Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with our unaudited Unaudited Condensed Consolidated Financial Statements and notes thereto included in this Quarterly Report on Form 10-Q ("Form 10-Q") as of and for the three months ended March 31, 2026 and 2025. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those set forth in the sections titled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" included in this Form 10-Q. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.

Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," "the Company", "EMAT" and "EM&T" generally refer to Evolution Metals & Technologies Corp.

Business Overview

EM&T (formerly known as Welsbach Technology Metals Acquisition Corp. ("WTMA")) 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"), automotive manufacturers, 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 to support a sustainable future through efficient processing and the application of cutting edge robotics and artificial intelligence ("AI").

To achieve this vision, EM&T acquired Four Entities (as defined below) critical to the CMM supply chain in order to combine initial capabilities believed to serve as the foundation for the Company's growth - transforming raw materials into essential components for further manufacturing; recycling lithium batteries; producing materials that are essential feedstocks used in the production of advanced magnets, which include (a) bonded magnets that are vital components in various high-tech applications (including automotive, aerospace, and consumer electronics industries) and (b) sintered magnets that are crucial for high-performance applications (particularly in the defense and aerospace sectors where precision and durability are paramount); developing AI software and machines to drive automation, innovation, and efficiency to reduce labor costs, lower manufacturing reject rates, and automating the quality of control processes. The Operating Companies include Handa Lab Co., Ltd., a Korean company ("Handa Lab"), KCM Industry Co., Ltd., a Korean company ("KCM"), KMMI Inc., a Korean company ("KMMI"), and NS World Co., Ltd., a Korean company (collectively with Handa Lab, KCM and KMMI, the "Four Entities" or the "Korean Companies"). As a result of the acquisition of the Four Entities, the Company is expected to produce materials annually, including magnets and battery metals to meet the growing global demand driven by the electrification of transportation, the expansion of green energies, advancements in healthcare technologies, military and defense manufacturing, and consumer appliances, among others.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Recent Developments

Recent events impacting our business are as follows:

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.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

Jones Day Lawsuit

On April 23, 2026, Jones Day filed a complaint against Evolution Metals LLC ("EM"), a Delaware limited liability company and a wholly owned subsidiary of the Company, in the Superior Court of Fulton County, State of Georgia, Civil Action No. 26CV005969. The complaint alleges claims for breach of contract, account stated, open account and attorneys' fees arising from legal services allegedly provided by Jones Day to EM in connection with the Business Combination. Jones Day is seeking damages in the amount of approximately $3.9 million, plus prejudgment interest, attorneys' fees, costs and expenses of collection, and such other relief as the court deems appropriate. The Company is currently evaluating the complaint and has not yet filed a formal response. The Company intends to vigorously defend itself in this matter. At this time, the Company is unable to predict the ultimate outcome of the proceeding or reasonably estimate the amount of any potential loss, if any.

Securities Purchase Agreement, Convertible Debentures and Related Agreements

On May 7, 2026, the Company entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with YA II PN, LTD. ("Yorkville"), a fund managed by Yorkville Advisors Global, LP, pursuant to which the Company agreed to issue and sell to Yorkville convertible debentures in the aggregate principal amount of up to $100,000,000 (the "Convertible Debentures" and each a "Convertible Debenture"), which will be convertible into shares of the Company's common stock, par value $0.0001 per share (the "Common Stock," and as converted, the "Conversion Shares").

The first Convertible Debenture (the "First Debenture") in the principal amount of $20,000,000 was issued on May 7, 2026. The second Convertible Debenture in the principal amount of $5,775,000 is expected to be issued upon effectiveness of the Registration Statement on Form S-1, which the Company has agreed to file pursuant to the Registration Rights Agreement, as such term is defined below. Additionally, pursuant to the Securities Purchase Agreement, up to $74,225,000 in Convertible Debentures shall be purchased in subsequent tranches from time to time upon the mutual agreement of the Company and Yorkville.

Each Convertible Debentures will have a purchase price equal to 97% of principal amount thereunder. Each Convertible Debenture is convertible into Conversion Shares at a conversion price equal to the lower of $12.09 or 95% of the lowest daily volume-weighted average price ("VWAP") during the 5 consecutive trading days immediately preceding the conversion date. The Company shall not issue any Conversion Shares upon conversion of the Convertible Debentures held by Yorkville if the issuance of such Conversion Shares would exceed the aggregate number of Common Stock that the Company may issue in compliance with the Company's obligations under the rules or regulations of the Nasdaq Stock Market (the "Exchange Cap"). The Exchange Cap will not apply if the Company obtains the approval of its stockholders as required by the applicable rules of the Nasdaq Stock Market for issuances of Common Stock in excess of such amount. In addition, no conversion will be permitted to the extent that, after giving effect to such conversion, the holder together with the certain related parties would beneficially own in excess of 4.99% of the Common Stock outstanding immediately after giving effect to such conversion, subject to certain adjustments.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The First Debenture bears interest at an annual rate of 5.0%, unless an event of default occurs and remains uncured, upon which the Convertible Debentures will bear interest at an annual rate of 18.0%. The Convertible Debentures will mature on November 7, 2027.

The Company will not be required to make monthly cash payments pursuant to the Convertible Debentures unless an Amortization Event, as such term is defined below, has occurred and then the Company will make monthly cash payments each month until the entire outstanding amount under the Convertible Debentures have been repaid. An "Amortization Event" means (i) the VWAP of the Company's Common Stock is lower than the floor price for any five of seven consecutive trading days, (ii) the Company has issued in excess of 99% of the Common Stock available under the Exchange Cap or (iii) Yorkville is unable to use the Registration Statement, as such term is defined below, for a period of 10 consecutive trading days.

The monthly cash payments will be in an amount equal to 1/5 of the original principal amount (or the outstanding principal amount of the Convertible Debentures if lower than such amount), plus a payment premium of 5% and all accrued and unpaid interest as of the date of such payment. Such Amortization Event payments will commence 7 days following the Amortization Event. The Securities Purchase Agreement includes customary registration rights, investor protections, and provisions governing trading activity, including limitations on short selling. The Company intends to use the proceeds from the facility for general corporate purposes, including supporting the expansion of its operations and development initiatives.

On May 7, 2026, pursuant to the Securities Purchase Agreement, the Company and Yorkville entered into a Registration Rights Agreement (the "Registration Rights Agreement") pursuant to which Yorkville is entitled to certain registration rights under the Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the Registration Rights Agreement, the Company is required to, on the 30th calendar day following the date of the Securities Purchase Agreement, file with the Securities and Exchange Commission a registration statement (the "Registration Statement") registering the resale by Yorkville of 5.4 million Conversion Shares. Under the Registration Rights Agreement, Yorkville was also granted piggyback registration rights under certain conditions as described in the Registration Rights Agreement.

On May 7, 2026, pursuant to the Securities Purchase Agreement, the Company and Yorkville entered into a Global Guarantee Agreement, pursuant to which, the Company and its subsidiaries agreed to guarantee all of the Company's obligations under the Convertible Debentures.

Equipment Supply Contracts

On May 13, 2026, EM entered into eight separate equipment supply contracts (collectively, the "Contracts" and each a "Contract") with ULVAC Korea, Ltd. ("ULVAC Korea") for the purchase of vacuum induction melting furnaces and continuous vacuum sintering furnaces. The equipment is intended for use in the Company's rare earth metal and rare earth permanent magnet production operations. A summary of the equipment to be supplied under the eight Contracts is set forth below:

Contract No.		Equipment		Quantity
W20260330-001-01		Vacuum Induction Melting Furnace (600 kg) - Magcaster-600C, with Karayaki-ro, Recovering Container Turning Device and Furnace Lining Turning Device		2 sets
W20260330-003-01		Vacuum Induction Melting Furnace (600 kg) - Magcaster-600C		2 sets
W20260330-004-01		Vacuum Induction Melting Furnace (50 kg) - FVI-50-SC		2 sets
W20260330-005-01		Continuous Vacuum Sintering Furnace - FSC-6150C-8		2 sets
W20260330-006-01		Continuous Vacuum Sintering Furnace - FHH-6150C-6		2 sets
W20260330-007-01		Vacuum Induction Melting Furnace (600 kg) - Magcaster-600C/A, with Karayaki-ro, Recovering Container Turning Device and Furnace Lining Turning Device		1 set
W20260330-008-01		Vacuum Induction Melting Furnace (600 kg) - Magcaster-600C/A		1 set
W20260330-009-01		Vacuum Induction Melting Furnace (50 kg) - FVI-50-SC/A		1 set

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Material Terms

Delivery. Delivery is to be made on a DDP buyer final destination basis (Republic of Korea) no later than November 30, 2026. Delivery is to occur prior to completion of full installation and commissioning at the buyer's site.

Payment Structure. Each Contract provides for payment in four installments tied to project milestones: a first installment due in May or July 2026; a second installment due in July or August 2026; a third installment due within five (5) days of shipment ex Dalian; and a final installment due within thirty (30) days of arrival at destination.

Performance Bond and Cargo Insurance. ULVAC Korea is required to procure, and to submit to EM LLC within twenty-four (24) hours after execution of each Contract, a performance guarantee insurance policy issued by Seoul Guarantee Insurance Co., Ltd. covering ULVAC Korea's delivery obligations. ULVAC Korea is also required, at its sole cost, to procure and maintain comprehensive inland, transit and marine cargo insurance covering the equipment from its facility through final delivery in the Republic of Korea.

Acceptance, Warranty and Late-Delivery Remedies. Shipment of the equipment is conditioned upon successful completion of a Factory Acceptance Test (FAT) in the presence of EM LLC and mutual agreement on the On-site Installation Inspection Test Plan (ITP). ULVAC Korea will deliver technical specifications, acceptance criteria, equipment drawings, testing reports and the ITP prior to or during the FAT. ULVAC Korea provides a one (1) year warranty on the equipment, running from completion of full commissioning and commencement of normal operation at the buyer's site. Late delivery (other than as a result of force majeure) is subject to a daily late-delivery penalty payable by ULVAC Korea, subject to a cap.

Cancellation, Force Majeure and Governing Law. EM LLC has the right to terminate any Contract for its convenience at any time prior to delivery upon written notice, subject to a tiered cancellation charge that scales with the number of weeks between ULVAC Korea's receipt of advance payment and the date of cancellation. Either party may terminate a Contract if a force majeure event continues for more than four (4) weeks. The Contracts are governed by the laws of the Republic of Korea, with disputes settled by arbitration in the Republic of Korea before the Korean Commercial Arbitration Board; the United Nations Convention on Contracts for the International Sale of Goods is expressly excluded.

Relationship. ULVAC Korea is not a related party to the Company or EM LLC. The Contracts were negotiated on arm's-length terms.

Market Developments, Trends, and Uncertainties

Our business is affected by macroeconomic, geopolitical, regulatory, technological and industry-specific trends that impact demand for critical minerals and materials, the availability and cost of feedstock, customer purchasing decisions, financing availability and our ability to scale our operations. As a newly public company that completed the Business Combination on January 5, 2026, our historical results may not be indicative of future results, particularly as we integrate the Korean Companies, pursue additional financing, and seek to expand our midstream and downstream critical materials platform.

Demand for critical minerals and materials continues to be driven by the electrification of transportation, renewable energy infrastructure, defense and aerospace applications, industrial automation, consumer electronics and other advanced manufacturing applications. Many of these applications rely on materials and components such as rare earth oxides, rare earth metals and alloys, bonded magnets, sintered magnets, battery materials, precious metals and base metals. We believe these demand drivers create long-term market opportunities for companies with capabilities across recycling, processing, refining and downstream manufacturing. However, demand in these markets may fluctuate based on customer production schedules, capital spending cycles, commodity prices, electric vehicle adoption rates, defense procurement priorities, interest rates, tariffs, trade restrictions and broader macroeconomic conditions.

The global supply chain for rare earth elements, battery materials, permanent magnets and other critical materials remains highly concentrated in Asia, particularly in China. This concentration has increased customer, governmental and industry focus on developing alternative, secure and geographically diversified supply chains. Geopolitical tensions, export controls, tariffs, sanctions, industrial policy initiatives and national security considerations may increase demand for U.S.-aligned and non-China sources of critical materials and related products. At the same time, these factors may also increase operating complexity, affect the availability or cost of feedstock and equipment, create uncertainty in customer procurement decisions, and require us to invest significant capital before realizing commercial benefits.

We believe recycling and "urban mining" represent an increasingly important source of critical materials supply. End-of-life batteries, electronic devices, motors, magnets and other materials contain valuable metals and materials that can be recovered, processed and reused in new manufacturing. The ability to convert these end-of-life materials into commercially usable outputs may reduce reliance on primary mining, shorten supply chains, support sustainability objectives and provide customers with alternative sources of supply. However, the recycling market remains subject to uncertainties, including variability in feedstock availability, feedstock composition, collection economics, transportation and handling costs, regulatory requirements, customer qualification timelines and the technical complexity of producing materials that meet customer specifications.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our operating results will also be affected by our ability to integrate and scale the Korean Companies acquired in connection with the Business Combination. These companies provide the Company with initial capabilities in magnet-related materials, bonded and sintered magnets, and automation and AI-enabled manufacturing systems. We expect the integration of these businesses to require substantial management attention, working capital and capital expenditures. Our ability to realize the anticipated benefits of the Business Combination will depend on, among other things, our ability to coordinate operations across jurisdictions, retain key personnel, maintain customer and supplier relationships, improve capacity utilization, execute expansion plans, implement consistent financial reporting and internal control processes, and secure additional financing on acceptable terms.

Because our growth strategy is capital intensive, our future performance will depend significantly on our ability to raise additional capital. We expect to require substantial funding to support working capital, public company costs, integration activities, capital expenditures, equipment purchases, facility expansion, research and development, customer qualification processes and potential future acquisitions. If we are unable to obtain financing on acceptable terms or at all, we may be required to delay, reduce or abandon certain expansion plans, which could materially and adversely affect our business, financial condition and results of operations. In addition, financing transactions may result in dilution to existing stockholders, increased leverage, restrictive covenants or other terms that could adversely affect our business.

Our results may also be affected by changes in commodity prices, foreign currency exchange rates and interest rates. Many of our products and feedstocks are linked directly or indirectly to the market prices of metals and critical materials, which may be volatile. Changes in these prices may affect revenue, gross margin, inventory valuation, customer demand and supplier economics. In addition, because a significant portion of our current operations is conducted in Korea, fluctuations between the Korean won and the U.S. dollar may affect our reported results, cash flows and financial position. Rising interest rates or constrained credit markets may also increase the cost of capital and reduce the availability of financing for us and our customers.

As a result of becoming a public company, we expect to incur additional costs, including costs related to financial reporting, legal and accounting compliance, internal control development, investor relations, insurance and governance matters. We also expect that certain non-cash and non-operating items may continue to affect our reported results, including fair value changes in financial instruments, credit loss provisions, foreign currency gains and losses, and changes in liabilities related to dissenting shareholder appraisal rights. These items may cause significant period-to-period volatility and may not directly reflect the underlying operating performance of our business.

Given these factors, our near-term results may be difficult to predict and may vary significantly from period to period. We are still in the early stages of operating as a combined public company, and our ability to achieve our business plan will depend on the successful integration of the acquired businesses, access to capital, development of customer relationships, execution of expansion initiatives, stability of supply chains and broader market acceptance of our products and technologies.

Key Factors Affecting our Performance

Our results of operations, financial condition and cash flows are affected by a number of factors, including those described below. As a result of the Business Combination completed on January 5, 2026, our historical results may not be comparable to our future results, and our operating results may vary significantly from period to period as we integrate the Korean Companies, operate as a public company, pursue financing and execute our growth strategy.

Ability to Obtain Additional Financing

Our business plan is capital intensive and depends significantly on our ability to obtain additional financing on acceptable terms. We expect to require substantial capital to fund working capital needs, public company costs, integration activities, equipment purchases, facility upgrades, customer qualification processes, research and development, expansion projects and potential future acquisitions. Our ability to raise capital may be affected by market conditions, investor demand, interest rates, our operating performance, regulatory developments and broader macroeconomic factors. If we are unable to obtain sufficient financing when needed, or if financing is available only on unfavorable terms, we may be required to delay, reduce or abandon certain business initiatives, which could materially and adversely affect our business, financial condition and results of operations.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Integration of the Korean Companies

Our future performance will depend in part on our ability to successfully integrate Handa Lab, KCM, KMMI and NS World following the Business Combination. The integration process requires management attention and may involve operational, financial, legal, tax, accounting, human resources, information technology, reporting and internal control matters. Our ability to realize the anticipated benefits of the Business Combination will depend on, among other things, our ability to retain key personnel, coordinate operations across jurisdictions, maintain customer and supplier relationships, implement consistent financial reporting and internal control processes, align strategic priorities and manage working capital requirements. Any delays or difficulties in integration could adversely affect our operating results and delay our ability to execute our growth strategy.

Capacity Utilization and Production Ramp-Up

Our revenues and margins are expected to be affected by the timing and pace at which we utilize and expand our production capacity. Certain of our acquired operations are expected to require additional capital investment, equipment purchases, facility improvements, process optimization, customer qualification and working capital before reaching targeted operating levels. Our ability to increase production volumes and improve operating efficiency will depend on the availability of equipment, skilled labor, raw materials and feedstock, as well as our ability to implement automation and quality control processes. Delays in ramping production or lower-than-expected capacity utilization may result in lower revenue, reduced gross margin and higher unit costs.

Customer Demand and Qualification

Our products are intended to serve customers in industries such as automotive, aerospace, defense, electronics, industrial manufacturing, gigafactories, OEMs and refineries. Sales into these markets may require customer qualification, testing, technical validation, sample production, commercial negotiation and, in certain cases, regulatory or customer-specific approval processes. The timing and success of customer qualification may affect when we are able to convert commercial opportunities into revenue. Demand for our products may also be affected by end-market conditions, customer production schedules, procurement policies, commodity prices, geopolitical considerations and customer efforts to diversify supply chains away from concentrated sources of critical materials.

Availability and Cost of Feedstock and Raw Materials

Our operations depend on the availability, quality and cost of feedstock and raw materials, including end-of-life materials, magnet-related materials, electronic scrap, batteries, metals and other critical materials. Feedstock availability may fluctuate based on collection economics, competition, regulatory requirements, transportation costs, commodity prices and supplier relationships. Variability in feedstock composition may also affect processing yields, production costs and product quality. If we are unable to secure sufficient feedstock or raw materials on commercially acceptable terms, our ability to operate and scale our business may be adversely affected.

Commodity Price Volatility

Many of our products and feedstocks are exposed directly or indirectly to the market prices of critical materials, rare earth elements, battery materials, precious metals and base metals. These prices may be volatile and may be affected by supply and demand dynamics, geopolitical developments, trade restrictions, tariffs, currency movements, energy prices, inventory levels and macroeconomic conditions. Changes in commodity prices may affect our revenue, cost of sales, gross margin, inventory values and customer demand. In periods of significant price volatility, our results of operations may fluctuate even if production volumes remain stable.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Foreign Currency Exposure

A significant portion of our current operating activities is conducted in Korea, while our reporting currency is the U.S. dollar. Accordingly, our results of operations, financial position and cash flows may be affected by fluctuations in exchange rates, particularly between the Korean won and the U.S. dollar. Foreign currency fluctuations may affect the translated value of our revenues, expenses, assets and liabilities, as well as the cost of imported equipment, materials and services. We may also be exposed to transaction gains and losses on monetary assets and liabilities denominated in currencies other than the applicable functional currency.

Public Company Costs and Compliance Requirements

Following the Business Combination, we became subject to the reporting, governance, internal control and compliance requirements applicable to public companies. We expect to incur additional expenses related to financial reporting, legal and accounting services, audit and review procedures, investor relations, directors' and officers' insurance, board and committee matters, internal controls and other public company infrastructure. These costs may be significant, particularly in the periods immediately following the Business Combination, and may adversely affect our near-term results of operations.

Non-Cash and Non-Operating Items

Our reported results may be affected by non-cash and non-operating items that may not directly reflect the underlying performance of our operating businesses. These items may include changes in fair value of financial instruments, credit loss provisions, foreign currency gains and losses, interest expense, and changes in liabilities related to dissenting shareholder appraisal rights. These items may cause significant period-to-period volatility in our results of operations and may make it more difficult to compare our operating performance across periods.

Regulatory, Trade and Geopolitical Developments

Our business is affected by regulatory, trade and geopolitical developments relating to critical minerals and materials, rare earth elements, battery materials, recycling, environmental regulation, national security, export controls, tariffs and industrial policy. Government policies that support domestic or allied critical materials supply chains may create opportunities for our business. However, changes in laws, regulations, trade restrictions, permitting requirements, tariffs, sanctions or export controls may also increase costs, restrict supply chains, delay customer decisions or otherwise adversely affect our operations. Because our business involves operations and supply chains across multiple jurisdictions, we may be affected by regulatory and political developments in the United States, Korea and other markets in which we source materials, operate or sell products.

Factors Affecting the Comparability of our Results

Our historical results of operations may not be comparable to our future results of operations, and our results for the three months ended March 31, 2026 may not be comparable to the three months ended March 31, 2025, primarily due to the consummation of the Business Combination, the acquisition of the Korean operating companies, the inclusion of post-combination public company costs, changes in the fair value of financial instruments, and the Company's change in tax status, as described below.

Expenses Associated with the Business Combination

On January 5, 2026, the Company consummated the Business Combination. In connection with the Business Combination, the Company incurred significant transaction-related, professional, accounting, legal, valuation, advisory, public company readiness and other corporate costs. In addition, the Company recognized significant non-cash losses from changes in the fair value of financial instruments, including the July Investment Agreement derivative and CPU Share Allocation Obligations. These fair value changes and transaction-related costs materially affected the Company's results of operations for the three months ended March 31, 2026 and may limit comparability to prior periods.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Acquisitions

Immediately prior to the consummation of the Business Combination, the Company acquired controlling interests in the Korean operating companies. As a result, the Company's results of operations for the three months ended March 31, 2026 include revenues, cost of sales, operating expenses, assets and liabilities of the Korean operating companies following the acquisition date, while the comparable prior-year period primarily reflects the historical results of EM LLC before the acquisition of such operating businesses. Accordingly, the Company's results of operations for the periods presented are not directly comparable. The Company may continue to pursue acquisitions as part of its growth strategy, which could further affect comparability of future periods.

Income Taxes

Following the Business Combination, EM&T is subject to U.S. federal and state income taxes as a corporation. EM LLC, the accounting predecessor, was treated as a pass-through entity for U.S. federal income tax purposes and was generally not subject to U.S. federal income tax at the entity level. In addition, following the acquisition of the Korean operating companies, the Company is subject to income taxes in Korea. As a result, the Company's income tax expense and effective tax rate for periods following the Business Combination may not be comparable to historical periods prior to the Business Combination.

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.

Business Segments

We operate our business through a single operating and reportable segment focused on rare earth magnet-related products and technologies. Following the Business Combination, our current operating activities are primarily conducted through the Korean Companies, with our near-term operating focus on rare earth magnet-related products and technologies. As our broader critical materials platform develops, including e-scrap recycling, battery recycling and related metals recovery activities, we expect to continue evaluating our segment presentation based on the manner in which management reviews operating results, allocates resources and assesses performance.

Our operating activities consist of the production and development of rare earth magnet materials and finished magnet products. These activities include rare earth metals, rare earth alloys, sintered magnets and bonded magnets. These products are used, or are expected to be used, in a range of high-performance and industrial applications, including automotive, aerospace, defense, industrial automation, consumer electronics and other advanced manufacturing end markets.

Our current operating business following the acquisition of the Korean Companies supports the Company's strategy to participate across the rare earth magnet supply chain, from magnet-related materials and alloy production to bonded and sintered magnet manufacturing. Over time, the Company intends to expand these rare earth magnet-related operations beyond Korea, including through the development of a U.S. industrial campus designed to replicate and scale the Company's Korean commercial capabilities in the United States. The planned U.S. expansion is expected to support the Company's broader strategy of establishing a secure, reliable and U.S.-aligned supply chain for rare earth magnet materials and finished magnet products.

Our operating performance is affected by, among other things, customer demand, capacity utilization, production yields, availability and pricing of rare earth materials, customer qualification timelines, foreign currency movements, labor and energy costs, access to growth capital, timing of facility expansion, and our ability to expand production capacity and improve operating efficiency.

Components of Results of Operations

Revenues

The Company derives revenue from manufacturing and selling magnet and magnet materials. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cost of sales

Cost of sales represent all direct and indirect costs associated with the manufacture of our products. Cost of goods sold consists primarily of direct costs associated with inventory and delivery of the Company's goods, including freight costs. Cost of sales also includes inventory impairment, allocated personnel-related expenses and allocated facilities and overhead costs.

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.

Selling, general and administrative expenses

Selling, general and administrative expenses consist of corporate service functions such as finance, legal, human resources and information technology expenses, as well as rent, utilities, depreciation, amortization and insurance costs.

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 income and expenses

Interest income primarily consists of interest earned on the Company's notes receivable and other non-trade receivables, including related-party receivables.

Interest expense primarily consists of interest incurred on the Company's debt obligations, including short-term debt, related-party debt, long-term debt, and assumed obligations in connection with the Business Combination.

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.

Gain (loss) on financial instruments

Gain (loss) on financial instruments primarily consists of non-cash changes in the fair value of the Company's financial instruments that are measured at fair value each reporting period.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

The following table summarizes our results of operations for the following periods (dollars in thousands):

		Three Months Ended March 31,
		2026				2025				Change
		($)				($)				($)				(%)
Revenues			1,879				-				1,879				*
Cost of sales			(1,434	)			-				(1,434	)			*
Gross Profit			445				-				445				*
Other operating income			-				-				-				*
Selling, general and administrative expenses			(16,100	)			(2,802	)			(13,298	)			475	%
Operating income (loss)			(15,655	)			(2,802	)			(12,853	)			459	%
Interest expense (income), net			(705	)			(493	)			(212	)			43	%
Provision for credit losses			-				(470	)			470				(100	)%
Change in fair value of financial instruments			(425,227	)			(15,467	)			(409,760	)			2649	%
Other expense (income)			1,273				250				1,023				409	%
Income before income taxes			(440,314	)			(17,996	)			(422,318	)			2347	%
Income taxes (benefit)			-				-				-				*
Net loss from operations			(440,314	)			(17,996	)			(422,318	)			2347	%

Revenues

Revenues were $1.9 million for the three months ended March 31, 2026 as compared to $0.0 million for the three months ended March 31, 2025, an increase of $1.9 million. The percentage change is not meaningful because the Company did not generate revenues during the prior-year period. This increase was primarily due to the Company's acquisition of the Korean operating companies in connection with the Business Combination, which resulted in the Company recognizing product sales generated in Korea during the three months ended March 31, 2026.

Cost of sales

Cost of sales were $1.4 million for the three months ended March 31, 2026 as compared to $0.0 million for the three months ended March 31, 2025, an increase of $1.4 million. The percentage change is not meaningful because the Company did not incur cost of sales during the prior-year period. The Company's cost of sales for the three months ended March 31, 2026 increased compared to the three months ended March 31, 2025, mainly as a result of the commencement of revenue-generating product sales activities through the Korean operating companies acquired in connection with the Business Combination.

Selling, general and administrative expenses

Selling, general and administrative expenses were $16.1 million for the three months ended March 31, 2026 as compared to $2.8 million for the three months ended March 31, 2025, an increase of $13.3 million, or 475%. This increase was primarily due to higher corporate, professional, transaction-related and public company costs incurred in connection with the Business Combination and post-combination operations, together with the inclusion of selling, general and administrative expenses of the Korean operating companies acquired in connection with the Business Combination.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Operating loss

Operating loss was $15.7 million for the three months ended March 31, 2026 as compared to $2.8 million for the three months ended March 31, 2025, an increase of $12.9 million, or 459%. This increase was primarily due to the increase in selling, general and administrative expenses, partially offset by gross profit generated from the Korean operating companies during the three months ended March 31, 2026.

Other non-operating income and losses, net

Other non-operating income and losses, net were a loss of $424.7 million for the three months ended March 31, 2026 as compared to a loss of $15.2 million for the three months ended March 31, 2025, an increase in net loss of $409.5 million, or 2,695%. This increase was primarily due to a $425.2 million non-cash loss from the change in fair value of financial instruments during the three months ended March 31, 2026, compared to a $15.5 million non-cash loss from the change in fair value of financial instruments during the three months ended March 31, 2025. The increase was partially offset by other income of $1.3 million recognized during the three months ended March 31, 2026, compared to other income of $0.3 million during the three months ended March 31, 2025, and the absence of provision for credit losses during the three months ended March 31, 2026, compared to provision for credit losses of $0.5 million during the three months ended March 31, 2025.

Income taxes (benefit)

Income tax expense was $0.0 million for each of the three months ended March 31, 2026 and 2025. There was no income tax expense or benefit recognized during either period, and therefore there was no period-over-period increase or decrease.

Segment Results of Operations

The following table presents our revenue by segment as well as the dollar and percentage change from the prior year (dollars in thousands):

		Three Months Ended March 31,
		2026				2025				Change
		($)				($)				($)				(%)
Revenues:
Rare Earth Magnets			1,796				-				1,796				*
Other			83				-				83				*
Total			1,879				-				1,879				*

The following table presents our gross profit by segment as well as the dollar and percentage change from the prior year (dollars in thousands):

		Three Months Ended March 31,
		2026				2025				Change
		($)				($)				($)				(%)
Gross Profit:
Rare Earth Magnets			392				-				392				*
Other			53				-				53				*
Total			445				-				445				*

Liquidity and Going Concern

Overview

We are an early-stage company. Our future capital requirements will depend on many factors, including the timing and extent of our research and the acquisition of processing facilities. In order to finance these opportunities and associated costs, it is possible that the Company would need to raise additional financing if the proceeds received from other equity financing are insufficient to support its business needs. While there can be no assurances, the Company intends to raise such capital through additional equity raises. If additional financing is required from outside sources, the Company may not be able to raise it on terms acceptable to it or at all. If the Company is unable to raise additional capital on acceptable terms when needed, its product development business, results of operations and financial condition would be materially and adversely affected.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Historically, the Company's primary sources of liquidity have been cash flows from issuance of convertible preferred units. The Company reported a net loss of $440.3 million for the three months ended March 31, 2026. As of March 31, 2026, the Company had an aggregate cash balance of $5.4 million and a net working capital deficit of $81.8 million. These are indicators of substantial doubt as to the Company's ability to continue as a going concern for at least one year from issuance of the unaudited condensed consolidated financial statements. The Company's ability to continue as a going concern is dependent upon the management of its expenses and its ability to obtain necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due, and upon profitable operations.

As a result of the above, in connection with the Company's assessment of going concern considerations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2014-15, "Disclosures of Uncertainties about an Entity's Ability to Continue as a Going Concern," management has determined that the Company's liquidity condition raises substantial doubt about the Company's ability to continue as a going concern through twelve months from the date the unaudited condensed consolidated financial statements were available to be issued. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Sources of Liquidity

In assessing liquidity, we monitor and analyze cash on-hand and operating expenditure commitments. Our business is capital intensive and requires substantial expenditure for, among other things, the purchase and maintenance of equipment used in our operations, and to remain in compliance with environmental laws. Our short-term and long-term liquidity needs arise primarily from working capital requirements, capital expenditures, including expansion projects and principal and interest payments related to our outstanding indebtedness. Our liquidity as of March 31, 2026, and March 31, 2025, is as follows (dollars in thousands):

		March 31, 2026				March 31, 2025
Cash and cash equivalents		$	5,389			$	3,733
Restricted cash		$	34			$	-
Working capital (deficit), excluding cash, cash equivalents, and restricted cash		$	(87,215	)		$	(81,159	)
Accumulated deficit		$	(1,119	)		$	(78,889	)

During the three months ended March 31, 2026, we did not raise a significant amount of additional external financing in connection with the Business Combination. The Business Combination did not include significant external financing at closing, and management is actively pursuing additional sources of capital, including equity and strategic financing arrangements, to support the Company's operations and growth initiatives.

The Business Combination provided the Company with access to the public capital markets and established EM&T as a Nasdaq-listed public company. However, the transaction did not result in significant cash proceeds at closing. Accordingly, our liquidity following the Business Combination continues to depend on our ability to manage operating expenditures, fund working capital needs, service existing indebtedness, and raise additional capital through equity, debt, strategic financing or other arrangements. There can be no assurance that such financing will be available on acceptable terms, or at all.

Subsequent to March 31, 2026, on May 7, 2026, the Company entered into a Securities Purchase Agreement with YA II PN, Ltd., a fund managed by Yorkville Advisors Global, LP, pursuant to which the Company agreed to issue and sell convertible debentures in an aggregate principal amount of up to $100.0 million. The Company issued the first convertible debenture in the principal amount of $20.0 million on May 7, 2026. A second convertible debenture in the principal amount of $5.8 million is expected to be issued upon effectiveness of a resale registration statement on Form S-1, and up to an additional $74.2 million in convertible debentures may be purchased in subsequent tranches from time to time upon the mutual agreement of the Company and Yorkville.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cash flows

The following table summarizes our cash flows from operating, investing and financing activities for the following periods (dollars in thousands):

		Three Months Ended
		March 31,								Change
		2026(1)				2025				($)				(%)
Net cash provided by (used in) operating activities			(5,569	)			(2,063	)			(3,506	)			70	%
Net cash provided by (used in) investing activities			1,005				(474	)			1,479				(412	)%
Net cash provided by (used in) financing activities			(1,741	)			3,655				(5,396	)			(248	)%
Net increase (decrease) in cash and cash equivalents			(6,296	)			1,118				(7,414	)			(763	)%

(1)

March 31, 2026 figures includes immaterial effect of exchange rate changes on cash and cash equivalents, and restricted cash

Net cash flows used in operating activities

For the Three Months Ended March 31, 2026 (unaudited) net cash used in operating activities of $5.6 million as compared to $2.1 million for the three months ended March 31, 2025. The difference was a result of higher operating expenditures following the Business Combination and the inclusion of the Korean operating companies.

Net cash flows used in investing activities

For the Three Months Ended March 31, 2026 (unaudited), net cash provided in investing activities was $1.0 million as compared to net cash used by investing activities of $0.5 million for the three months ended March 31, 2025. The difference was a result of net cash acquired in the Business Combination, partially offset by increases in loans, acquisitions of property, plant and equipment and leasehold deposits.

Net cash flows provided by financing activities

For the Three Months Ended March 31, 2026 (unaudited), net cash provided by financing activities was $1.7 million as compared to $3.7 million for the three months ended March 31, 2025. The difference was a result of payments made to effectuate the reverse recapitalization, constructive disbursements to related parties, repayments of debt and lease liabilities, and payments for appraisal rights during the three months ended March 31, 2026. In the prior-year period, net cash provided by financing activities primarily reflected proceeds from the issuance of convertible preferred units.

Dissenting Shareholder Appraisal Rights

In connection with the share exchange transactions contemplated by the share exchange agreements dated February 10, 2025, as amended (collectively, the "Agreements"), by and among the Company, EMT Sub Co. Ltd ("EMT Sub"), and the other operating companies party thereto, shareholders who formally dissented at the general meeting of shareholders held to approve the share exchange (the "Share Exchange EGM") were granted statutory appraisal rights under the Korean Commercial Code (the "Appraisal Rights").

Pursuant to the Agreements, dissenting shareholders may obtain the Appraisal Rights by delivering to the Company, within 20 days from the date of the Share Exchange EGM, a written notice identifying the class and number of shares for which appraisal rights are elected (the "Appraisal Shares"). Upon receipt of valid notice, the Company is contingently required to repurchase the Appraisal Shares within two (2) months, provided the Share Exchange remains in effect and the dissenting shareholder does not withdraw its notice (by mutual agreement with the Company), after which any unpaid amount will begin to accrue interest at a statutorily dictated 6% interest rate per annum. The repurchase price for Appraisal Shares is determined by mutual agreement between the Company and the applicable dissenting shareholder through the Agreements.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management accounts for these appraisal rights as a liability under ASC 480 measured at fair value, with changes recognized in earnings, until the obligation becomes unconditional at merger close. In January 2026, the Company completed the Business Combinations. This event legally obligates the Company to repurchase the Appraisal Shares in accordance with the terms above. The payment amount was approximately $48.3 million as of the closing of the share exchange transaction and continues to accrue statutory interest until the actual payment date. Because the appraisal rights obligation is denominated in Korean Won, the U.S. dollar carrying amount of the liability is affected by changes in the USD/KRW exchange rate. As a result of changes in the exchange rate between the closing date and March 31, 2026, the U.S. dollar-equivalent carrying amount of the liability decreased from the initial obligation amount. As of March 31, 2026, a liability of $46.2 million was recorded in non-trade accounts payable on the condensed consolidated balance sheets.

Contractual Obligations

The following table presents a summary of our contractual obligations, including payments due by period, as of March 31, 2026 (in thousands):

		2026(3)				2027				2028				2029				Thereafter				Total
Operating lease(1)		$	17			$	2			$	-			$	-			$	-			$	19
Finance lease(1)		$	56			$	52			$	25			$	14			$	5			$	152
Debt obligations(2)		$	2,694			$	2,080			$	571			$	478			$	720			$	6,543
Total		$	2,767			$	2,134			$	596			$	492			$	725			$	6,714

(1)	Future lease payment obligations for operating and finance lease liabilities.

(2)	Long-term debt principal repayment obligations for individual cash loans, our bank loans, and loans provided by Korea Small and Medium-sized Enterprises and Startups Agency and Industrial bank of Korea.

(3)	Represents the period April 1, 2026 through December 31, 2026.

As of March 31, 2026, there have been no material changes to our contractual obligations and commitments since December 31, 2025.

Issuance of Note Receivables and Note Receivables - Related Party

During 2025 and 2026, the Company entered into unsecured promissory notes with the Sponsor in the amounts of $1.1 million and $0 million, respectively (the "WTMA Sponsor Notes"). The WTMA Sponsor Notes are non-interest bearing and mature on the earlier of the (a) Closing or (b) liquidation of WTMA.

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

During 2026, the Company entered into one unsecured promissory note with the voting member of the Company in the aggregate principal amount of $0.5 million (the "2026 Related Party Notes"). The 2026 Related Party Notes are non-interest bearing and mature on the earlier of (a) the Closing or (b) December 31, 2026. The proceeds from the 2026 Related Party Notes were used primarily to fund general and administrative expenditures incurred on behalf of the Company, including transaction-related costs, professional fees, operational support activities, business development expenditures, organizational expenses, and other expenditures incurred in furtherance of the Company's business activities and strategic objectives. As of March 31, 2026, the outstanding balance of the 2026 Related Party Notes was included in non-trade accounts receivable - related parties on the Company's condensed consolidated balance sheets, net of the related allowance for credit losses, as applicable.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Off Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2026.

Critical Accounting Estimates

The above discussion and analysis of our financial condition and results of operations is based upon our unaudited condensed consolidated financial statements. The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and judgments that affect the amounts reported. Our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies of the accompanying Notes to Unaudited Condensed Consolidated Financial Statements of the Company in Part I, Item 1 of this Form 10-Q, of which this exhibit forms a part. Critical accounting policies are those that we consider to be the most important in portraying our financial condition and results of operations and also require the greatest amount of judgments by management. Judgments or uncertainties regarding the application of these policies may result in materially different amounts being reported under different conditions or using different assumptions. During the three months ended March 31, 2026, the only significant changes to our critical accounting estimates are as follows:

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of the Company's management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. References to GAAP issued by the FASB in the accompanying notes to the unaudited condensed consolidated financial statements are to the FASB Accounting Standards Codification ("ASC"). The unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The accompanying unaudited condensed consolidated financial statements are presented in US dollars and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Business Combination

The accounting for business combinations is considered a critical accounting estimate because it requires management to make significant judgments in determining the fair values of assets acquired and liabilities assumed, including identifiable intangible assets and goodwill, in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations. These estimates involve the use of complex valuation techniques and assumptions that are inherently uncertain, and changes in these assumptions could have a material impact on the Company's unaudited condensed consolidated financial statements. The purchase price allocation required management to estimate the fair values of acquired tangible and intangible assets and assumed liabilities as of the acquisition date. Significant assumptions used in these valuations included projected future cash flows, discount rates, and growth rates. Management believes these assumptions were reasonable based on information available at the time; however, actual results may differ from these estimates. Changes in key assumptions could affect the recorded amounts of acquired assets and liabilities and future results of operations through amortization expense or impairment charges. Goodwill arising from business combinations is not amortized but is tested for impairment at least annually or upon the occurrence of triggering events, and adverse changes in market conditions, integration results, or operating performance could increase the likelihood of a future goodwill impairment that could be material to the Company's financial position and results of operations.

Fair Value of Financial Instruments

The Company's financial instruments with a carrying value that approximates fair value consist of cash and cash equivalents, prepaid and other current assets, notes receivable, convertible notes receivable, accounts payable and accrued expenses because of the short-term nature or expected settlement dates of these instruments.

EVOLUTION METALS & TECHNOLOGIES CORP.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Convertible Preferred Unit

EM Convertible Preferred Units consist of preferred units issued with either (i) an option to convert into New EM Common Stock at the option of the holders or (ii) automatic conversion into New EM Common Stock ninety days after closing of the Business Combination. The EM Convertible Preferred Units are accounted for as permanent equity in the scope of ASC 815, "Derivatives and Hedging" ("ASC 815") and recorded at fair value which is representative of the proceeds received.

Derivative Liabilities

Certain agreements the Company entered into either require the Company to issue or provide the Company the option to issue a variable number of shares of New EM Common Stock to certain investors and vendors. The Company applies ASC 480, "Distinguishing Liabilities and Equity" ("ASC 480"), ASC 815, and ASC 718, "Compensation - Stock Compensation" ("ASC 718") in its evaluation of the terms of each agreement. Financial instruments that were identified in each agreement and

●

meet the criteria to be accounted for as a liability in accordance with ASC 480 were reported at fair value at issuance and re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations;

●

do not meet the criteria to be accounted for as a liability in accordance with ASC 480 and do not meet the criteria to be accounted for as equity in accordance with ASC 815 are accounted for as a liability and were reported at fair value at issuance and re-measured to fair value each reporting period with changes in the estimated fair value of the liability recognized as a non-cash gain or loss on the accompanying consolidated statements of operations;

●

meet the criteria of a liability-classified share-based payment transaction in accordance with ASC 718 were measured based on the fair value of the transaction on the date of grant and remeasured to fair value each reporting period until settlement.

Agreements where multiple financial instruments are identified that would individually warrant separate accounting as a derivative instrument are bundled together as a single, compound embedded derivative that is bifurcated and accounted for separately from the host contract in accordance with ASC 815.

Revenue Recognition

The Company only has revenue from customers. The Company recognizes revenue when it satisfies performance obligations under the terms of its contracts, and the control of its products is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products.

This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer, and (b) is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or product to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the product.