EMAT 10-K & 10-Q changes, risk factors and insider trading
Evolution Metals & Technologies Corp. · Nasdaq · Miscellaneous Electrical Machinery, Equipment & Supplies · CIK 1866226 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.”
New heading “Risks Related to EM&T’s Financial Condition and Results of Operations”
New heading “EM&T has a limited operating history as a consolidated company following the Business Combination, which makes it difficult to evaluate its business, prospects, and future operating results.”
New heading “EM&T has incurred operating losses and may be unable to achieve sustained, long-term profitability and commercial success.”
New heading “EM&T’s future success depends on its ability to execute its growth and go-to-market strategies effectively.”
New heading “EM&T’s failure to execute its strategic plans would have a material adverse effect on its operating results and business, harm its reputation and could result in substantial liabilities that exceed its resources.”
New heading “EM&T’s ability to secure reliable and cost-effective volumes of spent lithium-ion batteries for its planned battery recycling facility is critical to generating black mass feedstock, which is expected to be further refined at its planned multi-feedstock processing facility into downstream battery materials. Failure to secure sufficient battery supply or successfully operate either facility may materially and adversely affect the Company’s operations, financial results, and ability to meet customer demand.”
New heading “EM&T’s ability to secure reliable and cost-effective supplies of e-scrap is critical to its recycling strategy, and failure to do so could materially impair its operations, profitability, and customer relationships.”
New heading “Development and future operation of EM&T’s planned lithium-ion battery recycling facility may expose the Company to significant safety, environmental, and regulatory risks, including but not limited to thermal events, fire hazards, explosions, chemical exposure, and electrical accidents.”
New heading “EM&T may not be able to successfully integrate the business and operations of the subsidiaries that it recently acquired into its future business operations, which may result in EM&T’s inability to fully realize the intended benefits of these acquisitions, or may disrupt EM&T’s current operations, which could have a material adverse effect on EM&T’s business, financial position and/or results of operations.”
New heading “EM&T is expected to need to raise additional funds in order to pursue its growth strategy, and these funds may not be available on terms favorable to EM&T or its stockholders, or at all, when needed.”
New heading “EM&T’s quarterly net sales and operating results are difficult to predict accurately and may fluctuate significantly from period to period, which could cause its stock price to decline if it fails to meet investor expectations.”
New heading “The expectations for future operating and financial results and market growth of EM&T rely in large part upon assumptions and analyses developed by it. If these assumptions or analyses prove to be incorrect, EM&T’s actual operating results may be materially different from its anticipated results.”
New heading “EM&T may be adversely affected by fluctuations in demand for and prices of battery metals, rare earth elements and its related products.”
New heading “The success of EM&T’s business will depend, in part, on the growth of existing and emerging uses for battery metals, magnets and rare earth elements, and related products.”
New heading “Industry consolidation may result in increased competition, which could reduce our revenue.”
New heading “EM&T’s profitability could be adversely affected if we fail to maintain satisfactory labor relations; work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues, and materially affect our results of operations.”
New heading “A shortage of skilled technicians and engineers may increase operating costs, adversely affecting our results of operations.”
New heading “EM&T will depend on key personnel for the success of our business.”
New heading “Increasing costs or limited access to raw materials may adversely affect our profitability.”
New heading “Fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport could decrease our competitiveness or impair our ability to supply products to our customers, which could adversely affect our results of operations.”
New heading “EM&T’s facilities or operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics or pandemics.”
New heading “EM&T’s ability to generate revenue may be diminished if substitutes for EM&T’s concentrates, oxides, metals, carbonates, sulfates, precursor cathode active material (pCAM), magnets, and their related products become available or if technological advancements reduce their demand.”
New heading “If EM&T is deemed to be an investment company under the Investment Company Act, it may be required to institute burdensome compliance requirements and its activities may be restricted, which may make it difficult to operate or to execute its growth plans.”
New heading “Risks Related to EM&T’s Intellectual Property”
New heading “EM&T is expected to rely heavily on its intellectual property portfolio. If EM&T is unable to protect its intellectual property rights, its business and competitive position would be harmed.”
New heading “EM&T’s inability to protect its existing and future intellectual property rights could have a material adverse effect on its operations and success.”
New heading “EM&T may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause EM&T to incur substantial costs.”
New heading “EM&T’s patent applications may not result in issued patents or its patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on EM&T’s ability to prevent others from interfering with its commercialization of its products.”
New heading “There is uncertainty regarding the ability of each of the subsidiaries to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about each subsidiary’s ability to continue as a going concern.”
New heading “We are dependent upon information technology systems, operational technology, and digital infrastructure to conduct our business, and these systems are subject to cyber threats, disruption, damage, and failure. Any unauthorized access to, disclosure, or theft of confidential, proprietary, or personal information that we gather, store, or use could harm our reputation, disrupt our operations, subject us to claims or litigation, and adversely affect our business, financial condition, or results of operations.”
New heading “Additional Risks Related to the EM&T Common Stock”
New heading “The price of the EM&T Common Stock may be volatile.”
New heading “Our failure to meet the continued listing requirements of The Nasdaq Global Market could result in a delisting of our common stock.”
New heading “EM&T is a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, will qualify for exemptions from certain corporate governance requirements. If EM&T relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.”
New heading “EM&T does not intend to pay cash dividends for the foreseeable future.”
New heading “EM&T Common Stock may be subject to the “penny stock” rules in the future. It may be more difficult to resell securities classified as “penny stock.””
New heading “If analysts do not publish research about EM&T’s business or if they publish inaccurate or unfavorable research, EM&T’s stock price and trading volume could decline.”
New heading “EM&T may be subject to securities litigation, which is expensive and could divert management attention.”
New heading “Future resales of the EM&T Common Stock may cause the market price of the EM&T Common Stock to drop significantly, even if EM&T’s business is doing well.”
New heading “Future sales or other dilution of our equity could adversely affect the market price of EM&T Common Stock.”
New heading “EM&T is an emerging growth company and smaller reporting company, and EM&T cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies make its shares less attractive to investors.”
New heading “The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from EM&T’s business operations.”
New heading “Each of the recently acquired subsidiaries in connection with the Business Combination with EM&T has identified one or more material weaknesses in its internal control over financial reporting which, if not corrected, could affect the reliability of each of the subsidiaries’ and EM&T’s consolidated financial statements and have other adverse consequences.”
New heading “Our certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our shareholders, which could limit its stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or other employees.”
New heading “An active market for our securities may not develop and the market price of our Common Stock may decline which would adversely affect the liquidity and price of our securities.”
New heading “Substantial future sales of shares of our Common Stock could cause the market price of our Common Stock to decline.”
New heading “Risks Related to EM&T’s Technology, Products and Manufacturing”
New heading “EM&T will be subject to many hazards and operational risks at its facilities, that can result in potential injury to individuals, disrupt its business (including interruptions or disruptions in operations at its facilities), and subject EM&T to liability and increased costs (any of which could have a material adverse effect on EM&T’s business, financial condition and results of operations).”
New heading “EM&T’s success will depend on its ability to manufacture its products, including concentrates, oxides, metals, carbonates, sulfates, precursor cathode active materials (pCAM), magnets, and their related products, economically, at scale, with high quality, and in accordance with customer specifications.”
New heading “EM&T’s success depends on its ability to generate revenue and operate profitably, which relies in part on its ability to identify target customers and convert these contacts into substantial orders or expand existing customer relationships.”
New heading “EM&T may not be able to negotiate material agreements necessary for the operation of its business on satisfactory terms, or at all.”
New heading “If critical components or raw materials used to manufacture EM&T’s products become scarce or unavailable, it could lead to manufacturing delays and harm EM&T’s business.”
New heading “The impact of the conflict in Ukraine on the global economy, energy and commodity supplies and raw materials is uncertain and may negatively impact EM&T’s business and operations.”
New heading “EM&T’s profitability may depend on achieving cost reductions through scaling up manufacturing of its products, and failure to do so could materially affect its business.”
New heading “EM&T’s expansion plans include complex projects that will require significant capital expenditures and are subject to significant risks and uncertainties.”
New heading “Any acquisitions EM&T undertakes may disrupt its business, adversely affect its operations, dilute its stockholders, and expose it to significant costs and liabilities.”
New heading “EM&T’s foreign operations expose EM&T to additional business, financial, regulatory and geopolitical risks, and any adverse event could have a material adverse effect on its results of operations.”
New heading “Exchange rate fluctuations may materially affect EM&T’s results of operations and financial conditions.”
New heading “EM&T is subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws could subject EM&T to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect EM&T’s business, prospects, financial condition and results of operations and also its reputation.”
New heading “Cybersecurity breaches or information technology disruptions could impact EM&T’s business and operations.”
New heading “Computer malware, viruses, ransomware, hacking, phishing attacks and other network disruptions could result in security and privacy breaches, loss of proprietary information and interruption in service, which would harm EM&T’s business.”
New heading “Fluctuations in the price of certain feedstock and raw materials, and EM&T’s inability to obtain raw materials and products, could have an adverse effect on the margins of its products, its business, and its operating results.”
New heading “EM&T expects that the success of its business could be highly correlated to general economic conditions.”
New heading “EM&T is expected to compete with companies that have significantly more resources for their research and development efforts than EM&T or have received government contracts for the development of new products.”
New heading “EM&T’s business and financial results may be adversely affected by the demands of operating in multiple jurisdictions and the need to comply with a myriad of foreign and domestic laws and regulations, including various environmental, health and safety, employment and taxation laws and regulations.”
New heading “Potential litigation, regulatory actions or government investigations may significantly harm EM&T’s financial position, reputation and operating results.”
New heading “EM&T’s insurance coverage may not be adequate to protect it from all business risks.”
New heading “If EM&T does not maintain effective internal control over financial reporting, it may not be able to accurately report its financial results in a timely manner or prevent fraud, which may adversely affect investor confidence in its financial reporting and adversely affect its business and operating results and the market price for its common stock.”
Largest changes
“EM&T is subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and non-compliance with such laws could subject EM&T to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could materially and adversely affect EM&T’s business, prospects, financial condition and results of operations and also its reputation.”see in full comparison
“There is uncertainty regarding the ability of each of the subsidiaries to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about each subsidiary’s ability to continue as a going concern.”see in full comparison
“Additionally, instability or disruption in key geographic regions — whether due to war, terrorism, civil unrest, natural disasters, or other factors — could adversely impact EM&T’s business. For example, the ongoing conflict between Russia and Ukraine, which began in February 2022, has led to severe sanctions and export controls imposed by the U.S. and other governments where EM&T plans to operate. …”see in full comparison
“EM&T may identify material weaknesses in the future, which could limit its ability to prevent or detect a material misstatement of its annual or interim financial statements. …”see in full comparison
“If not remediated, these material weaknesses could result in material misstatements to EM&T’s annual or interim financial statements that would not be prevented or detected on a timely basis, or in delayed filing of required periodic reports. …”see in full comparison
“If our information systems, operational technology, or data are compromised in a material way, our ability to operate our facilities, manage supply chains, conduct financial reporting, or protect proprietary technologies may be impaired. We could experience operational disruptions, production delays, equipment malfunctions, inaccurate recordkeeping, loss of intellectual property, or interruption of customer or supplier relationships. …”see in full comparison
Full comparison: every changed paragraph (245)
An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this Annual Report on Form 10-K, including our historical financial statements and related notes included elsewhere in this Annual Report on Form 10-K, before making a decision to invest in our securities. Any one of these risks and uncertainties has the potential to cause material adverse effects on our business, financial condition and operating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant decrease in the value of our common stock. Refer to “Cautionary Statement Regarding Forward-Looking Statements.”
We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.
Risks Related to EM&T’s Financial Condition and Results of Operations
EM&T has a limited operating history as a consolidated company following the Business Combination, which makes it difficult to evaluate its business, prospects, and future operating results.
EM&T was formed as the result of the business combination completed in January 2026, and its historical financial information does not reflect the operations of EM&T as a consolidated public company. While EM&T conducts its business through EM and other operating subsidiaries that have varying operating histories, EM&T itself has a limited operating history in its current structure, scale, and scope. As a result, investors have limited historical information upon which to evaluate EM&T’s business, prospects, and future performance.
Although certain of EM&T’s operating subsidiaries have been engaged in activities related to critical materials processing, recycling, and magnet manufacturing prior to the Business Combination, these businesses were not previously operated or managed as part of a single, vertically integrated platform. Accordingly, EM&T’s historical results may not be indicative of its future performance as a consolidated enterprise.
EM&T may encounter risks, uncertainties, expenses, and difficulties commonly associated with companies transitioning to a larger, integrated operating model, including, among others:
Due to these risks and uncertainties, investors may have difficulty evaluating EM&T’s business and prospects, and EM&T’s actual results may differ materially from expectations or projections.
EM&T has incurred operating losses and may be unable to achieve sustained, long-term profitability and commercial success.
Since the completion of the Business Combination, EM&T has incurred operating losses and expects to continue to incur significant expenses as it integrates its operating subsidiaries, scales production capacity, and expands its vertically integrated critical materials platform. EM&T has not yet generated revenues at levels sufficient to offset its operating expenses, and there can be no assurance that it will achieve or maintain profitability in the future.
EM&T anticipates incurring substantial operating costs, including research and development (“R&D”) expenses, capital expenditures, and integration-related costs, as it seeks to ramp up revenues from the sale of concentrates, oxides, metals, carbonates, sulfates, precursor cathode active materials (“pCAM”), magnets, and their related products. These expenditures are expected to continue until EM&T is able to achieve sufficient scale, operational efficiency, and market adoption of its products.
To achieve sustained profitability and long-term commercial success, EM&T must successfully execute its growth and integration strategy, including, among other things:
If EM&T fails to execute one or more of these initiatives effectively or within expected timeframes, EM&T may be unable to achieve sustained profitability or generate sufficient cash flows to support its operations.
As EM&T transitions from an integration and scale-up phase to a more mature commercial operating phase, its future revenue growth will depend on factors both within and outside its control. Adverse developments such as reduced global demand for critical materials, pricing pressure, increased competition, regulatory changes, or delays in customer adoption could materially limit EM&T’s revenue growth. In addition, EM&T’s reliance on third-party suppliers for spent lithium-ion batteries and other feedstock exposes it to sourcing volatility, price fluctuations, quality variability, and potential supply disruptions, any of which could adversely affect production yields, operating efficiency, and downstream product output.
If EM&T is unable to generate sufficient revenues, achieve operational efficiencies, or raise additional capital as needed, its ability to continue operations and execute its business plan could be materially and adversely affected, including the risk that EM&T may not be able to continue as a going concern.
EM&T’s future success depends on its ability to execute its growth and go-to-market strategies effectively.
EM&T’s success hinges on its ability to implement its growth and go-to-market strategies, particularly in expanding its production of critical materials, scaling its recycling operations, and integrating its planned acquisitions. EM&T’s future management team must execute these strategies to increase sales, bring new products to market, and capitalize on its proprietary technologies in areas such as AI-driven automation and material recycling. The success of EM&T’s strategy depends on its ability to develop and operate both its planned battery recycling facility and its multi-feedstock processing facility. The battery recycling facility is expected to convert spent lithium-ion batteries into black mass, specifically designed to integrate with its downstream multi-feedstock processing operations. This black mass, along with other third-party sourced material, is expected to then be processed at the multi-feedstock facility into battery-grade carbonates, sulfates, and precursor cathode active materials (pCAMs). Separately, the multi-feedstock facility is expected to also recover rare earth elements, precious metals, and non-ferrous materials from e-scrap such as printed circuit boards (PCBs). If EM&T is unable to secure consistent volumes of spent lithium-ion batteries or high-quality e-scrap at competitive prices, or if the facilities fail to meet downstream product specifications or customer offtake requirements, its ability to generate revenue from these operations could be materially and adversely affected.
However, the success of EM&T’s strategy is subject to several uncertainties, including potential delays in completing acquisitions, longer-than-expected timelines to generate projected revenues, and challenges in developing or commercializing new products. Moreover, EM&T’s growth and go-to-market strategies may prove ineffective due to factors such as unforeseen market conditions, increased competition, or challenges in customer adoption of its products.
If EM&T cannot execute its strategies in a timely or cost-effective manner, it could face significant challenges to its business, financial condition, and ability to achieve profitability. Ineffective execution of these strategies could negatively impact EM&T’s results of operations and its ability to meet its long-term growth objectives.
EM&T’s failure to execute its strategic plans would have a material adverse effect on its operating results and business, harm its reputation and could result in substantial liabilities that exceed its resources.
The estimated costs and timelines developed by EM&T for the large-scale integration, assembly, and production of its concentrates, oxides, metals, carbonates, sulfates, precursor cathode active materials (pCAM), magnets, and their related products are subject to the risks and uncertainties inherent in transitioning from an early-stage company to full commercial operations. EM&T’s growth strategy, which includes the acquisition of multiple businesses and the expansion of its AI-driven smart factory capabilities, is dependent on the successful integration of these acquisitions, scaling its operations, and managing complex manufacturing processes.
EM&T has not yet secured contractual relationships with all component suppliers needed to scale its production capacity. Additionally, EM&T may face challenges in accurately estimating demand for its products, which could lead to inefficiencies, increased costs, or delays in generating revenue. If EM&T fails to properly predict supply and demand for its materials and manufacturing requirements, or if it is unable to invest in the necessary infrastructure, people, and capital equipment in a timely manner, EM&T could experience production delays and higher costs.
In addition, EM&T’s ability to secure sufficient volumes of feedstock — including lithium-ion batteries and e-scrap — will be critical to supporting its planned operations. Volatility or disruptions in the availability, pricing, or quality of these inputs could materially impact its commercial execution.
The success of EM&T’s strategic plans must be considered in light of these risks, complications, and the highly competitive environment in which it operates. There is no assurance that EM&T’s business plan will succeed. Moreover, as a capital-intensive business, EM&T will likely continue to incur substantial operating expenses without generating sufficient revenue to cover these expenditures, which may impact its ability to achieve profitability in the near term.
As a result, any investment in EM&T carries significant risk, and there is a possibility that investors could lose the entirety of their investment.
EM&T’s ability to secure reliable and cost-effective volumes of spent lithium-ion batteries for its planned battery recycling facility is critical to generating black mass feedstock, which is expected to be further refined at its planned multi-feedstock processing facility into downstream battery materials. Failure to secure sufficient battery supply or successfully operate either facility may materially and adversely affect the Company’s operations, financial results, and ability to meet customer demand.
EM&T plans to establish a vertically connected battery recycling facility that will process end-of-life lithium-ion batteries into black mass — a critical intermediate product used in the production of carbonates, sulfates, and precursor cathode active materials (pCAM) at its separate planned multi-feedstock processing facility, specifically designed to integrate with its downstream multi-feedstock processing operations. The success of this two-stage model is dependent on the Company’s ability to secure large volumes of spent lithium-ion batteries from third parties, particularly automotive OEMs, battery manufacturers, fleet operators, and aggregators, and we do not currently have any agreements in place for spent lithium-ion batteries.
However, many high-volume suppliers of spent batteries engage in structured bid or tender processes for disposal and recycling contracts. These competitive procurement processes often prioritize recyclers with proven track records, existing capacity, or vertically integrated logistics — areas where EM&T, as a new market entrant with non-operational facilities, may face significant disadvantages. Inability to win bids or enter into favorable long-term supply contracts may prevent the Company from achieving the scale needed to support downstream processing or meet customer offtake requirements.
Additional risks stem from variability in battery chemistries, degradation levels, and contamination across supplier batches. This inconsistency can reduce black mass yields, affect product purity, increase processing costs, or require costly pre-treatment stages to ensure quality specifications are met at the multi-feedstock facility.
Moreover, as a substantial portion of global battery scrap is generated outside the United States, EM&T’s supply chain may also be exposed to evolving international trade restrictions, export controls, or geopolitical disruptions. Since the Company does not plan to collect or dismantle batteries in-house, it is structurally reliant on external counterparties across this entire supply chain.
If EM&T is unable to secure a stable, scalable, and cost-effective supply of spent lithium-ion batteries through competitive channels, or if its recycling and multi-feedstock processing facilities underperform or face delays, the Company may be unable to fulfill offtake agreements, realize projected margins, or establish itself as a competitive player in the battery materials market. These sourcing and execution risks may significantly impair its financial performance and long-term growth prospects.
EM&T’s ability to secure reliable and cost-effective supplies of e-scrap is critical to its recycling strategy, and failure to do so could materially impair its operations, profitability, and customer relationships.
EM&T intends to process e-scrap — including printed circuit boards (PCBs), hard disk drives, and magnet-containing electronic devices — as a key source of critical materials such as rare earth elements (REEs), precious metals, and other non-ferrous inputs. This recycling strategy supports EM&T’s broader midstream and downstream production plans by providing recovered inputs for use in alloys, magnets, and other advanced materials. However, the Company does not currently operate a formal collection or dismantling infrastructure and will rely entirely on third-party suppliers for access to e-scrap.
As of the date of this Report, EM&T has not entered into long-term supply contracts with e-scrap aggregators or material recovery partners. The Company may be unable to secure such agreements on acceptable terms or may face heightened competition from established processors and new entrants, which could limit feedstock availability or increase procurement costs. Inconsistent or insufficient access to high-grade e-scrap could lead to underutilized processing capacity, lower production volumes, and reduced operating margins.
E-scrap feedstock presents inherent variability in material composition, quality, and recoverable value. Inputs can differ significantly based on device type, origin, and prior usage, and may require additional sorting, pre-treatment, or refinement to meet processing standards. These steps can drive up cost and reduce overall recovery efficiency. In some cases, incoming material may fall below the economic threshold for recovery.
In addition, global e-waste generation and trade flows are subject to export regulations, environmental restrictions, and geopolitical risks. Because EM&T does not control the upstream collection network, it may be exposed to fluctuations in international policy, supply chain disruptions, or force majeure events that impact the availability or pricing of feedstock.
If EM&T is unable to consistently procure high-quality e-scrap at scale and at competitive prices, it may not be able to support its recycling operations, fulfill customer demand, or achieve its targeted operating efficiencies. These challenges could delay commercialization, impair profitability, and materially and adversely impact EM&T’s business and strategic objectives.
Development and future operation of EM&T’s planned lithium-ion battery recycling facility may expose the Company to significant safety, environmental, and regulatory risks, including but not limited to thermal events, fire hazards, explosions, chemical exposure, and electrical accidents.
EM&T intends to construct and operate a lithium-ion battery recycling facility, specifically designed to integrate with its downstream multi-feedstock processing operations as part of its broader battery materials strategy. The facility, which remains in the planning and pre-development stage, is expected to process end-of-life lithium-ion batteries into black mass, which will then be further refined into battery-grade materials at EM&T’s anticipated multi-feedstock processing facility.
While no operations have commenced, lithium-ion battery recycling poses well-documented industrial hazards, particularly during battery discharging, dismantling, shredding, and thermal or chemical processing. The recycling of lithium-ion batteries involves handling volatile materials and operating at elevated temperatures, increasing the risk of thermal runaway, fire, explosion, or release of hazardous substances such as heavy metals and toxic gases. These risks are compounded by the variability in battery chemistries, physical damage to incoming batteries, or the presence of residual charge — all of which may create unsafe working conditions or mechanical instability during processing.
Additionally, the Company may be exposed to risks related to electrical shock or equipment failure due to the high energy density of lithium-ion batteries. These operational risks may require sophisticated safety systems, specialized equipment, environmental controls, and adherence to evolving regulatory standards issued by local, state, and federal authorities, including the EPA and OSHA. The failure to adequately mitigate these hazards could result in material harm to personnel, damage to equipment or property, regulatory enforcement actions, permitting delays, reputational harm, or material financial loss.
Although EM&T intends to implement best-in-class safety systems, fire suppression infrastructure, and standard operating protocols, there can be no assurance that these measures will be sufficient to prevent or contain incidents. Moreover, given the facility has not yet been constructed, the Company faces additional execution risks in designing, permitting, and commissioning a complex industrial operation capable of safely processing spent batteries at commercial scale.
Any material incident at the future recycling facility — whether during development, construction, or operations — could delay the facility’s timeline, increase costs, trigger regulatory scrutiny, or adversely affect EM&T’s ability to deliver downstream products or meet customer commitments.
EM&T may not be able to successfully integrate the business and operations of the subsidiaries that it recently acquired into its future business operations, which may result in EM&T’s inability to fully realize the intended benefits of these acquisitions, or may disrupt EM&T’s current operations, which could have a material adverse effect on EM&T’s business, financial position and/or results of operations.
EM&T will need to integrate the business and operations of the subsidiaries that it recently acquired. This process involves complex operational, technological and personnel-related challenges, which are time-consuming and expensive and may disrupt our ongoing business operations. Furthermore, integration involves a number of risks, including, but not limited to:
These factors could cause EM&T to not fully realize the anticipated financial and/or strategic benefits of the acquisitions of the Operating Companies, which could have a material adverse effect on its business, financial condition and/or results of operations.
Even if EM&T is able to successfully operate the Operating Companies, EM&T may not be able to realize the revenue and other synergies and growth that EM&T anticipates from these acquisitions in the time frame that EM&T currently expects, and the costs of achieving these benefits may be higher than what EM&T currently expects, because of a number of risks, including, but not limited to:
As a result of these risks, the acquisitions and integration may not contribute to EM&T’s earnings as expected, EM&T may not achieve expected revenue synergies or EM&T’s return on invested capital targets when expected, or at all, and EM&T may not achieve the other anticipated strategic and financial benefits of the acquisitions of the Operating Companies.
EM&T is expected to need to raise additional funds in order to pursue its growth strategy, and these funds may not be available on terms favorable to EM&T or its stockholders, or at all, when needed.
The development, manufacture, and sale of EM&T’s future battery metals, magnets, and its related products are capital-intensive businesses. EM&T’s business plan — which includes acquiring and integrating new companies, scaling production, and implementing AI-driven automation — will require continued capital investment through public or private equity, debt financings, or other sources. These funds will be necessary to support ongoing operations, research and development, and the expansion of facilities. However, such financings may result in dilution of stockholder equity, the issuance of securities with liquidation and dividend preferences, significant interest payments, the imposition of security interests or debt covenants, and other terms that could adversely impact EM&T’s business.
EM&T may seek additional funds through equity, equity-related or debt securities, strategic partnerships, licensing arrangements, or by obtaining credit from government or financial institutions. This capital will be essential for supporting EM&T’s growth plans, including scaling operations, further research and development, infrastructure improvements, and the introduction of new products or services.
If EM&T is unable to secure additional funds when needed, it could hinder the company’s ability to operate efficiently, execute its growth strategy, or achieve its business objectives. This could have a material adverse effect on EM&T’s financial condition, business prospects, and results of operations.
EM&T’s quarterly net sales and operating results are difficult to predict accurately and may fluctuate significantly from period to period, which could cause its stock price to decline if it fails to meet investor expectations.
EM&T is expected to operate in a dynamic and evolving industry, and its operating results may experience significant fluctuations, especially on a quarterly basis. EM&T’s quarterly net sales and operating results may vary significantly due to a variety of factors, many of which are beyond EM&T’s control.
Although EM&T is anticipated to grow from its business plan, accurately forecasting its quarterly operating results is challenging due to several uncertainties, including the reliance on integrating multiple acquired businesses and the demand for EM&T’s battery metals, magnet and rare earth elements, and its related products. If EM&T’s operating results fail to meet the expectations of securities analysts and investors in any given quarter, its stock price may decline. Factors that could contribute to fluctuations in EM&T’s operating results include:
EM&T may experience delays in generating or recognizing revenue for several reasons. Open orders at the start of a quarter are generally lower than expected and are often subject to cancellation or rescheduling. Therefore, EM&T is expected to rely heavily on obtaining and fulfilling customer orders during each quarter to meet its sales objectives, and any delays or cancellations could negatively impact on its financial performance. Additionally, EM&T’s customer agreements are expected to allow customers to delay delivery dates or cancel orders without significant penalties.
Given the fixed nature of many of EM&T’s operating expenses, any shortfall in forecasted revenue could significantly impact on its financial results, as the EM&T is expected to have limited flexibility to reduce expenses in the short term. As a result, EM&T’s operating results may decline from one quarter to the next or fall below the expectations of analysts and investors, which could adversely affect its stock price. Due to these factors, EM&T’s quarterly results may vary significantly, and period-to-period comparisons of operating results may not be indicative of future performance. Any shortfall in net sales or income relative to expectations could lead to a decline in EM&T’s stock price.
The expectations for future operating and financial results and market growth of EM&T rely in large part upon assumptions and analyses developed by it. If these assumptions or analyses prove to be incorrect, EM&T’s actual operating results may be materially different from its anticipated results.
EM&T is expected to operate in fast-changing and highly competitive markets, and its expectations for future performance are based on management’s assumptions about its industry, many of which may not be accurate. The anticipated operating results of EM&T depend largely on management’s assessment of when its battery metals, magnet and rare earth elements and its related products will be adopted by customers, which remains uncertain. Moreover, EM&T’s projections are subject to numerous economic, competitive, industry-specific, and other uncertainties and contingencies that are difficult or impossible to predict and often beyond EM&T’s control. Future developments may also affect EM&T’s ability to meet its expectations. As discussed further in this Report, projected future sales and associated cash flows may not materialize in full, or at all.
Furthermore, EM&T’s expected revenue streams such as battery metals production, rare earth magnet manufacturing, and other recycling operations — may never achieve commercial success due to factors such as limited market adoption, competition, or unforeseen challenges in scaling operations. Important factors that may affect EM&T’s actual results and cause its operating and financial results to fall short of expectations include risks related to EM&T’s business, industry performance, the regulatory environment, general economic conditions, and other factors described in the section entitled “Cautionary Statement Regarding Forward-Looking Statements” in this Report.
Management's Discussion & Analysis (MD&A)
New heading “Cautionary Note Regarding Forward-Looking Statements”
Removed heading “Recent Developments”
Removed heading “Merger Agreement, as Amended”
Removed heading “Ancillary Agreements”
Removed heading “CMR Merger Agreement”
Largest changes
“Subsequent to December 31, 2025, on January 5, 2026, the Company consummated its business combination with Evolution Metals LLC, including the acquisition of KCM Industry Co., Ltd., KMMI Inc., NS World Co., Ltd., and Handa Lab Co., Ltd. Management considered this subsequent event in its going concern assessment. However, the business combination did not result in the receipt of significant external funding at closing, and therefore the Company’s liquidity position was not materially improved as a result of the transaction. …”see in full comparison
“Evolution Metals & Technologies Corp. is a fully integrated critical materials and technology company focused on building a secure, reliable, and self-sustaining U.S.-aligned supply chain for critical minerals and materials (“CMM”), including rare earth elements (“REEs”), primarily through the recycling of end-of-life materials (“urban mining”). …”see in full comparison
As a result of thesee in full comparisonabove,foregoing, in connection with the Company’s assessment of going concern considerations in accordance withFASB’sFinancial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15,“Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”management has determined that the Company’s liquidity conditionand date for mandatory liquidation and dissolution raiseraises substantial doubt about thetheCompany’s ability to continue as a going concernthrough August 30, 2023,for thescheduledtwelve-monthliquidationperiod from the dateoftheCompanyfinancialifstatementsitaredoesavailablenot complete a Business Combination priortosuch date. Management may raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties to meet the Company’s working capital needs and to complete a Business Combination before the mandatory liquidation date. The Company may notbeable to obtain additional financing.issued. TheCompany cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. The Company intends to complete a Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be able to consummate any Business Combination by December 31, 2024. These consolidatedfinancial statements do not include any adjustments relating to the recovery oftherecorded assets or the classification oftheliabilities that might be necessary should the Company be unable to continue as a going concern.The consolidated financial statements do not include any adjustments that might result from its inability to consummate a Business Combination or its inability to continue as a going concern.
“As a condition and inducement to WTMA’s willingness to enter into the Merger Agreement, William David Wilcox Jr. (the “Company Equityholder”) executed and delivered to WTMA a Support and Lock-up Agreement (the “Company Equityholder Support and Lock-Up Agreement”), dated as of November 6, 2024, by and among the Company Equityholder, WTMA, the Sponsor, and the Company Minority Equityholders. …”see in full comparison
“On February 10, 2025 WTMA entered into an Amendment No. 2 to the Merger Agreement restating certain recitals and defined terms in the Merger Agreement and the corresponding consideration schedule in the Company Disclosure Schedule, clarifying the amount of Company Membership Units to be received by Korea NewCo and US NewCo in connection with the transactions contemplated by the Merger Agreement. Further, the Amendment No. …”see in full comparison
Full comparison: every changed paragraph (91)
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this Report including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward- looking statements. When used in this Report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward- looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph.
Evolution Metals & Technologies Corp. is a fully integrated critical materials and technology company focused on building a secure, reliable, and self-sustaining U.S.-aligned supply chain for critical minerals and materials (“CMM”), including rare earth elements (“REEs”), primarily through the recycling of end-of-life materials (“urban mining”). End-of-life materials are recovered from products that have reached the end of their useful service life — such as batteries, electronic devices, motors, and magnets — which can no longer perform their intended function but still contain valuable metals and materials that can be recycled and reused in new manufacturing. EM&T owns and operates across the following midstream to downstream segments: (i) feedstock processing, (ii) oxide production, (iii) metal and alloy manufacturing, (iv) powder production, (v) the manufacture of bonded and sintered rare earth magnets, (vi) battery-grade sulfates and carbonates, (vii) precursor cathode active materials (“pCAM”), (viii) precious metals, and (ix) base metals. These outputs integrate directly into the supply chains of, and are suitable for direct delivery to, gigafactories, defense suppliers, original equipment manufacturers (“OEMs”), and refineries. EM&T’s own operations are supported by advanced recycling processes, proprietary automation, and artificial intelligence-enabled systems, allowing the Company to continue to operate at commercial scale using proven technologies and experienced operating personnel.
We are a blank check company
formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business
combination with one or more target businesses. We intend to effectuate our business combination using cash from the proceeds of our initial
public offering and the sale of the placement units that occurred simultaneously with the completion of our IPO, our capital stock, debt
or a combination of cash, stock and debt.
We expect to continue to
incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a business combination
will be successful.
Recent Developments
PromissoryHistory Notesof EM&T
Evolution Metals & Technologies Corp. (the “Company”) (formerly known as Welsbach Technology Metals Acquisition Corp. (“WTMA”)) was a blank check company incorporated in the State of Delaware for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. WTMA consummated its initial public offering in 2021, and its securities were listed on The Nasdaq Stock Market LLC (“Nasdaq”).
Evolution Metals LLC (“EM”), a Delaware limited liability company, was formed in February 2024 for the purpose of building an integrated midstream and downstream critical materials platform focused on recycling, processing, and manufacturing products derived from end-of-life materials, including rare earth elements, permanent magnets, battery metals, and precious metals.
In connection with its formation, EM was organized as a holding company intended to acquire and integrate operating businesses with established commercial capabilities across critical materials recycling, metal and alloy manufacturing, and advanced materials processing.
Prior to the consummation of the Business Combination, EM completed the acquisition of (i) Handa Lab Co., Ltd., (ii) KCM Industry Co., Ltd., (iii) KMMI INC., and (iv) NS World Co., Ltd., each a corporation organized under the laws of the Republic of Korea (collectively, the “Korean Companies”). The Korean Companies operate commercial-scale facilities engaged in the production of rare earth oxides, metals, alloys, powders, and permanent magnets, and collectively represent the core operating assets of EM.
On March 20, 2024, the Company
issued a promissory note (the “Working Capital Note 6”) in the principal amount of $373,737 to the Sponsor in exchange for
cash.
On June 28, 2024, the Company
issued a promissory note (the “Working Capital Note 7”) in the principal amount of $177,773 to the Sponsor in exchange for
cash.
On September 30, 2024,
the Company issued a promissory note (the “Working Capital Note 8”) in the principal amount of $192,069 to the Sponsor in
exchange for cash.
On December 31, 2024, the
Company issued a promissory note (the “Working Capital Note 9”) in the principal amount of $448,287 to the Sponsor in exchange
for cash.
Merger Agreement, as Amended
On January 25, 2024, the Company
issued a press release to announce that it had entered into a non-binding letter of intent with a target in the critical materials space
(the “Target”) for a potential business combination. There can be no assurance that a definitive agreement will be entered
into or that the proposed transaction will be consummated.
On March 22, 2024, the Company
issued a press release to announce that it had entered into a binding letter of intent with Evolution Metals LLC, a Delaware company (“EM”
or the “Target”) for a potential business combination.
On April 1, 2024, the Company
entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, the Merger Sub, and EM. Upon
the terms and subject to the conditions set forth in this Merger Agreement, the Company, Merger Sub and the EM (Merger Sub and EM sometimes
being referred to herein as the “Constituent Corporations”) shall cause Merger Sub to be merged with and into EM, with EM
being the surviving corporation in the Merger. The Merger shall be consummated in accordance with the Merger Agreement and shall be evidenced
by a certificate of merger with respect to the Merger (as so filed, the “Merger Certificate”), executed by the Constituent
Corporations in accordance with the relevant provisions of the Delaware General Corporation Law (“DGCL”), Upon consummation
of the Merger, the separate corporate existence of Merger Sub shall cease and EM, as the surviving corporation of the Merger (hereinafter
the “Surviving Corporation”), shall continue its corporate existence under the DGCL, as a wholly owned subsidiary of the Company.
The Company will immediately be renamed Evolution Metals & Technologies Corp.
On November 6, 2024, the Company
entered an Amended and Restated Agreement and Plan of Merger amending the Agreement and Plan of Merger, dated as of April 1, 2024.
On November 11, 2024 WTMA
entered into an Amendment No. 1 to the Merger Agreement, amending and restating certain defined terms in the Merger Agreement and the
corresponding consideration schedule in the Company Disclosure Schedule, to clarify that US NewCo will be a holder of membership interests
in EM following the proposed merger that is part of the Business Combination.
On February 10, 2025 WTMA
entered into an Amendment No. 2 to the Merger Agreement restating certain recitals and defined terms in the Merger Agreement and the corresponding
consideration schedule in the Company Disclosure Schedule, clarifying the amount of Company Membership Units to be received by Korea NewCo
and US NewCo in connection with the transactions contemplated by the Merger Agreement. Further, the Amendment No. 2 amended and restated
certain provisions of the Merger Agreement such that the New EM board of directors after the Closing will consist of six (6)
directors, which shall initially include six (6) director nominees designated by EM and reasonably acceptable to WTMA, insofar as those
nominees are elected to the New EM board of directors. Finally, the Amendment No. 2 replaced the form of the Amended and Restated Certificate
of Incorporation to be filed immediately following the Effective Time with the form attached as Exhibit A to the Amendment No. 2.
Ancillary Agreements
Company Equityholder
Support and Lock-up Agreement
As a condition and inducement
to WTMA’s willingness to enter into the Merger Agreement, William David Wilcox Jr. (the “Company Equityholder”) executed
and delivered to WTMA a Support and Lock-up Agreement (the “Company Equityholder Support and Lock-Up Agreement”), dated as
of November 6, 2024, by and among the Company Equityholder, WTMA, the Sponsor, and the Company Minority Equityholders. Pursuant to the
Company Equityholder Support and Lock-up Agreement, the Company Equityholder has agreed, among other things, (i) to vote in favor of the
adoption and approval, promptly following the time at which the registration statement on Form S-4 shall have been declared effective
and delivered or otherwise made available to WTMA stockholders, of the Merger Agreement and the Business Combination and (ii) not
to sell, transfer, convey or assign any Subject Shares (as defined in the Company Equityholder Support and Lock-Up Agreement) until such
time to be mutually agreed by the parties hereto after the Closing Date subject to the terms and conditions of the Company Equityholder
Support and Lock-up Agreement.
Sponsor Support and Lock-Up
Agreement
As a condition and inducement
to the EM’s willingness to enter into the Merger Agreement, the Sponsor executed and delivered to EM a Sponsor Support and Lock-up
Agreement (the “Sponsor Support and Lock-up Agreement”), dated as of November 6, 2024, by and among the Sponsor, WTMA, EM
and the persons set forth on Schedule I thereto. Pursuant to the Sponsor Support and Lock-Up Agreement, the Sponsor has agreed, among
other things, (i) to vote (whether pursuant to a duly convened meeting of the WTMA stockholders or pursuant to an action by written consent
of the WTMA stockholders) in favor of the adoption and approval, promptly following the time at which the registration statement on Form
S-4 shall have been declared effective and delivered or otherwise made available to WTMA stockholders, of the Merger Agreement and the
Business Combination and (ii) not to sell, transfer, convey or assign any shares of WTMA Common Stock until such time to be mutually agreed
by the parties thereto after the Closing subject to the terms and conditions of the Sponsor Support and Lock-up Agreement.
On November 14, 2024, WTMA
issued a press release announcing the execution of that certain Amended and Restated Agreement and Plan of Merger, dated as of November
6, 2024, as amended by the Amendment No. 1 to Amended and Restated Agreement and Plan of Merger, dated as of November 11, 2024, (the “Merger
Agreement”), by and among the WTMA, WTMA Merger Subsidiary LLC, a Delaware limited liability company and a direct wholly-owned subsidiary
of WTMA (“Merger Sub”), and Evolution Metals LLC, a Delaware limited liability company (“EM”), which amended and
restated that certain Agreement and Plan of Merger, dated as of April 1, 2024.
PursuantOn toJanuary the5, Merger Agreement,
at the closing2026 (the “Closing
Date”), WTMA Merger Subsidiary LLC, a wholly owned subsidiary of theWelsbach transactionsTechnology contemplatedMetals byAcquisition the Merger AgreementCorp. (the “Business CombinationWTMA”),
Merger Sub will mergemerged with and into EM,EM pursuant to the Amended and Restated Agreement and Plan of Merger, with EM surviving as a wholly owned subsidiary
of WTMA.WTMA (the “Merger”). In connection with the Closing, WTMA intends
to changechanged its name to Evolution Metals & Technologies Corp.
(such post-Closing entity is referred to as “New EM&T”).
As a result of the Business Combination, EM&T is a holding company, all of whose assets are held directly or indirectly by, and all of whose operations are conducted through, EM and its subsidiaries, including the Korean Companies. EM is the Company’s primary operating subsidiary and holds substantially all of the operating assets of the consolidated enterprise. As the sole equity owner of EM, EM&T exercises full control over the management and operations of EM and its subsidiaries.
The Business Combination is a subsequent event that occurred after the periods for which the financial information herein is presented. However, an annual report on Form 10-K, including financial statements of the Company for the periods presented herein, is required to be filed with the SEC. The financial information included in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” reflects the historical operations of the Company prior to the Business Combination, unless otherwise noted. For additional information on the Business Combination please see the section titled “Recent Developments” on page 13 of this Annual Report on Form 10-K.
CMR Merger Agreement
On February 10, 2025, as part
of the series of transactions contemplated by the Business Combination, WTMA entered into an Agreement and Plan of Merger (the “CMR
Merger Agreement”), by and among WTMA, Critical Mineral Recovery, Inc., a Missouri corporation (“CMR”), and the other
parties thereto, pursuant to which CMR will be merged out of existence and into a wholly owned subsidiary of WTMA.
Pursuant to the CMR Merger
Agreement, the sole shareholder of CMR shall receive (A) 22,500,000 shares of New EM common stock, (B) cash in an amount of $125,000,000
and (C) cash in an amount up to $50,000,000 to be used to repay CMR’s indebtedness.
The CMR Merger Agreement contains
customary representations and warranties by the parties. Certain of the representations are subject to specified exceptions and qualifications
contained in the CMR Merger Agreement or in information provided pursuant to certain disclosure schedules to the CMR Merger Agreement.
The closing of the CMR Merger
Agreement is subject to the closing of the other transactions that are part of the Business Combination and other customary closing conditions.
The consummation of the other transactions that are part of the Business Combination are conditioned on the consummation of the transactions
contemplated by the CMR Merger Agreement.
We have neither engaged
in in
any operations nor generated any operating revenues to date. Our only activities for the period ended December 31, 20242025 were in connection
with the search for a prospective initial Business Combination. We do not expect to generate any operating revenues until after the completion
of our initial Business Combination, at the earliest. We generate non-operating income in the form of interest income from the proceeds
of the IPO placed in the Trust Account. We expect that we will incur increasedincurred expenses as a result of being a public company (for legal,
financial reporting, accounting
and auditing compliance), as well as for due diligence expenses in connection with searching for, and
completing, a Business Combination.
For the year ended December 31, 2025, we had a net loss of $1,789,441, which primarily consists of operating expenses of $1,948,431, franchise taxes of $92,400 and a provision for income taxes of $38,685, partially offset by interest earned on cash held in the Trust Account in total of $276,616.
For the year ended December
31, 2023, we had a net loss of $54,322, which primarily consists of operating expenses of $2,022,981 and accrual of Delaware franchise
taxes of $200,000, partially offset by interest and dividend earned on marketable securities held in the Trust Account in total of $2,168,659.
Upon the closing of the Over-allotment
on January 14, 2022, the Company consummated a private sale of an additional 4,554 Private Placement Units at a price of $10.00 per Private
Placement Unit, generating gross proceeds of $45,540. As of January 14, 2022, a total of $77,276,860 of the net proceeds from the IPO
(including the Over-allotment Units) and the sale of Private Placement Units has beenwere placed in the Trust Account. As the over-allotmentOver-allotment option
option was only partially exercised, 224,328 shares of Commoncommon stock purchased by the Initial Stockholders have beenwere forfeited for no consideration.
Offering costs for the IPO
amounted to $4,663,218, consisting of $1,500,000 of underwriting fees, $2,625,000 of deferred underwriting fees payable (which are held
in the trust account) and $538,218 of other costs. The deferred underwriting fee payable of $2,704,690 iswas contingent upon the consummation
of a Business Combination by September 30, 2023, subject to the terms of the Underwriting Agreement.
For the year ended December 31, 2025, cash used in operating activities was $1,328,287. Net cash provided by investing activities was $6,069,575 mainly reflecting cash withdrawn from trust account in connection with redemption and to pay franchise and income taxes. Net cash used in financing activities was $4,738,451 reflecting redemption and partially offset by the proceeds from working capital loans entered into with the related party.
For the year ended December
31, 2023, cash used in operating activities was $1,347,387. Net cash provided by investing activities was $58,044,586 and net cash used
in financing activities was $57,052,053 mainly reflecting the redemptions of common stock due to stockholders exercising their redemption
rights in connection with the Extension and proceeds from convertible promissory notes entered into with the Sponsor.
At December 31, 2024,2025, we
had cash held in the trustTrust accountAccount of $12,257,933.$6,464,974. We intend to useused substantially all of the funds held in the trustTrust account,Account, including
any amounts
representing interest earned on the trustTrust accountAccount (less income taxes payable), to complete our businessBusiness combination.Combination. To the
extent that
our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds
proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other
other acquisitions and pursue our growth strategies. For the year ended December 31, 2024,2025, the Company had $12,320,164$6,069,575 withdrawnwithdrawal from
the trust accountTrust
Account in connection with redemption and to pay franchise and income taxes.
At December 31, 2024,2025, we
had operating cash of $1,185,$4,022, outside of the trustTrust account.Account. We have used and intend to continue to use the funds held outside the trust
accountTrust Account primarily to identify and
evaluate target businesses, perform business due diligence on prospective target businesses, travel
to and from the offices, plants or
similar locations of prospective target businesses or their representatives or owners, review corporate
documents and material agreements
of prospective target businesses, and structure, negotiate and complete a business combination. Through
December 31, 2024, the CompanyBusiness has withdrawn a total of $841,386 from the Trust Account for taxes of which was already utilized to pay
for franchise and income taxes. Through December 31, 2023, the Company has withdrawn a total of $741,013 from the Trust Account for taxes
of which $579,564 was already utilized to pay for franchise and income taxes. As of December 31, 2024 and 2023, respectively, there is
a restricted cash balance of nil and $0 which were utilized to pay the outstanding franchise and income taxes. For the year ended December
31, 2024 and 2023, amounts accrued and paid for interest and penalties related to franchise tax were $7,935 and $22,771, respectively.Combination.
Through December 31, 2025, the Company withdrew a total of $1,045,248 from the Trust Account for taxes of which was utilized to pay for franchise and income taxes. Through December 31, 2024, the Company withdrew a total of $841,386 from the Trust Account for taxes of which was utilized to pay for franchise and income taxes. As of December 31, 2025 and 2024, there is no outstanding balance under restricted cash. For the period ended December 31, 2025 and 2024, amounts accrued for interest and penalties related to franchise tax were $552 and $7,935, respectively.
Going Concern
Subsequent to December 31, 2025, on January 5, 2026, the Company consummated its business combination with Evolution Metals LLC, including the acquisition of KCM Industry Co., Ltd., KMMI Inc., NS World Co., Ltd., and Handa Lab Co., Ltd. Management considered this subsequent event in its going concern assessment. However, the business combination did not result in the receipt of significant external funding at closing, and therefore the Company’s liquidity position was not materially improved as a result of the transaction. The combined company is currently planning to conduct a primary equity offering within the next several months to raise additional capital, and if such financing is successfully completed, management believes the going concern conditions may be alleviated.
We monitor the adequacy of
our working capital in order to meet the expenditures required for operating our business prior to our initial business combination. However,
if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business
combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior
to our business combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because
we become obligated to redeem a significant number of our public shares upon completion of our business combination, in which case we
may issue additional securities or incur debt in connection with such business combination. If we are unable to complete our initial Business
Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
The Company will need to
raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties.
The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any
time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly,
the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to
take additional measures to conserve liquidity, which could include, but not necessarily be limited to, suspending the pursuit of a Business
Combination. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if
at all.
As a result of the above,foregoing,
in connection with the Company’s assessment of going concern considerations in accordance with FASB’sFinancial Accounting Standards Board
(“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability
to Continue as a Going Concern,”
management has determined that the Company’s liquidity condition and date for mandatory liquidation and dissolution raiseraises substantial doubt about
the the
Company’s ability to continue as a going concern through August 30, 2023,for the scheduledtwelve-month liquidationperiod from the date of the Companyfinancial ifstatements itare doesavailable
not complete a Business Combination prior to such date. Management may raise additional capital through loans or additional investments
from its Sponsor, stockholders, officers, directors, or third parties to meet the Company’s working capital needs and to complete
a Business Combination before the mandatory liquidation date. The Company may not be able to obtain additional financing.issued. The Company
cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. The Company intends
to complete a Business Combination before the mandatory liquidation date. However, there can be no assurance that the Company will be
able to consummate any Business Combination by December 31, 2024. These consolidated financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification
of the liabilities that might be necessary should the Company be
unable to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from its
inability to consummate a Business Combination or its inability to continue as a going concern.
In addition, in order to
finance transaction
costs in connection with athe Business Combination, certain of the Company’s officers and directors may, but are
not obligated to, loanloaned the Company funds as may be was
required. If the Company completescompleted aits Business Combination, the Company would repay
the Working Capital Loans out of the proceeds of
the Trust Account released to the Company. Otherwise, the Working Capital Loans would
be repaid only out of funds held outside the Trust
Account. In the event that a Business Combination doesdid not close, the Company maywas entitled to use
a portion of proceeds held outside the
Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would
be used to repay the Working Capital
Loans.
On September 30, 2022 and
December 30, 2022, the
Company issued a firsttwo promissory notenotes, each for $772,769 (the “First Promissory Note” and “Second
Promissory Note,” respectively) in the principal amount of $772,769 to the Sponsor in
connection with the Extension. The First Promissory Note bearsand Second Promissory
Note bear no interest and shall beare payable upon the earlier to occur of (i ) upon
consummation of the Company’s initial businessBusiness combination Combination
out of the proceeds of the Trust Account released to the Company’s
Company or (ii) at the Sponsor’s discretion, converted, in full or in
part, upon consummation of the Company’s businessBusiness combination
Combination into additional private units at a price of $10.00 per unit.
On December 30, 2022, the
Company issued a second promissory note (the “Second Promissory Note”) in the principal amount of $772,769 to the Sponsor
in connection with the Extension. The Second Promissory Note bears no interest and shall be payable upon the earlier to occur of (i) upon
consummation of the Company’s initial business combination out of the proceeds of the Trust Account released to the Company’s
or (ii) at the Sponsor’s discretion, converted, in full or in part, upon consummation of the Company’s business combination
into additional private units at a price of $10.00 per unit.
On March 30, 2023, April
30, 2023, May 30, 2023, June 30, 2023, July 30, 2023 and August 30, 2023, the Company issued six promissory notes to the Sponsor in connection
with the March Extensions (the “Third”, “Fourth”, “Fifth”, “Sixth”, “Seventh”,
and “Eighth” Promissory Notes) in the principal amount of $125,000 for each note. The First Promissory Note together with
Second through Eighth Promissory Notes (collectively, the “Convertible Promissory Notes”). The Convertible Promissory Notes
bear no interest and shall be payable
upon the earlier to occur of (i) upon consummation of the Company’s initial businessBusiness combination
Combination out of the proceeds of the Trust
Account released to the Company’s or (ii) at the Sponsor’s discretion, converted, in full
or in part, upon consummation of
the Company’s businessBusiness combinationCombination into additional private units at a price of $10.00 per unit
(the “Conversion”).
On July 30, 2023, the Company
issued a promissory note (the “Working Capital Note 1”) in the principal amount of $84,000 to the Sponsor in exchange for
cash. The Company drawndrew an additional $100 from this promissory note which resulted in a total outstanding amount of $84,100.
On August 30, 2023, September 28, 2023, November 10, 2023, December 29, 2023, March 20, 2024, June 28, 2024, September 30, 2024, December 31, 2024, March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025, the Company issued promissory notes in the principal amounts of $378,000, $22,000, $50,000, $15,000, $373,737, $177,773, $192,069, $4048,287, $474,490, $286,259, $106,716 and $259,798, respectively (“Working Capital Notes 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13,” respectively), to the Sponsor in exchange for cash.
On August 30, 2023, the Company
issued a promissory note (the “Working Capital Note 2”) in the principal amount of $378,000 to the Sponsor in exchange for
cash.
On September 28, 2023, the
Company issued a promissory note (the “Working Capital Note 3”) in the principal amount of $22,000 to the Sponsor in exchange
for cash.
On November 10, 2023, the
Company issued a promissory note (the “Working Capital Note 4”) in the principal amount of $50,000 to the Sponsor in exchange
for cash.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company, we are not required to disclose material changes to the risk factors that were contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”) which was filed with the Securities and Exchange Commission on February 20, 2026. You should carefully consider the risk factors we previously disclosed in the 2025 Annual Report. These risks could materially and adversely affect our business, financial condition, results of operations, and cash flows. However, these risks are not the only risks we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business, financial condition, results of operations, and cash flows.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Nasdaq Delinquency Notice and Regained Compliance”
New heading “Share Issuances to Advisors, Consultants and Marketing Service Providers”
New heading “Agreement with Senri Trading Co., Ltd.”
New heading “Provision for credit losses”
New heading “Other expense (income)”
New heading “Three Months Ended June 30, 2026”
New heading “Six Months Ended June 30, 2026”
New heading “Three Months Ended June 30, 2026 and 2025”
New heading “Six Months Ended June 30, 2026 and 2025”
Removed heading “Precedent Transaction Agreements”
Removed heading “Registration Rights Agreement”
Removed heading “Lock-up Agreements”
Removed heading “Other operating income and expense”
Removed heading “Other non-operating income and expenses”
Removed heading “Finance expense”
Removed heading “Gain (loss) on foreign currency”
Removed heading “Fair Value of Financial Instruments”
Largest changes
“Under DFARS 252.225-7052, effective January 1, 2027, U.S. defense contractors will be prohibited from delivering to the Department of War rare earth magnets containing materials mined, refined, separated, melted, or produced in China, Russia, North Korea, or Iran. Because the People’s Republic of China appropriates most of the world’s NdPr metal, the majority of globally available magnet supply is expected to become non-compliant absent qualified ex-China feedstock and manufacturing. …”see in full comparison
“On May 29, 2026, the Company entered into an agreement with Senri Trading Co., Ltd. (“Senri”) to purchase bulk quantities of NdPr metal supplied by SRE Vietnam (“SRE”), a wholly owned subsidiary of Tokai Trading Co., Ltd. The agreement is intended to provide the Company with a non-China source of NdPr metal to support the planned expansion of its rare earth magnet production. Subsequent to June 30, 2026, the Company received an initial shipment of 4 metric tons of NdPr metal from SRE on July 22, 2026. …”see in full comparison
“As of July 22, 2026, the Company has taken delivery of the first shipment of 4 metric tons of NdPr metals from SRE for the manufacture of high performance magnets that are compliant with new federal regulations requiring U.S. defense systems to exclude magnets that are sourced or originated from certain prohibited countries. …”see in full comparison
“Share Issuances to Advisors, Consultants and Marketing Service Providers”see in full comparison
Full comparison: every changed paragraph (119)
The following “Management’s
Discussion and Analysis of
Financial Condition and Results of Operations” should be read in conjunction with our unauditedUnaudited Unaudited
Condensed Consolidated Financial
Statements and notes thereto included in this Quarterly Report on Form 10-Q (“Form 10-Q”) as
of and for the three and six
months ended MarchJune 31,30, 2026 and 2025. This discussion contains forward-looking statements that involve risks, uncertainties,
and assumptions.
Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute
to those differences
include, but are not limited to, those identified below and those set forth in the sectionssection titled “Risk Factors”
and “Cautionary Note Regarding Forward-Looking
Statements” included in this Form 10-Q.10-Q, as well as in “Risk Factors” in the Company’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2025, as the same may be amended from time to time. Additionally, our historical results
are not
necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.
Unless the context otherwise
requires, references in this “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
to “we,” “us,” “our,”
the “the CompanyCompany,”, “EMAT” and “EM&T” generally
refer to Evolution Metals & Technologies Corp.
and its consolidated subsidiaries.
On January 5, 2026 (the “Closing
Date”), following the approval at the special meeting of the shareholders of WTMA, held on September 2, 2025, WTMA Merger Subsidiary
LLC, a Delaware limited liability company, and a wholly owned subsidiary of EM&T (the “Merger Sub”) consummated a merger
(the “Merger”) with and into Evolution Metals LLC (“EM”), a Delaware limited liability company, pursuant to an
Amended and Restated Agreement and Plan of Merger, dated as of November 6, 2024, as amended by Amendment No. 1 to Amended and Restated
Agreement and Plan of Merger, dated as of November 11, 2024, as amended by Amendment No. 2 to Amended and Restated Agreement and Plan
of Merger, dated February 10, 2025, as amended by Amendment No. 3 to Amended and Restated Agreement and Plan of Merger, dated March 31,
2025, as amended by Amendment No. 4 to Amended and Restated Agreement and Plan of Merger, dated June 11, 2025, as amended by Amendment
No. 5 to Amended and Restated Agreement and Plan of Merger, dated July 21, 2025, and as amended by Amendment No. 6 to Amended and Restated
Agreement and Plan of Merger, dated January 5, 2026 (the “Merger Agreement”). Accordingly, the Merger Agreement was adopted,
and the Merger and other transactions contemplated thereby (collectively, the “Business Combination”) were approved and completed.
At the closing of the Business Combination (the “Closing”) on January 5, 2026, pursuant to the Merger Agreement, Merger Sub
merged with and into EM, with EM surviving the Merger as a wholly owned subsidiary of WTMA. On the Closing Date, pursuant to the Business
Combination, WTMA changed its name to Evolution Metals & Technologies Corp. As part of the Business Combination and prior to the closing
of the Merger, EM acquired Handa Lab, KCM, KMMI, and NS World.
On January 5, 2026, WTMA,
entered into Amendment No. 6 to the Amended and Restated Agreement and Plan of Merger, which amended the Amended and Restated Agreement
and Plan of Merger, by among other things, amended the recitals of the Merger Agreement, as well as certain definitions under the Merger
Agreement, and also updated the list of minority equityholders.
On January 5, 2026, WTMA
entered into that certain Agreement and Plan of Merger, dated as of January 5, 2026, by and among WTMA, EM, NewCo, Inc., Inc., a Delaware
corporation (“NewCo”), and William David Wilcox Jr., as the sole stockholder of NewCo, as it may be amended or supplemented
from time to time (the “Step 7 Merger Agreement”), pursuant to which Merger Sub merged with and into NewCo (the Step 7 Merger),
on the terms and subject to the conditions set forth in the Step 7 Merger Agreement, with NewCo continuing as the surviving corporation
in the Step 7 Merger. Thereafter, on January 5, 2026, Merger Sub merged with and into EM, with EM surviving the Step 8 Merger as a wholly
owned subsidiary of WTMA. On the Closing Date, pursuant to the Business Combination, WTMA changed its name to Evolution Metals & Technologies
Corp.
Precedent Transaction Agreements
As contemplated by the Merger
Agreement, EM and WTMA entered into the following transactions that were consummated in connection with the Closing (the “Precedent
Transactions”) in order to effectuate the Business Combination and which occurred prior to or at the Closing.
On January 5, 2026, in the
first step of the Precedent Transactions, the EM Equityholder formed a wholly owned subsidiary and Delaware corporation (“US NewCo”)
and immediately thereafter contributed 13,000 of the limited liability company common member units of EM (the “EM Member Units”)
to US NewCo in exchange for 100 shares of common stock of US NewCo.
On January 5, 2026, in the
second step of the Precedent Transactions, EM formed (i) a wholly owned subsidiary and Korean Chusik Hosea company (“Korea NewCo”)
and (ii) a wholly owned subsidiary and Korean non-Chusik Hosea company (“Korea DRE”).
On January 5, 2026, in the
third step of the Precedent Transactions, Korea DRE elected to be classified as a disregarded entity for U.S. federal income tax purposes.
On January 5, 2026, in the
fourth step of the Precedent Transactions, EM contributed $78,870,000 (the “Capital Contribution”) to the capital of, and
assigned its rights under certain heads of agreement between EM and each of the Korean Companies to Korea NewCo.
On January 5, 2026, in the
fifth step of the Precedent Transactions, EM caused Korea NewCo to distribute the Capital Contribution to EM in exchange for 16,571 EM
Member Units.
On January 5, 2026, in Step
6-A of the Precedent Transactions, Korea NewCo acquired Korean DRE from EM in exchange for KRW 10,000,000, after which Korea DRE became
a wholly owned subsidiary of Korea NewCo.
On January 5, 2026, in Step
6-B of the Precedent Transactions, each equity holder of each of the equityholders of each of the Korean Companies (collectively, the
“Korean Equityholders”) who did not exercise his, her or its appraisal rights with respect to all of his, her or its equity
interests in the applicable Korean Company exchanged, pursuant to certain share exchange agreements, as amended (the “Korean Company
Exchange Agreements”), those of his, her or its equity interests in the applicable Korean Company owned by such equityholder with
respect to which such equityholder did not exercise the appraisal right for the respective portions of the EM Member Units and the remaining
EM Member Units, which represented the fair market value of the shares of the Korean Companies with respect to which the appraisal rights
are exercised, were transferred by Korea NewCo to each applicable Korean Company.
On January 5, 2026, in Step
6-C of the Precedent Transactions, Korea NewCo, pursuant to an agreement and plan of merger, merged with and into Korea DRE, such that
the separate existence of Korea NewCo ceased and Korea DRE became the surviving company.
On January 5, 2026, EM and
the applicable Korean Companies executed the Step 6-D transaction documents providing for EM’s acquisition of all EM Member Units
held by such Korean Companies for an aggregate purchase price of $48,118,084. The payment of Step 6-D is contractually required to occur
on the earlier of (i) 14 calendar days following EM’s consummation of a capital raise exceeding $50,000,000, or (ii) the third anniversary
of the Korean Company Exchange Agreements, after which the Korean Companies will become wholly owned subsidiaries of Korea DRE following
the required redemptions of interests subject to appraisal rights.
On January 5, 2026, in the
seventh step of the Precedent Transactions, Merger Sub merged with and into US NewCo pursuant to Step 7 Merger Agreement, such that (i)
the separate existence of Merger Sub ceased and US NewCo became the surviving corporation and a wholly owned subsidiary of WTMA and (ii)
the EM Equityholder received $61,875,098 worth of WTMA Common Stock in consideration for such merger.
On January 5, 2026, the Merger
and related transactions consummated under the Merger Agreement at the Closing were the eighth step of the Precedent Transactions and
occurred immediately following the seventh step of the Precedent Transactions.
Registration Rights Agreement
In connection with the Closing,
EMAT, WTMA’s sponsor, Welsbach Acquisition Holdings LLC (the “Sponsor”), certain former holders of WTMA Common Stock,
certain former members of EM and certain other entities (such holders, collectively, the “RRA Holders”) entered into the Amended
and Restated Registration Rights Agreement, dated as of the Closing Date (the “Registration Rights Agreement”), pursuant to
which, among other things, EMAT is obligated to file, within 180 days following the Closing Date, a shelf registration statement to register
the resale of certain securities of EMAT, including EMAT Common Stock, held by the RRA Holders after the Closing. The Registration Rights
Agreement also provides the RRA Holders with certain demand and piggy-back registration rights, subject to certain requirements and customary
conditions.
The Registration Rights Agreement
will terminate on the earlier of (i) the tenth anniversary of the Closing Date and (b) with respect to any RRA Holder, on the date that
such RRA Holder no longer holds any securities permitted to be registered pursuant to the Registration Rights Agreement.
Lock-up Agreements
In connection with the Business
Combination, on the Closing Date, the stockholders of the Korean Companies, EM Convertible Preferred Unit holders, and holders of EM Member
Units entered into lock-up agreements with respect to their equity interests and the shares of EMAT Common Stock that they received in
the Business Combination pursuant to which they agreed to certain restrictions on transfer of their securities until seven calendar days
following the Closing or until up to the third anniversary of the Closing.
The
first Convertible Debenture
(the “First Debenture”) in the principal amount of $20,000,000 was issued on May 7, 2026.
The second Convertible Debenture
in the principal amount of $5,775,000 is expected to bewas issued on July 14, 2026 upon effectiveness of thea Registrationresale
registration Statementstatement on Form S-1,S-1 whichon the
CompanyJuly has10, agreed to file pursuant to the Registration Rights Agreement, as such term is defined below.2026. Additionally, pursuant to the
Securities Purchase Agreement, up to $74,225,000
in Convertible Debentures shall be purchased in subsequent tranches from time to time
upon the mutual agreement of the Company and
Yorkville.
Subsequent to June 30, 2026, YA II PN, Ltd. (“Yorkville”) converted portions of the Company’s second convertible debenture, which was issued on July 14, 2026 in the original principal amount of $5.775 million. From July 29, 2026 through August 13, 2026, Yorkville converted an aggregate of $550,000 of principal and approximately $23,195 of accrued interest into an aggregate of 210,191 shares of the Company’s common stock. The conversions were effected at conversion prices ranging from approximately $2.14 to $4.59 per share in accordance with the terms of the convertible debenture. Following these conversions, approximately $5.225 million of principal remained outstanding under the second convertible debenture.
On
May 7, 2026, pursuant
to the Securities Purchase Agreement, the Company and Yorkville entered into a Registration Rights Agreement (the
“Registration
Rights Agreement”) pursuant to which Yorkville is entitled to certain registration rights under the Securities
Act of 1933, as amended
(the “Securities Act”). Pursuant to the Registration Rights Agreement, the Company iswas required to,
on the 30th calendar day
following the date of the Securities Purchase Agreement, file with the Securities and Exchange Commission a
registration statement (the
“Registration Statement”) registering the resale by Yorkville of 5.4 million Conversion Shares.
Under the Registration Rights
Agreement, Yorkville was also granted piggyback registration rights under certain conditions as described
in the Registration Rights Agreement.
Payment
Structure. Each
Contract provides for payment in four installments tied to project milestones: a first installment due in May or July 2026; a second
installment installment
due in July or August 2026; a third installment due within five (5) days of shipment ex Dalian; and a final installment due
within thirty
(30) days of arrival at destination.
Nasdaq Delinquency Notice and Regained Compliance
On May 21, 2026, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC notifying the Company that as it had not yet filed its Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”), the Company no longer complied with Nasdaq Listing Rule 5250(c)(1). Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. The Company filed the Form 10-Q on May 22, 2026, thereby curing the deficiency described in the Notice. On May 26, 2026, the Company received notice from Nasdaq that the Company had regained compliance with Nasdaq Listing Rule 5250(c)(1) and that the matter is now closed.
Share Issuances to Advisors, Consultants and Marketing Service Providers
Subsequent to March 31, 2026, the Company entered into certain advisory, consulting, marketing and related services agreements and amendments pursuant to which the Company issued or agreed to issue an aggregate of 674,768 shares of its common stock, par value $0.0001 per share, of which 650,189 shares have been issued as of August 17, 2026, as compensation for services rendered or to be rendered to the Company. The shares include issuances or agreed issuances to certain advisors, consultants and marketing service providers, including for capital markets advisory services, shareholder base expansion and marketing services, and sourcing and origination services related to rare earth magnets and related critical materials derived from end-of-life electronic scrap components. The Company did not receive any cash proceeds from these issuances or agreed issuances. The shares have been or will be issued in exempt private transactions as compensation for services. The issuances were made, or are expected to be made, in reliance upon exemptions from the registration requirements of the Securities Act of 1933, as amended.
Agreement with Senri Trading Co., Ltd.
On May 29, 2026, the Company executed an agreement with Senri Trading Co., Ltd. (“Senri”) to purchase bulk quantities of NdPr metal from SRE Vietnam (“SRE”), a wholly-owned subsidiary of Tokai Trading Co., Ltd. (“Tokai”) in Japan. Obtained entirely from a non-China source, we believe that NdPr metal are essential in the Company’s intended increase of magnet production to approximately 10,000 tons per annum of rare earth magnets in 2026. Tokai has been operating as a specialized trading company for rare earths and rare metals since its founding in 1981 and began investing in its wholly owned Vietnamese subsidiary, SRE, in 2008. As of January 2025, SRE began tripling its rare earth processing capacity of mid-stream materials to 3,929 metric tons per annum.
As of July 22, 2026, the Company has taken delivery of the first shipment of 4 metric tons of NdPr metals from SRE for the manufacture of high performance magnets that are compliant with new federal regulations requiring U.S. defense systems to exclude magnets that are sourced or originated from certain prohibited countries. The Company views this development as directly aligned with the Trump administration’s July 20, 2026 Executive Order “Securing America’s Defense Supply Chains and Ensuring Domestic Acquisition of Critical Materials”, as well as with the existing January 1, 2027 DFARS 252.225-7052 sourcing deadline for rare earth permanent magnets in U.S. defense systems. The deliveries of compliant NdPr metal allows the Company produce high-performance magnets that are compliant with DFARS 252.225-7052. The initial delivery of five tons of NdPr metals is the first stage of an agreement for SRE to scale deliveries to support the Company’s increased production capacity, expected to reach approximately 10,000 metric tons per annum by November 2026.
Under DFARS 252.225-7052, effective January 1, 2027, U.S. defense contractors will be prohibited from delivering to the Department of War rare earth magnets containing materials mined, refined, separated, melted, or produced in China, Russia, North Korea, or Iran. Because the People’s Republic of China appropriates most of the world’s NdPr metal, the majority of globally available magnet supply is expected to become non-compliant absent qualified ex-China feedstock and manufacturing. The July 20, 2026 Executive Order sharply tightens enforcement by ending routine waivers, requiring a formal mitigation plan for any exception, and eliminating the “non-availability” argument unless a contractor demonstrates active, adequately funded, and ongoing efforts to qualify a domestic or allied source. The Executive Order follows the Trump administration’s January 2026 Section 232 Proclamation identifying rare earth permanent magnets as “vital to nearly all electronics and vehicles” and also follows the February 2026 launch of the $12 billion Project Vault critical minerals reserve.
Our
historical results of operations may not be
comparable to our future results of operations, and our results for the threesix months ended
June March 31,30, 2026 may not be comparable to the
three six months ended MarchJune 31,30, 2025, primarily due to the consummation of the Business Combination,
the acquisition of the Korean operating
companies, the inclusion of post-combination public company costs, changes in the fair value
of financial instruments, and the Company’s
change in tax status, as described below.
On
January 5, 2026, the
Company consummated the Business Combination. In connection with the Business Combination, the Company incurred
significant significant
transaction-related, professional, accounting, legal, valuation, advisory, public company readiness and other corporate costs.
In In
addition, the Company recognized significant non-cash losses from changes in the fair value of financial instruments, including the
July Investment Agreement derivative and CPU Share Allocation Obligations. These fair value changes and transaction-related costs materially
materially affected the Company’s results of operations for the threesix months ended MarchJune 31,30, 2026 and may limit comparability
to prior periods.
ImmediatelyAs
part prior toof the consummation of the Business
Combination, the Company acquired controlling interests in the Korean operating companies. As
a result, the Company’s results of
operations for the threesix months ended MarchJune 31,30, 2026 include revenues, cost of sales, operating
expenses, assets and liabilities of the
Korean operating companies following the acquisition date, while the comparable prior-year period
primarily reflects the historical results
of EM LLC before the acquisition of such operating businesses. Accordingly, the Company’s
results of operations for the periods
presented are not directly comparable. The Company may continue to pursue acquisitions as part
of its growth strategy, which could further
affect comparability of future periods.
Our
future results of operations may not be comparable
to the historical results of operations for the periods presented, primarily for the reasons described below.presented.
Other operating income and expense
Other operating income primarily
consists of government grants, rental income, income from the provision of technical services, gain on the disposal of tangible assets,
and brokerage income. Other operating expense primarily consists of loss on disposal of asset.
Other non-operating income and expenses
Other non-operating income
includes miscellaneous income. Other non-operating expense primarily includes other costs consist of miscellaneous loss and amortization
of accumulated actuarial loss and loss on disposal of tangible assets and loss from shares repurchase liability.
Interest
expense (income), and expensesnet
Interest income primarily
consists of interest earned on the Company’s notes receivable and other non-trade receivables, including related-party receivables.
Interest
expense (income), net consists primarily
consists of interest incurred on the Company’s debt obligations, including short-term debt,
related-party debt, long-term debt,
and assumed obligations in connection with the Business Combination.Combination, offset by interest
earned on the Company’s notes receivable and other non-trade receivables, including related-party receivables.
Provision for credit losses
Provision for credit losses primarily consists of expected credit losses recognized on the Company’s financial assets, including notes receivable and other receivables.
Finance income
Finance income primarily includes
realized gain on deposit or loan.
Finance expense
Finance expense primarily consists
of interest incurred on our finance leases, financing obligations and outstanding loans, as well as losses on derivatives.
Gain (loss) on foreign currency
Gain (loss) on foreign currency
primarily consists of the translation of monetary assets and liabilities denominated in foreign currencies.
GainChange
in (loss)fair onvalue of financial instruments
GainChange
in (loss)fair onvalue of financial instruments primarily
consists of non-cash changes in the fair value of the Company’s financial
instruments that are measured at fair value each reporting
period.
Other expense (income)
Other expense (income) primarily consists of miscellaneous income and expense, amortization of accumulated actuarial loss, gain or loss on disposal of tangible assets, foreign currency transaction gains or losses, and other non-operating items.
Income taxes
Income taxes consist of current and deferred income tax expense or benefit recognized in the applicable period.
EMAT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-26 | Good Earth 1000, Llc |
Other | 1,700,000 | — | — |
Well-known investors holding EMAT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Millennium Management (Israel Englander) | 2026-06-30 | 34,958 | $231.1K | 0.0% | New position |