capitalization transaction

(see Note 4 and Note 15) are capitalized as deferred transaction costs until the consummation of the transaction. The costs

will be reclassified to additional paid-in capital upon the closing of the transaction. If the transaction does not close, these transaction

costs will be written off to general and administrative expenses at such time the transaction is determined to be unsuccessful. As of

December 31, 2025 and 2024, deferred transaction costs totaling approximately $9,265,000 and $3,995,000, respectively, were recorded

on the accompanying consolidated balance sheets related to the anticipated reverse capitalization (see Note 4 and Note 15).

Share-Based Compensation Cost: Compensation

cost attributable to liability-classified share-based payment transactions is recorded over the vesting term of a share-based payment

transaction, net of estimated forfeitures. Changes in the estimated vesting term are determined each reporting period and prospectively

applied to the unrecognized compensation cost associated with an unvested transaction. Changes in the fair-value-based measure are recognized

as compensation cost (with a corresponding increase or decrease in the share-based liability) either immediately if the award is vested

or based on the percentage of the vesting term that has completed if the award is unvested.

A modification of a liability-classified award is

accounted for as an exchange of an original award for a new award and is accounted for by calculating the award’s fair-value-based

measure and multiplying this amount by the percentage of the service rendered as of the modification date. Compensation cost is adjusted

for the difference between the cumulative cost recognized for the modified award the cumulate cost recognized for the original award.

Net Loss Per Unit: Net

loss per unit is calculated and reported under the “two-class” method, which is an earnings allocation model that

treats participating securities as having rights to earnings that otherwise would have been available to holders of

member units. Under the two-class method, earnings for the period are required to be allocated between member units and participating securities

based upon their respective rights to receive distributed and undistributed earnings. For net loss per share computation

purposes, the Company’s member units, voting and member units, non-voting are considered one single class of common equity because

both classes have the same dividend and liquidation rights. The Company’s convertible preferred units do not participate

in the earnings or losses of the Company and are therefore not participating securities.

Basic net loss per unit is computed by dividing

net loss for the period by the weighted average number of member units outstanding during the period. In periods when the Company is in

a net loss position, potentially dilutive securities are excluded from the computation of diluted net loss per unit because their inclusion

would have an anti-dilutive effect. Thus, basic net loss per unit is the same as diluted net loss per unit.

F-14

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

Diluted net loss per unit is computed similar to

basic net loss per unit except that the denominator is increased to include the potential dilutive effect of member unit equivalents on

the average number of member units outstanding during the period. As of December 31, 2025 and 2024, there are no potentially dilutive

securities currently issued and outstanding.

Income Taxes: The

Company is treated as a partnership for U.S. federal and most applicable state and local income tax purposes effective May 16, 2025.

As a partnership, the Company is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss

generated by the Company is passed through to and included in the taxable income or loss of its members on a pro rata basis. As such,

no recognition of federal or state income taxes for the Company has been provided for in the accompanying consolidated financial statements.

The Company accounts for income taxes in accordance

with ASC 740, “Income Taxes” (“ASC 740”), which prescribes a recognition threshold and measurement process

for accounting for uncertain tax positions and also provides guidance on various related matters such as derecognition, interest, penalties,

and disclosures required. The Company does not have any entity-level uncertain tax positions. The Company files income tax returns in

the U.S. federal jurisdictions, various state jurisdictions, and Korea. Generally, the Company is subject to examination by U.S. federal

(or state and local) income tax authorities for three years from filing a tax return.

Recent Accounting Pronouncements, adopted:

ASU 2023-09, “Improvements to Income

Tax Disclosures” (“ASU 2023-09”) provide more transparency about income tax information through improvements to

income tax disclosures primarily related to the rate reconciliation and income taxes paid. The update is effective for fiscal years

beginning after December 15, 2024, with early adoption permitted. The adoption of this standard resulted in additional tax disclosures

in the consolidated financial statements.

ASU 2024-01, “Compensation-Stock Compensation

(Topic 718): Scope Application of Profits Interest and Similar Awards” (“ASU 2024-01”) introduces updates

to accounting standards related to the classification and measurement of financial instruments under ASC 320. The update primarily

focuses on clarifying guidance for equity securities, debt instruments, and other financial assets, particularly in the areas of fair

value measurement and impairment recognition. It aims to improve consistency and comparability in the reporting of financial instruments

by refining the criteria for classifying securities and enhancing the methodology for recognizing and measuring impairments. ASU

2024-01 also mandates additional disclosures to provide greater transparency around the valuation techniques and assumptions used in determining

the fair value of financial instruments. The update is effective for fiscal years beginning after December 15, 2024, with early

adoption permitted. The adoption of this standard did not have a material impact on the consolidated financial statements.

ASU 2024-02, “Codification Improvements-Amendments

to Remove References to the Concepts Statements” (“ASU 2024-02”) updates accounting standards for revenue recognition,

lease accounting, and impairment of long-lived assets. ASU 2024-02 provides enhanced guidance for estimating variable consideration,

accounting for contract modifications, determining lease terms, and simplifying impairment testing for long-lived assets. It also introduces

increased disclosure requirements for financial instruments and derivatives. ASU 2024-02 is effective for fiscal years

beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its

consolidated financial statements and disclosures.

Recent Accounting Pronouncements, not yet adopted:

ASU 2024-03, “Disaggregation of Income

Statement Expenses (“DISE”)” (“ASU 2024-03”) requires disclosures about specific types of expenses

included in the expense captions presented on the face of the income statement as well as disclosure about selling expenses. ASU 2024-03

is effective for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating

the impact of this ASU on its consolidated financial statements and disclosures.

F-15

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 3 — Summary of Significant

Accounting Policies (cont.)

ASU 2023-06, “Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”)

incorporates several disclosure and presentation requirements currently residing in SEC Regulation S-X and S-K into the ASC. The

amendments are applied prospectively and are effective when the SEC removes the related requirements from Regulation S-X and S-K. Any

amendments the SEC does not remove by June 30, 2027 will not be effective. Early adoption is prohibited. The Company is currently

evaluating the impact of this ASU on its consolidated financial statements and disclosures.

ASU 2025-03, “Business Combination and

Consolidation: Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity” (“ASU 2025-03”)

provides clarifying guidance on determining the accounting acquirer in certain transactions involving VIEs. The update aims to improve

consistency and comparability in financial reporting, especially when companies merge with a special-purpose acquisition company

(“SPAC”). ASU 2025-03 requires entities to apply the same factors used for determining the accounting acquirer in

other acquisition transactions. Essentially, it aims to make financial reporting more comparable and decision-useful for investors

by ensuring that the accounting acquirer is appropriately identified in acquisitions of VIEs, particularly in SPAC transactions. ASU 2024-03 is

effective for fiscal years beginning after December 15, 2026 including interim periods within those annual periods, with early

adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and disclosures.

Except as mentioned above, the Company does not

believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s

consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flow

Note 4 — Proposed Business Combination

Merger Agreement with Welsbach Technology Metals Acquisition

Corp

Key terms of the Amended Merger Agreement include,

but are not limited to, the following:

● Each issued and outstanding share of the Company’s

voting member units, nonvoting member units, and convertible preferred units on an as-converted basis will automatically be cancelled

and converted into the right to receive the number of shares of New EM common stock in accordance with the Amended Merger Agreement.

● Total consideration consisted of (i) 416,436,066 shares

of New EM common stock in exchange for the Company’s voting member units issued and outstanding immediately prior to the Merger,

(ii) 62,601,409 shares of New EM common stock in exchange for the Company’s nonvoting member units issued and outstanding

immediately prior to the Merger, and (iii) 109,436,178 shares of New EM common stock in exchange for the Company’s convertible

preferred units issued and outstanding immediately prior to the Merger.

● The New EM board of directors after the Closing will consist

of six directors, which shall initially include six director nominees designated by the Company and reasonably acceptable to WTMA.

● The obligations of the Company to consummate the Merger are

conditioned on, among other things, that as of the Closing, New EM would have available to it a positive amount of cash after giving

effect to (x) the amount in the WTMA trust account as of the Closing, after deducting the amount required to satisfy WTMA’s

obligations to its stockholders (if any) that exercise their rights to redeem all or a portion of their shares of WTMA common stock pursuant

to the WTMA charter and certain WTMA and EM LLC transaction expenses, plus (y) the amount of funding actually received by WTMA from

its private investment in public equity offering prior to or substantially concurrently with the Closing, plus (z) the aggregate

gross proceeds received or to be received by WTMA or EM LLC pursuant to any agreement or arrangement entered into prior to or substantially

concurrently with the Closing in connection with the issuance or other grant of any interests of WTMA or EM LLC or any of WTMA’s

subsidiaries, if any (the “Minimum Available Cash Condition”). The Minimum Available Cash Condition is for the sole benefit

of EM LLC.

F-16

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 4 — Proposed Business

Combination (cont.)

● The Closing is subject to certain conditions, including,

but not limited to, the approval of the Company’s voting member and the approval of the stockholders of WTMA. Holders of WTMA’s

public shares will have the opportunity to redeem all or a portion of their public shares for cash in connection with the Business Combination.

In connection with the Amended Merger Agreement,

the Company entered into a Sponsor Support and Lock-Up Agreement with WTMA, Welsbach Acquisition Holdings LLC, a Delaware limited liability

company (the “Sponsor”), and certain officers and directors of WTMA (“Sponsor Persons”) on November 6, 2024

and amended on February 10, 2025 WTMA (collectively, the “Amended Sponsor Support and Lock-Up Agreement”). Pursuant to

the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to, among other things, vote all of its shares

of WTMA common stock (as defined within the Amended Sponsor Support and Lock-Up Agreement) in favor of the Amended Merger Agreement and

the Business Combination. Also pursuant to the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to

certain customary lock-up restrictions on their ability to transfer their WTMA common stock and the shares of New EM common stock they

will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

In connection with the Amended Merger Agreement,

the Company also entered into an EM Equityholder Support and Lock-Up Agreement with WTMA and the sole member of the Company on November 6,

2024 and amended on February 10, 2025 (collectively and as further supplemented, the “Amended EM Equityholder Lock-Up Agreement”).

Pursuant to the Amended EM Equityholder Lock-Up Agreement, the sole voting member of the Company agreed to execute and deliver written

consents with respect to the Company’s outstanding voting member units to adopt the Amended Merger Agreement and related transactions,

approving the Business Combination. Also pursuant to the Amended EM Equityholder Lock-up Agreement, the holders of the member units of

EM LLC agreed to certain customary lock-up restrictions on their ability to transfer their EM LLC common units and the shares of New EM

common stock they will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

On January 5, 2026, in connection with the

Business Combination, the equityholders of the Four Entities and the Company’s holders of the Company’s member units entered

into lock-up agreements under which they agreed to certain customary lock-up restrictions on their ability to transfer the shares of New

EM common stock they received at closing of the Business Combination until up to the third anniversary of the close of the Business Combination.

Similarly, on January 5, 2026, the Company’s convertible preferred units entered into lock-up agreements under which they agreed

to certain customary lock-up restrictions on their ability to transfer the shares of New EM common stock they received at closing of the

Business Combination until seven calendar days following the close of the Business Combination.

Note 4 — Proposed Business

Combination (cont.)

During the period from

February 8, 2024 (inception) to December 31, 2024, the Company entered into seven agreements to acquire controlling

interests in seven different entities in connection with the Business Combination. Two of these agreements were terminated as of

December 31, 2024, one of these agreements was terminated as of July 3, 2025, and the remaining agreements with four

entities were terminated and replaced with share exchange agreements between each of the four Korean companies and a subsidiary of

the Company (“EMT Sub”). The share exchange agreements were approved by the shareholders of the four Korean domiciled

companies on June 2, 2025, with no dissenting shareholders. The share exchange agreements were consummated on January 5,

2026, immediately prior to the closing of the Business Combination. Under the share exchange agreements with the Four Entities, EMT

Sub acquired the following shares of each target’s common stock in exchange for the following number of non-voting EM LLC

member units to be contributed to EMT Sub by EM LLC:

F-17

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Target

Shares of

Target’s

common stock

Exchange

Ratio

EM Units

Value

NS World, Co., Ltd. (“NSW”)

289,055

0.009427

2,725

$ 12,970,000

Handa Lab Co., Ltd. (“Handa”)

380,800

0.004138

1,576

$ 7,500,000

KCM Industry Co., Ltd. (“KCM”)

21,666

0.1396

3,026

$ 14,400,000

KMMI, Inc.(“KMMI”)

22,080

0.4187

9,244

$ 44,000,000

During the year ended December 31, 2025 and

the period from February 8, 2024 (inception) to December 31, 2024, the Company has incurred and paid approximately $2,047,000

and $1,553,000, respectively, in connection with the audit, accounting and legal fees of the seven entities for which agreements were

entered into.

Terminated Acquisitions during 2024

On March 15, 2024, the Company entered into

a heads of agreement with KMMI (the “First HOA”) to acquire 100% of the outstanding shares of KMMI in exchange for shares

of New EM common stock totaling an estimated $44.0 million, that will be adjusted based on the results of due diligence on KMMI. The

closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025,

the First HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and KMMI, which the Company is not

directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into

a heads of agreement with Handa (the “Second HOA”). to acquire 100% of the outstanding shares of Handa in exchange for shares

of New EM common stock totaling an estimated $7.5 million, that will be adjusted based on the results of due diligence on Handa.

The closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In

February 2025, the Second HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and Handa, which

the Company is not directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into

a heads of agreement with KCM (the “Third HOA”) to acquire 100% of the outstanding shares of KCM in exchange for shares of

New EM common stock totaling an estimated $14.4 million, that will be adjusted based on the results of due diligence on KCM. The

closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025,

the Third HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and KCM, which the Company is not

directly a party to until such time the Business Combination closes.

On March 15, 2024, the Company entered into

a heads of agreement with NSW (the “Fourth HOA”) to acquire 100% of the outstanding shares of NSW in exchange for shares of

New EM common stock totaling an estimated $13.0 million, that will be adjusted based on the results of due diligence on NSW. The

closing of this transaction is subject to the proxy statement/prospectus filed by WTMA being declared effective by the SEC. In February 2025,

the Fourth HOA was terminated and replaced by a share exchange agreement between a subsidiary of WTMA and NSW, which the Company is not

directly a party to until such time the Business Combination closes.

F-18

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 4 — Proposed Business

Combination (cont.)

In March 2024, the Company entered into an

investment agreement with Clever Co. Ltd (“Clever”), a company incorporated in Korea to acquire at least 80%, but up to 100%,

of the outstanding shares of Clever Co. Ltd in exchange for shares of New EM common stock totaling at least an estimated $14.1 million,

but up to an estimated $17.6 million, with the amount adjusted in proportion the percentage of shares acquired. In October 2024,

the Company decided not to pursue the acquisition of Clever.

In June 2024, the Company entered into an investment

agreement with Camston Wrather LLC (“CW”), a company incorporated in Delaware to acquire 100% of the outstanding Class D

units of CW in exchange for $1,250.0 million, payable through the issuance of shares of New EM common stock totaling an estimated

$850.0 million and in exchange for cash totaling $400.0 million. In October 2024, the Company decided not to pursue the

acquisition of CW and in November 2024 sent CW notice of termination.

On August 26, 2024, the Company entered into

an investment agreement with Robert N Feldman Revocable Living Trust (the “Trust”), owner of 100% of the shares of Critical

Mineral Recovery, Inc (“CMR”) (the “August CMR Investment Agreement”) to acquire 100% of the outstanding shares

of CMR. The August CMR Investment Agreement was subsequently terminated on November 4, 2024 as a result of a fire sustained

at CMR’s facility on October 30, 2024, which resulted in a total loss of the physical facility.

On November 4, 2024, the Company entered into

a new investment agreement with the Trust (the “November CMR Investment Agreement”) to acquire 100% of the outstanding shares

of CMR in exchange for $400.0 million, payable through the issuance of shares of New EM common stock totaling an estimated $225.0 million

and in exchange for cash totaling $175.0 million. The $175.0 million cash payment is to be used by CMR to redeem all of its

outstanding shares for $125.0 million and to repay CMR’s debt for $50.0 million. The actual purchase price will be adjusted

based on the results of due diligence on CMR. In February 2025, the November CMR Investment Agreement was terminated and replaced

by the February 2025 Merger Agreement, which the Company is not directly a party to until such time the Business Combination closes.

Terminated Acquisitions during 2025

In March 2025, the Company entered into an

amended and restated agreement and plan of merger with WTMA, the Company Critical Mineral Recovery, Inc. (“CMR”), and the

other parties thereto (the “March 2025 Merger Agreement”) providing for the acquisition of CMR. The March 2025

Merger Agreement amended and restated the Agreement and Plan of Merger, dated February 10, 2025, in its entirety. The March 2025

Merger Agreement was terminated on July 3, 2025.

In September 2024, the Company entered into

a Transactional Advance Agreement (“CMR Advance Agreement”) with CMR. Under the CMR Advance Agreement, the Company agreed

to advance CMR $12,000,000 in three installments in connection with the contemplated acquisition of CMR. During the period from February 8,

2024 (inception) to December 31, 2024, a total of $9,000,000 was advanced to CMR under the terms of the CMR Advance Agreement. No

amounts were advanced to CMR during the year ended December 31, 2025. As of December 31, 2025, $9,000,000 was outstanding under

the CMR Advance Agreement.

For the year ended December 31, 2025 and for

the period from February 8, 2024 (inception) to December 31, 2024, allowances for credit loss of $4,500,000 were included in

the accompanying consolidated statements of operations and comprehensive loss. In light of the termination of the March 2025 Merger

Agreement effective July 3, 2025, the Company determined a full allowance for credit losses was necessary for the monies advanced

under the CMR Advance Agreement.

F-19

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 5 — Notes Receivable

Notes receivable consisted of the following as of

December 31, 2025 and 2024:

December 31,

2025

December 31,

2024

CMR Advances (see Note 4)

$ 9,000,000

WTMA Sponsor Notes

2,319,128

1,191,865

WTMA Co-Sponsor Note

331,785

Acquired Notes

2,000

—

Clever Note

—

200,000

Notes Receivable

11,652,913

10,723,650

Less: Allowance for credit losses

(10,159,565 )

(5,265,933 )

Less: Notes receivable, current portion, net of allowance for credit losses

(1,493,348 )

(957,717 )

Notes Receivable, net of current portion, net of allowance for credit losses

$ —

$ 4,500,000

WTMA Sponsor Notes

During 2025 and 2024, the Company and the Sponsor

entered into four unsecured promissory notes totaling approximately $1,127,000 and four unsecured promissory notes totaling approximately

$1,192,000, respectively, (the “WTMA Sponsor Notes”). The WTMA Sponsor Notes are non-interest bearing and mature

on the earlier of the (a) Closing or (b) liquidation of WTMA.

For the year ended December 31, 2025 and for

the period from February 8, 2024 (inception) to December 31, 2024, allowances for credit loss of approximately $564,000 and

$596,000, respectively, related to the WTMA Sponsor Notes were included in the accompanying consolidated statements of operations and

comprehensive loss.

WTMA Co-Sponsor Note

During April 2024, the Company and the co-sponsor

of WTMA entered into a senior secured promissory note in the amount of approximately $332,000 (the “WTMA Co-Sponsor Note”).

The WTMA Co-Sponsor Note is non-interest bearing and matures on the earlier of the (a) Closing or (b) March 31,

2025. The WTMA Co-Sponsor Note is senior to other obligations of the borrower at any time and is secured by all shares of the borrower

on a pari-passu basis with other notes in the series. As of December 31, 2025, the WTMA Co-Sponsor Note was in maturity default.

Acquired Notes

During September 2025, the Company acquired

two notes receivables with aggregate principal balance of approximately $56,578,000 for an aggregate purchase price of $2,000. These acquisitions

were determined to be asset acquisitions. Accordingly, the acquired notes receivable were recorded at cost on the acquisition date. There

were no transactions costs incurred related to these acquisitions during the year ended December 31, 2025.

Clever Note

During April 2024, the Company entered into

a loan agreement (the “Clever Note”) with Clever Co. Ltd (“Clever”), in the amount of $200,000. The Company collected

the Clever Note in full during April 2025. Accordingly, during the year ended December 31, 2025, the Company removed the allowance

for credit loss of $170,000 that was recorded as of December 31, 2024.

F-20

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 6 — Convertible Notes Receivable

During 2024 the Company entered into three convertible

promissory notes with CW whereby the Company advanced an aggregate principal amount of $12,500,000 (collectively, the “CW Notes”)

to fund its working capital. With the first advancement under the CW Notes in June 2024, the Company became a senior lender under

CW’s credit agreement.

The Company has the option to convert 100% of the

outstanding principal balance, excluding unpaid interest, on the CW Notes into CW’s Class AA Units of capital stock at

the rate of one CW’s Class AA Unit per $1.00. Prepayment of principal and accrued interest without consent of the Company is

permitted. The CW Notes bear interest at a rate per annum equal to the adjusted daily Secured Overnight Financing Rate (3.87% at December 31,

2025) (“SOFR”) plus an applicable margin of 10.00% (13.87% at December 31, 2025) and matured on December 28, 2024

and is recorded on a paid in-kind basis through an increase in the outstanding principal balance amount of the CW Notes (inclusive of

interest capitalized the prior quarter).

In November 2024, the Company terminated its

investment agreement with CW (see Note 4) in accordance with the terms of the investment agreement and notified CW that approximately

$4,174,000 of the advances made by the Company under the convertible note receivable were due and payable. As of September 30, 2025,

the CW Note was placed in non-accrual status. As of December 31, 2025, approximately $13,209,000 was outstanding under the CW Notes

and in maturity default, which includes $709,000 of paid in-kind interest income recognized during the period from February 8, 2024

(inception) to December 31, 2024 and included as a component of interest income on the accompanying consolidated statements of operations

and comprehensive loss. For the year ended December 31, 2025, approximately $2,009,000 of paid in-kind interest was not recorded

as the CW Notes were on non-accrual status.

For the year ended December 31, 2025 and for

the period from February 8, 2024 (inception) to December 31, 2024, an allowance for credit losses of approximately $1,981,000

and $11,228,000, respectively, related to the CW Notes, of which approximately $106,000 and $603,000, respectively, was related to paid

in-kind interest, was included in the accompanying statements of operations and comprehensive loss.

Note 7 — Notes Receivable, Related Party

During 2025 and 2024, the Company and the voting

member of the Company entered into nine unsecured promissory notes in the aggregate amount of approximately $3,145,000 and five unsecured

promissory notes in the aggregate amount of approximately $3,250,000, respectively, (the “Related Party Notes”). The Related

Party Notes are non-interest bearing and mature on the earlier of (a) the Closing or (b) December 31, 2025. As of December 31,

2025 and 2024, approximately $6,395,000 and $3,250,000 was outstanding under Related Party Notes. As of December 31, 2025, the Related

Party Notes were in maturity default.

During November 2025, the Company advanced

$1,940,000 to EMT Asia Co., Ltd. (“EMT Asia”), a company wholly owned by the voting member of the Company, pursuant to unsecured

promissory notes bearing interest at 6% per annum and maturing on May 26, 2026 (“EMT Asia Note Receivable”). As

of December 31, 2025, $1,940,000 was outstanding under the EMT Asia Note Receivable. For the year ended December 31, 2025,

interest income totaled approximately $11,000 and was included as a component of interest income on the accompanying consolidated statements

of operations and comprehensive loss.

For the year ended December 31, 2025 and the

period from February 8, 2024 (inception) to December 31, 2024, allowance for credit losses of $2,543,000 and $1,625,000, respectively,

related to the Related Party Notes and the EMT Asia Note Receivable were included in the accompanying consolidated statements of

operations and comprehensive loss.

F-21

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Derivative Liabilities

July Investment Agreement Derivative

In July 2024 the Company entered into an investment

agreement (the “July Investment Agreement”) with an existing holder of the Company’s convertible preferred units (the

“Anchor Investor”), and amended in December 2024, whereby in exchange for $17,500,017 cash consideration (a) the

Company committed to issue 17,500,017 units of convertible preferred units with the same rights, preferences and privileges and restrictions

as the outstanding convertible preferred units, with a stated conversion rate of 5:1, whereby 3,500,000 shares of New EM common stock

would be issued in exchange for the convertible preferred units issued at the closing of the Business Combination (see Note 10),

(b) the Company will pass through the economics of the CW Notes to the Anchor Investor, whereby an estimated $25,000,000 cash payment

and the shares of New EM stock totaling an estimated $212,500,000 the Company receives at closing of the Business Combination in connection

with the conversion of the CW Notes will be transferred to the Anchor Investor, (c) an allocation of shares of New EM common stock

valued at 10.0% of the Company’s fully diluted ownership in New EM to the Anchor Investor at closing of the Business Combination.

The Company is required to make a $45,000,000 payment to the Anchor Investor at closing of the Business Combination, by either (i) transferring

New EM common shares totaling $45,000,000 that were included in the S-4 registration statement that are not subject to a lock up period

or (ii) making a $45,000,000 cash payment. Other than the New EM common shares valued at $45,000,000 that may be transferred at closing

of the Business Combination, the shares to be transferred to the Anchor Investor will be subject to a lock-up period.

Pursuant to the terms of the July Investment Agreement,

the gross investment of the Anchor Investor as of the July Investment agreement will be secured by the managing member’s life insurance

policy totaling $2,500,000 and the Anchor Investor will assist the Company with raising an additional $30,000,000 of convertible preferred

units from other investors.

Under the July Investment Agreement, the following

financial instruments were identified:

● the Company’s promise to issue the Anchor Investor

an estimated $212,500,000 of New EM common shares (the “Anchor Investor Share Issuance Obligation”) at closing of the Business

Combination. The Anchor Investor Share Issuance Obligation is recorded as a liability in accordance with ASC 480.

● the Company’s promise to issue a variable number of

New EM common shares to the Anchor Investor equal to 10.0% of the Company’s fully diluted ownership in New EM at closing of the

Business Combination (the “Anchor Investor Share Allocation Obligation”). The Anchor Investor Share Allocation Obligation

is recorded as a liability in accordance with ASC 480 and ASC 815.

● the requirement to pay the Anchor Investor $25,000,000 at

closing of the Business Combination (the “Anchor Investor Payment Obligation”). The Anchor Investor Payment Obligation is

recorded in accordance with ASC 815.

The above financial instruments are accounted for

as a single, compound embedded derivative and referred to as the “July Investment Agreement Derivative”. The fair value of

the July Investment Agreement Derivative exceeded the proceeds received, and as such the July Investment Agreement Derivative was recorded

at fair value with the excess of the fair value over the proceeds recorded as a day one loss on July Investment Agreement Derivative

on the accompanying consolidated statements of operations and comprehensive loss.

As of the issuance date the July Investment Agreement

Derivative was measured at fair value of approximately $37,660,000 and re-measured to fair value at each subsequent reporting period (see

Note 12). For the period from February 8, 2024 (inception) to December 31, 2024, a day one loss on issuance of July

Investment Agreement Derivative of approximately $20,160,000 was recorded as a component of other income (expense) on the accompanying

consolidated statement of operations and comprehensive loss.

F-22

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 8 — Derivative Liabilities

(cont.)

Convertible Preferred Unit Issuance

Certain convertible preferred unit issuances (see

Note 10) provided investors with additional share allocation issuance whereby the investors will receive a variable number of New

EM common shares equal to either: (i) 1.0% of the Company’s fully diluted ownership in New EM at closing of the Business Combination

for every additional $2,000,000 investment into the Company’s convertible preferred units the investors purchase or (ii) a

pro rata percentage of 1.0% of the Company’s fully diluted ownership in New EM at closing of the Business Combination equal to the

percentage of the investor’s investment into the Company’s convertible preferred units the investors purchase divided by either

(a) $2,000,000 or (ii) $4,000,000, as determined by the terms of each investor’s convertible preferred unit agreement.

The additional share allocation issuances are collectively

referred to as the “CPU Share Allocation Obligations” and are calculated on one of the above methods based on the terms of

the investor’s specific convertible preferred unit agreement. The additional share allocation was provided to certain investors

as an incentive to make additional future investments into the Company’s convertible preferred units.

For convertible preferred unit issuances where proceeds

received from the convertible preferred unit issuances exceeded the fair value of the CPU Share Allocation Obligation, the convertible

preferred unit issuances were recorded net of the fair value attributed to the CPU Share Allocation Obligation at issuance.

For convertible preferred unit issuances where the

fair value of the CPU Share Allocation Obligation exceeds the proceeds received from the convertible preferred unit issuances, the CPU

Share Allocation Obligation was recorded at fair value with the excess of the fair value over the proceeds recorded as a day one

loss on CPU Share Allocation Obligation on the accompanying consolidated statements of operations and comprehensive loss.

As of the various issuance dates, the CPU Share

Allocation Obligations were measured at fair value aggregating to approximately $8,170,000 and $8,371,000 for the year ended December 31,

2025 and the period from February 8, 2024 (inception) to December 31, 2024, respectively, and re-measured to fair value at each

subsequent reporting period (see Note 12). For the year ended December 31, 2025 and the period from February 8, 2024 (inception)

to December 31, 2024, the day one loss on CPU Share Allocation Obligations of approximately $404,000 and $228,000, respectively,

were recorded as a component of other income (expense) on the accompanying consolidated statements of operations and comprehensive loss.

Note 9 — Notes Payable, Related Party

During 2025, the Company entered into five non-interest

loan agreements with EMT Asia, a company wholly owned by the voting member of the Company, for aggregate proceeds of approximately KRW

695,347,000 (approximately $484,000 as of December 31, 2025) (the “EMT Asia Loans Payable”). All loans mature six months

from the date of the loan and maturity dates range between May 2026 and June 2026. There are no prepayment penalties on these

loan agreements. As of December 31, 2025, approximately $484,000 remains outstanding on these loan agreements.

Note 10 — Members’ Deficit

The Company was authorized to issue an unlimited

number of participating member units at no par value, an unlimited number of member non-voting units at no par value, and an unlimited

number of convertible preferred units at no par value.

F-23

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Members’ Deficit

(cont.)

Member Units: On

May 15, 2025, the Company amended its operating agreement to create a non-voting member unit class. Subject to approval, the Company

may issue an unlimited number of non-voting member units and any voting member units can be converted into non-voting member units. On

May 15, 2025, 900,000 of the Company’s member units held by the sole member were exchanged for 900,000 non-voting member units

and par was proportionately reclassified between the classes of members units. There was no net effect to members’ deficit for this

exchange. As of December 31, 2025, there were 100,000 voting member units and 900,000 non-voting member units issued and outstanding.

The voting and non-voting member units have identical

rights and preferences with the exception of voting rights.

Convertible Preferred Units: During

the year ended December 31, 2025 and the period from February 8, 2024 (inception) to December 31, 2024, the Company issued

24,441,000 and 35,230,021 convertible preferred units, respectively, in exchange for $1.00 per unit for gross proceeds of $24,441,000

and approximately $35,230,000, respectively. Certain issuances of convertible preferred units provide the investor an additional share

allocation issuance (see Note 8).

The Company intends to use the proceeds from the

convertible preferred units as working capital to complete the Business Combination (see Note 4) and acquire the Four Entities (see

Note 1), with the exception if the convertible preferred unit issuance during June 2024 raising gross proceeds of $2,500,000,

which was used to acquire the CW Note (see Note 6). The convertible preferred units were accounted for as permanent equity.

The rights, preferences, privileges and restrictions

for the convertible preferred units are as follows:

Dividends: Non-cumulative,

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

Liquidation preference: None

Conversion: Convertible

preferred units issued between February 8, 2024 (inception) and March 31, 2025 are convertible into shares of New EM common

shares at the option of the holder, according to a conversion ratio set forth in the holder’s convertible preferred unit agreement

assuming a New EM common share price of $10.00 at Closing. Convertible preferred units issued between April 1, 2025 and December 31,

2025 will be automatically converted into shares of New EM common shares ninety days after the Closing.

The Conversion ratio for convertible preferred units

issued as of December 31, 2025 was as follows:

Convertible

Preferred

Units

Conversion

Ratio

New EM

common

March 2024

1,100,003

1:1

1,100,003

April 2024

864,655

1:1

864,655

May 2024

1,265,347

1:1

1,265,347

June 2024

2,500,000

5:1

500,000

July 2024

19,500,016

5:1

3,900,003

August 2024

100,000

5:1

20,000

October 2024

5,700,000

5:1

1,140,000

November 2024

500,000

5:1

100,000

December 2024

3,700,000

5:1

740,000

January 2025

500,000

5:1

100,000

F-24

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 10 — Members’ Deficit

(cont.)

Convertible

Preferred

Units

Conversion

Ratio

New EM

common

February 2025

2,700,000

5:1

540,000

March 2025

1,850,000

5:1

370,000

March 2025

2,000,000

1:1

2,000,000

September 2025

16,550,000

6:1

2,758,333

October 2025

620,000

6:1

103,333

December 2025

221,000

6:1

36,833

Total

59,671,021

15,538,507

Redemption: The convertible

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

Voting: The convertible

preferred units are non-voting.

Note 11 — Share-Based Compensation

In September 2024, the Company entered into

an agreement with a vendor (the “Vendor Agreement”) whereby the Company has the option to settle its obligations for services

provided with either cash payments when the services are rendered or the issuance of a fixed monetary amount of New EM common shares at

the closing of the Business Combination (the “Vendor Share-Based Settlement Obligation”). The Vendor Agreement was classified

as a liability share-based payment transaction in accordance with ASC 718 and ASC 480, with the identification of two service

conditions. The vesting period is measured on the effective date of the agreement as the period the services are expected to be rendered,

and re-assessed each reporting period until the services are fully rendered and the share-based payment transaction is fully vested.

In December 2024, the Company amended the Vendor

Agreement (the “Amended Vendor Agreement”), replacing the Company’s settlement options for services provided with an

exclusive cash payment option. The Company determined the Amended Vendor Agreement was a modified liability-classified award. Accordingly,

the Company re-measured the Vendor Share-Based Settlement Obligation as of the cancellation date noting a nominal change in the fair value

for the period from February 8, 2024 (inception) to December 31, 2024 (see Note 12) and recognized the difference between

the cumulative compensation cost under the original award and the cumulative cost on the modified award, as compensation cost.

Note 12 — Fair Value Measurements

The following table presents assets and liabilities

measured at fair value by classification within the fair value hierarchy as of:

Level I

Level II

Level III

Total

December 31, 2025

Assets

Money Market Funds

$ 11,671,467

$ —

$ 11,671,467

Total assets

$ 11,671,467

$ —

$ 11,671,467

Liabilities

July Investment Agreement Derivative

$ —

$ 379,204,796

CPU Share Allocation Obligation

—

292,679,981

Total liabilities

$ —

$ 671,884,777

F-25

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Fair Value Measurements

(cont.)

Level I

Level II

Level III

Total

December 31, 2024

Assets

Money Market Funds

$ 2,588,289

$ —

$ 2,588,289

Total assets

$ 2,588,289

$ —

$ 2,588,289

Liabilities

July Investment Agreement Derivative

$ —

$ 53,231,638

CPU Share Allocation Obligation

—

10,231,516

Total liabilities

$ —

$ 63,463,154

The following table provides a reconciliation of

the beginning and ending balance associated with the liabilities measured at fair value using significant unobservable inputs for the

year ended December 31, 2025 and for the period from February 8, 2024 (inception) to December 31, 2024:

July

Investment

Agreement

Derivative

(Level III)

CPU Share

Allocation

Obligation

(Level III)

Balance, February 8, 2024 (inception)

$ —

Additions

37,660,336

8,370,647

Change in fair value

15,571,302

1,860,869

Balance, December 31, 2024

53,231,638

10,231,516

Additions

—

8,169,984

Change in fair value

325,973,158

274,278,481

Balance, December 31, 2025

$ 379,204,796

$ 292,679,981

Money Market Funds

Money market funds are investments with maturities

within three months of their purchase dates held at banks, that approximate fair value based on Level I measurements.

Derivative Liabilities

Prior to December 31, 2025, the Company utilized

scenario-based valuation models to value the July Investment Agreement Derivative and the CPU Share Allocation Obligations (collectively,

the “Derivative Liabilities”) at issuance and each subsequent reporting period. A key estimate used in the valuations of the

Derivative Liabilities is an enterprise valuation of New EM, which included the acquisition of the Four Entities which uses a sum-of-the-parts

valuation model that combined the arm’s length purchase prices of the Four Entities pursuant to acquisition agreements signed with

the Company on February 10, 2025, and the invested capital of the Company for each measurement date. Prior to the termination of

the March 2025 Merger Agreement, CMR was also included as a component of the sum-of-the-parts valuation model.

As of December 31, 2025, the Company updated

its valuation methodology to reflect the advanced stage of the Business Combination and the availability of observable market-based inputs.

At that date, substantially all substantive closing conditions had been satisfied, and the only remaining item was final Nasdaq listing

approval, which was subsequently obtained on January 2, 2026, with the Business Combination closing on January 5, 2026. Given

the proximity to closing and the presence of a publicly traded instrument directly linked to the post-closing equity structure, management

determined that a market-based valuation approach more faithfully reflected fair value as of December 31, 2025.

F-26

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Fair Value Measurements

(cont.)

Accordingly, for the December 31, 2025 measurement,

the Company first determined the implied equity value of EM&T on a pro forma fully diluted basis at closing. The Company then applied

a market-based adjustment derived from the trading price of WTMA Rights, which were publicly traded securities that converted into WTMA

common shares at a fixed ratio upon consummation of the Business Combination. The implied ratio between the aggregate conversion value

of the Rights and the trading price of WTMA common shares reflected the market’s assessment of both (i) the probability of

closing and (ii) expected post-closing share price performance. The final market-based adjustment incorporated the observable Rights

pricing, which inherently reflected both closing risk and market expectations regarding post-closing performance.

As a result, the December 31, 2025 valuation

of the Derivative Liabilities was based on the implied EM&T equity value at closing, adjusted by the market-derived factor from WTMA

Rights pricing, rather than solely on the prior sum-of-the-parts enterprise valuation framework.

July Investment Agreement Derivative:

The Company utilized the following assumptions to

value the July Investment Agreement Derivative:

December 31,

2025

December 31,

2024

July 18,

2024

(issuance)

Expected Business Combination date

January 5, 2026

June 30, 2025

Term (years)

0.01

0.50

0.95

Risk free rate

3.7%

4.2%

4.9%

CCC credit rating

15.7%

8.7%

19.4%

Present value factor

1.00

0.98

0.80 – 0.95

Probability of Business Combination close

90.0%

60.0%

Market adjustment(1)

45.5%

Expected Company fully diluted ownership of New EM

96.5%

71.3%

Additional share allocation percentage

10.0%

(1) Market adjustment inherently considers probability of Business

Combination close and post Business Combination close price movements to the New EM common share price per share.

A loss on change in fair value of July Investment

Agreement Derivative was approximately $325,973,000 and $15,571,000 for the year ended December 31, 2025 and for the period from

February 8, 2024 (inception) to December 31, 2024, respectively, and was reported as a component of other income (expense) on

the accompanying consolidated statements of operations and comprehensive loss.

CPU Share Allocation Obligations:

The CPU Share Allocation Obligations are contingent

on the closing of the Business Combination and certain convertible preferred unit holders entering into additional convertible preferred

unit agreements in increments of $2,000,000 or $4,000,000, as defined in an investor’s specific convertible preferred unit agreement.

As of December 31, 2025 and 2024, the CPU Share Allocation Obligation totaled 11.28% and 4.75%, respectively, which represented an

estimated 10.84 % and 2.85%, respectively, of outstanding shares of New EM Common Stock at the Closing.

F-27

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Fair Value Measurements

(cont.)

The Company utilized the following assumptions to

value the CPU Share Allocation Obligations as of the balance sheet dates:

December 31,

2025

December 31,

2024

Expected Business Combination date

January 5, 2026

June 30, 2025

Term (years)

0.01

0.50

Risk free rate

3.7%

4.2%

Present value factor

1.00

0.98

Probability of Business Combination close

60.0%

Market adjustment(1)

45.5%

Expected Company fully diluted ownership of New EM

96.5%

71.3%

Additional share allocation percentages

11.28%

4.75%

(1) Market adjustment inherently considers probability of Business

Combination close and post Business Combination close price movements to the New EM common share price per share.

The Company utilized the following assumptions to

value the CPU Share Allocation Obligations as of the respective issuance dates:

November 2025

(issuances)

October 2025

(issuances)

September 2025

(issuances)

March 2025

(issuances)

February 2025

(issuances)

December 2024

(issuances)

October 2024

(issuances)

July 2024

(issuance)

Expected Business Combination date

December 30, 2025

June 30,

2025

June 30,

2025

June 30,

2025

June 30,

2025

June 30,

2025

Term (years)

0.12 – 0.15

0.20 – 0.23

0.27 – 0.29

0.25

0.35 – 0.37

0.54 – 0.56

0.68

0.92

Risk free rate

3.9%

4.0%

3.9%

4.3%

4.2 – 4.3%

4.3%

4.8%

Present value factor

0.99 – 1.00

0.99

0.98

0.97

0.96

Probability of Business Combination close

60.0%

Expected Company fully diluted ownership of New EM

98.7%

97.8%

71.3%

Additional share allocation percentages

0.07%

0.17%

4.14%

1.80%

1.35%

1.75%

2.0%

1.0%

A loss on change in fair value of the CPU Share

Allocation Obligations was approximately $274,278,000 and $1,861,000 for the year ended December 31, 2025 and for the period from

February 8, 2024 (inception) to December 31, 2024, respectively, and was reported as a component of other income (expense) on

the accompanying consolidated statements of operations and comprehensive loss.

Vendor Share-Based Settlement Obligation

The Company utilized a scenario-based valuation

model to value the Vendor Share-Based Settlement Obligation at issuance, utilizing the following assumptions:

December 31,

2024

(cancellation)

September 20,

2024

(issuance)

Expected Business Combination date

June 30, 2025

Term (years)

0.53

0.78

Risk free rate

4.2%

Present value factor

0.97

Implied probability Business Combination closes

8.3%

15.4%

F-28

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 12 — Fair Value Measurements

(cont.)

During the period from February 8, 2024 (inception)

to December 31, 2024, the Company recognized $40,000 of compensation cost associated with the Amended Vendor Agreement, with approximately

$6,000 of compensation cost recognized at the time the Vendor Agreement was modified and an additional compensation cost of approximately

$34,000 was recognized as incremental compensation cost resulting from the modification of the award. As of December 31, 2025 and

2024, $40,000 was recorded as a component of accrued expenses associated with the Company’s obligations for the services received

under this agreement.

Note 13 — Commitments and Contingencies

Indemnification Agreements: The

Company enters into contractual relationships that contain indemnification provisions in its normal course of business with other parties.

The Company may agree to hold other parties harmless against specific losses, such as those that could arise from a breach of representation,

covenant, or third party infringement claims. It may not be possible to determine the maximum potential amount of liability under such

indemnification agreements due to the unique facts and circumstances that are like to be involved in each particular claim and indemnification

provision. Historically, there have been no such indemnification claims. Management believes any liability arising from these agreements

will not be material to the Company’s consolidated financial statements.

Legal Matters: The

Company may periodically become involved in legal proceedings, legal actions, and claims arising in the normal course of business, including

proceedings relating to intellectual property, safety and health, employment and other matters. Management believes that the outcome of

such legal proceedings, legal actions, and claims will not have a significant adverse effect, individually, or in aggregate, on the Company’s

financial position, results of operations or cash flows.

Note 14 — Related Party Transactions

The Company has entered into transactions with its

voting member or a company owned solely by its managing member for consulting services, reimbursement of travel expenses incurred on behalf

of the Company, and issuance of twelve unsecured promissory notes receivable.

During the year ended December 31, 2025 and

for the period from February 8, 2024 (inception) to December 31, 2024, the Company reimbursed its voting member for travel expenses

and corporate expenses incurred on behalf of the Company totaling approximately $219,000 and $369,000, respectively. These amounts are

included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. As of

December 31, 2025 and 2024, approximately $3,200 was owed to the Company’s voting member and is included as a component of

accounts payable on the accompanying consolidated balance sheets.

During the period from February 8, 2024 (inception)

to December 31, 2024, the Company paid a company owned 100% by its voting member for consulting services totaling approximately $63,000.

These amounts are included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive

loss. As of December 31, 2025 and 2024, no amounts were owed to this company. There were no amounts incurred or paid to this company

during the year ended December 31, 2025.

During 2025 and 2024, the Company advanced approximately

$3,145,000 and $3,250,000, respectively, to the Company’s voting member under the Related Party Notes (see Note 7).

On November 26, 2025, the Company entered into

two types of transactions with EMT Asia, a company wholly owned by the Company’s voting member, whereby the Company advanced $1,940,000

pursuant to the EMT Asia Note Receivable (see Note 7) and the Company’s subsidiaries borrowed approximately KRW 695,347,000

(approximately $484,000 as of December 31, 2025) pursuant to the EMT Asia Loans Payable (see Note 9).

F-29

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Subsequent Events

On January 5, 2026, subsequent to the balance

sheet date, the Company completed two concurrent transactions: a reverse recapitalization and the acquisition of four operating companies.

These transactions represent non-recognized subsequent events in accordance with ASC 855, Subsequent Events. Accordingly,

the accompanying financial statements as of and for the year ended December 31, 2025, do not reflect any effects of these transactions,

and no post-acquisition operating results are included for the period then ended.

Reverse Recapitalization

On January 5, 2026, the Company was legally

acquired by Welsbach Technology Metals Acquisition Corp. (“WTMA”), a special purpose acquisition company. For financial accounting

and reporting purposes, this transaction was accounted for as a reverse recapitalization, with the Company being treated as the accounting

acquirer. As a result, the historical financial statements of the Company will become the historical financial statements of the combined

entity, which was renamed Evolution Metals & Technologies Corp. (“EM&T”).

Acquisition of Korean Operating Companies

Concurrent with the reverse recapitalization on,

January 5, 2026, in exchange for 6,461 shares of the Company and approximately $48.3 million of liabilities incurred to dissenting

shareholders, the Company acquired 100% of the voting equity interests in four Korean operating companies: Handa Lab Co., Ltd. (“Handa

Lab”), KMMI, INC. (“KMMI”), NS World Co., Ltd. (“NS World”), and KCM Industry Co., Ltd. (“KCM”)

(collectively, the “Operating Companies”). The primary purpose for the acquisitions is to build a complete and integrated

global supply chain focused on midstream processing of critical materials, including precious metals, battery metals, magnets &

rare earth elements, and its related products. Descriptions of the Operating Companies are as follows:

- Handa Lab specializes in the manufacturing and sale of intelligent

monitoring systems, machine vision and laser testing systems, data gathering systems;

- KMMI focuses on the production of sintered magnets, using

the NdPr alloy;

- NS World specializes in the production of bonded magnets,

using NdPr alloy; and

- KCM specializes in the manufacturing and sale of neodymium-iron-boron

(“NdFeb”) powder for NdFeb permanent magnets.

The following table summarizes the total estimated

consideration transferred for each acquisition:

in thousands

Handa

Lab

KMMI

World

KCM

Total

Equity

$ 2,702

$ 16,141

$ 6,485

$ 5,423

$ 30,751

Liabilities incurred to dissenting shareholders

4,814

27,951

6,507

9,006

48,278

Total estimated consideration

$ 7,516

$ 44,092

$ 12,992

$ 14,429

$ 79,029

F-30

EVOLUTION METALS, LLC AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 15 — Subsequent Events

(cont.)

The following table summarizes the preliminary allocation

of the purchase price to the assets acquired and liabilities assumed. The initial accounting for this business combination is incomplete

as the Company is still in the process of finalizing the valuation of certain intangible assets, property, plant, and equipment, liabilities

assumed, and obligations incurred to former owners included in consideration. Accordingly, the provisional amounts are subject to change,

and any adjustments are expected to be completed within the one-year measurement period from the acquisition date.

in thousands

Handa

Lab

KMMI

World

KCM

Total

Total estimated consideration

$ 7,516

$ 44,092

$ 12,992

$ 14,429

$ 79,029

Less: Net assets acquired

Historical net assets (liabilities)

353

(58 )

(1,710 )

(976 )

(2,391 )

Liabilities not assumed

471

110

152

813

Intangible assets (FV Step-up)

3,981

340

1,620

940

6,881

Property, plant and equipment (FV Step-up)

(308 )

(147 )

(396 )

Deferred tax liabilities (assets)

(804 )

(7 )

(328 )

(159 )

(1,297 )

Total identifiable net assets

3,649

439

(287 )

(190 )

3,610

Preliminary goodwill

$ 3,867

$ 43,653

$ 13,279

$ 14,619

$ 75,419

The goodwill is attributable to expected strategic

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

determined.

Acquisition-related transaction costs of approximately

$2.1 million, comprised of legal, advisory, and accounting fees, were expensed as incurred and are not included as a component of

consideration transferred. Separately, the Company capitalized approximately $9.3 million in equity issuance costs, which will be

reclassified to additional paid-in capital as a reduction of proceeds from the reverse recapitalization.

The following unaudited pro forma financial information

presents the combined results of the Company and the Operating Companies as if the reverse acquisition and the acquisition of the Operating

Companies had all occurred on January 1, 2025. This pro forma information is for informational purposes only and is not necessarily

indicative of the results of operations that would have occurred had the acquisitions been completed on that date, nor is it indicative

of future results.

Year Ended

December 31,

(Unaudited)

in thousands

2025

2024

Pro Forma Revenue

$ 6,833

$ 6,581

Pro Forma Net Loss

$ (22,941 )

$ (63,642 )

On February 24, 2026, the Company and the voting

member of the Company entered into another unsecured promissory notes in the amount of $475,000.

F-31

EX-99.3 — AUDITED FINANCIAL STATEMENTS OF KCM FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

EX-99.3

Filename: ea028354901ex99-3.htm · Sequence: 13

Exhibit

99.3

KCM

INDUSTRY CO., LTD. FINANCIAL STATEMENTS

Page

Audited

Financial Statements of KCM INDUSTRY Co., Ltd. as of and for each of the Years Ended December 31, 2025 and 2024

Report

of Independent Auditors for the Year Ended December 31, 2025

F-2

Report

of Independent Auditors for the Year Ended December 31, 2024

F-3

Balance

Sheets

F-5

Statements

of Operations

F-7

Statements

of Comprehensive Loss

F-8

Statements of Changes in Stockholders’ (Deficit) Equity

F-9

Statements

of Cash Flows

F-10

Notes

to the Financial Statements

F-11

F-1

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of KCM INDUSTRY Co., Ltd.

Opinion on the Financial Statements

We have audited the accompanying balance sheet

of KCM INDUSTRY Co., Ltd. (the “Company”) as of December 31, 2025, and the related statement of operations and comprehensive

loss for the year ended December 31, 2025, and statement of cash flows and changes in stockholders’ deficit for the year then ended,

and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present

fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and

its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States

of America.

Substantial Doubt About the Company’s

Ability to Continue as a Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s

decline in sales associated with the business and net loss and negative cash flows from operations in the current period raise substantial

doubt about its ability to continue as a going concern. Management’s evaluation of the events and conditions, and management’s

plans regarding those matters, are also described in Note 1. The financial statements do not include any adjustments that might result

from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our

audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required

to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,

whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over

financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly,

we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

We have served as the Company’s auditor since

2025.

Glastonbury, Connecticut

March 31, 2026

F-2

Report

of Independent Auditors

The Shareholders and Board of Directors

KCM Industry Co., Ltd.

Opinion

We have audited the financial statements of KCM

Industry Co., Ltd. (the “Company”), which comprise the balance sheet as of December 31, 2024, and the related statements

of operations, comprehensive loss, changes in stockholders’ equity, and cash flows for the year then ended, and the related notes

(collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its

cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for opinion

We conducted our audits in accordance with auditing

standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described

in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent

of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Substantial Doubt about the Company’s Ability to Continue

as a Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern. As discussed in Note 1(3) to the financial statements,

the Company has incurred a net loss, has a negative working capital, and has stated that these events or conditions indicate that a material

uncertainty exists that casts significant doubt on the Company’s ability to continue as a going concern. Management’s plans

in regard to these matters are also described in Note 1(3). The financial statements do not include any adjustments that might result

from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and

fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of

America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of

financial statements that are free of material misstatement, whether due to fraud or error.

In preparing the financial statements, management

is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s

ability to continue as a going concern for one year after the date that the financial statements are available to be issued.

F-3

Auditor’s Responsibilities for the Audit of the Financial

Statements

Our objectives are to obtain reasonable assurance

about whether the financial statements as a whole are free of material misstatement, whether due to fraud or error, and to issue an auditor’s

report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not

a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not

detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial

likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial

statements.

In performing an audit in accordance with GAAS,

we:

●

Exercise professional judgment and maintain professional skepticism throughout the audit.

●

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform

audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

●

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,

but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion

is expressed.

●

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management,

as well as evaluate the overall presentation of the financial statements.

●

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the

Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged

with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal

control-related matters that we identified during the audit.

/s/ Ernst & Young Han Young

Seoul, the Republic of Korea

April 21, 2025

F-4

KCM

INDUSTRY Co., Ltd.

Balance Sheets

As of December 31, 2025, and 2024

(in US dollars)

Notes

December 31,

2025

December 31,

2024

Assets:

Cash and cash equivalents

$ 47,964

4,541

Trade accounts receivable (Related party)

2,3,19

694,885

295,000

Non-trade account receivable

17,423

—

Non-trade account receivable (Related party)

4,19

—

153,000

Inventories

427,433

1,494,851

Prepaids and other current assets

3,362

10,022

Total current assets

1,191,067

1,957,414

Property, plant and equipment, net

7,8,9

2,698,298

2,599,386

Other non-current assets

5,874

17,007

Total non-current assets

2,704,172

2,616,393

Total assets

$ 3,895,239

4,573,807

Liabilities and Stockholders’ (deficit) equity

Liabilities:

Trade accounts payable

$ 47,535

53,700

Non-trade accounts payable

109,468

95,920

Short-term debt

300,718

278,911

Short-term debt (Related party)

9,19

575,650

436,055

Current portion of long-term debt

368,074

253,306

Derivative liabilities

151,661

—

Current portion of finance lease liabilities

22,663

13,948

Current portion of defined severance benefits

109,184

55,218

Other current liabilities

44,823

15,955

Total current liabilities

1,729,776

1,203,013

Long-term debt

1,857,899

2,053,776

Convertible debt

6,10

—

882,236

Defined severance benefits

93,466

64,972

Long-term taxes payable

33,135

30,378

Finance lease liabilities

47,011

45,200

Total non-current liabilities

2,031,511

3,076,562

Total liabilities

3,761,287

4,279,575

F-5

KCM

INDUSTRY Co., Ltd.

Balance Sheets — (Continued)

As of December 31, 2025, and 2024

(in US dollars)

Notes

December 31,

2025

December 31,

2024

Mezzanine equity:

Redeemable convertible preferred stock

1,106,583

—

Total mezzanine equity

1,106,583

—

Stockholders’ (deficit) equity:

Common stock, KRW 5,000 par value. Authorized 1,000,000 shares; issued and outstanding 20,000 shares as of December 31, 2025, and 2024

73,174

Retained earnings (Accumulated deficit)

(921,048 )

303,915

Accumulated other comprehensive loss

(124,757 )

(82,857 )

Total (deficit) equity

(972,631 )

294,232

Total Liabilities and Stockholders’ (deficit) equity

$ 3,895,239

4,573,807

See

accompanying notes to financial statements.

F-6

KCM

INDUSTRY Co., Ltd.

Statements of Operations

For the years ended December 31, 2025, and 2024

(in US dollars)

Notes

2025

2024

Net revenues

$ 995

672

Net revenues (Related party)

2,19

1,298,956

115,324

Total net revenues

1,299,951

115,996

Cost of sales

(1,747,812 )

(961,893 )

Gross loss

(447,861 )

(845,897 )

Other operating income

—

61,718

Other operating expense

—

(8,092 )

Selling, general, and administrative expenses

(360,540 )

(493,427 )

Operating loss

(808,401 )

(1,285,698 )

Other income

43,359

4,539

Other expense

(733 )

(2,359 )

Interest income

2,586

2,016

Interest expense

(110,205 )

(116,486 )

Interest expense(Related party)

(24,050 )

(10,159 )

Gain on foreign currency

4,024

20,258

Loss on foreign currency

(12,221 )

—

Loss on derivatives

(153,013 )

—

Gain on financial instruments

72,536

—

Loss on financial instruments

6,10

(252,390 )

(141,146 )

Loss before tax

(1,238,508 )

(1,529,035 )

Income tax expense

2,032

1,741

Loss for the year

$ (1,240,540 )

(1,530,776 )

See

accompanying notes to financial statements.

F-7

KCM

INDUSTRY Co., Ltd.

Statements of Comprehensive Loss

For the years ended December 31, 2025, and 2024

(in US dollars)

Notes

2025

2024

Loss for the year

$ (1,240,540 )

(1,530,776 )

Other comprehensive loss:

Foreign currency translation adjustments, net of tax

(22,020 )

(126,360 )

Actuarial (loss) gain on defined severance benefits, net of tax

(19,880 )

58,646

Total other comprehensive loss

(41,900 )

(67,714 )

Total comprehensive loss

$ (1,282,440 )

(1,598,490 )

See

accompanying notes to financial statements.

F-8

KCM

INDUSTRY Co., Ltd.

Statements of Changes in Stockholders’ (Deficit) Equity

For the years ended December 31, 2025, and 2024

(in US dollars)

Common

stock

Additional

paid-in

capital

Accumulated

other

comprehensive

income (loss)

Retained

earnings

Total

stockholders’

equity

Balances at January 1, 2024

$ 73,174

—

(15,143 )

1,834,691

1,892,722

Loss for the year

—

(1,530,776 )

Foreign currency translation adjustments, net of tax

—

(126,360 )

—

(126,360 )

Actuarial gain on defined severance benefits, net of tax

—

58,646

—

58,646

Balances at December 31, 2024

$ 73,174

—

(82,857 )

303,915

294,232

Balances at January 1, 2025

$ 73,174

—

(82,857 )

303,915

294,232

Loss for the year

—

(1,240,540 )

Accretion of redeemable preferred stock to redemption value

—

15,577

Foreign currency translation adjustments, net of tax

—

(22,020 )

—

(22,020 )

Actuarial loss on defined severance benefits, net of tax

—

(19,880 )

—

(19,880 )

Balances at December 31, 2025

$ 73,174

—

(124,757 )

(921,048 )

(972,631 )

See

accompanying notes to financial statements.

F-9

KCM

INDUSTRY Co., Ltd.

Statements of Cash Flow

For the years ended December 31, 2025, and 2024

(In US dollars)

2025

2024

Cash flows from operating activities

Loss for the year

$ (1,240,540 )

(1,530,776 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Inventory write-down adjustment

219,010

827,538

Depreciation and amortization

140,965

141,471

Interest expenses

4,272

10,145

Income taxes

2,032

1,741

Pension benefits provision

72,040

96,791

Loss on derivatives

153,013

—

Loss on valuation of financial instrument

252,390

141,146

Miscellaneous Loss

—

813

Loss on Foreign Exchange Translation

12,221

—

Gain on Disposal of Financial Instrument

(72,536 )

—

Gain on Foreign Exchange Translation

—

(20,258 )

Interest Income

(2,542 )

(1,967 )

Non-cash others

(6,389 )

8,771

Change in operating assets and liabilities:

Trade accounts receivable

(396,169 )

351,911

Non-trade account receivable

(3,754 )

(5,613 )

Inventories

895,794

(730,418 )

Prepaids and other current assets

1,081

(827 )

Trade accounts payable

(7,545 )

20,977

Non-trade accounts payable

11,301

(13,269 )

Defined severance benefits and other

(7,031 )

(35,924 )

Income taxes payable

18,420

Other current liabilities

28,731

(15,678 )

Net cash provided by (used in) operating activities:

56,389

(735,006 )

Cash flows from investing activities

Proceeds from Short-term financial instruments

—

168,624

Proceeds from disposal of property, plant, and equipment

—

59,238

Acquisitions of property, plant, and equipment

(1,020 )

(47,655 )

Acquisition of Short-term financial instruments

—

(29,326 )

Net cash (used in) provided by investing activities:

(1,020 )

150,881

Cash flows from financing activities

Proceeds from short-term borrowings

15,117

43,989

Proceeds from short-term borrowings (Related party)

256,641

539,597

Repayment of short-term borrowings (Related party)

(126,563 )

(69,649 )

Repayment of long-term borrowings

(138,769 )

(6,298 )

Payment of lease liabilities

(17,817 )

(25,017 )

Repayment of convertible bonds

(281 )

—

Net cash (used in) provided by financing activities:

$ (11,672 )

482,622

Effect of exchange rate changes on cash and cash equivalents

(274 )

(6,506 )

Net increase (decrease) in cash and cash equivalents

43,697

(101,503 )

Cash and cash equivalents at beginning of year

4,541

112,550

Cash and cash equivalents at end of year

$ 47,964

4,541

See

accompanying notes to financial statements.

F-10

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies

(1)

Description of Business

KCM

INDUSTRY Co., Ltd. (the Company), established in 2021, specializes in the manufacture and sale of neodymium-iron-boron (“NdFeb”)

powder for NdFeb permanent magnets. The Company is one of the companies operating NdFeb Powder manufacture in South Korea. The Company

offers diverse types of NdFeb Powder with different magnetic characteristics. The Company is headquartered in Gunsan, South Korea and

production takes place at headquarter.

(2)

Basis of Presentation

These

financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company

will continue as a going concern.

(3)

Going Concern

The

going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. However,

substantial doubt about the Company’s ability to continue as a going concern exists.

Primarily

due to an incline in sales associated with the business, the Company incurred losses of $1,240,540 for the year ended December 31,

2025. Absent any other action, the Company will require additional liquidity to continue its operations over the next 12 months.

The

Company is evaluating strategies to obtain the required additional funding for future operations. These strategies may include, but are

not limited to, obtaining equity financing, issuing debt or entering other financing arrangements, and restructuring of operations to

grow revenues and decrease expenses. However, upon the economic environment and the Company’s current capability, the Company may

be unable to access future equity or debt financing when needed. As such, there can be no assurance that the Company will be able to

obtain additional liquidity when needed or under acceptable terms, if at all.

The

financial statements do not include any adjustments to the carrying amounts and classification of assets, liabilities, and reported expenses

that may be necessary if the Company were unable to continue as a going concern.

(4)

Use of Estimates

The

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant

items subject to such estimates and assumptions include the useful lives of fixed assets, deferred tax assets, property, plant, and equipment,

inventory, lease liabilities and right-of-use assets, the fair value of convertible debt and derivative liabilities, actuarial valuation of defined severance

benefits obligation, income tax uncertainties, and other contingencies.

(5)

Cash and Cash Equivalents

The

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

(6)

Allowance for Credit Losses

The

estimate of expected credit losses includes expected recoveries of amounts previously written off as well as amounts expected to be written

off. The estimate of expected credit losses is based on the Company’s historical loss experience, adjusted for current and reasonable

and supportable forecasts of economic conditions and other pertinent factors affecting the Company’s customers such as known credit

risk or industry trends.

F-11

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies (cont.)

The

allowance is estimated over the contractual term of the financial asset adjusted for expected prepayments. The contractual term excludes

any extensions, renewals, and modifications, unless the borrower has a contractual option that provides it with the unilateral ability

to extend the maturity date. The Company does not have any off-balance-sheet credit exposures. Subsequent changes (favorable and unfavorable)

in expected credit losses each period are recognized immediately in net income as a credit loss expense or a reversal of credit loss

expense.

Accounts

receivable

The

Company uses an aging schedule to estimate the allowance for credit losses for accounts receivable. This method categorizes receivables

into different groups based on industry and the number of days past due. Past due status is measured based on the number of days

since the payment due date. Receivables are evaluated individually for expected credit losses if they no longer share similar risk characteristics.

The Company determines that the receivables no longer share similar risk characteristic if they are past due balances over 90 days

and over a specified amount. The Company evaluates the collectability of accounts receivable with payments that are more than 90 days

past due on a basis to determine if any are deemed uncollectible. Accounts receivable balances are deemed uncollectible and written off

as a deduction from the allowance after all means of collection have been exhausted (see Note 3, 4).

(7)

Trade Accounts Receivable

Trade

accounts receivable is recorded at the invoiced amount, net of an allowance for credit losses and do not bear interest. Amounts collected

on trade accounts receivable are included in net cash provided by operating activities in the statements of cash flows.

(8)

Inventories

are stated at the lower of cost and net realizable value. The cost of inventories is determined by the first-in, first-out (FIFO) method

for raw materials and the weighted average method for work in progress and finished goods. The Company assesses the valuation of inventory

and periodically writes down the value for estimated excess and obsolete inventory based upon assumptions about future demand and market

conditions.

(9)

Revenue Recognition

The

Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of

its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects

to receive from its customers in exchange for those products. This process involves identifying the customer contract, determining the

performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance

obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is

considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together

with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers

a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability

to direct the use and obtain the benefit of the product.

Shipping

and handling costs associated with outbound freight, after control over a product has transferred to a customer, are accounted for as

a fulfillment cost and are included in a cost of goods sold as incurred.

Taxes

assessed by a government authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected

by the Company from a customer, are excluded from sales.

The Company’s primary

source of revenue is product revenues of Neodymium Powder (NdFeb Powder) for Neodymium Magnet which is used in manufacturing of household

appliances and cars. Contracts with customers generally state the terms of the sale, including the quantity and price of each product

purchased. Payment terms and conditions may vary by contract. Such contracts do not include a significant financing component. In addition,

contracts typically do not contain variable consideration as the contracts include stated prices, as such, no-provision- e.g. rebates

or discounts is not provided. The Company provides an assurance type warranties on all of its products, which are not separate performance

obligations and are outside the scope of Topic 606. There were no loss contingencies related to warranties recorded as of December 31,

2025 and 2024.

F-12

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies (cont.)

(10)

Government grants

The

Company receives grants from local government agencies and public institutions in relation to employee compensation and salaries that

are necessary for the Company’s business activities. Government grants are either deducted from the carrying amount of the related

assets or recognized as income when there is reasonable assurance that the Company will comply with the relevant conditions and that

the grant will be received. Government grants related to assets are presented in the statement of balance sheets by deducting the grant

from the carrying amount of the asset. If it is not related to the acquisition of an asset, it can be treated as a grant related to income.

Government grants related to income are presented to other income (presented in operating income) in the statement of profit or loss.

The Company recognized no income-related grants for the year ended December 31, 2025, compared to $61,718 recognized for the year

ended December 31, 2024. There were no asset-related grants that the Company recognized in 2025 and 2024.

There

is no comprehensive accounting standard under GAAP specifically addressing government grants received by for-profit entities. In the

absence of such guidance, the Company has elected to apply an accounting policy by analogy to IAS 20, Accounting for Government Grants

and Disclosure of Government Assistance, which is commonly accepted in practice under GAAP. The Company believes that this policy

appropriately reflects the economic substance of the transactions and enhances comparability with other industry participants.

(11)

Property, Plant, and Equipment

Property,

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

Depreciation

on plant and equipment is calculated using the straight-line method over the estimated useful lives of the assets. The estimated useful

life of buildings is 40 years, while the estimated useful lives of machinery and equipment is 8 years. Furthermore, the estimated

useful life of vehicles is 5 years, and that of furniture and fixtures is 8 years.

Once

an asset is identified for retirement or disposition, the related cost and accumulated depreciation or amortization are removed, and

a gain or loss is recorded in other income or expense in the statement of operations.

(12)

Leases

The

Company has entered into various finance lease agreements for transportation equipment, apartment and office equipment. The Company determines

if an arrangement is a lease, or contains a lease, at inception, and records the leases in our financial statements upon lease commencement,

which is the date when the underlying asset is made available for use by the lessor.

The

Company has lease agreements with lease and non-lease components and has elected to utilize the practical expedient to account for lease

and non-lease components together as a single combined lease component.

The

Company has elected not to present short-term leases on the balance sheets if the lease term is 12 months or less at lease inception

and the leases do not contain purchase options or renewal terms that the Company are reasonably certain to exercise. All other lease

assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. When

determining lease terms, the Company factors in options to extend or terminate leases when it is reasonably certain that the Company

will exercise that option. For certain leases we account for the lease and non-lease components as a single lease component.

F-13

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies (cont.)

Finance

lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date.

As most of the leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available

at commencement date in determining the present value of future payments.

Depreciation

expenses for finance lease assets are recognized over the lease term and classified as cost of sales or selling, general, and administrative

expenses depending on the nature of the leased asset. Interest expenses on finance lease liabilities are recognized as interest expenses

in the statement of income over the lease term.

(13)

Equipment Maintenance Activities

The

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

(14)

Other Assets

Prepaids,

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

leasehold deposits.

(15)

Research and Development and Advertising

Research

and development and advertising costs are expensed as incurred. There were no research and development expenses, nor advertising and

promotion expenses incurred in both 2024 and 2025.

(16)

Income Taxes

Income

taxes are accounted for under the asset and liability method.

Deferred

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred

tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

The

effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment

date. Deferred tax assets are recognized to the extent that it is more likely

than not that sufficient taxable income will be available to realize the related tax benefits.

The

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

process.

the first step, recognition, we determine whether it is more-likely-than-not that a tax position will be sustained upon examination,

including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The

second step addresses measurement of a tax position that meets the more-likely-than-not criteria. The tax position is measured at the

largest amount of benefit that has a likelihood of greater than 50% of being realized upon ultimate settlement.

In December 2023, the FASB issued ASU

No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting company’s

effective tax rate reconciliation as well as additional information on income taxes paid. The ASU became effective on a prospective basis

for the Company for the year-end December 31, 2025. The effect of ASU 2023-09 is reflected in Note 12. Management has concluded that the

adoption of this standard will not have a material impact on the Company’s financial statements.

F-14

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies (cont.)

(17)

Defined Severance Benefits

The

Company has a defined severance benefits plan covering all employees upon their retirement according to the Retirement Benefit Security

Act of Korea. Eligible employees with one or more years of service are entitled to severance payments upon the termination

of their employment based on their length of service and pay rate. The Company recognizes defined severance benefits obligation in the

balance sheets with a corresponding adjustment to Statements of Operations and Comprehensive Income (Loss). The obligations are measured

annually, or more frequently if there is a remeasurement event, based on the measurement date utilizing various actuarial assumptions

and methodologies. The Company uses certain assumptions including, but not limited to, the discount rates, salary growth rates, and certain

employee-related factors, such as turnover, retirement age and mortality. The Company uses the discount rate based on observations of

relevant high-quality corporate bonds in the market. The Company reviews actuarial assumptions and makes modifications to the assumptions

based on current rates and trends when appropriate. The Company has adopted an amortization approach and the net cumulative gain or loss

at the beginning of the period in excess of the corridor is amortized into net periodic benefit cost on a straight-line basis over the

expected average remaining service period of the employees participating in the plan.

(18)

Impairment of Long-Lived Assets

Long-lived

assets, such as property, plant, and equipment subject to amortization, are reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested

for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to

its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis,

an impairment loss is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various

valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered

necessary.

(19)

Commitments and Contingencies

Liabilities

for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable

that a liability has been incurred and the amount can be reasonably estimated. Legal fees incurred in connection with loss contingencies

are expensed as incurred.

(20)

Fair Value Measurements

The

Company measured the convertible debt and derivative liabilities using fair value options. The Company’s convertible debt has complex

provisions, so we believe measuring them at fair value could better explain the characteristics of the financial instrument.

The

Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent

possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability

in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following

fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels (see

Note 6):

●

Level 1: Unadjusted quoted prices in

active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

●

Level 2: Other than quoted prices included

in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the

asset or liability.

●

Level 3: Unobservable inputs for the

asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations

in which there is little, if any, market activity for the asset or liability at measurement date.

F-15

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Summary of Significant Accounting Policies (cont.)

(21)

Foreign Currency

The

functional currency of the Company is the Korean Won. Transactions in foreign currencies are translated into the functional currency

of the Company at the exchange rates at the dates of the transactions. Transaction gains and losses are included in “Gain/Loss

on foreign currency” in the statements of operations. Monetary assets and liabilities denominated in foreign currencies are translated

into the functional currency at the exchange rate at the reporting date, which are included in the “Effect of exchange rate changes

on cash and cash equivalents” in the Statements of Cash Flows.

Assets

and liabilities of the Company are translated into U.S. dollars, the reporting currency, at the exchange rate in effect at the end

of each period. Revenue and expenses for the Company are translated into U.S. dollars using average rates that approximate those

in effect during the period. Currency translation adjustments are included in “Accumulated other comprehensive loss,”

a separate component of Stockholders’ (deficit)

equity.

(22)

New Accounting Standards and Interpretations Not Yet Adopted

Income

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

November 2024, the FASB issued ASU 2024-03, which becomes effective for fiscal years beginning after December 15,

2026, and interim periods within fiscal years beginning after December 15, 2027. The standard requires to disclose disaggregated

information about certain income statement expense line items. The Company does not expect the standard to have a material effect on

its financial statements and has begun evaluating disclosure presentation alternatives.

Debt — Debt

with Conversion and Other Options (Subtopic 470-20)

November 2024, the FASB issued ASU 2024-04, which becomes effective for annual reporting periods beginning after December 15,

2025, and interim periods within annual reporting periods. Early adoption is permitted for entities that have adopted the amendments

in Update 2020-06. The amendments clarify the requirements for determining whether certain settlements of convertible debt instruments

should be accounted for as an induced conversion. The Company is currently assessing the impact of the amendments on its financial statements.

Income

Taxes (Topic 740) — Improvements to Income Tax Disclosures

December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated

information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid.

The ASU is effective on a prospective basis for annual periods beginning after December 15, 2025 for non-public business entities.

Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company

does not expect the standard to have a material effect on its financial statements.

The

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

statements.

F-16

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Significant Risks and Uncertainties Including Business and Credit Concentrations

The

Company manufactures Neodymium Powder (NdFeb Powder) for Neodymium Magnet which is used in manufacturing of household appliances and

cars. The Company’s main products are NdFeb bonded powders with different types of magnetic characteristics.

The

Company’s operating segment is a single segment and composes of NdFeb Powder manufacturing segment, and as of the end of the reporting

period, assets, and liabilities of the segment are the same as the attached financial statements.

The

following table disaggregates revenue by category.

(in US dollars)

2025

2024

Revenue by category

Finished goods(*1)

$ 1,298,956

72,582

Merchandise & Others(*2)

995

43,414

(*1)

Revenue from sales of NdFeb Powder

(*2)

Revenue other than sales of NdFeb Powder such as sales of rare

earth raw materials, other raw materials, etc.

Domestic

sales are approximately $1,299,951 (or 100% of total net revenue) and export sales are approximately $0 (or 0% of total net revenue)

in 2025. Domestic sales are approximately $73,254 (or 63.2% of total net revenue) in 2024.

Sales

to a small number of major customers account for the majority of the Company’s total net revenue. The Company is making efforts

to gain new customers by continuously expanding its sales activities not only to domestic magnet manufactures but also to overseas NdFeb

Magnet manufactures.

The

following table disaggregates trade accounts receivable by major customers.

(in US dollars)

2025

2024

Trade accounts receivable by customers

NS World Co., Ltd.

$ 694,885

295,000

Sales

to one direct customer, NS World Co., Ltd., one of the Company’s related parties (See note 19) represented 99.9% ($1,298,956) and

62.6% ($72,582) of total revenue in 2025, and 2024, respectively. In addition, equipment installation service provided to GCM VINA, represented

36.8% ($42,742) of total revenue in 2024.

Trade Accounts Receivable

of December 31, 2025, and 2024, the Company’s trade accounts receivable is attributable entirely to related parties (refer

to Note 19). There was no effect in allowance for credit losses for trade accounts receivable.

Non-trade account receivable

The

Company disaggregates the non-trade account receivable by type of financing receivable when assessing and monitoring risk and performance

of the entire portfolio. Non-trade account receivable consists of accrued revenue and non-trade receivable, which are unsecured.

There

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

F-17

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Inventories

Details

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

(in US dollars)

2025

2024

Merchandise

$ 23,619

22,109

Raw materials

74,907

87,879

Work in process

518,128

349,210

Write-down of work in process

(365,715 )

(156,832 )

Work in process, net

152,413

192,378

Finished goods

363,007

1,810,909

Write-down of finished goods

(186,513 )

(618,424 )

Finished goods, net

176,494

1,192,485

Total

$ 427,433

1,494,851

The

amount of cost from write-down of inventories for the year ended December 31, 2025 is $552,228 and the write-down of inventories

recorded for the year ended December 31, 2024 is $775,256. The write-down recognized at the cost of sales is $219,010, and the write-down

recognized at the deduction of inventory assets is $223,028. The difference is due to a decrease in valuation allowance resulting from

increased sales of goods and the difference in the exchange rate applied.

Fair Value Measurements

(1)

Fair value represents the price that would be received to sell

an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements

are reported in one of three levels reflecting the significant inputs used to determine fair value.

Level 1 —

Observable

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

Level 2 —

Observable market-based

inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included

in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3 —

Unobservable inputs

that are not corroborated by market data and may be used with internally developed methodologies that result in management’s

best estimate of fair value.

(2)

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

(in US dollars)

Classification

Measurement

Level

2025

2024

Convertible debt

Financial liabilities

Level 3

$ —

882,236

Dissenting shareholder appraisal rights

Derivative liabilities

Level 3

151,661

—

F-18

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Fair Value Measurements (cont.)

(3)

The following

table summarizes changes in the convertible debt and dissenting shareholder appraisal rights during 2025 and 2024:

Convertible debts

Dissenting shareholder

appraisal rights

(in US dollars)

2025

2024

2025

2024

Balance as of January 1

$ 882,236

856,497

Loss in fair value

252,390

141,146

153,013

Gain on extinguishment of Debt

(72,536 )

Repayment

(281 )

Conversion to redeemable convertible preferred stocks

(1,091,448 )

Changes in foreign currency translation

29,639

(115,407 )

(1,352 )

Balance as of December 31

882,236

151,661

The

change in fair value of the convertible debt resulted in a loss of $252,390 and $141,146 for the year ended December 31, 2025, and December

31, 2024, which was recognized in the statements of operations within loss on financial instruments. Convertible debts were converted

to redeemable convertible preferred stocks during the year ended December 31, 2025.

of December 31, 2025, the Company’s derivative liability related to dissenting shareholder appraisal rights (“DSAR put option”)

is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. The change in fair value

of the DSAR put option resulted in a loss of $153,013 for the year ended December 31, 2025, which was recognized in the statements of

operations within loss on derivatives.

(4)

Convertible

debts

The

Company estimated the fair value of convertible debts using the Tsiveriotis-Fernandes model with strip and bootstrapping method. The

fair value is estimated using Level 3 inputs based on Stock price volatility of similar listed companies.

Quantitative

information as of December 31, 2024 for the significant unobservable inputs of convertible debts used to value the company’s liabilities

measured at fair value:

Unobservable Inputs

Assumptions

Factors

December 31, 2024

Volatility

Mean of the annual volatility of proxy companies

45.80 %

Risk neutrality probability, max

Dynamic hedge for each node

47.80 %

As of December 31, 2025, there were no liabilities required to be measured

at fair value.

For

the fair value of the convertible debts, reasonably possible changes at the reporting date to one of the significant unobservable inputs,

holding other inputs constant, would have the following effects in the statement of profit or loss.

2025

2024

(in US dollars)

Increase

Decrease

Increase

Decrease

Volatility of underlying stock price (+/-10%p)

$ -

(45,574 )

31,791

Underlying stock price (+/- 5%p)

(33,422 )

42,079

F-19

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Fair Value Measurements (cont.)

(5)

DSAR put option

The DSAR put option represents a freestanding

financial instrument that provides dissenting shareholders with the right to require the Company to repurchase their shares at a predetermined

price, contingent on closing of the Share Exchange Agreement described in Note 15.

The fair value of the DSAR put option

is determined using a valuation model based on the difference between:

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

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

The valuation incorporates significant

assumptions, including:

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

2) estimated fair value of the Company’s shares

3) probability of occurrence of the underlying transaction

4) discount rates reflecting the time value of money

Due to the use of significant unobservable inputs, the DSAR put option

is classified as a Level 3 financial liability.

(6)

The carrying amounts of our financial instruments, including cash and

cash equivalents, accounts receivable, commercial paper notes, accounts payable and accrued expenses, approximate fair value due to their

short maturities.

Property, plant and equipment

Details

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

Useful

Initial Cost

Carrying Amount

(in US dollars)

Lives

2025

2024

2025

2024

Land(*1)

—

$ 1,143,914

1,116,600

1,143,914

1,116,600

Buildings, structures and related equipment(*1)

991,073

967,409

908,482

910,975

Machinery and equipment(*1)

550,979

537,823

310,221

370,041

Vehicles

30,901

30,163

11,411

17,172

Furniture and fixtures

117,813

114,014

77,354

88,896

Construction in progress

168,204

20,408

168,205

20,408

Finance lease right-of-use assets

2 – 5

131,410

104,319

78,711

75,294

Total

$ 3,134,294

2,890,736

2,698,298

2,599,386

(*1)

As of December 31, 2025, land, buildings, machinery, and

equipment have been provided as security (with a secured amount of $3,052,478) for long-term debt. The contractual secured amount is

set at 120% of the credit line agreed with Industrial Bank of Korea and Shinhan Bank (refer to Note 9, 18).

Total

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

F-20

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Leases

The

Company has finance leases for certain transportation equipment, apartment and office equipment. Finance lease assets and liabilities

are included in property, plant and equipment and finance lease liabilities, respectively, on the balance sheets.

The

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

in 12 months.

The

Company’s leases generally do not include termination options for either party to the lease or restrictive financial or other covenants.

Payments due under the lease contracts include fixed payments only. The Company also elected to discount all lease liabilities using

an incremental borrowing rate.

The

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

(in US dollars)

2025

2024

Finance lease expense:

Depreciation of right-of-use assets

$ 25,388

19,645

Interest on lease liabilities

6,981

6,188

Sub-total

32,369

25,833

Short-term lease expense

6,218

12,898

Total

$ 38,587

38,731

Amounts

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

(in US dollars)

2025

2024

Finance Leases:

Finance lease right-of-use assets

$ 131,410

104,319

Less: Accumulated amortization assets

(52,699 )

(29,025 )

Property, plant and equipment, net

$ 78,711

75,294

Long-term finance lease liabilities

$ 47,011

45,200

Current portion of finance lease liabilities

22,663

13,948

Total

$ 69,674

59,148

Other

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

(in US dollars)

2025

2024

Cash paid for amounts included in the measurement of lease liabilities:

Cash used in operations for finance leases

$ 24,798

25,017

Right-of-use assets obtained in exchange for lease obligations:

Finance leases

$ 24,539

35,360

Weighted average remaining lease term:

Finance leases

3.14 years

2.78 years

F-21

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Leases (cont.)

Maturities

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

(in US dollars)

2025

Finance

leases

2026

$ 28,676

2027

25,274

2028

16,262

2029

8,101

2030

2,215

Total undiscounted lease payments

80,528

Less imputed interest

(10,854 )

Total lease liabilities

$ 69,674

Debt

(1) Short-Term

debt

Details

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

(in US dollars)

Maturity Date

Interest rate

(%)

Borrowing

Limit

2025

2024

Sep. 2026

4.6

436,267 (*1)

$ 436,267

436,055

Jun. 2026

4.6

41,815

40,816

Mar. 2026

0.0

14,984

—

May. 2026

6.0

139,383

—

Oct. 2026

9.5

243,919

238,095

Total short-term debt

$ 876,368

714,966

(*1)

This represents working capital loan borrowed from the Company’s

CEO and employees.

F-22

KCM INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Debt (cont.)

(2)

Current portion of long-term debt

Details

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

(in US dollars)

Description(*1)

Maturity Date

Interest

Rate (%)

Borrowing

Limit

2025

2024

Operating Funds Loan

Oct. 2026

12.0

$ 139,383

$ 121,960

136,054

Operating Funds Loan

Jan. 2026 – Dec. 2026

2.87

69,691

23,165

22,612

Operating Funds Loan

Jan. 2026 – Dec. 2026

2.92

348,456

116,077

94,640

Facility Funds Loan

Aug. 2026 – Dec. 2026

2.54 – 3.61

1,533,208

106,872

—

Total current portion of long-term debt

368,074

253,306

(*1)

The debt has been classified as current portion of long-term

debt because it matures less than 12 months.

(3)

Long-Term Debt

Details

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

(in US dollars)

Description

Maturity Date

Interest

Rate

(%)

Borrowing

Limit

2025

2024

Facility Funds Loan(*1, 2, 3)

Sep. 2027 – Jul. 2030

3.61

$ 1,533,208

$ 1,184,752

1,156,463

Facility Funds Loan(*1, 2, 3)

Mar. 2027 – Sep. 2032

2.54

627,221

612,245

Operating Funds Loan(*1)

Oct. 2026

12.0

139,383

121,960

136,054

Operating Funds Loan

Sep. 2027

2.87

69,691

40,539

62,184

Operating Funds Loan

Feb. 2028

2.92

348,456

251,501

340,136

Total principal long-term debt

$ 2,225,973

2,307,082

Less: current portion of long-term debt

(368,074 )

(253,306 )

Total long-term debt

$ 1,857,899

2,053,776

(*1)

In December 2025, the Company provided property, plant

and equipment, (net book value: $2,242,777, secured amount: $3,052,478) as security in relation to this loan. The contractual secured

amount is set at 120% of the credit line agreed with Industrial Bank of Korea and Shinhan Bank (refer to Note 7, 18).

(*2)

In December 2025, the Company was provided guarantees

from the representative director (with a guarantee amount of $373,765) in relation to this loan (refer to Note 18).

(*3)

In December 2025, the Company established pledge fire

insurance claims (with a pledge amount of $1,789,343).

F-23

KCM

INDUSTRY Co., Ltd.

Notes to the Financial Statements

December 31, 2025, and 2024

Debt (cont.)

(4)

Future principal payments for long-term debt as of December 31,

2025 are as follows:

(in US dollars)

2025

2026

$ 368,073

2027

525,423

2028

411,318

2029

391,972

2030

320,113

Thereafter

209,074

Total

$ 2,225,973

10.

Convertible Debt

(1)

Details of carrying amounts of the convertible debt as of December 31,

2025 and 2024 are as follows:

(in US dollars)

Maturity Date

Interest rate

(%)

2025

2024

Sep. 2027 – Jun. 2030

0.25

—

882,236

(2)

Descriptive information of the Convertible debt

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

Upon

the issuance of convertible debt, the Company measured the convertible debt using fair value options. The Company’s convertible

debt has complex provisions, so the Company believes measuring them at fair value could better explain the characteristics of the financial

instrument. The change in fair value of the convertible debt resulted in a loss of $252,390 for the year ended December 31, 2025,

which was recognized as loss on valuation of financial instruments in the statements of operations.

The

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

(3)

Terms of the Convertible debt

The

details of the Company’s convertible debt are as follows: