As filed with the U.S. Securities and Exchange Commission on August 7, 2025

Registration No. 333-        

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

K WAVE MEDIA LTD.

(Exact Name of Registrant as Specified in its Charter)

121 South Church Street

George Town, Grand Cayman,

KY1-1104

Cayman Islands

(Address of principal executive offices)

Tel: 703-790-0717

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

+1 800-221-0102

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Andrew M. Tucker

Duane Morris LLP

901 New York Avenue

N.W., Suite 700 East

Washington, DC 20001-4795

Telephone: (202) 776-5248

Approximate date of commencement of proposed sale to public: From time to time after the effective date hereof.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the registration statement shall become effective on such date as the SEC, acting pursuant to Section 8(a) of the Securities Act, may determine.

The information contained in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

K Wave Media Ltd.

Up to 14,603,234 Ordinary Shares

This prospectus of K Wave Media Ltd., a Cayman Islands exempted company (“we,” “us,” “our,” “K Wave,” “Pubco,” or the “Company”) relates to the resale by Anson Investments Master Fund, LP and Anson East Master Fund LP (each, a “Selling Shareholder,” and, together, the “Selling Shareholders”) from time to time of up to 14,603,234 ordinary shares, par value $0.0001 (“Ordinary Shares”) (the “Offered Shares”).

The Ordinary Shares to which this prospectus relates may be issued by us to the Selling Shareholders pursuant to (i) the Senior Secured Convertible Notes issued by the Company on July 11, 2025 to the Selling Shareholders pursuant to the Securities Purchase Agreement, dated as of July 3, 2025, by and among the Company, the Selling Shareholders, and Anson Investments Master Fund L.P., as collateral agent for the Selling Shareholders (the “SPA”), in the aggregate principal amount of $15,789,473.68 (the “Initial Notes”), which Initial Notes are convertible into an aggregate of 4,449,761 Ordinary Shares (assuming interest is payable on such notes at a rate of 12% commencing on the date of issuance of the applicable SPA Note and ending on the date that is 2 years thereafter); (ii) the warrants to purchase an aggregate of 4,312,180 Ordinary Shares issued by the Company on July 11, 2025 to the Selling Shareholders pursuant to the SPA (the “Initial Warrants”); (iii) Senior Secured Convertible Notes which may be issued by the Company to the Selling Shareholders pursuant to the SPA in the aggregate principal amount of $10,526,315.79 (the “Second Notes”), which Second Notes are convertible into an aggregate of 2,996,507 Ordinary Shares (assuming interest is payable on such notes at a rate of 12% commencing on the date of issuance of the applicable SPA Note and ending on the date that is 2 years thereafter); and (iv) warrants to purchase an aggregate of 2,874,786 Ordinary Shares which may be issued by the Company to the Selling Shareholders pursuant to the SPA (the “Second Warrants” and, together with the Initial Notes, the Initial Warrants, and the Second Notes, the “Securities”).

We are not selling any securities under this prospectus and will not receive any of the proceeds from the sale of our Ordinary Shares by the Selling Shareholders. We will, however, receive the proceeds of any cash exercise of the Initial Warrant and/or Second Warrant by the Selling Shareholders.

The Selling Shareholders may sell or otherwise dispose of the Offered Shares described in this prospectus in a number of different ways and at varying prices. See “Plan of Distribution” for more information about how the Selling Shareholders may sell or otherwise dispose of our Ordinary Shares pursuant to this prospectus.

We will pay the expenses incurred in registering under the Securities Act of 1933, as amended (the “Securities Act”), the offer and sale of our Ordinary Shares to which this prospectus relates by the Selling Shareholders, including legal and accounting fees. See section titled “Plan of Distribution” beginning on page 170 of this prospectus.

To the extent the Selling Shareholders decide to sell their Ordinary Shares, we will not control or determine the price at which the shares are sold.

You should read this prospectus, together with additional information described under the headings “Where You Can Find Additional Information” carefully before you invest in any of our securities.

Our Ordinary Shares and our Warrants (as defined below) are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “KWM” and “KWMWW”, respectively. The last reported sale price of our Ordinary Shares on the Nasdaq Capital Market on August 6, 2025, was $3.865 per share. We urge prospective purchasers of our Ordinary Shares to obtain current information about the market prices of our Ordinary Shares.

Investing in our Ordinary Shares involves a high degree of risk. Please consider carefully the risks described in this prospectus under “Risk Factors” beginning on page 11 of this prospectus and in our filings with the U.S. Securities and Exchange Commission.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is _________, 2025

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form F-1 that we filed with the U.S. Securities and Exchange Commission (the “SEC”). Under this registration process, the Selling Shareholders may, from time to time, sell the securities offered by them described in this prospectus. The Selling Shareholders may sell up to 14,603,234 Ordinary Shares from time to time in one or more offerings as described in this prospectus. We will not receive any proceeds from the sale of Ordinary Shares by the Selling Shareholders.

We may also file a prospectus supplement or post-effective amendment to the registration statement of which this prospectus forms a part that may contain material information relating to these offerings. The prospectus supplement or post-effective amendment, as the case may be, may add, update or change information contained in this prospectus with respect to such offerings. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement or post-effective amendment, you should rely on the prospectus supplement or post-effective amendment, as applicable. Before purchasing any of the Ordinary Shares, you should carefully read this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, together with the additional information described under “Where You Can Find More Information.”

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”

Neither we nor the Selling Shareholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, prepared by or on behalf of us or to which we have referred you. We and the Selling Shareholders take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the Selling Shareholders will not make an offer to sell the Ordinary Shares in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, is accurate only as of the date on the respective cover. Our business, prospects, financial condition or results of operations may have changed since those dates. This prospectus contains, and any prospectus supplement or post-effective amendment may contain, market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts that may be included in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable, may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under “Risk Factors” in this prospectus and any prospectus supplement and/or post-effective amendment, as applicable. Accordingly, investors should not place undue reliance on this information.

FREQUENTLY USED TERMS

Unless otherwise stated in this prospectus, the terms “we,” “us,” “our” “Pubco” or “K Wave” refer to K Wave Media Ltd., a Cayman Islands exempted company with limited liability, and its consolidated subsidiaries. In addition, in this prospectus:

Defined terms in the financial statements contained in this prospectus have the meanings ascribed to them in the financial statements.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements, within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements appear in a number of places in this prospectus including, without limitation, statements about the anticipated benefits of the Business Combination, and the financial conditions, results of operations, earnings outlook and prospects of K Wave and other statements about the period following the consummation of the Business Combination, statements in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business of K Wave.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of K Wave and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated.

All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this prospectus and attributable to K Wave or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this prospectus. Except to the extent required by applicable law or regulation, K Wave undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events.

MARKET AND INDUSTRY DATA

Certain industry data and market data included in this prospectus were obtained from independent third-party surveys, market research, publicly available information, reports of governmental agencies and industry publications and surveys. All of management’s estimates presented herein are based upon management’s review of independent third-party surveys and industry publications prepared by a number of sources and other publicly available information. All of the market data used in this prospectus involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We believe that the information from these industry publications and surveys included in this prospectus is reliable. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

RISK FACTORS

Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with all of the other information contained in this prospectus, including our financial statements and related notes appearing at the end of this prospectus and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding to invest in our securities. Although we have organized risks generally according to these categories in the discussion below, many of the risks may have ramifications in more than one category. These categories, therefore, should be viewed as a starting point for understanding the significant risks we face and not as a limitation on the potential impact of the matters discussed. If any of the events or developments described below were to occur, our business, prospects, operating results and financial condition could suffer materially, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business.

Risks Relating to the SPA

It is not possible to predict the Securities we will sell under the SPA to the Selling Shareholders, whether the Selling Shareholders will execute any of the SPA Warrants for cash, or the actual gross proceeds we will receive in connection with the SPA.

On July 3, 2025, we entered into the Securities Purchase Agreement, by and among the Company, the Selling Shareholders, and Anson Investments Master Fund L.P., as collateral agent for the Selling Shareholders (the “SPA”). We cannot be certain that the closing conditions with respect to the Second Closing and any Additional Closing may be met and that such closings will occur. Additionally, we cannot be certain whether the Selling Shareholders will exercise any of the SPA Warrants which they have purchased or will purchase for cash or at all. Accordingly, it is not possible for us to predict the additional Securities that we will sell to the Selling Shareholders under the SPA, if any, or the actual aggregate gross proceeds that we will receive under the SPA.

Our redemption obligations under the SPA Notes upon the occurrence of a Change of Control Transaction may discourage a transaction that could be beneficial to the holders of our shareholders.

Pursuant to each SPA Note, if at any time after such SPA Note is issued, a Change of Control Transaction occurs, the holder of such SPA Note will have the right to cause the Company to redeem all or any portion of the SPA Notes then outstanding, plus all accrued and unpaid interest thereon. Our redemption obligations under the SPA Notes upon the occurrence of a Change of Control Transaction may discourage a transaction that could be beneficial to the holders of our shareholders. Further, if a Change of Control Transaction occurs, there are no assurances that we will have sufficient funds to redeem the SPA Notes.

We may not be able to generate sufficient cash to service the SPA Notes, and may be forced to take other actions to satisfy our obligations under the SPA Notes, which may not be successful.

Our ability to make scheduled payments on SPA Notes depends on our financial condition and results of operations, which in turn are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, interest and other amounts payable, if any, under the SPA Notes.

If our cash flows and capital resources are insufficient to fund our obligations under the SPA Notes, we could face substantial liquidity problems and may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or debt or restructure the SPA Notes. Our ability to restructure the SPA Notes or seek additional capital or debt will depend on, among other things, the condition of the capital markets and our financial condition at such time. Additional capital or debt may require us to comply with onerous covenants, which could further restrict our business operations. In the absence of such cash flows and resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations.

Additional issuances of our Ordinary Shares as a result of the conversion of the SPA Notes or the exercising of the SPA Warrants could result in significant dilution to our shareholders.

Issuances of our Ordinary Shares as a result of the conversion of the SPA Notes and/or the exercising of the SPA Warrants will result in dilution to existing shareholders. The amount of dilution could be substantial depending upon the size of the conversion or exercise. Sales by the Selling Shareholders of substantial numbers of such shares in the public market could adversely affect the market price of our shares. In addition, the perceived risk of dilution as a result of the SPA Notes and SPA Warrants may cause our shareholders to be more inclined to sell their shares, which would contribute to a downward movement in the price of our Ordinary Shares. Moreover, the perceived risk of dilution and the resulting downward pressure on our Ordinary Share price could encourage investors to engage in short sales of our Ordinary Shares, which could further contribute to price declines in our Ordinary Shares. The fact that the Selling Shareholders may sell substantial amounts of our Ordinary Shares in the public market could make it more difficult for us to raise additional funds through the sale of equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, or at all.

Risks Relating to the SEPA

It is not possible to predict the actual number of shares we will sell under the SEPA to Bitcoin Strategic, or the actual gross proceeds resulting from those sales.

On June 3, 2025, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”). Upon the terms and subject to the satisfaction of the conditions contained in the SEPA, we will have the right, in our sole discretion, to sell to Bitcoin Strategic up to $1 billion of our Ordinary Shares, subject to certain limitations set forth in the SEPA, from time to time. The Ordinary Shares that may be issued under the SEPA may be sold by us to Bitcoin Strategic at our discretion from time to time for a period of up to 36 months, unless the SEPA is earlier terminated.

We generally have the right to control the timing and amount of any sales of our Ordinary Shares to Bitcoin Strategic under the SEPA. Sales of our Ordinary Shares, if any, to Bitcoin Strategic under the SEPA will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Bitcoin Strategic all, some or none of the Ordinary Shares that may be available for us to sell to Bitcoin Strategic pursuant to the SEPA.

Because the per share purchase price that Bitcoin Strategic will pay for the Ordinary Shares in any transaction that we may elect to effect pursuant to the SEPA will be determined by reference to the VWAP during the applicable period, respectively, on the applicable purchase date, as of the date of this prospectus, it is not possible for us to predict the Ordinary Shares that we will sell to Bitcoin Strategic under the SEPA, the purchase price per share that Bitcoin Strategic will pay for shares purchased from us under the SEPA, or the actual aggregate gross proceeds that we will receive from those purchases by Bitcoin Strategic under the SEPA.

Although the SEPA provides that we may sell up to an aggregate of $1 billion of our Ordinary Shares to Bitcoin Strategic, only 100 million Ordinary Shares are being registered under the Securities Act for resale by Bitcoin Strategic under the registration statement that relates to the SEPA. If it becomes necessary for us to issue and sell to Bitcoin Strategic under the SEPA more than the 100 million Ordinary Shares being registered in order to receive aggregate gross proceeds equal to $500 million under the SEPA, we must first file with the SEC one or more additional registration statements to register such additional shares, which the SEC must declare effective, in each case before we may elect to sell any additional Ordinary Shares to Bitcoin Strategic under the SEPA. Any issuance and sale by us under the SEPA of a substantial number of shares of Ordinary Shares could cause additional substantial dilution to our shareholders. The number of Ordinary Shares ultimately offered for sale by Bitcoin Strategic is dependent upon the number of Ordinary Shares, if any, we ultimately elect to sell to Bitcoin Strategic under the SEPA.

Investors who buy shares at different times will likely pay different prices.

Pursuant to the SEPA, we will have discretion, subject to market demand, to vary the timing, prices and numbers of shares sold to Bitcoin Strategic. If and when we do elect to sell Ordinary Shares to Bitcoin Strategic pursuant to the SEPA, after Bitcoin Strategic has acquired such shares, Bitcoin Strategic may resell all, some or none of such shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from Bitcoin Strategic at different times will likely pay different prices for those shares and so may experience different levels of dilution, and in some cases substantial dilution, and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from Bitcoin Strategic as a result of future sales made by us to Bitcoin Strategic at prices lower than the prices such investors paid for their shares. In addition, if we sell a substantial number of shares to Bitcoin Strategic under the SEPA, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with Bitcoin Strategic may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

We may use proceeds from sales of Ordinary Shares made pursuant to the SEPA in ways with which you may not agree or in ways which may not yield a significant return.

We have broad discretion over the use of proceeds from sales of Ordinary Shares made pursuant to the SEPA, and stockholders will not have the opportunity to assess whether the proceeds are being used appropriately. In addition, the ultimate use of the net proceeds may vary from the currently intended uses. The net proceeds may be used for corporate purposes that do not increase our operating results or enhance the value of our Ordinary Shares.

We are engaged in multiple transactions and offerings of our securities. Future resales and/or issuances of Ordinary Shares may cause the market price of our shares to drop significantly and may dilute stockholders.

Sales of a substantial number of our Ordinary Shares in the public market by Bitcoin Strategic, the Selling Shareholders or by our other existing stockholders, or the perception that those sales might occur, could depress the market price of our Ordinary Shares and could impair our ability to raise capital through the sale of additional equity securities.

The market price of Ordinary Shares could drop significantly if the holders of the Ordinary Shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of Ordinary Shares or other securities. The issuance of additional Ordinary Shares will significantly dilute the equity interests of existing holders of the Company securities and such dilution may also reduce the influence that you may have on the management of the Company through the matters that are presented for voting to the Company’s shareholders.

Sales of a substantial number of our securities in the public market by our existing securityholders could cause the price of our Ordinary Shares to fall.

Sales of a substantial number of our Ordinary Shares in the public market by our existing securityholders, or the perception that those sales might occur, could depress the market price of our Ordinary Shares and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that such sales may have on the prevailing market price of our Ordinary Shares.

Risk Factors Relating to K Wave

If K Wave ceases to qualify as a foreign private issuer, it would be required to convert the financials to US GAAP from IFRS in order comply fully with the reporting requirements of the Exchange Act applicable to U.S. domestic issuers, and it would incur significant additional legal, accounting and other expenses that it would not incur as a foreign private issuer.

As a foreign private issuer, K Wave are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and its officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States domestic issuers, and are not be required to disclose in our periodic reports all of the information that United States domestic issuers are required to disclose. In addition, K Wave could be required to report its financial statements in accordance with U.S. GAAP if it ceases to be a foreign private issuer, which could result in significant additional expenses and impact K Wave’s financial results due to the change in accounting framework. If it ceases to qualify as a foreign private issuer in the future, it would incur significant additional expenses that could have a material adverse effect on its results of operations.

Because K Wave is a foreign private issuer and is exempt from certain Nasdaq corporate governance standards applicable to U.S. issuers, you will have less protection than you would have if it were a domestic issuer.

K Wave’s status as a foreign private issuer exempts it from compliance with certain Nasdaq corporate governance requirements if it instead complies with the statutory requirements applicable to a Cayman Islands exempted company. The statutory requirements of K Wave’s home country of Cayman Islands, do not strictly require a majority of its board to consist of independent directors. Thus, although a director must act in the best interests of K Wave, it is possible that fewer board members will be exercising independent judgment and the level of board oversight on the management of K Wave may decrease as a result. In addition, the Nasdaq Listing Rules also require U.S. domestic issuers to have an independent compensation committee with a minimum of two members, a nominating committee, and an independent audit committee with a minimum of three members. K Wave, as a foreign private issuer, with the exception of needing an independent audit committee composed of at least three members, is not subject to these requirements. The Nasdaq Listing Rules may also require shareholder approval for certain corporate matters that K Wave’s home country’s rules do not. Following Cayman Islands governance practices, as opposed to complying with the requirements applicable to a U.S. company listed on Nasdaq, may provide less protection to you than would otherwise be the case.

Although as a Foreign Private Issuer K Wave is exempt from certain corporate governance standards applicable to US domestic issuers, if K Wave cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq, K Wave’s securities may not be listed or may be delisted, which could negatively impact the price of its securities and your ability to sell them.

K Wave cannot assure you that it will be able to continue to meet the listing requirements of Nasdaq or continue to be listed on Nasdaq.

In addition, in order to maintain the Company’s listing on Nasdaq, K Wave is required to comply with certain rules of Nasdaq, including those regarding minimum stockholders’ equity, minimum share price, minimum market value of publicly held shares, and various additional requirements. K Wave may not be able to continue to satisfy these requirements and applicable rules. If K Wave is unable to satisfy Nasdaq criteria for maintaining its listing, its securities could be subject to delisting.

If Nasdaq delists K Wave’s securities from trading, K Wave could face significant consequences, including:

A potential failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on K Wave’s business, financial condition, and results of operations. K Wave may be unable to accurately report K Wave’s financial results or prevent fraud if Global Star cannot maintain an effective system of internal controls over K Wave’s financial reporting.

K Wave is be subject to reporting obligations under the U.S. securities laws. The Securities and Exchange Commission, or the “SEC,” as required by Section 404 of the Sarbanes-Oxley Act of 2002, or the “Sarbanes-Oxley Act,” adopted rules requiring every public company to include a management report on such company’s internal controls over financial reporting in its annual report, which contains management’s assessment of the effectiveness of the company’s internal controls over financial reporting. K Wave is an “emerging growth company,” and are expected to first include a management report on K Wave’s internal controls over financial reporting in K Wave’s annual report in the K Wave’s second annual report after the close of the business combination. K Wave’s management may conclude that K Wave’s internal controls over K Wave’s financial reporting are not effective, and K Wave’s reporting obligations as a public company will place a significant strain on K Wave’s management, operational and financial resources, and systems for the foreseeable future, which will increase K Wave’s operating expenses.

The establishment of effective internal controls over financial reporting is necessary for K Wave to produce reliable financial reports and are important to help prevent fraud. K Wave’s failure to achieve and maintain effective internal controls over financial reporting could consequently result in the loss of investor confidence in the reliability of K Wave’s financial statements, which in turn could harm K Wave’s business and negatively impact the trading price of K Wave’s stock. K Wave anticipates that it will incur considerable costs and devote significant management time and efforts and other resources to comply with Section 404 of the Sarbanes-Oxley Act.

K Enter identified material weaknesses in its internal control over financial reporting which, if not corrected, could affect the reliability of K Enter’s financial statements and have other adverse consequences.

K Enter has identified material weaknesses in its internal control over financial reporting as of December 31, 2023 which relate to: (a) the design and operation of K Enter’s information technology general controls; (b) K Enter’s overall closing and financial reporting processes, including accounting for significant and unusual transactions, (c) general segregation of duties, including the review and approval of journal entries and (d) the design, implementation and operation for process level control activities related to equity transactions.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of K Enter’s financial statements will not be prevented or detected on a timely basis. These deficiencies could result in additional misstatements to K Enter’s financial statements that would be material and would not be prevented or detected on a timely basis.

K Enter’s management has concluded that these material weaknesses in K Enter’s internal control over financial reporting are due to the fact that, prior to this prospectus, K Enter was a private company with limited resources and did not have the necessary business processes and related internal control formally designed and implemented coupled with the appropriate resources with the appropriate level of experience and technical expertise to oversee K Enter’s business processes and controls surrounding information technology general controls and K Enter’s closing and financial reporting processes.

K Enter’s management has developed a remediation plan to address the remaining material weaknesses. Specifically, (a) to alleviate the information technology control issue, K Enter plans to implement Enterprise Resource Planning (ERP) systems and financial solution, which will allow personnel to implement workflow controls; (b) to alleviate the overall closing and financial reporting processes, including accounting for significant and unusual transactions, K Enter plans to hire internal personnel and external advisors with relevant public reporting experience and conduct training for K Enter’s personnel in GAAP reporting requirements; (c) to alleviate the segregation of duties issue, K Enter plans to leverage ERP system configuration and workflow while expanding the accounting team and reviewing roles; (d) to alleviate the lack of a formal journal entry review and approval process, K Enter will be implementing work flow steps within the ERP system to ensure all journal entries are approved before posting to the general ledger; and (e) to alleviate the lack of process level control activities relate to equity transactions, K Enter plans to improve the review process including the documentation of the assessment of equity transactions and the engagement of external advisors to review management’s accounting analysis. The material weaknesses will not be considered remediated until management concludes, through testing, that these controls are effective. K Enter’s management will monitor the effectiveness of K Enter’s remediation plans and will make changes management determines to be appropriate.

Play Company identified material weaknesses in its internal control over financial reporting which, if not corrected, could affect the reliability of Play Company’s financial statements and have other adverse consequences.

Play Company has identified material weaknesses in its internal control over financial reporting as of December 31, 2024 which relate to: (a) Play Company did not have sufficient skilled personnel with requisite IFRS reporting knowledge and experience and (b) Play Company did not have sufficient entity level controls and sufficiently designed internal controls and financial reporting policies and procedures including segregation of duties that are commensurate with IFRS reporting requirements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Play Company’s respective financial statements will not be prevented or detected on a timely basis. These deficiencies could result in additional misstatements to Play Company’s financial statements that would be material and would not be prevented or detected on a timely basis.

Play Company’s management has concluded that these material weaknesses in Play Company’s respective internal control over financial reporting are due to the fact that, prior to this prospectus, Play Company was a private company with limited resources and did not have the necessary business processes and related internal control formally designed and implemented coupled with the appropriate resources with the appropriate level of experience and technical expertise to oversee Play Company’s business processes and controls surrounding information technology general controls and Play Company’s closing and financial reporting processes.

To remediate the material weaknesses described above, Play Company’s management plans to (a) continue to establish a comprehensive and effective internal control system with the assistance from third-party consulting firm which shall provide relevant professional advisory services; (b) continue to assess Play Company’s standardized processes to further enhance the effectiveness of Play Company’s financial review, including the analysis and monitoring of financial information in a consistent and thorough manner; and (c) hire internal personnel and external advisors with relevant public reporting experience and conduct training for Play Company’s personnel in IFRS reporting requirements.

If not remediated, these material weaknesses could result in further material misstatements to K Enter’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. If K Enter is unable to assert that its internal control over financial reporting is effective, or when required in the future, if K Wave’s independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of the internal control over financial reporting, investors may lose confidence in the accuracy and completeness of K Wave’s financial reports, the market price of K Wave Ordinary Shares could be adversely affected and K Wave could become subject to litigation or investigations by the Nasdaq, the SEC or other regulatory authorities, which could require additional financial and management resources.

K Enter’s management has identified material weaknesses in K Enter’s internal control over financial reporting and K Enter may not be able to remediate these weaknesses. Additionally, K Enter’s management may identify material weaknesses in the future that could adversely affect investor confidence, impair the value of K Wave’s securities, and increase K Wave’s cost of raising capital.

There can be no assurance as to how quickly or effectively K Enter can remediate the material weaknesses in K Enter’s internal control over financial reporting or that additional material weaknesses will not be identified in the future. Any failure to remedy additional weaknesses or deficiencies in K Enter’s internal control over financial reporting that may be discovered in the future or to implement new or improved controls, or difficulties encountered in the implementation of such controls, could harm K Enter’s operating results, cause K Wave to fail to meet K Enter’s reporting obligations or result in material misstatements in K Enter’s financial statements. Any such failure could, in turn, affect the future ability of K Enter’s management to certify that K Enter’s internal control over financial reporting is effective. Ineffective internal control over financial reporting could also subject K Enter to the scrutiny of the SEC and other regulatory bodies which could cause investors to lose confidence in K Enter’s reported financial information and subject K Enter to civil or criminal penalties or shareholder litigation, which could have an adverse effect on the trading price of K Enter’s securities. In addition, if identify additional deficiencies in K Enter’s internal control over financial reporting, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in K Enter’s financial statements and harm K Wave’s share price. Furthermore, additional deficiencies could result in future non-compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Such non-compliance could subject K Enter to a variety of administrative sanctions, including review by the SEC or other regulatory authorities.

Play Company’s management has identified material weaknesses in Play Company’s internal control over financial reporting and Play Company may not be able to remediate these weaknesses. Additionally, Play Company’s management may identify material weaknesses in the future that could adversely affect investor confidence, impair the value of K Wave’s securities, and increase K Wave’s cost of raising capital.

There can be no assurance as to how quickly or effectively Play Company can remediate the material weaknesses in K Enter’s internal control over financial reporting or that additional material weaknesses will not be identified in the future. Any failure to remedy additional weaknesses or deficiencies in Play Company’s internal control over financial reporting that may be discovered in the future or to implement new or improved controls, or difficulties encountered in the implementation of such controls, could harm Play Company’s operating results, cause K Wave to fail to meet Play Company’s reporting obligations or result in material misstatements in Play Company’s financial statements. Any such failure could, in turn, affect the future ability of Play Company’s management to certify that Play Company’s internal control over financial reporting is effective. Ineffective internal control over financial reporting could also subject Play Company to the scrutiny of the SEC and other regulatory bodies which could cause investors to lose confidence in Play Company’s reported financial information and subject Play Company to civil or criminal penalties or shareholder litigation, which could have an adverse effect on the trading price of Play Company’s securities. In addition, if identify additional deficiencies in Play Company’s internal control over financial reporting, the disclosure of that fact, even if quickly remedied, could reduce the market’s confidence in Play Company’s financial statements and harm K Wave’s share price. Furthermore, additional deficiencies could result in future non-compliance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Such non-compliance could subject Play Company to a variety of administrative sanctions, including review by the SEC or other regulatory authorities.

The directors and officers of K Wave own 52.01% of K Wave’s Ordinary Shares following the closing of the Business Combination.

The directors and officers of K Wave beneficially own 33,128,623 Ordinary Shares representing 52.01% of K Wave following the closing of the Business Combination. Accordingly, following the closing of the Business Combination and directors and officers of K Wave, if they vote together as a group may be able to approve matters submitted to a vote of shareholders of K Wave provide such matter only requires a simple majority of K Wave shareholders to approve.

K Wave may face litigation and other risks as a result of the material weakness in its internal control over financial reporting.

As a result of (i) any potential material weakness in internal control over financial reporting arising out of the Business Combination, (ii) any changes made to accounting procedures with respect to K Wave’s business or those of its subsidiaries following the Business Combination, or (iii) other matters raised or that may in the future be raised by the SEC, K Wave may face potential for litigation or other disputes, including, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the Restatement and material weaknesses in K Wave’s internal control over financial reporting and the preparation of K Wave’s financial statements. As of the date of this prospectus, K Wave has no knowledge of any such litigation or dispute. However, K Wave can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on K Wave’s business, results of operations and financial condition.

You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because K Wave is incorporated under Cayman Islands law.

K Wave is an exempted company incorporated under the laws of the Cayman Islands. K Wave’s corporate affairs are governed by its memorandum and articles of association, the Companies Act (As Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against K Wave’s directors, actions by K Wave’s minority shareholders and the fiduciary duties of K Wave’s directors to K Wave under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of K Wave’s shareholders and the fiduciary duties of K Wave’s directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands have a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have standings to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like K Wave have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of lists of shareholders of these companies. K Wave’s directors have discretion under its articles of association to determine whether or not, and under what conditions, its corporate records may be inspected by its shareholders, but are not obliged to make them available to its shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

As a result of all of the above, K Wave’s public shareholders may have more difficulty in protecting their interests in the face of actions taken by K Wave’s management, users of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States.

Future changes to U.S. and non-U.S. tax laws could adversely affect K Wave.

The U.S. Congress and other government agencies in jurisdictions where K Wave and its affiliates will do business have had an extended focus on issues related to the taxation of multinational corporations. One example is in the area of “base erosion and profit shifting,” including situations where payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates. As a result, the tax laws in the countries in which K Wave and its affiliates do business could change on a prospective or retroactive basis, and any such changes could adversely affect K Wave and its affiliates.

Risk Factors Relating to K Enter’s Business, the Six Korean Entities’ Business, and K Wave’s Business

K Enter is a holding company with limited independent operations as a drama production studio in South Korea. K Enter acquired controlling interests in the Six Korean Entities. Specifically, K Enter acquired a controlling interest in the following companies: (1) Apeitda Co., Ltd, Bidangil Pictures Co., Ltd., The LAMP Co., Ltd., and Studio Anseilen Co., Ltd., each of which is in the content production business, (the “Production Companies”); (2) Play Company Co., Ltd., which is in the content merchandising business, (the “Merchandising Company”); and (3) Solaire Partner LLC, which is in content investment business, (the “Investment Company”). Following the closing of K Enter’s acquisition of the controlling interests in the Six Korean Entities, K Enter is referred to herein as “K Wave.”

K Enter does not have any operational history except for its newly formed drama production studio. Thus, the risks apply primarily to the Six Korean Entities that face these risks as well as future risks to K Wave.

After each risk factor set forth below in this section, K Wave has identified in a parenthetical the business category to which the risk factor is applicable. Specifically, for each risk factor K Wave has provided the applicable business category: K Enter, Production Companies, Merchandising Company, and Investment Company.

K Enter is a recently formed company with limited business operations of its own and has not generated any revenues to date. K Enter acquired controlling equity interests in the Six Korean Entities. Further, as K Enter has limited business operations of its own, it will depend primarily on the revenue and profits generated by the businesses of the Six Korean Entities in which it plans to acquire controlling interests. (K Enter)

K Enter was formed on January 4, 2023 and is a holding company which recently commenced operations as a drama production studio in South Korea. K Enter expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that K Enter will be able to generate the revenue necessary to support its cost structure or that it will be successful in obtaining the level of financing necessary for its operations. K Enter acquired a controlling interest in each of the Six Korean Entities.

There is a risk that K Enter will not be able to manage the Six Korean Entities or the regulatory compliance activities for each of the Six Korean Entities. K Enter cannot guarantee that K Enter will be able to keep abreast of the changing legal and regulatory landscapes for each of the jurisdictions in which K Enter and the Six Korean Entities are expected to operate. If K Enter fails to manage the Six Korean Entities or the applicable regulatory compliance matters for each of the Six Korean Entities, then K Wave’s business and financial results may be harmed.

Additionally, as a holding company, K Enter will rely on earning generated by the businesses of the Six Korean Entities for distributions or payments for cash flow. Therefore, K Wave’s ability to fund and conduct K Wave’s business, service any debt, and pay dividends, if any, in the future may depend on the ability of K Enter and the Six Korean Entities to make upstream cash distributions or payments to us, which may be impacted, for example, by their ability to generate sufficient cash flow or limitations on the ability to repatriate funds, whether as a result of currency liquidity restrictions, monetary or exchange controls, regulatory restrictions, or otherwise. Further, the Six Korean Entities’ ability to make payments to K Enter will depend on:

K Enter cannot assure that the operating results of K Enter’s planned subsidiaries at any given time will be sufficient to make distributions or other payments to us.

K Enter was formed to be an intellectual property (“IP”) entertainment company primarily through the acquisition, management, and development of companies in the entertainment business focusing on IP development and production, merchandising and IP ownership and investing and then moving into to other areas in the future such as virtualization and music. K Enter also created an in-house production company to develop, acquire and produce dramas and movies. To complement our existing portfolio and expand our influence, K Enter. actively pursues strategic partnerships, licensing agreements, and joint ventures within the entertainment industry. This allows us to access content development resources, studio facilities, and distribution channels apart from the six Korean entities. The objective of K Enter is to curate a portfolio of the best content.

Acquiring controlling stakes in the Six Korean Entities alongside the three core capabilities will form the cornerstone of our initial growth. Longer term, K Wave plans to actively pursue additional acquisitions, strategic partnerships, licensing agreements, and joint ventures within the entertainment industry. K Wave believe this strategy will allows it to access content development resources, studio facilities, and distribution channels apart from the Six Korean Entities and K Enter.

K Wave’s inability to pay scheduled cash payment to the current owner of Play Company that are due following the closing of the Business Combination could negatively affect the business of K Wave.

Pursuant to the share purchase agreement between K Enter and the current owner of Play Company, K Wave is required to make the following payments to the current owner of Play Company (i) 18.1 billion won (approximately $13.7 million by August 13, 2025, (ii) 9.05 billion won (approximately $6.87 million) by January 31, 2025 and (iii) 9.05 billion won (approximately $6.87 million) by January 31, 2026. The payment dates and other key terms of the foregoing obligations remain subject to further negotiation and may be amended pursuant to mutual agreement among the parties. If K Wave does not have the available cash to make the required payment to the current owner of Play Company, K Wave may be subject to certain risks under the share purchase agreement such as the possibility of litigation. Specifically, Section 7.5(8) of the Share Purchase Agreement provides following the Closing of the Share Purchase Agreement the right of the non-breaching party to claim damages against the breaching party shall be the sole and exclusive remedy available to the non-breaching party for any monetary claims arising out of the breaching parties actions. Additionally, Section 2.3 of the Share Purchase Agreement between the owner of Play Company and K Enter provides that, in the event K Enter fails to pay the Purchase Price when due, the Purchaser shall pay to the Seller a default interest on such unpaid amount as calculated at the rate of fifteen percent (15%) per annum for the period from the relevant due date until the day immediately preceding the date of actual payment. Accordingly, in the event K Wave fails to make the payments that are due to the current owner of Play Company following the Closing of the Share Purchase Agreement, K Wave may be subject to a lawsuit commenced by the current owner of Play Company for monetary damages, including default interest at the rate of fifteen percent (15%) per annum until such obligations are paid. Such a lawsuit and the damages that may be potentially awarded to the current owner of Play Company could have a material adverse impact on the financial condition and/or results of operations of K Wave.

Our Bitcoin-centric treasury strategy exposes us to significant market, regulatory, cybersecurity, and liquidity risks, which could materially and adversely affect our financial condition and results of operations.

We have adopted a digital asset treasury strategy centered on holding Bitcoin as a reserve asset. While we believe this strategy may enhance our financial flexibility and long-term value preservation, it also exposes us to numerous risks.

Bitcoin and other digital assets are highly volatile and have experienced extreme fluctuations in value. The market price of Bitcoin may decline for a variety of reasons, including changes in investor sentiment, technological developments, regulatory developments, macroeconomic factors, and other events. Significant volatility could have a material adverse effect on the value of our Bitcoin holdings and, as a result, our financial condition.

Moreover, Bitcoin is not legal tender in any jurisdiction, and regulatory frameworks governing digital assets remain uncertain and subject to rapid change. Governmental authorities may restrict or prohibit the use or possession of Bitcoin or impose new taxes or regulations that could adversely affect our ability to hold, transfer, or use Bitcoin.

There are also substantial risks related to cybersecurity and the safekeeping of digital assets. Any failure to safeguard our private keys or digital wallets, including through a third-party custodian, could result in the loss of all or a portion of our Bitcoin holdings. Additionally, Bitcoin is relatively illiquid compared to traditional fiat currencies. If we are unable to liquidate our holdings at favorable prices or within a desired timeframe, our liquidity and ability to meet capital needs or operational expenses could be negatively impacted.

Given the novelty and evolving nature of Bitcoin, we may be unable to accurately assess or manage the risks associated with our treasury strategy, which could lead to material adverse effects on our business, financial performance, and investor confidence.

Furthermore, by acquiring and holding Bitcoin, K Wave Media’s financial results will likely become highly sensitive to fluctuations in Bitcoin’s market price. A prolonged decline in Bitcoin prices could result in substantial impairment losses or erosion of capital. Bitcoin is also relatively less liquid compared to cash and may not serve as a source of immediate liquidity. Furthermore, our Bitcoin strategy may subject us to increased regulatory scrutiny. If future regulatory developments were to classify Bitcoin as a security, it could trigger our classification as an “investment company” under the Investment Company Act of 1940 — a designation that could adversely affect both our business operations and the market value of our securities.

Risk factors impacting K Wave (K Enter, Production Companies, Merchandising Company)

Competition within the broader entertainment industry may be intense and we expect that the Six Korean Entities’ existing and potential customers may be attracted to competing forms of entertainment, such as television, gaming and sporting events, as well as other entertainment options on the Internet. If the Six Korean Entities’ offerings may not be popular, K Wave’s business may be harmed. (K Enter, Production, Merchandising)

K Wave operates in the global motion pictures industry within the broader entertainment industry with K Wave’s mostly Korean offerings. K Wave’s customers face a vast array of entertainment choices. Other forms of entertainment, such as television, gaming, and sporting events, may be more well-established and may be perceived by post-acquisition K Wave’s customers to offer greater variety, affordability, interactivity and enjoyment. K Wave competes with these other forms of entertainment for the discretionary time and income of K Wave’s customers. If we are unable to sustain sufficient interest in the Six Korean Entities’ Korean entertainment offerings in comparison to other forms of entertainment, including new forms of entertainment, K Wave’s business model may not be viable.

The specific industries in which the Six Korean Entities operate may be characterized by dynamic customer demand and technological advances, and there may be intense competition among entertainment providers. A number of established, well-financed companies producing motion pictures, episodic content, or other relevant IPs and services may compete with the Six Korean Entities’ offerings, and other well-capitalized companies may introduce competitive IPs. Such competitors may spend more money and time on developing and testing content and services, undertake more extensive marketing campaigns, adopt more aggressive pricing or promotional policies or otherwise develop more commercially successful content or services than the Six Korean Entities’, which may negatively impact the Six Korean Entities’ business. The Six Korean Entities’ competitors may also develop content, features, or services that may be similar to theirs or that achieve greater market acceptance. Such competitors may also undertake more far-reaching and successful content development efforts or marketing campaigns, or may adopt more aggressive pricing policies. Furthermore, new competitors offering Korean motion pictures and episodic content may compete directly against the Six Korean Entities. There has also been considerable consolidation among competitors in the Korean entertainment industries and such consolidation and future consolidation may result in the formation of larger competitors with increased financial resources and altered cost structures, which may enable them to offer more competitive content, gain a larger market share, acquire the Six Korean Entities’ key partners, decrease cost per user acquisition, expand offerings and broaden their geographic scope of operations. If we are not able to maintain or improve the Six Korean Entities’ market share, or if their offerings may not be accepted by the markets in which we operate, we expect that K Wave’s business may suffer.

We expect that K Wave may experience substantial fluctuations in its operating results and growth rate. (K Enter, Production Companies, Investment and Merchandising Company)

We may not be able to accurately forecast post-acquisition K Wave’s growth rate in content IP development, investment and merchandizing. K Wave may base its expense levels and investment plans on sales estimates. A significant portion of the Six Korean Entities’ expenses and investments may be fixed, and we may not be able to adjust their spending quickly enough if their sales may be less than expected.

The Six Korean Entities revenue growth may not achieve our expectations. The Six Korean Entities’ revenue and operating profit growth may depend on the continued growth of demand for the content and services offered by the Six Korean Entities or their customers, and their business may be affected by general economic and business conditions worldwide. A softening of demand, whether caused by changes in customer preferences or a weakening of the Korea, U.S. or global economies, may result in decreased revenue or growth.

The Six Korean Entities’ sales and operating results for content merchandizing may also fluctuate for many other reasons, including due to risks described elsewhere in this section and the following:

The Six Korean Entities international operations in content production, content merchandizing and content investment expose us to a number of risks (K Enter, Production Companies, Merchandising Company).

The Six Korean Entities’ specializing operations (content production, content merchandizing and content investment) currently involve some level of international activities and efforts that we believe will be significant to post-acquisition K Wave’s revenues and profits, and we plan to further expand the Six Korean Entities’ international reach of those operations. However, while expanding into new international market segments, the Six Korean Entities may have relatively little operating experience in newly expanded segments and may not benefit from any first-to-market advantages or otherwise succeed in these segments. It may be costly to establish, develop, and maintain more committed international operations, and promote post-acquisition K Wave’s brand internationally. The post-acquisition K Wave’s international operations may not be profitable on a sustained basis due to the Six Korean Entities’ limited experience and knowledge in newly expanded segments.

In addition to risks described elsewhere in this section, we expect that the post-acquisition K Wave’s international sales and operations may be subject to a number of risks, including:

As international physical, e-commerce, and other services grow, competition may intensify, including through adoption of evolving business models. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. We may not be able to hire, train, retain, and manage required personnel, which may limit the post-acquisition K Wave’s international growth.

The Six Korean Entities’ technology, content and brands are subject to the threat of piracy, unauthorized copying and other forms of intellectual property infringement. (K Enter, Production Companies, Merchandising Company)

We regard the Six Korean Entities’ technology, content and brands as proprietary and take measures to protect their technology, content and brands and other confidential information from infringement. Piracy and other forms of unauthorized copying and use of the Six Korean Entities’ technology, content and brands may become persistent, and policing is difficult. Further, the laws of some countries in which the Six Korean Entities’ products are or may be distributed either do not protect the Six Korean Entities’ intellectual property rights to the same extent as the laws of the United States, or are poorly enforced. Legal protection of the Six Korean Entities’ rights may be ineffective in such countries. In addition, although we take steps to enforce and police the Six Korean Entities’ rights, factors such as the proliferation of technology designed to circumvent the protection measures used by the Six Korean Entities’ business partners or by us, the availability of broadband access to the Internet, the refusal of Internet service providers or platform holders to remove infringing content in certain instances, and the proliferation of online channels through which infringing product is distributed all have contributed to a general expansion in unauthorized copying of technology, content and brands.

We may not be able to prevent others from unauthorized use of the Six Korean Entities’ intellectual property, which we expect could harm K Wave’s business and competitive position. (K Enter, Production Companies, Merchandising Company)

K Enter, the Production Companies and the Merchandising Company are each engaged in the “IP content business,” which refers to a business that focuses on creating, managing, licensing, and monetizing intellectual property (IP) content such as TV shows, movies, dramas and music. At the heart of K Enter’s and the Production Companies content business is the creation of original content or the acquisition of rights to existing content from creators, artists, or other sources, such as films and TV shows that are valuable intellectual property. In the case of the Merchandising Company it involves the merchandise sales of IP Content based on a popular musicians, TV shows and movies. K Enter, the Production Companies and the Merchandising Company regard their IP, including copyrights, registered trademark and pending trademarks, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to K Wave’s success. The IP rights we expect K Wave to own upon the closing of the Business Combination are limited to the IP Content that is currently owned by the Apeitda and Bidangil, which are two of the Six Korean Entities.

Specifically, Bidangil owns 100% for the movies it produced: The Chaser, Forbidden Quest and The Showdown. For these works Bidangil owns the copyrights, the exploitation rights including distribution, sales, licensing, and remake rights as well as a certain percentage of the net profit share rights of these works. Bidangil also owns partial IP rights (noted in parentheses) to the following works it produced: The Scam (50%), A Werewolf Boy (40%), The Royal Tailor (40%), Perfect Proposal (40%), Phantom Detective (40%), and Resonance (50%). For these works both the copyrights and net profit share rights are maintained in the percentages noted in the parentheses. Likewise, Apeitda owns 100% of the intellectual property rights for the movie Action boys and 50% of the intellectual property rights for the movie Villainess. The significance of the intellectual property is that K Enter believes that holding the intellectual property rights of content will help increase K Wave’s revenues not just directly from content creation, but also from leveraging and exploiting that IP content across other mediums such as webtoons and additional revenue sources such as merchandising. In addition, securing the intellectual property rights will enable us to seek better distribution terms of our IP content, provide greater artistic freedom for the artists that work with K Wave and ultimately allow K Wave to secure better creators and content. The intellectual property rights relating to the merchandise produced and sold by Play Company are owned and retained by the respective K Pop agencies who contract with Play Company. We will rely on trademark law, trade secret protection and confidentiality and license agreements with K Wave’s employees and others to protect K Wave’s proprietary rights. One of the objectives of K Wave is to be able to own the intellectual property rights of the content it creates. K Enter is working towards this goal but as of now Six Korean Entities own limited intellectual property as noted above.

K Enter, the Production Companies and the Merchandising Company have invested significant resources to develop their IP content and acquire licenses and permissions to use and distribute the IP content of others. We believe that failure to maintain or protect these rights could harm K Wave’s business. In addition, any unauthorized use of the intellectual property owned by K Enter, the Production Companies and/or the Merchandising Company by third parties may adversely affect K Wave’s future revenues and reputation. The significance of the intellectual property is that K Wave believes that owning and exploiting IP of content will help increase our revenues not just directly from content creation but also from leveraging that IP across other mediums such as webtoons and additional revenue sources such as merchandising. In addition, securing the IP will enable K Wave to seek better distribution terms for its content, provide greater artistic freedom for the artists that work with K Wave and ultimately allow us to secure better creators of content as well as additional IP content.

Policing unauthorized use of proprietary technology is difficult and expensive. We expect to rely on a combination of copyright, trademark and trade secret laws and restrictions on disclosure to protect the intellectual property rights of K Enter, the Production Companies and the Merchandising Company. Further, K Wave plans to require every employee and consultant to execute proprietary information and invention agreements prior to commencing work. Despite such efforts there can be no assurances that K Wave will be able to adequately protect it IP content or other proprietary rights. Third parties may attempt to copy or otherwise obtain and use the IP content and intellectual property of K Enter, the Production Companies and the Merchandising Company or seek court declarations that their conduct does not infringe upon the IP content and intellectual property rights of K Enter, the Production Companies and the Merchandising Company. From time to time, K Wave may have to resort to litigation to enforce the IP content and intellectual property rights of K Enter, the Production Companies and the Merchandising Company, which could result in substantial costs and diversion of our resources.

Our quarterly and annual operating results after the business combination may fluctuate due to seasonality in the Six Korean Entities’ business. (K Enter, Production Companies, Merchandising Company)

The Six Korean Entities’ business may be subject to seasonal variations based on the timing of their IP content releases. Release dates may be determined by several factors, including the timing of holiday periods, geographical release dates and competition in the market, and more recently, the timing of release dates has been affected by the pandemic.

This seasonal pattern of business requires significant use of working capital, mainly to prepare inventory during the months prior to the holiday season, and requires accurate forecasting of demand for specific IP offerings during the holiday season in order to avoid losing potential sales of popular IP content offerings or producing excess inventory that may be less popular with consumers. The Six Korean Entities’ failure to accurately predict and respond to consumer demand, resulting in under producing popular IP offerings and/or overproducing less popular IP offerings, would reduce the Six Korean Entities’ total sales and harm their results of operations.

As a result of the seasonal nature of the Six Korean Entities’ business, we would be significantly and adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events such as a natural disaster, a terrorist attack, economic shock or pandemic that harms the retail environment or consumer buying patterns during the Six Korean Entities’ key selling season, or by events such as strikes or port delays or other supply chain challenges that interfere with the shipment of goods, particularly from the Far East, during the important months leading up to the holiday shopping season.

We may experience fluctuations in the Six Korean Entities’ operating results, which make their future results difficult to predict and may cause our operating results to fall below expectations. (K Enter, Production Companies, Merchandising Company)

We expect K Wave’s financial results to fluctuate in the future due to the nature of the Six Korean Entities’ business. These fluctuations may be due to a variety of factors, some of which may be outside of the Six Korean Entities’ control and may not fully reflect the underlying performance of their business.

For example, consumer engagement in the Six Korean Entities’ entertainment offerings may decline or fluctuate as a result of a number of factors, including the popularity of Korean culture, the customer’s taste in Asian movies, the Six Korean Entities’ ability to improve and innovate, outages and disruptions of online services, the services offered by the Six Korean Entities’ competitors, the Six Korean Entities’ marketing and advertising efforts or declines in consumer activity generally as a result of economic downturns, among others. Any decline or fluctuation in the recurring portion of the Six Korean Entities’ business may have a negative impact on our post-acquisition business, financial condition, results of operations or prospects.

We may be unable to maintain or acquire licenses or approvals to incorporate intellectual property owned by others in the Six Korean Entities’ IP content offerings. (K Enter, Production Companies, Merchandising Company)

The Six Korean Entities’ IP content offerings may incorporate intellectual property owned by others. Relatedly, content that we distribute across various platforms may incorporate motions pictures of K Wave’s associated parties and other third parties.

Additionally, the Six Korean Entities’ content offerings may incorporate motion pictures intellectual property owned by third parties. Exhibition of such content on different platforms, such as movie theatre or traditional media television or subscription video on demand platforms, may require additional licensing that may be difficult or costly to obtain. If the platforms on which content is distributed, redistributed and/or embedded change their policies relating to how content exhibited or published on the platform may be used, it may impact the Six Korean Entities’ ability to develop, distribute and exhibit engaging content and negatively impact their operations. If the Six Korean Entities are unable to maintain their licenses, rights and approvals or obtain additional licenses, rights and approvals with significant commercial value, their ability to develop successful and engaging IP content may be adversely affected and their operations may be negatively impacted.

The Six Korean Entities’ IP content and brand names may be subject to intellectual property infringement, including in jurisdictions that do not adequately protect brands and intellectual property rights. (K Enter, Production Companies, Merchandising Company)

We regard the Six Korean Entities’ brand, IP content and other intellectual property as proprietary and we expect to take measures to protect K Wave’s assets from infringement post-acquisition. We expect to be aware that potential unauthorized use of the Six Korean Entities’ brands and content may occur, and if a significantly greater amount were to occur, it may negatively impact K Wave’s business. Further, the Six Korean Entities’ IP content offerings may be available worldwide and the laws of some countries either do not protect their content, brands and intellectual property to the same extent as the laws of the U.S. or may be poorly enforced. Legal protection of the Six Korean Entities’ rights may be ineffective in countries with weaker intellectual property enforcement mechanisms. In addition, certain third parties may register the Six Korean Entities’ intellectual property rights without authorization in foreign countries. Successfully registering such intellectual property rights may limit or restrict the Six Korean Entities’ ability to offer content and services based on such rights in those countries. Although we take steps to enforce and police the Six Korean Entities’ rights, our practices and methodologies may not be effective against all eventualities.

As a producer, investor, and distributor of IP content, the Six Korean Entities may face liability and expenses for legal claims based on the nature and content of the materials that they create or distribute, including materials provided by third parties. If they are required to pay damages or expenses in connection with these legal claims, we expect that K Wave’s business and results of operations may be harmed. (K Enter, Production Companies, Merchandising Company)

We expect to display the Six Korean Entities’ and its original IP content and third-party IP content on K Wave’s websites and in its marketing materials. As a result, K Wave may face potential liabilities including, but not limited to, copyright or trademark infringements and content misuse. K Wave will generally rely on the “fair use” exception for K Wave’s use of third-party brand names and marks, but these third parties may disagree, and the laws governing the fair use of these third-party materials are imprecise and adjudicated on a case-by-case basis in Korea. The Six Korean Entities also produce IP content we believe to be original. While we do not believe that such IP content infringe on any third-party copyrights or other intellectual property rights, companies that adopt business models similar to us may take the position that some of our IP content infringe on their intellectual property rights. These claims could divert management time and attention away from K Wave’s business and result in significant costs to investigate and defend, regardless of the merit of these claims. The general liability insurance K Wave plans to maintain may not cover potential claims of this type or may not be adequate to indemnify K Wave for all liability that may be imposed. Any imposition of liability that is not covered by insurance, or is in excess of insurance coverage, could materially adversely affect K Wave business, financial condition and results of operations and the price of K Wave’s securities.

The Six Korean Entities’ dependence on third-party relationships with IP content producers and distribution channels to develop and distribute IP content is critical to the success of K Wave’s business. (K Enter, Production Companies, Merchandising Company)

K Wave plans to rely on the Six Korean Entities’ third-party relationships with Korean IP content producers and distribution channels to develop and distribute IP content. K Wave’s financial performance may be adversely affected by the Six Korean Entities’ relationships with content producers and distribution channels. Some of the Six Korean Entities’ content producers may have their own or other distribution capabilities in the markets in which they operate. These third-party content producers and distribution channels may decide, or be required by their respective parent companies, to use their intracompany distribution or content production capabilities rather than publishing such content with the Six Korean Entities. K Wave’s business may be harmed if the content producers and distribution channels with which the Six Korean Entities work stop or reduce the amount of content they produce for the Six Korean Entities, or otherwise demand less favorable terms to them.

Risk Factors Impacting K Wave (K Enter, Production Companies, Merchandising Company, Investment Company)

If the Six Korean Entities fails to respond to or capitalize on the rapid technological development in the video, music, gaming, and entertainment industry, including changes in entertainment delivery formats, K Wave’s business may be harmed. (K Enter, Production Companies, Merchandising Company, Investment Company)

The video, music, gaming, and entertainment industry continues to experience frequent change driven by technological development, including developments with respect to the formats through which music, films, television programming, games, and other content may be delivered to consumers. With rapid technological changes and expanded digital content offerings, the scale and scope of these changes have accelerated in recent years. For example, consumers may be increasingly accessing television, film and other episodic content on streaming and digital content networks, such as Netflix, Amazon Prime Video, Hulu, Disney+ and Apple TV+.

Many motion pictures and episodic content offerings have gone direct to streaming channels and not produced a physical content format. Direct release to streaming channels may be likely to continue. Technological as well as other changes caused by the pandemic may have caused significant disruption to the retail distribution of film and episodic content offerings and have caused and may in the future cause a negative impact on sales of K Wave’s content and other forms of monetization of content. K Wave may lose opportunities to capitalize on changing market dynamics, technological innovations or consumer tastes if the Six Korean Entities do not adapt its content offerings or distribution capabilities in a timely manner. The overall effect that technological development and new digital distribution platforms have on the revenue and profits the Six Korean Entities derive from their movie content, including from merchandise sales derived from such content, and the additional costs associated with changing markets, media platforms and technologies, may be unpredictable. If the Six Korean Entities fails to accurately assess and effectively respond to changes in technology and consumer behavior in the entertainment industry, the post-acquisition K Wave’s business may be harmed.

Failure to protect or enforce the Six Korean Entities’ intellectual property rights or the costs involved in such enforcement may harm K Wave’s business, financial condition and results of operations. (K Enter, Production Companies, Merchandising Company, Investment Company)

We expect K Wave to rely on trademark, copyright, patent, trade secret, and domain-name-protection laws to protect the Six Korean Entities’ proprietary rights. In Korea and internationally, the Six Korean Entities’ may have filed various applications to protect aspects of their intellectual property, and they may hold a number of issued IPs in multiple jurisdictions. K Wave may acquire additional companies or their portfolios, which may require significant cash expenditures. However, third parties may knowingly or unknowingly infringe the proprietary rights of K Wave’s subsidiaries, third parties may challenge proprietary rights held by K Wave’s operating subsidiaries, and pending and future trademark and patent applications may not be approved. In addition, effective intellectual property protection may not be available in every country in which the Six Korean Entities’ operates or intends to operate its business. In any of these cases, the Six Korean Entities may be required to expend significant time and expense to prevent infringement or to enforce their rights. There may be no assurance that others may not offer content or services that are substantially similar to the Six Korean Entities’ and compete with their business.

Circumstances outside the Six Korean Entities’ control may pose a threat to their intellectual property rights. For example, effective intellectual property protection may not be available in the United States or other countries from which the Six Korean Entities’ content offerings may be accessible. Also, the efforts the Six Korean Entities have taken to protect their proprietary rights may not be sufficient or effective. Any significant impairment of the Six Korean Entities’ intellectual property rights may harm their business or its ability to compete. Also, protecting the Six Korean Entities’ intellectual property rights may be costly and time-consuming. Any unauthorized disclosure or use of the Six Korean Entities’ intellectual property may make it more expensive to do business, thereby harming their operating results. Furthermore, if the Six Korean Entities are unable to protect their proprietary rights or prevent unauthorized use or appropriation by third parties, the value of the Six Korean Entities’ brand and other intangible assets may be diminished, and competitors may be able to more effectively mimic the Six Korean Entities’ offerings and services. The occurrence of any of these events may seriously harm K Wave’s business post-acquisition of the Six Korean Entities.

We face concentration risk within Play Company Co. Ltd. (K Enter, Merchandise Company)

Play Company faced concentration risk due to its historic reliance on HYBE Co., Ltd. (“HYBE”), as a major business partner in its merchandising business.

Historically, in 2021 and 2022, Play Company’s dependence on HYBE, a K-pop agency, accounted for 86% and 80% of the total revenues of Play Company. In 2024, Play Company’s dependency on HYBE decreased, and HYBE contribute approximately 18% of Play Company’s total revenues in 2024. Play Company recognizes the risks associated with this level of dependency and is actively working towards diversifying its revenue sources to mitigate these risks.

Play Company’s written agreement with Weverse Company Inc. provided for a term from September 28, 2022 to Feb. 5, 2023. Play Company’s written agreement with UMJ provided for a term from January 1 2022 to Dec. 31 2022. The formal, comprehensive agreement (producing, publishing, and distributing merchandise) between Play Company and HYBE has also expired. Since the second half of 2023, HYBE has revised its internal procedures regarding video publication production and distribution by separating production and distribution operations.

Play Company signed a distribution-only agreement with HYBE on March 19, 2024, for select products released in the first half of 2024. This agreement covered four specific products from artists TXT and ENHYPEN and was valid for one year (January 26, 2024, to January 25, 2025). Subsequently, Play Company engaged in negotiations with HYBE for a new agreement covering products scheduled for release in 2025. However, they were not successful.

On December 22, 2023 we entered into a new agreement with SM Entertainment Co., Ltd., a major K-pop agency, to create video merchandise for all of their artists. Revenues from SM Entertainment could take some years to build to the levels achieved by HYBE. A copy of a redacted version of Play Company’s agreement with SM Entertainment, dated December 12, 2023, is attached as Exhibit 10.57 to the Registration Statement on Form F-4/A filed by the Company with the SEC on December 23, 2024.

Play Company is committed to diversifying its revenue streams by reducing dependence on specific K-pop agencies or video publication products and continuously broadening its business scope

K Wave may be subject to risks related to online payment methods, including third-party payment processing-related risks. (K Enter, Merchandise Company)

We expect that K Wave will accept payments using a variety of methods, including ACH, bitcoin, wire transfers, credit card and debit cards. As K Wave offers new payment options to consumers, it may be subject to additional regulations, compliance requirements, fraud, and other risks. K Wave may also rely on third parties to provide payment processing services, and for certain payment methods, K Wave will pay interchange and other fees, which may increase over time and raise K Wave’s operating costs and affect ability to achieve or maintain profitability. K Wave may be also subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard, or PCI-DSS, and rules governing electronic funds transfers, which may change or be reinterpreted to make it difficult or impossible for K Wave to comply. If K Wave (or a third-party processing payment card transactions on K Wave’s behalf) suffer a security breach affecting payment card information, it may have to pay onerous and significant fines, penalties and assessments arising out of the major card brands’ rules and regulations, contractual indemnifications or liability contained in merchant agreements and similar contracts, and K Wave may lose its ability to accept payment cards for payment for its goods and services, which may materially impact K Wave’s operations and financial performance.

As K Wave’s business changes in the future, it may be subject to different rules under existing standards, which may require new assessments that involve costs above what Play Company currently pays for compliance. As K Wave offer new payment options to consumers, including by way of integrating emerging mobile and other payment methods, K Wave may be subject to additional regulations, compliance requirements and fraud. If K Wave fails to comply with the rules or requirements of any provider of a payment method it accepts, if the volume of fraud in K Wave’s transactions limits or terminates its rights to use payment methods we currently accept, or if a data breach occurs relating to K Wave’s payment systems, K Wave may, among other things, be subject to fines or higher transaction fees and may lose, or face restrictions placed upon, K Wave ability to accept credit card payments from consumers or facilitate other types of online payments.

The Six Korean Entities’ may occasionally receive orders placed with fraudulent data, and we expect that K Wave may ultimately be held liable for the unauthorized use of a cardholder’s card number in an illegal activity and be required by card issuers to pay charge-back fees. Charge-backs may result not only in K Wave’s loss of fees earned with respect to the payment, but also may leave us liable for the underlying money transfer amount. If K Wave’s charge-back rate becomes excessive, card associations also may require us to pay fines or refuse to process K Wave’s transactions. In addition, we may be subject to additional fraud risk if third-party service providers or K Wave’s employees fraudulently use consumer information for their own gain or facilitate the fraudulent use of such information. Overall, we may have little recourse if we process a criminally fraudulent transaction.

K Wave may not realize the anticipated benefits of acquisitions or investments in IP content, or those benefits may be delayed or reduced in their realization. (K Enter, Production Companies, Merchandising Company, Investment Company)

Acquisitions, investments and mechanizations in IP content may be crucial components of the expected growth and the development of K Wave’s business. Acquisitions may broaden and diversify K Wave’s brand holdings and content offerings may and allow K Wave to build additional capabilities and competencies.

K Wave cannot be certain that the IP content it may acquire, or acquire an interest in, may achieve or maintain popularity with consumers in the future or that any such acquisitions or investments may allow K Wave to more effectively market its brands, develop its competencies or grow its business. In some cases, K Wave expects that the integration of the Six Korean Entities that K Wave plans to acquire and incorporate into its operations may create development, marketing and other operating, revenue or cost synergies which may produce greater revenue growth and profitability and, where applicable, cost savings, operating efficiencies and other advantages. However, K Wave cannot be certain that these synergies, efficiencies and cost savings will be realized. Even if achieved, these benefits may be delayed or reduced in their realization. In other cases, K Wave may acquire or invest in IP that it believes to have strong and creative management, in which case K Wave may plan to operate them more autonomously rather than fully integrating them into its operations. K Wave may not be certain that the key talented individuals who own such IP content would continue to work for K Wave after the acquisition or that they would develop popular and profitable content, entertainment or services in the future. K Wave cannot guarantee that any acquisition or investment it may make will be successful or beneficial, and such acquisitions may consume significant amounts of management attention and other resources, which may negatively impact other aspects of K Wave’s business.

K Wave will face competition and if it is unable to compete effectively with existing or new competitors, K Wave’s revenues, market share and profitability may not achieve its expectations. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave has many competitors in the motion picture and broader entertainment industry. Some of the current and potential competitors have greater resources, longer histories, more customers, and/or greater brand recognition than K Wave, Such competitors may secure better IP content deals, adopt more aggressive marketing, and devote more resources to technology, infrastructure, content delivery, and other areas. K Wave competes in Korea and internationally with a wide array of large and small IP content development, IP content investment firms, virtual IP content production companies and movie studios. In addition, K Wave competes with companies who may be focused on building their brands across multiple consumer categories, including through entertainment offerings other than motion pictures and episodic content. Across K Wave’s business, it face competitors who may be constantly monitoring and attempting to anticipate consumer tastes and trends, seeking content which may appeal to consumers, and introducing new content that compete with K Wave’s content for consumer acceptance and purchase.

Competition may intensify, including with the development of new business models and the entry of new and well-funded competitors, and as K Wave’s competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with K Wave’s business. In addition, new and enhanced technologies, including search, digital content, and electronic devices, may increase K Wave’s competition. The Internet may facilitate competitive entry and content offerings comparison, and increased competition may reduce K Wave’s business profits.

K Wave’s expansion into new IP content offerings, services, technologies, and geographic regions subjects K Wave to additional business, legal, financial, and competitive risks. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave may have limited or no relevant expertise in its future IP content development and merchandizing, and it customers may not adopt to K Wave’s IP content offerings. These offerings may present new and difficult technology and content delivery challenges, and K Wave may be subject to claims if customers of these offerings experience service disruptions or failures or other quality issues. In addition, profitability, if any, in K Wave’s newer business activities may be lower than in its existing activities, and K Wave may not be successful enough in these newer activities to recoup its investments in them. If any of this were to occur, it may damage K Wave’s reputation, limit its growth, and negatively affect K Wave’s results from operations.

Misalignment with public and consumer tastes and preferences for entertainment offerings may negatively impact demand for K Wave’s IP content, which may have an adverse effect on K Wave’s business, financial condition, results of operations and prospects. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave plans to develop, invest in, and merchandize entertainment content, the success of which may depend substantially on consumer interests and preferences that frequently change in unpredictable ways. The success of K Wave’s business may depend on its ability to consistently create popular content, and to engage popular talent, that may meet the changing preferences of the broad consumer market and may respond to competition from an expanding array of entertainment choices facilitated by technological developments in the availability and delivery of digital content. Misalignment of K Wave’s IP content if K Wave may not be successful in responding to rapidly changing public and consumer tastes and preferences, may impact demand for K Wave’s IP content offerings and its business, financial condition, results of operations and prospects may be materially affected.

Inflation may cause K Wave’s investment and development costs as well as operating and administrative expenses to grow more rapidly than net sales, which may result in lower gross margins and lower net earnings (K Enter, Production Companies, Merchandising Company, Investment Company)

Market variables, such as inflation of labor rates and fuel, freight and energy costs, across multiple geographic regions, have and may continue to increase potentially causing K Wave to be unable to efficiently manage its development costs and operating and administrative expenses in a way that would enable K Wave to leverage its revenue growth into higher net earnings. In addition, K Wave’s inability to pass on such increases in development costs to the consumers in a timely manner, or at all, may cause K Wave’s operating and administrative expenses to grow, which may result in lower gross profit margins and lower net earnings.

The current inflation levels have not materially impacted K Wave’s day-to-day operations. However, inflation affects the cost of production and demand for K Wave’s merchandise products, film and drama and food and beverage segment (the smallest segment). K Wave competes with limited consumer and teenager’s budgets for entertainment and K Pop merchandise goods.

K Pop video merchandise customers are the least price sensitive among K Wave’s clientele. K Wave’s merchandise is purchased by fans who are very loyal to their artists, and this results in a lower price elasticity. K Wave believes that product sales volume is driven by product quality that meets the needs of fans and the timely release of these goods.

In the case for film production, inflation impacts K Wave’s break-even point. Higher movie ticket prices and lower consumer disposable income also lowers demand. The main customers of dramas are broadcasting companies and Over-the-Top or OTT companies, and although production costs are increasing due to inflation K Wave believes these firms have been willing to invest in high-quality content.

The food and beverage segment is particularly sensitive to inflation with rising material costs and wages directly impacting K Wave’s costs. Consumers with lower disposable income and intense competition in the market makes it more difficult to pass on the increased costs to K Wave’s customers.

Weakness in the economy, market trends and other conditions affecting the profitability and financial stability of K Wave’s expected consumers may negatively impact K Wave’s expected sales growth and results of operations. (K Enter, Production Companies, Merchandising Company, Investment Company)

Economic, political and industry trends will affect K Wave’s business environments. We expect that K Wave will serve an industry in which the demand for its content and services may be sensitive to the production activity, capital spending and demand for content and services of K Wave’s customers. Some of these customers (including distributors) operate in markets that maybe subject to cyclical fluctuations resulting from market uncertainty, trade and tariff policies, costs of goods sold, currency exchange rates, central bank interest rate fluctuations, economic downturns, recessions, foreign competition, offshoring of production, oil and natural gas prices, geopolitical developments, labor shortages, inflation, natural or human induced disasters, extreme weather, outbreaks of pandemic disease such as the COVID-19 pandemic, inflation, deflation, and a variety of other factors beyond our control. Any of these factors may cause customers to idle, delay purchases, reduce wholesale purchasing levels, or experience reductions in the demand.

Any of these events may also reduce the volume of content and services these customers purchase from K Wave or impair the ability of K Wave’s customers to make full and timely payments and may cause increased pressure on K Wave’s selling prices and terms of sale.

K Wave’s expansions may place a strain on its management, operational, financial, and other resources. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s business may plan on operations of expansions, including increasing K Wave’s IP acquisitions, service offerings and scaling K Wave’s infrastructure to support its IP merchandizing businesses. This expansion may increase the complexity of K Wave’s business and may place strain on K Wave’s management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. K Wave may not be able to manage growth effectively, which may damage K Wave’s reputation, limit its growth, and negatively affect K Wave’s operating results.

Consumer interests change rapidly and acceptance of K Wave’s IP content offerings may be influenced by factors beyond K Wave’s control. (K Enter, Production Companies, Merchandising Company, Investment Company)

The interests of families, individuals, fans and audiences evolve extremely quickly and may change from year to year and by geography. To be successful, K Wave plans to correctly anticipate the types of IP content patterns which may capture consumers’ interests and imagination, and quickly develop and introduce innovative IP offerings which may compete successfully for consumers’ limited time, attention and spending. This challenge may be more difficult with the ever-increasing utilization of technology, social media and digital media in entertainment offerings, and the increasing breadth of entertainment available to consumers. Evolving consumer tastes and shifting interests, coupled with an ever-changing and expanding pipeline of entertainment and consumer properties and content which compete for consumer interest and acceptance, create an environment in which some content offerings may fail to achieve consumer acceptance, and other IP content offerings may be popular during a certain period of time but then be rapidly replaced. As a result, K Wave’s IP content offerings may have short consumer life cycles.

Consumer acceptance of K Wave’s or its partners’ entertainment offerings may be also affected by outside factors, such as reviews, promotions, the quality and acceptance of films and television programs, music, video games, and content released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and public tastes generally, all of which may change rapidly and most of which may be beyond K Wave’s control. There may be no assurance that television programs and films, video games, video movies K Wave distributes may obtain favorable reviews or ratings, that films, video games, video movies K Wave distributes may be popular with consumers and perform well in K Wave’s distribution channels.

If K Wave devotes time and resources to distributing and marketing content that consumers do not accept or do not find interesting enough to buy in sufficient quantities to be profitable to K Wave, K Wave’s revenues and profits may decline, and K Wave’s business performance may be harmed. Similarly, if K Wave’s IP offerings fail to correctly anticipate consumer interests, K Wave’s revenues and earnings may be reduced.

Failure to successfully operate K Wave’s information systems and implement new technology effectively may disrupt K Wave’s business or reduce K Wave’s sales or profitability. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave may rely on various information technology systems and software applications to manage many aspects of its businesses, including content development, communications with K Wave’s affiliates and partners, sale and delivery of K Wave’s K Wave K Wave K Wave content, royalty and financial reporting and various other processes and transactions. K Wave may be dependent on the integrity, security and consistent operations of these systems and related back-up systems. These systems may be subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other cybersecurity breaches, catastrophic events such as hurricanes, fires, floods, earthquakes, tornadoes, acts of war or terrorism and usage errors by K Wave’s employees or partners. The efficient operation and successful growth of K Wave’s business may depend on these information systems, including K Wave’s K Wave ability to operate them effectively and to select and implement appropriate upgrades or new technologies and systems and adequate disaster recovery systems successfully. The failure of K Wave’s information systems or third-party hosted technology to perform as designed or K Wave’s failure to implement and operate them effectively may disrupt K Wave’s business, require significant capital investments to remediate a problem or subject K Wave to liability.

The products and internal systems of the Six Korean Entities that K Wave acquired, rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in K Wave’s systems, could adversely affect K Wave’s business. (K Enter, Production Companies, Merchandising Company, Investment Company)

The Six Korean Entities’ products and internal systems rely on software and hardware, including software and hardware developed or maintained internally and/or by third parties, that is highly technical and complex. In addition, the Six Korean Entities’ products and internal systems depend on the ability of such software and hardware to store, retrieve, process, and manage immense amounts of data. The software and hardware on which they rely upon may contain, and will in the future may further contain, errors, bugs, or vulnerabilities, and their systems are subject to certain technical limitations that may compromise the Six Korean Entities’ ability to meet their objectives. Some errors, bugs, or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which the Six Korean Entities rely upon have in the past led to, and may in the future lead to, outcomes including a negative experience for users and marketers who use their products, compromised ability of the Six Korean Entities’ products to perform in a manner consistent with their terms, contracts, or policies, delayed product introductions or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data of the Six Korean Entities’ users and/or their intellectual property or other data, or reductions in the Six Korean Entities’ ability to provide some or all of their services. For example, the Six Korean Entities make commitments to their users as to how their data will be used within and across products, and the Six Korean Entities’ systems are subject to errors, bugs and technical limitations that may prevent them from fulfilling these commitments reliably. In addition, any errors, bugs, vulnerabilities, or defects in K Wave’s systems or the software and hardware on which K Wave relies, failures to properly address or mitigate the technical limitations in the Six Korean Entities’ systems, or associated degradations or interruptions of service or failures to fulfil commitments to their users may in the future lead to outcomes including damage to our reputation, loss of users, loss of marketers, loss of revenue, regulatory inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect the post-acquisition K Wave’s business and financial results.

If K Wave’s electronic data is compromised, K Wave’s business may be significantly harmed. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave and its subsidiaries may maintain significant amounts of data electronically in locations around the United States and in the cloud. This data may relate to all aspects of K Wave’s business, including the Six Korean Entities’ and post-acquisition K Wave’s content under development, and also may contain certain customer, consumer, supplier, partner and employee data. K Wave may maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there may be a risk of intrusion, cyber-attacks or tampering that may compromise the integrity and privacy of this data. Cyber-attacks may be increasing in their frequency, sophistication and intensity, and may be becoming increasingly difficult to detect. They may be often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Cyber-attacks may include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of the Six Korean Entities’ and K Wave’s technology systems and data. Cyber-attacks may also include information system attacks, which may cause a delay in the development, investment and distribution of K Wave’s IP content. In addition, we expect that the K Wave may provide confidential and proprietary information to its and the Six Korean Entities’ third-party business partners in certain cases where doing so may be necessary to conduct K Wave’s business. While K Wave obtains assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they may take steps to assure the protections of such data by third parties, those partners may also be subject to data intrusion or otherwise compromise the protection of such data. Any compromise of the confidential data of K Wave’s customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of K Wave’s information technology systems or other means may substantially disrupt K Wave’s operations, harm K Wave’s customers, consumers, employees and other business partners, damage K Wave’s reputation, violate applicable laws and regulations, subject K Wave to potentially significant costs and liabilities and may result in a loss of business that may be material.

K Wave’s failure to raise additional capital or generate cash flows necessary to expand its operations and invest in the future which may reduce K Wave’s ability to compete successfully and adversely affect K Wave’s results of operations. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave may need to raise additional funds following the closing of the Business Combination, and K Wave may not be able to obtain additional debt or equity financing on favorable terms or at all. If K Wave raises additional equity financing, you may experience significant dilution of your ownership interests. If K Wave raises additional debt financing, K Wave may be required to accept terms that restrict K Wave’s ability to incur additional indebtedness, may force K Wave to maintain specified liquidity or other ratios or may restrict K Wave’s ability to pay dividends or make acquisitions. If K Wave needs additional capital and may not raise it on acceptable terms, or at all, K Wave may not be able to, among other things:

We expect K Wave will face risks related to health epidemics and other widespread outbreaks of contagious disease, which may disrupt K Wave’s expected operations and impact its expected operating results. (K Enter, Production Companies, Merchandising Company, Investment Company)

Significant outbreaks of contagious diseases, and other adverse public health developments, may have a material impact on K Wave’s business operations and operating results. Since the global outbreak of COVID-19, nearly every country has throughout the world have been affected by the spread of the virus, including Korea and the United States, and has implemented various emergency measures to contain the virus outbreak, including travel restrictions, restrictions on public gatherings and required in-home quarantine. As K Wave has a presence in these locations, these measures may affect the health of K Wave’s employee and ability to travel and work remotely.

Moreover, during and since the Covid-19 pandemic, the film exhibition industry has suffered from a decline in attendance in revenues and attendance as well as delays in film production. In this environment, some high budget movies have failed to recoup production and distribution costs. K Wave cannot predict how the Covid-19 pandemic or other pandemics may impact K Wave’s operations and financial results.

Economic downturns and political and market conditions beyond K Wave’s control may adversely affect K Wave’s business, financial condition and results of operations. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s financial performance may be subject to global, Korea and U.S. economic conditions and their impact on levels of spending by customers and advertisers. Economic recessions may have had, and may continue to have, far reaching adverse consequences across many industries, including the global entertainment and movie industries, which may adversely affect K Wave’s business and financial condition. Due to international trade and monetary policy and other changes, there may appear to be an increasing risk of a recession. If the national and international economic recovery slows or stalls, these economies may experience another recession or any of the relevant regional or local economies suffers a downturn, K Wave may experience a material adverse effect on K Wave’s business, financial condition, results of operations or prospects.

In addition, changes in general market, economic and political conditions in domestic and foreign economies or financial markets, including fluctuation in stock markets resulting from, among other things, trends in the economy as a whole may reduce customers’ disposable income. Any one of these changes may have a material adverse effect on K Wave’s business, financial condition, results of operations or prospects.

Reductions in discretionary consumer spending may have an adverse effect on K Wave’s business, financial condition, results of operations and prospects. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s expected business may be particularly sensitive to reductions from time to time in discretionary consumer spending. Demand for entertainment and leisure activities, including movies and TV series, may be affected by changes in the economy and consumer tastes, both of which may be difficult to predict and beyond K Wave’s control. Unfavorable changes in general economic conditions, including recessions, economic slowdowns, sustained high levels of unemployment, and rising prices or the perception by consumers of weak or weakening economic conditions, may reduce K Wave’s customers’ disposable income or result in fewer individuals engaging in entertainment and leisure activities, such as movie going or online streaming. As a result, K Wave may not ensure that demand for future offerings may remain constant. Adverse developments affecting economies throughout the world, including a general tightening of availability of credit, decreased liquidity in certain financial markets, increased interest rates, foreign exchange fluctuations, increased energy costs, acts of war or terrorism, transportation disruptions, natural disasters, declining consumer confidence, sustained high levels of unemployment or significant declines in stock markets, as well as concerns regarding pandemics, epidemics and the spread of contagious diseases may lead to a further reduction in discretionary spending on leisure activities, such as movie going or online streaming. Any significant or prolonged decrease in consumer spending on entertainment or leisure activities may adversely affect the demand for K Wave’s expected offerings, reducing K Wave’s expected cash flows and revenues, and thereby materially harming K Wave’s expected business, financial condition, results of operations and prospects.

Changes in foreign currency exchange rates may significantly impact K Wave’s expected reported financial performance. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s expected global operations mean it will transact business in many different jurisdictions with many different currencies. As a result, if the exchange rate between the U.S. dollar and a local currency for an international market in which K Wave has significant sales or operations changes, K Wave’s financial results as reported in U.S. dollars, may be meaningfully impacted even if K Wave’s business in the local currency is not significantly affected. Similarly, K Wave’s expenses may be significantly impacted, in U.S. dollar terms, by exchange rates, meaning the profitability of K Wave’s business in U.S. dollar terms may be negatively impacted by exchange rate movements which K Wave does not control. Depreciation in key currencies may have a significant negative impact on K Wave’s revenues and earnings as they may be reported in U.S. dollars.

The Six Korean Entities’ business involves risks of liability claims for media content, which may adversely affect their business, results of operations and financial condition. (K Enter, Production Companies, Merchandising Company, Investment Company)

As a developer, investor and distributor of media content, K Wave may face potential liability for defamation, invasion of privacy, negligence, copyright or trademark infringement, and other claims based on the nature and content of the materials distributed. These types of claims have been brought, sometimes successfully, against producers and distributors of media content. Any imposition of liability that may be not covered by insurance or may be in excess of insurance coverage may have a material adverse effect on K Wave’s business, results of operation and financial condition.

The Six Korean Entities’ relies on information technology and other systems and platforms, and any failures, errors, defects or disruptions in their systems or platforms may diminish K Wave’s brand and reputation, subject K Wave to liability, disrupt its business, affect its ability to scale technical infrastructure and adversely affect its operating results and growth prospects. K Wave’s IP content and other software applications and systems, and the third-party platforms upon which they may be made available may contain undetected errors. (K Enter, Production Companies, Merchandising Company, Investment Company)

The Six Korean Entities’ technology infrastructure may be important to the performance of their offerings and to customer satisfaction. K Wave will devote resources to network and data security to protect the Six Korean Entities’ systems and data. However, K Wave’s systems may not be designed with the necessary reliability and redundancy to avoid performance delays or outages that may be harmful to the Six Korean Entities’ business. We may not assure you that the measures K Wave will take to prevent or hinder cyber-attacks and protect K Wave’s systems, data and customer information and to prevent outages, data or information loss, fraud and to prevent or detect security breaches, including a disaster recovery strategy for server and equipment failure and back-office systems and the use of third parties for certain cybersecurity services, may provide absolute security. We may in the future experience website disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. To date, the Six Korean Entities have not had a material impact from such disruptions; however, future disruptions from unauthorized access to, fraudulent manipulation of, or tampering with their computer systems and technological infrastructure, or those of third parties, may result in a wide range of negative outcomes, each of which may materially adversely affect their business, financial condition, results of operations and prospects. Additionally, the Six Korean Entities’ content may contain errors, bugs, flaws or corrupted data, and these defects may only become apparent after their launch. If a particular content offering may be unavailable when customers attempt to access it or navigation through platforms may be slower than they expect, customers may be less likely to return to the Six Korean Entities’ content as often, if at all. Furthermore, programming errors, defects and data corruption may disrupt the Six Korean Entities’ operations, may adversely affect the experience of the Six Korean Entities’ customers, harm the Six Korean Entities’ reputation, cause the Six Korean Entities’ customers to stop utilizing their platforms, divert the Six Korean Entities’ resources and delay market acceptance of their offerings, any of which may result in legal liability to the Six Korean Entities, harm their business, financial condition, results of operations and prospects.

If the Six Korean Entities’ customer base and engagement continue to grow, and the amount and types of offerings continue to grow and evolve, the Six Korean Entities may need an increasing amount of technical infrastructure, including network capacity and computing power, to continue to satisfy the Six Korean Entities’ customers’ needs. Such infrastructure expansion may be complex, and unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or interruptions in the delivery or degradation of the quality of the Six Korean Entities’ offerings. In addition, there may be issues related to this infrastructure that may be not identified during the testing phases of design and implementation, which may only become evident after the Six Korean Entities’ has started to fully use the underlying equipment or software, that may further degrade the customer experience or increase their costs. As such, K Wave may fail to continue to effectively scale and grow its technical infrastructure to accommodate increased demands. In addition, the post-acquisition K Wave’s business may be subject to interruptions, delays or failures resulting from adverse weather conditions, other natural disasters, power loss, terrorism, cyber-attacks, public health emergencies (such as COVID-19) or other catastrophic events. We believe that if K Wave’s customers have a negative experience with is content offerings, or if K Wave’s brand or reputation may be negatively affected, customers may be less inclined to continue or resume enjoying its content or recommend its content to other potential customers. As such, a failure or significant interruption in K Wave’s service may harm its reputation, business and operating results.

Despite the Six Korean Entities’ security measures, their information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach may compromise Six Korean Entities’ networks and the information stored there may be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information may result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties, disruption of Six Korean Entities’ operations and the services they provides to customers, damage to K Wave’s reputation, and a loss of confidence in K Wave’s content and services, which may adversely affect K Wave’s business. (K Enter, Production Companies, Merchandising Company, Investment Company)

The secure maintenance and transmission of customer information will be an important element of K Wave’s operations. The Six Korean Entities’ information technology and other systems that maintain and transmit customer information, or those of service providers, business partners or employee information may be compromised by a malicious third-party penetration of K Wave’s network security, or that of a third-party service provider or business partner, or impacted by intentional or unintentional actions or inactions by their employees, or those of a third-party service provider or business partner. As a result, the Six Korean Entities’ customers’ information may be lost, disclosed, accessed or taken without their customers’ consent. K Wave and its Korean subsidiaries may not provide assurance that they may not experience any cyberattacks in the future and such cyberattacks may have a material impact on K Wave’s operations or financial results.

The Six Korean Entities rely on encryption and authentication technology licensed from third parties in an effort to securely transmit confidential and sensitive information, including credit card numbers. Advances in computer capabilities, new technological discoveries or other developments may result in the whole or partial failure of this technology to protect transaction data or other confidential and sensitive information from being breached or compromised. In addition, websites may be often attacked through compromised credentials, including those obtained through phishing and credential stuffing. The Six Korean Entities’ security measures, and those of their third-party service providers, may not detect or prevent all attempts to breach the Six Korean Entities’ systems, denial-of-service attacks, viruses, malicious software, break-ins, phishing attacks, social engineering, security breaches or other attacks and similar disruptions that may jeopardize the security of information stored in or transmitted by their websites, networks and systems or that they or such third parties otherwise maintain, including payment card systems, which may subject the Six Korean Entities or K Wave to fines or higher transaction fees or limit or terminate their access to certain payment methods. K Wave, its Korean subsidiaries and such third parties may not anticipate or prevent all types of attacks until after they have already been launched. Further, techniques used to obtain unauthorized access to or sabotage systems change frequently and may not be known until launched against them or their third-party service providers.

In addition, security breaches may also occur as a result of non-technical issues, including intentional or inadvertent breaches by K Wave’s employees or by third parties. These risks may increase over time as the complexity and number of technical systems and applications K Wave uses also increases. Breaches of K Wave’s security measures or those of K Wave’s third-party service providers or cybersecurity incidents may result in unauthorized access to K Wave’s sites, networks and systems; unauthorized access to and misappropriation of customer information, including customers’ personally identifiable information, or other confidential or proprietary information of ourselves or third parties; viruses, worms, spyware or other malware being served from K Wave’s sites, networks or systems; deletion or modification of content or the display of unauthorized content on K Wave’s sites; interruption, disruption or malfunction of operations; costs relating to breach remediation, deployment of additional personnel and protection technologies, response to governmental investigations and media inquiries and coverage; engagement of third-party experts and consultants; litigation, regulatory action and other potential liabilities. If any of these breaches of security should occur and be material, K Wave’s reputation and brand may be damaged, K Wave’s business may suffer, K Wave may be required to expend significant capital and other resources to alleviate problems caused by such breaches, and K Wave may be exposed to a risk of loss, litigation or regulatory action and possible liability. K Wave may not guarantee that recovery protocols and backup systems may be sufficient to prevent data loss. Actual or anticipated attacks may cause K Wave to incur increasing costs, including costs to deploy additional personnel and protection technologies, train employees and engage third-party experts and consultants.

In addition, any party who may be able to illicitly obtain a customer’s password may access the customer’s transaction data or personal information, resulting in the perception that K Wave’s systems may be insecure. Any compromise or breach of K Wave’s security measures, or those of K Wave’s third-party service providers, may violate applicable privacy, data protection, data security, network and information systems security and other laws and cause significant legal and financial exposure, adverse publicity and a loss of confidence in K Wave’s security measures, which may have a material adverse effect on K Wave’s business, financial condition, results of operations and prospects.

K Wave addresses cyber security risks and plan to strengthen K Wave’s security by working with an IT consulting firm to mitigate potential security breaches of customer information, business partners and employee information. Breaches at third-party providers can also directly impact us. K Wave is bolstering in-house capabilities and risk management measures including data backup and recovery, investment in advanced technologies but also recognize the need to leverage the expertise of cybersecurity professionals. K Wave plans to evaluate K Wave’s consultant’s recommendations regarding assessing, identifying, and mitigating these risks to develop a comprehensive plan to manage cybersecurity risks. K Wave plans to keep the board informed of these discussions, the implementation plan and proactively engage with them on K Wave’s cybersecurity efforts.

K Wave’s data is stored both in the U.S. and in Korea and K Wave will maintain security to ensure the continued integrity of K Wave’s business operation while weighing costs and the need to minimize potential impacts to K Wave’s business.

The Six Korean Entities rely on third-party service providers with respect to their platforms and to deliver their offerings to customers on their platforms, and any disruption of or interference with their use of such services may adversely affect K Wave’s business, financial condition, results of operations and prospects. (K Enter, Production Companies, Merchandising Company, Investment Company)

The Six Korean Entities currently maintain and support their operations using private cloud infrastructure, which may be built using third-party platform and data center providers. In addition, as we expect K Wave to enter new jurisdictions, K Wave may rely on third-party providers of cloud infrastructure services. K Wave may not have control over the operations of the facilities or infrastructure of any third-party service providers, including third-party platform providers, that K Wave expect to use. Such third parties’ facilities may be vulnerable to damage or interruption from natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct. K Wave’s platform’s continuing and uninterrupted performance may be important to K Wave’s success. We expect that in K Wave will experience interruptions, delays and outages in service and availability from these third-party service providers from time to time due to a variety of factors, including infrastructure changes, human or software errors, website hosting disruptions and capacity constraints. In addition, any changes in these third parties’ service levels may adversely affect K Wave’s ability to meet the requirements of K Wave’s customers. As K Wave’s platform’s continuing and uninterrupted performance may be important to its success, sustained or repeated system failures would reduce the attractiveness of K Wave’s offerings. It may become increasingly difficult to maintain and improve K Wave’s performance, especially during peak usage times, as K Wave expands and the usage of K Wave’s offerings increases.

In the event that any of the Six Korean Entities’ agreements with these third-party service providers may be terminated, K Wave may experience significant costs or downtime in connection with the transfer to, or the addition of, new platform providers, data site providers or cloud infrastructure service providers. Although alternative providers may host K Wave’s platform on a substantially similar basis, such transition may potentially be disruptive and K Wave may incur significant one-time costs.

Any of the above circumstances or events may harm K Wave’s reputation and brand, reduce the availability or usage of K Wave’s platform, lead to a significant loss of revenue, increase K Wave’s costs and impair K Wave’s ability to attract new customers, any of which may adversely affect K Wave’s business, financial condition and results of operations.

K Wave plans to have a significant level of operations outside of the United States, which subjects K Wave to additional costs and risks that may adversely affect its operating results. (K Enter, Production Companies, Merchandising Company, Investment Company)

We expect a significant portion of K Wave’s operations will be located in Korea.

Compliance with Korean and U.S. laws and regulations that apply to K Wave’s international operations may increase K Wave’s cost of doing business. As a result of K Wave’s international operations, K Wave may be subject to a variety of risks and challenges in managing an organization operating in various countries, including those related to:

If K Wave is unable to expand or manage K Wave’s existing development operations, K Wave may not realize, in whole or in part, the anticipated business projections, which in turn may materially adversely affect K Wave’s business, financial condition, and results of operations.

K Wave expects, from time to time, to be subject to various legal proceedings which, if adversely determined, may cause K Wave to incur substantial losses. An adverse outcome in one or more of such proceedings may adversely affect K Wave’s business. (K Enter, Production Companies, Merchandising Company, Investment Company)

From time to time, during the normal course of operating K Wave’s business, K Wave may be subject to various legal proceedings. Because K Wave may not accurately predict the outcome of any action, it may be possible that, as a result of current and/or future litigation, K Wave may be subject to adverse judgments or settlements, some of which may not be covered under K Wave’s insurance policies. Any litigation to which K Wave may be a party may result in an onerous or unfavorable judgment that may not be reversed upon appeal, or in payments of substantial monetary damages or fines, the posting of bonds requiring significant collateral, letters of credit or similar instruments, or K Wave may decide to settle lawsuits on similarly unfavorable terms. These proceedings may also result in reputational harm, criminal sanctions, consent decrees or orders preventing K Wave from offering certain content or requiring a change in K Wave’s business practices in costly ways or requiring development of non-infringing or otherwise altered content. Litigation and other claims and regulatory proceedings against K Wave may result in unexpected disciplinary actions, legal expenses and liabilities. Any of the foregoing may have a material adverse effect on K Wave’s business, financial condition, results of operations and prospects.

If Internet and other technology-based service providers experience service interruptions, K Wave’s ability to conduct its business may be impaired and K Wave’s business, financial condition and results of operations may be adversely affected. (K Enter, Production Companies, Merchandising Company, Investment Company)

A substantial portion of K Wave’s network infrastructure may be provided by third parties, including Internet service providers and other technology-based service providers. See “—K Wave relies on third-party service providers with respect to K Wave’s platform and to deliver K Wave’s offerings to customers on K Wave’s platform, and any disruption of or interference with K Wave’s use of such services may adversely affect K Wave’s business, financial condition, results of operations and prospects.” K Wave requires technology-based service providers to implement cyber-attack-resilient systems and processes. However, if Internet service providers experience service interruptions, including because of cyber-attacks, or due to an event causing an unusually high volume of Internet use (such as during the COVID-19 pandemic or other public health emergency), communications over the Internet may be interrupted and impair K Wave’s ability to conduct K Wave’s business. Internet service providers and other technology-based service providers may in the future roll out upgraded or new mobile or other telecommunications services, such as 5G or 6G services, which may not be successful and thus may impact the ability of K Wave’s customers to access K Wave’s platform or offerings in a timely fashion or at all. In addition, K Wave’s ability to process e-commerce transactions may depend on bank processing and credit card systems. To prepare for system problems, K Wave may continuously seek to strengthen and enhance K Wave’s current facilities and the capabilities of K Wave’s system infrastructure and support. Nevertheless, there may be no assurance that the Internet infrastructure or K Wave’s own network systems may continue to be able to meet the demand placed on K Wave by the continued growth of the Internet, the overall online streaming communities and the motion picture industry and K Wave’s customers. Any difficulties these providers face, including the potential of certain network traffic receiving priority over other traffic (such as lack of net neutrality), may adversely affect K Wave’s business, and K Wave may exercise little control over these providers, which may increase K Wave’s vulnerability to problems with the services they provide. Any system failure as a result of reliance on third parties, such as network, software or hardware failure, including as a result of cyber-attacks, which causes a loss of K Wave’s customers’ property or personal information or a delay or interruption in K Wave’s online services and content, including K Wave’s ability to handle existing or increased traffic, may result in a loss of anticipated revenue, interruptions to K Wave’s platform and offerings, cause K Wave to incur significant legal, remediation and notification costs, degrade the customer experience and cause customers to lose confidence in K Wave’s offerings, any of which may have a material adverse effect on K Wave’s business, financial condition, results of operations and prospects.

The Six Korean Entities’ growth may depend, in part, on the success of their current and future strategic relationships with third parties. Overreliance on certain third parties, or their inability to extend existing relationships of their predecessor entities or agree to new relationships may cause unanticipated costs for The Six Korean Entities and impact their financial performance in the future. (K Enter, Production Companies, Merchandising Company, Investment Company)

The Six Korean Entities may, in the future, rely on relationships with movie directors, IP investment and development firms, advertisers, marketing firms and other third parties in order to attract customers to their contents. These relationships may, along with providers of online services, search engines, social media, directories and other websites and ecommerce businesses, direct consumers to their platforms. In addition, many of the parties with whom the Six Korean Entities may have advertising arrangements through relationships of their predecessor entities provide advertising services to other companies, including other gaming platforms with whom the Six Korean Entities may compete. While the Six Korean Entities believe there may be other third parties that may drive customers to their platforms, adding or transitioning to them may disrupt their business and increase their costs. In the event that any of the Six Korean Entities’ future relationships fails to provide services to them in accordance with the terms of their arrangement, or at all, and the Six Korean Entities may not be able to find suitable alternatives, this may impact their ability to attract consumers cost effectively and harm our business, financial condition, results of operations and prospects.

K Wave’s growth may depend on its ability to attract and retain customers, and the loss of its customers, failure to attract new customers in a cost-effective manner, or failure to effectively manage K Wave’s growth may adversely affect its business, financial condition, results of operations and prospects. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s ability to achieve growth in revenue in the future may depend, in large part, upon K Wave’s ability to attract new customers to K Wave’s content offerings, retain existing customers of K Wave’s content offerings and reactivate customers in a cost-effective manner. Achieving growth in K Wave’s community of customers may require K Wave to increasingly engage in sophisticated and costly sales and marketing efforts, which may not make sense in terms of return on investment. K Wave expects to use a variety of free and paid marketing channels, in combination with compelling offers and exciting games to achieve K Wave’s objectives. If the search engines on which K Wave relies modify their algorithms, change their terms, or if the prices at which K Wave may purchase listings increase, then K Wave’s costs may increase, and fewer customers may click through to K Wave’s website. If links to K Wave’s website may not be displayed prominently in online search results, if fewer customers click through to K Wave’s website, if K Wave’s other digital marketing campaigns may not be effective, of it the costs of attracting customers using any of K Wave’s current methods significantly increase, then K Wave’s ability to efficiently attract new customers may be reduced, K Wave’s revenue may decline and K Wave’s business, financial condition and results of operations may be harmed.

K Wave may invest in or acquire other businesses, and its business may suffer if K Wave is unable to successfully integrate acquired businesses into K Wave or otherwise manage the growth associated with multiple acquisitions. (K Enter, Production Companies, Merchandising Company, Investment Company)

As part of K Wave’s business strategy, K Wave may make acquisitions as opportunities arise to add new or complementary businesses, content, or entertainment offerings. In some cases, the costs of such acquisitions may be substantial, including as a result of professional fees and due diligence efforts. There may be no assurance that the time and resources expended on pursuing a particular acquisition may result in a completed transaction, or that any completed transaction may ultimately be successful. In addition, K Wave may be unable to identify suitable acquisition or strategic investment opportunities, or may be unable to obtain any required financing or regulatory approvals, and therefore may be unable to complete such acquisitions or strategic investments on favorable terms, if at all. K Wave may decide to pursue acquisitions with which K Wave’s investors may not agree and K Wave may not assure investors that any acquisition or investment may be successful or otherwise provide a favorable return on investment. In addition, acquisitions and the integration thereof require significant time and resources and place significant demands on K Wave’s management, as well as on K Wave’s operational and financial infrastructure. In addition, if K Wave fails to successfully close transactions or integrate new teams, or integrate the content and technologies associated with these acquisitions into K Wave’s company, K Wave’s business may be seriously harmed. Acquisitions may expose K Wave to operational challenges and risks, including:

K Wave’s acquisition strategy may not succeed if K Wave is unable to remain attractive to target companies or expeditiously close transactions. Issuing common shares to fund an acquisition would cause economic dilution to existing shareholders. If K Wave develops a reputation for being a difficult acquirer or having an unfavorable work environment, or target companies view K Wave’s common shares unfavorably, K Wave may be unable to consummate key acquisition transactions essential to K Wave’s corporate strategy and K Wave’s business may be seriously harmed.

K Wave’s success may depend on the performance of its current and future employees, including certain key employees. Recruitment and retention of these individuals may be vital to growing K Wave’s business and meeting its business plans. The loss of any of K Wave’s key executives or other key employees may harm its business. (K Enter, Production Companies, Merchandising Company, Investment Company)

The leadership of K Wave’s current executive officers may have been a useful element in building K Wave’s operations, and the departure, death or disability of any one of K Wave’s executive officers or other extended or permanent loss of any of their services, or any negative market or industry perception with respect to any of them or their loss, may have a material adverse effect on K Wave’s business.

In addition, certain of K Wave’s other employees may have made significant contributions to their growth and success. K Wave believes its success and K Wave’s ability to compete and grow may depend in large part on the efforts and talents of K Wave’s employees and on K Wave’s ability to retain highly skilled personnel. The competition for these types of personnel may be intense and K Wave may compete with other potential employers for the services of K Wave’s employees. As a result, K Wave may not succeed in retaining the executives and other key employees that K Wave needs. Employees, particularly analysts and engineers, may be in high demand, and K Wave may devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. K Wave may not provide assurance that K Wave may be able to attract or retain such highly qualified personnel in the future. In addition, the loss of employees or the inability to hire additional skilled employees as necessary may result in significant disruptions to K Wave’s business, and the integration of replacement personnel may be time-consuming and expensive and cause additional disruptions to K Wave’s business.

The unexpected loss of services of one or more of these key employees may have a material adverse effect on K Wave’s business, financial condition, results of operations and prospects. Additionally, as K Wave grows and develop the infrastructure of a public company, K Wave may find it difficult to maintain K Wave’s entrepreneurial, innovative and team-based culture. K Wave’s retention and recruiting may require significant increases in compensation expense as K Wave transitions to a public company, which would adversely affect K Wave’s results of operation. If K Wave does not succeed in attracting, hiring, and integrating excellent personnel, or retaining and motivating existing personnel, K Wave may be unable to grow effectively, and K Wave’s business may be harmed.

Digital piracy may adversely impact the Six Korean Entities’ business. (K Enter, Production Companies, Merchandising Company, Investment Company)

A substantial portion of the Six Korean Entities’ revenue comes from the distribution of music and digital content which is potentially subject to unauthorized consumer copying and widespread digital dissemination without an economic return to us, including as a result of “stream-ripping.” In its Engaging with Music 2021 report, IFPI surveyed 43,000 people to examine the ways in which music consumers engaged with recorded music across 21 countries. Of those surveyed, 30% had used illegal or unlicensed methods to listen to or download music, and 14% had used unlicensed social media platforms for music purposes, the leading form of music piracy. Organized industrial piracy may also lead to decreased revenues. The potential impact of digital piracy on legitimate music revenues and subscriptions is hard to quantify, but we believe that illegal file sharing and other forms of unauthorized activity, including stream manipulation, have a substantial negative impact on music revenues. If the Six Korean Entities fail to obtain appropriate relief through the judicial process or the complete enforcement of judicial decisions issued in their favor (or if judicial decisions are not in their favor), if K Wave is unsuccessful in its efforts to lobby governments to enact and enforce stronger legal penalties for copyright infringement or if it fails to develop effective means of protecting and enforcing the Six Korean Entities’ intellectual property (whether copyrights or other intellectual property rights such as patents, trademarks and trade secrets) or their music entertainment-related products or services, K Wave’s results of operations, financial position and prospects may suffer.

Post-acquisition K Wave’s insurance may not provide adequate levels of coverage against claims. (K Enter, Production Companies, Merchandising Company, Investment Company)

We expect K Wave will maintain insurance that we believe may be customary for businesses of its size and type. However, there may be types of losses K Wave may incur that may not be insured against or that K Wave believes may not be economically reasonable to insure. Moreover, any loss incurred may exceed policy limits and policy payments made to K Wave may not be made on a timely basis. Such losses may adversely affect K Wave’s business prospects, results of operations, cash flows and financial condition.

K Wave’s business will be subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use and data protection, content, competition, consumer protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to K Wave’s business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm K Wave’s business. (K Enter, Production Companies, Merchandising Company, Investment Company)

We expect that K Wave will be subject to a variety of laws and regulations that involve matters central to its business, including privacy, data use, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, artificial intelligence, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, product liability, e-commerce, taxation, economic or other trade prohibitions or sanctions, anti-corruption and political law compliance, securities law compliance, and online payment services. The introduction of new products, expansion of K Wave’s activities in certain jurisdictions, or other actions that K Wave may take may subject K Wave to additional laws, regulations, or other government scrutiny. In addition, foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.

Since the Six Korean Entities’ operations are based in Korea, where most of their users are domiciled, K Wave and its subsidiaries are expected to be subject to, among others, the Personal Information Protection Act and related legislation, regulations and orders (the “PIPA”), the Act on the Promotion of Information and Communications Network Utilization and Protection of Information Act (Korea), and the Credit Information Act in Korea that specifically regulates certain sensitive personal information. PIPA requires consent by the consumer with respect to the use of his or her data and requires the persons responsible for management of personal data to take the necessary technological and managerial measures to prevent data breaches and, among other duties, to notify the Personal Information Protection Commission of any data breach incidents within 24 hours. Failure to comply with PIPA in any manner may subject these persons responsible to personal liability for not obtaining such consent in an appropriate manner or for such breaches, including even negligent breaches, and violators face varying penalties ranging from monetary penalties to imprisonment. K Wave strives to take the necessary technological and managerial measures to comply with PIPA, including the implementation of privacy policies concerning the collection, use, and disclosure of subscriber data on K Wave’s apps and websites, and K Wave regularly reviews and updates K Wave’s policies and practices. Despite these efforts to comply with PIPA, these rules are complex and evolving, subject to interpretation by government regulators which may change over time and therefore K Wave is subject to the risk of claims by regulators of failure to comply with PIPA. Any failure, or perceived failure, by K Wave and its subsidiaries to comply with such policies, laws, regulations, and other legal obligations and regulatory guidance could adversely affect K Wave’s reputation, brand, and business, and may result in claims, proceedings, or actions, including criminal proceedings, against K Wave and certain of K Wave’s executive officers by governmental entities or others or other liabilities. Any such claim, proceeding, or action, could hurt K Wave’s reputation, brand, and business, force K Wave to incur significant expenses in defense of such proceedings, distract K Wave’s management, increase K Wave’s costs of doing business, result in a loss of customers and merchants, and could have an adverse effect on K Wave’s business, financial condition, and results of operations.

These U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which K Wave operates, and may be interpreted and applied inconsistently from country to country and inconsistently with K Wave’s current policies and practices. For example, regulatory or legislative actions affecting the manner in which K Wave displays content to K Wave’s users or obtain consent to various practices could adversely affect user growth and engagement. Such actions could affect the manner in which K Wave provides its services or adversely affect K Wave’s financial results.

We also expect that K Wave will be subject to evolving laws and regulations that dictate whether, how, and under what circumstances K Wave and its subsidiaries can transfer, process and/or receive certain data that is critical to our future operations, including data shared between countries or regions in which we operate and data shared among Six Korean Entities’ products and services. If, post acquiring the Six Korean Entities, K Wave is unable to transfer data between and among countries and regions in which K Wave operates, or if K Wave is restricted from sharing data among K Wave’s products and services, it could affect K Wave’s ability to provide services, the manner in which K Wave provides its services or K Wave’s ability to target ads, which could adversely affect K Wave’s financial results.

Proposed or new legislation and regulations could also significantly affect K Wave’s business. Laws and regulations are evolving and subject to interpretation, and resulting limitations on K Wave’s advertising services, or reductions of advertising by marketers, have to some extent adversely affected, and will continue to adversely affect, K Wave’s advertising business. Changes to Six Korean Entities’ products or business practices as a result of these developments may adversely affect K Wave’s advertising business. Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting K Wave’s business. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering K Wave’s services.

For example, the European Union traditionally has imposed stricter obligations under its laws and regulations relating to privacy, data protection and consumer protection than the United States. In May 2018, the European Union’s new regulation governing data practices and privacy called the General Data Protection Regulation, or GDPR, became effective and substantially replaced the data protection laws of the individual European Union member states. The law requires companies to meet more stringent requirements regarding the handling of personal data of individuals in the EU than were required under predecessor EU requirements. In the United Kingdom, a Data Protection Bill that substantially implements the GDPR also became law in May 2018. The law also increases the penalties for non-compliance, which may result in monetary penalties of up to €20.0 million or 4% of a company’s worldwide turnover, whichever is higher. The GDPR and other similar regulations require companies to give specific types of notice and in some cases seek consent from consumers and other data subjects before collecting or using their data for certain purposes, including some marketing activities. Outside of the European Union, many countries have laws, regulations, or other requirements relating to privacy, data protection, information security, and consumer protection, and new countries are adopting such legislation or other obligations with increasing frequency. Many of these laws may require consent from consumers for the use of data for various purposes, including marketing, which may reduce K Wave’s ability to market K Wave’s products. There is no harmonized approach to these laws and regulations globally. Consequently, K Wave increases its risk of non-compliance with applicable foreign data protection laws by operating internationally. K Wave may need to change and limit the way K Wave uses personal information in operating K Wave’s business and may have difficulty maintaining a single operating model that is compliant. In addition, various federal, state and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, information security and consumer protection. For example, California adopted the California Consumer Privacy Act of 2018 (“CCPA”), which provides new data privacy rights for consumers and new operational requirements for businesses. The CCPA includes a statutory damages framework and private rights of action against businesses that fail to comply with certain CCPA terms or implement reasonable security procedures and practices to prevent data breaches. The CCPA went into effect in January 2020. The effects of the CCPA potentially are significant, however, and may require K Wave to modify K Wave’s data processing practices and policies and to incur substantial costs and expenses in an effort to comply. As a general matter, compliance with laws, regulations, and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to K Wave’s business practices, which may compromise K Wave’s growth strategy, adversely affect K Wave’s ability to acquire customers, and otherwise adversely affect K Wave’s business, financial condition and operating results.

These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions, have in the past led to, and may in the future lead to, unfavorable outcomes including increased compliance costs, delays or impediments in the development of new products, negative publicity and reputational harm, increased operating costs, diversion of management time and attention, and remedies that harm K Wave’s business, including fines or demands or orders that K Wave modifies or ceases existing business practices.

Changes in tax laws or regulations that are applied adversely to K Wave or its customers may have a material adverse effect on K Wave’s business, cash flow, financial condition or results of operations. (K Enter, Production Companies, Merchandising Company, Investment Company)

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of K Wave’s earnings and adversely affect K Wave’s operations, and K Wave’s business and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. There may be material adverse effects resulting from the legislation that K Wave has not yet identified. No estimated tax provision has been recorded in the financial statements included herein for tax attributes that are incomplete or subject to change.

The foregoing items could have a material adverse effect on K Wave’s business, cash flow, financial condition or results of operations. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities. The impact of this tax legislation on holders of K Wave’s Ordinary Shares is also uncertain and could be adverse. K Wave urges its stockholders and investors to consult with K Wave’s legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding K Wave’s Ordinary Shares.

Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on K Wave’s business. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. K Wave is committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. K Wave is subject, however, to the risk that we, K Wave’s affiliated entities or K Wave’s or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect K Wave’s business, results of operations or financial condition. In addition, actual or alleged violations could damage K Wave’s reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of K Wave’s senior management.

Fluctuations in exchange rates could result in foreign currency exchange losses to K Wave. (K Enter, Production Companies, Merchandising Company, Investment Company)

The value of the Korean Won and other currencies against the U.S. dollar has fluctuated, and may continue to fluctuate and is affected by, among other things, changes in political and economic conditions. It is difficult to predict how market forces or Korean or U.S. government policy, including any interest rate increases by the Federal Reserve, may impact the exchange rate between the Korean Won and the U.S. dollar in the future.

A substantial percentage of K Wave’s revenue and costs are denominated in Korean Won, and a significant portion of K Wave’s financial assets are also denominated in Korean Won, while K Wave anticipates that a substantial portion of any debt incurred will be denominated in U.S. dollars. K Wave is a holding company and K Wave may receive dividends, loans and other distributions on equity paid by K Wave’s operating subsidiaries in Korea. Any significant fluctuations in the value of the Korean Won may materially and adversely affect K Wave’s liquidity and cash flows. For example, the depreciation of the Korean Won and other foreign currencies against the U.S. dollar typically results in a material increase in the cost of hosting services and equipment purchased from outside of Korea and the cost of servicing debt denominated in currencies other than the Korean Won. As a result, any significant depreciation of the Korean Won or other major foreign currencies against the U.S. dollar may have a material adverse effect on K Wave’s results of operations. If K Wave decides to convert K Wave’s Korean Won into U.S. dollars for the purpose of repaying principal or interest expense on any future U.S. dollar-denominated debt, making payments for dividends on K Wave’s Ordinary Shares, or other business purposes, depreciation of the Korean Won or other foreign currencies against the U.S. dollar would have a negative effect on the U.S. dollar amount K Wave would receive. Conversely, to the extent that K Wave needs to convert U.S. dollars into Korean Won for K Wave’s operations, appreciation of the Korean Won against the U.S. dollar would have an adverse effect on the Korean Won amount K Wave would receive.

Tensions with North Korea could have an adverse effect on K Wave’s business, financial condition, and results of operations, and the price per share of K Wave’s Ordinary Shares may decrease. (K Enter, Production Companies, Merchandising Company, Investment Company)

Relations between Korea and North Korea have fluctuated over the years. Tension between Korea and North Korea may increase or change abruptly as a result of current and future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon and ballistic missile programs as well as its hostile military actions against Korea.

North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. Since April 2018, North Korea has held a series of bilateral summit meetings with Korea and the United States to discuss peace and denuclearization of the Korean peninsula. However, North Korea has since resumed its missile testing, heightening tensions, and the outlook of such discussions remains uncertain.

Further tensions in North Korean relations could develop due to a leadership crisis, breakdown in high-level inter-Korea contacts or military hostilities. Alternatively, tensions may be resolved through reconciliatory efforts, which may include peace talks, alleviation of sanctions or reunification. K Wave cannot assure you that future negotiations will result in a final agreement on North Korea’s nuclear program, including critical details such as implementation and timing, or that the level of tensions between Korea and North Korea will not escalate. Any increase in the level of tension between Korea and North Korea, an outbreak in military hostilities or other actions or occurrences, could adversely affect K Wave’s business, prospects, financial condition, and results of operations and could lead to a decline in the price per share of K Wave’s Ordinary Shares.

There are special risks involved with investments in companies with significant Korean operations, including the possibility of restrictions being imposed by the Korean government in emergency circumstances, accounting and corporate disclosure standards that differ from those in other jurisdictions, and the risk of direct or vicarious criminal liability for executive officers of K Wave and the Six Korean Entities. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Enter acquired all Six Korean Entities with significant operation in South Korea. K Wave’s planned Korean subsidiaries and their affiliates operate in a business and cultural environment that is different from that of other countries. For example, under the Foreign Exchange Transaction Act of Korea, if the Korean government determines that in certain emergency circumstances, including sudden fluctuations in interest rates or exchange rates, extreme difficulty in stabilizing the balance of payments or substantial disturbance in the Korean financial and capital markets are likely to occur, it may impose any necessary restriction such as requiring Korean or foreign investors to obtain prior approval from the Minister of Economy and Finance of Korea prior to entering into a capital markets transaction, repatriating interest, dividends or sales proceeds arising from Korean securities or from the disposition of such securities or other transactions involving foreign exchange. Although investors will hold shares of K Wave’s Ordinary Shares, K Wave’s subsidiaries may experience adverse risks and in turn could adversely impact K Wave’s business, prospects, financial condition, and results of operations and could lead to a decline in the price per share of K Wave’s Ordinary Shares.

In addition, under Korean law, there are circumstances in which certain executive officers of a company may be investigated or held criminally liable either directly or vicariously for the actions of K Enter and its executives and employees. For example, complaints alleging infringement of intellectual property rights, breaches of certain Korean laws (e.g., labor standards laws and fair trade laws), and product-related claims may be investigated and prosecuted as criminal offenses with both K Enter and K Enter’s executive officers being named as defendants in such proceedings. These risks change over time.

As a result of these current and changing risks, K Wave’s Korean subsidiaries and their affiliates’ executive officers may be named in the future in criminal investigations or proceedings stemming from K Wave’s operations. In Korea, company executive officers being named in such investigations or proceedings is a common occurrence, even though in practice many such cases result in no liability to the individual. If K Wave’s Korean subsidiaries and their affiliates’ executive officers were to be named in such criminal proceedings or held either directly or vicariously criminally liable for the actions of K Enter and its executives and employees, K Wave’s business, financial condition, and results of operations may be harmed.

K Wave’s planned transactions with the Six Korean Entities or with their affiliates may be restricted under Korean fair trade regulations. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s Korean subsidiaries enter into business relationships and transactions with their affiliates, which are subject to scrutiny by the Korean Fair Trade Commission (“KFTC”) as to, among other things, whether such relationships and transactions constitute undue financial support among companies in the same business group. If, in the future, the KFTC determines that K Wave’s Korean subsidiaries have engaged in transactions that violate the fair trade laws and regulations, it may be subject to an administrative and/or criminal fine, surcharge or other actions, which may have an adverse effect on K Wave’s business, financial condition, and results of operations.

K Enter’s Korean operations, the Six Korean Entities and a group of companies affiliated with it may be designated an affiliated group under Korean law, which would require that group of companies to make certain disclosures and implement additional corporate governance requirements. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s Korean subsidiaries and a group of companies affiliated with it are likely to be designated as a business group subject to disclosure under the Korean Monopoly Regulation and Fair Trade Act. As described in greater detail in the section titled “Government Regulation-The Monopoly Regulation and Fair Trade Act”, such a designation would impose additional corporate governance and public disclosure requirements on this group of affiliated companies. These requirements would create additional costs of compliance and could subject this group of affiliated companies to greater regulatory scrutiny and risk of penalties for any failure to comply with the additional obligations imposed.

K Enter’s Korean operations and the Six Korean Entities are subject to certain requirements and restrictions under Korean law that may, in certain circumstances, require it to act in a manner that may not be in K Wave’s or its shareholders’ best interest. (K Enter, Production Companies, Merchandising Company, Investment Company)

Under applicable Korean law, directors of a Korean company, such as the Six Korean Entities, owe a fiduciary duty to K Enter itself rather than to its stockholders. This fiduciary duty obligates directors of a Korean company to perform their duties faithfully for the good of K Enter as a whole. As a result, if circumstances arise in which the good of K Wave’s Korean subsidiaries conflicts with the good of K Enter Holdings or its stockholders, K Wave’s Korean subsidiaries may not be permitted under applicable Korean law to act in a manner that is in the best interest of K Enter Holdings, as its parent, or K Wave’s stockholders. For example, providing guarantees or collateral by K Wave’s Korean subsidiaries in favor of K Enter Holdings, as its parent, without a justifiable cause and on other than arm’s length terms may cause breach of a fiduciary duty of directors to K Wave’s Korean subsidiaries.

Approval by the board of directors of a Korean company is required for, among other things, all transactions between a director or major stockholder (including a 10% or more stockholder) and K Enter for the director’s or the major stockholder’s account. As a result, intercompany transactions between K Wave and the Six Korean Entities (or any other Korean entity K Enter may own, from time to time), could arise in the future in which the directors of the Korean subsidiary are not able to act in K Wave’s or its shareholders’ best interest as a result of competing interests of the subsidiary. Since substantially all of K Wave’s operations are conducted by the Six Korean Entities, any such occurrence with respect to the Six Korean Entities could adversely affect K Wave’s business, financial condition, and results of operations.

K Enter’s Korean operations and the Six Korean Entities’ transactions with related parties are subject to close scrutiny by the Korean tax authorities, which may result in adverse tax consequences. (K Enter, Production Companies, Merchandising Company, Investment Company)

Under Korean tax law, there is an inherent risk that K Wave’s transactions with its subsidiaries, affiliates or any other person or company that is related to K Wave may be challenged by the Korean tax authorities if such transactions are viewed as having been made on terms that were not on an arm’s-length basis. If the Korean tax authorities determine that any of its transactions with related parties were on other than arm’s-length terms, it may not be permitted to deduct as expenses, or may be required to include as taxable income, any amount which is found to be undue financial support between related parties in such transaction, which may have adverse tax consequences for K Wave and, in turn, may adversely affect K Wave’s business, financial condition, and results of operations.

If K Wave is deemed to have a “place of effective management” in Korea, K Wave will be treated as a Korean company for the purpose of Korean corporate income tax with regards to K Wave’s worldwide income. (K Enter, Production Companies, Merchandising Company, Investment Company)

Under the Corporate Tax Act (“CTA”), as amended on December 31, 2022, a corporation having a “place of effective management” in Korea will be treated as a Korean company for the purposes of Korean corporate income tax. The CTA does not clearly define what constitutes “place of effective management.” However, there are court precedents which establish certain factors to consider for determining whether a foreign corporation can be considered as having a “place of effective management” in Korea. Such factors include, without limitation, considerations such as the location of Board of Directors’ meetings, etc. If K Wave is deemed to have a “place of effective management” in Korea, K Wave will be required to file annual corporate income tax returns with the Korean tax authorities and be subject to Korean corporate income tax. Currently, the applicable rates are 9.9% (inclusive of local corporate taxes) for taxable income up to 200 million Korean Won, 20.9% (inclusive of local corporate taxes) for taxable income exceeding 200 million Korean Won and less than 20 billion Korean Won, 23.1% (inclusive of local corporate taxes) for taxable income greater than 20 billion won and less than 300 billion Korean Won, and 26.4% (inclusive of local corporate tax) for taxable income greater than 300 billion Korean Won. Taxable income would include any worldwide income, such as dividends K Wave receives from K Wave’s Korean operating company and any interest income earned outside of Korea. If K Wave is required to pay Korean corporate income tax, it may reduce K Wave’s cash flow and negatively impact the returns to investors.

If K Wave is deemed to have a “permanent establishment” in Korea, K Wave will be subject to Korean corporate income tax with regards to any Korean source income attributable to or effectively connected with such permanent establishment. (K Enter, Production Companies, Merchandising Company, Investment Company)

If K Wave is deemed to have a “permanent establishment” as defined under Korean tax law, K Wave would be required to file annual corporate income tax returns with the Korean tax office and be subject to Korean corporate income tax. The applicable rates are 9.9% (inclusive of local corporate taxes) for taxable income up to 200 million Korean Won, 20.9% (inclusive of local corporate taxes) for taxable income exceeding 200 million Korean Won and less than 20 billion Korean Won, 23.1% (inclusive of local corporate taxes) for taxable income greater than 20 billion won and less than 300 billion Korean Won, and 26.4% (inclusive of local corporate tax) for taxable income greater than 300 billion Korean Won. Taxable income includes any Korean source income attributable to or effectively connected with such permanent establishment, such as the dividends K Wave expects to receive from the Six Korean Entities. If K Wave is required to pay Korean corporate income tax, it may reduce K Wave’s cash flow and negatively impact the returns to investors.

A focus on regulating copyright and patent infringement by the Korean government subjects K Wave to extra scrutiny in K Wave’s operations and could subject K Wave to sanctions, fines, or other penalties, which could adversely affect K Wave’s business and operations in Korea. (K Enter, Production Companies, Merchandising Company, Investment Company)

The Korean government has recently focused on addressing copyright and patent infringement in Korea, particularly with respect to luxury and brand name merchandise. Despite measures K Wave has taken to address copyright and patent infringement, the Korean government may subject K Wave to sanctions, fines, or other penalties, which could adversely affect K Wave’s business and operations in Korea.

New legislative proposals may expose K Wave’s business to additional risks from litigation, regulation, and government investigations. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave expects to be subject to changing laws and regulations everywhere we does business, including in Korea. For example, on September 28, 2020, the Korean Ministry of Justice announced (i) a proposed amendment to the Korean Commercial Code to adopt a punitive damages system that would apply generally to all areas of business, and (ii) a proposed bill to introduce a class action litigation system in Korea.

Previously, punitive or exemplary damages have been available in Korea only in specific business fields. The proposed legislation would broaden the potential availability of such damages. Similarly, the proposal relating to class actions would make such litigation applicable to a broader scope of cases, would allow for a Korean style discovery process, jury trials in many cases, and would apply to claims whose cause arose before the bill’s enactment.

Additionally, on January 8, 2021, the main session of the Korean National Assembly passed a draft Bill on Punishment for Serious Accidents, etc. (the “Serious Accidents Act”), which came into effect January 27, 2022. The Serious Accidents Act imposes enhanced liability (including criminal liability) on businesses, managers, and individuals who are responsible for causing loss of life by failing to fulfill duties relating to workplace safety and health or risk prevention. The Serious Accidents Act provides the potential for criminal punishment, public disclosure of punishment, and monetary damages, including punitive damages up to five times the actual damages suffered. The Serious Accidents Act extends potential liability to a wider group of persons than under existing law, including those who oversee safety and health matters for the business concerned and also general managers of the business.

These are just some examples of how K Wave’s business could be affected by changing regulations. If these proposals are enacted and implemented, the Six Korean Entities could face substantial costs and management could be required to spend significant time and attention on these matters, which would divert K Wave’s focus from K Wave’s core business. This could adversely affect K Wave’s business, financial condition, and results of operations.

As K Wave’s planned subsidiaries are incorporated in Korea, it may be more difficult to enforce judgments obtained in courts outside Korea. (K Enter, Production Companies, Merchandising Company, Investment Company)

K Wave’s operations are primarily conducted outside of the United States. In addition, all but one of K Wave’s directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. K Wave is a Cayman corporation. As a result, while U.S. investors should be above to serve process within the United States on K Wave, it may be difficult or impossible for U.S. investors to serve process within the United States upon K Wave, the Six Korean Entities or K Wave’s directors and officers or to enforce a judgment against K Wave for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which K Wave or the Six Korean Entities are incorporated or where K Wave’s or the assets of the Six Korean Entities are located (1) would enforce judgments of U.S. courts obtained in actions against K Wave or the Six Korean Entities based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against K Wave or the Six Korean Entities based on those laws.

The preparation of K Wave’s financial statements involves the use of good faith estimates, judgments and assumptions, and K Wave’s financial statements may be materially affected if such good faith estimates, judgments or good faith assumptions prove to be inaccurate.

Financial statements prepared in accordance with IFRS, as issued by the International Accounting Standard Board, typically require the use of good faith estimates, judgments and assumptions that affect the reported amounts. Often, different estimates, judgments and assumptions could reasonably be used that would have a material effect on such financial statements, and changes in these estimates, judgments and assumptions may occur from period to period over time. Significant areas of accounting requiring the application of management’s judgment include, but are not limited to, determining the fair value of assets, share-based compensation and the timing and amount of cash flows from assets. These estimates, judgments and assumptions are inherently uncertain and, if K Wave’s estimates were to prove to be wrong, K Wave would face the risk that charges to income or other financial statement changes or adjustments would be required. Any such charges or changes would require a restatement of our financial statements and could harm K Wave’s business, including K Wave’s financial condition and results of operations and the price of K Wave’s securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the accounting estimates, judgments and assumptions that K Wave believes are the most critical to an understanding of K Wave’s financial statements and its business.

K Wave expects to prepare its financial statements in accordance with IFRS following the Business Combination, there may be a significant effect on K Enter’s reported financial results.

The SEC permits foreign private issuers to file financial statements in accordance with IFRS as issued by IASB. At any time in the future, as a foreign private issuer, K Wave expects to prepare its financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”). The application by K Wave of different accounting standards, a change in the rules of IFRS as issued by the IASB, or in the SEC’s acceptance of such rules, could have a significant effect on K Wave’s reported financial results. Additionally, U.S. GAAP is subject to interpretation by the Financial Accounting Standards Board, the American Institute of Certified Public Accountants, the Public Company Accounting Oversight Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. IFRS are subject to interpretation by the IASB. A change in these principles or interpretations could have a significant effect on K Wave’s reported financial results.

The JOBS Act permits “emerging growth companies” like K Wave to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

K Wave expects that it will continue to qualify as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act defines an emerging growth company as a company that has annual gross revenues less than $1.235 billion during its most recent fiscal year and has not sold Ordinary Shares under a registration statement. A company will be classified as an emerging growth company for its first five fiscal years, unless: its gross revenues exceed $1.235 billion, it has issued over $1 billion in non-convertible debt over three years, or it becomes a large accelerated filer. SEC Rule 12b-2 provides that a large accelerated filer is a company that has a public float of greater than $700 million, has been filing periodic reports for at least 12 months, has previously filed at least one annual report (e.g. Form 10-K), and is not a smaller reporting company. That is, a large accelerated filer is simply an accelerated filer whose public float exceeds $700 million. As such, K Wave will take advantage of certain exemptions from various reporting requirements applicable to other public companies based on its status as an emerging growth company. Pursuant to Section 404 of the Sarbanes-Oxley Act, once K Wave is no longer an emerging growth company, K Wave may be required to furnish an attestation report on internal control over financial reporting issued by K Wave’s independent registered public accounting firm. When K Wave’s independent registered public accounting firm is required to undertake an assessment of its internal control over financial reporting, the cost of complying with Section 404 of the Sarbanes-Oxley Act will significantly increase, and management’s attention may be diverted from other business concerns, which could adversely affect K Wave’s business and results of operations.

As a foreign private issuer, K Wave will be exempt from a number of U.S. securities laws and rules promulgated thereunder and will be permitted to publicly disclose less information than U.S. public companies must. This may limit the information available to holders of the K Wave Ordinary Shares.

K Wave qualifies as a “foreign private issuer,” as defined in the SEC’s rules and regulations, and, consequently, K Wave is not subject to all of the disclosure requirements applicable to public companies organized within the United States. For example, K Wave is exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, K Wave’s officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of K Wave’s securities. For example, some of K Wave’s key executives may sell a significant amount of K Wave Ordinary Shares and such sales are not required to be disclosed as promptly as public companies organized within the United States would have to disclose. Accordingly, once such sales are eventually disclosed, the price of K Wave Ordinary Shares may decline significantly. Moreover, K Wave is not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. K Wave is not subject to Regulation FD under the Exchange Act, which would prohibit K Wave from selectively disclosing material non-public information to certain persons without concurrently making a widespread public disclosure of such information. Accordingly, there may be less publicly available information concerning K Wave than there is for U.S. public companies.

As a foreign private issuer, K Wave has filed and will continue to file an annual report on Form 20-F within four months of the close of each fiscal year ended December 31 and furnish reports on Form 6-K relating to certain material events promptly after K Wave publicly announces these events. However, because of the above exemptions for foreign private issuers, which K Wave intends to rely on, K Wave shareholders will not be afforded the same information generally available to investors holding shares in public companies that are not foreign private issuers.

K Wave may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. This would subject K Wave to U.S. GAAP reporting requirements which may be difficult for it to comply with.

As a “foreign private issuer,” K Wave would not be required to comply with all of the periodic disclosure and current reporting requirements of the Exchange Act and related rules and regulations. Under those rules, the determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to Global Star on June 30, 2026.

In the future, K Wave could lose its foreign private issuer status if a majority of its Ordinary Shares are held by residents in the United States and it fails to meet any one of the additional “business contacts” requirements. Although K Wave intends to follow certain practices that are consistent with U.S. regulatory provisions applicable to U.S. companies, K Wave’s loss of foreign private issuer status would make such provisions mandatory. The regulatory and compliance costs to K Wave under U.S. securities laws if it is deemed a U.S. domestic issuer may be significantly higher. If K Wave is not a foreign private issuer, K Wave will be required to file periodic reports and prospectuses on U.S. domestic issuer forms with the SEC, which are more detailed and extensive than the forms available to a foreign private issuer. For example, K Wave would become subject to the Regulation FD, aimed at preventing issuers from making selective disclosures of material information. K Wave also may be required to modify certain of its policies to comply with good governance practices associated with U.S. domestic issuers. Such conversion and modifications will involve additional costs. In addition, K Wave may lose its ability to rely upon exemptions from certain corporate governance requirements of Nasdaq that are available to foreign private issuers. For example, Nasdaq’s corporate governance rules require listed companies to have, among other things, a majority of independent board members and independent director oversight of executive compensation, nomination of directors, and corporate governance matters. Nasdaq rules also require shareholder approval of certain share issuances, including approval of equity compensation plans. As a foreign private issuer, K Wave would be permitted to follow home country practice in lieu of the above requirements. As long as K Wave relies on the foreign private issuer exemption to certain of Nasdaq’s corporate governance standards, a majority of the directors on its board of directors are not required to be independent directors, its remuneration committee is not required to be comprised entirely of independent directors and it will not be required to have a nominating and corporate governance committee. Also, K Wave would be required to change its basis of accounting from IFRS as issued by the IASB to U.S. GAAP, which may be difficult and costly for it to comply with. If K Wave loses its foreign private issuer status and fails to comply with U.S. securities laws applicable to U.S. domestic issuers, K Wave may have to de-list from Nasdaq and could be subject to investigation by the SEC, Nasdaq and other regulators, among other materially adverse consequences.

Because K Wave is incorporated under the laws of the Cayman Islands and its Amended and Restated Memorandum and Articles of Association designates the courts of the Cayman Islands to have exclusive jurisdiction over certain matters, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be limited.

K Wave is an exempted company incorporated under the laws of the Cayman Islands. K Wave’s Amended and Restated Memorandum and Articles of Association designates the courts of the Cayman Islands to have exclusive jurisdiction over any claim or dispute arising out of or in connection with the Memorandum, the Articles or otherwise related in any way to each Member’s shareholding in the Company, including but not limited to: (a) any derivative action or proceeding brought on behalf of the Company; (b) any action asserting a claim of breach of any fiduciary or other duty owed by any current or former Director, Officer or other employee of the Company to the Company or the Members; (c) any action asserting a claim arising pursuant to any provision of the Companies Act (as revised) of the Cayman Islands, K Wave’s Amended and Restated Memorandum and Articles of Association and (d) any action asserting a claim against the Company governed by the “Internal Affairs Doctrine” (as such concept is recognized under the laws of the United States of America); provided, however, that this exclusive forum provision shall not apply to any action or suits brought to enforce any liability or duty created by the United States Securities Act of 1933, as amended, the Exchange Act, or any claim for which the federal district courts of the United States of America are, as a matter of the laws of the United States, the sole and exclusive forum for determination of such a claim. As a result, it may be difficult for investors to effect service of process within the United States upon K Wave’s directors or officers, or enforce judgments obtained in the United States courts against K Wave’s directors or officers.

K Wave’s corporate affairs will be governed by its amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands. K Wave will also be subject to the federal securities laws of the United States. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of K Wave’s directors to K Wave under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of K Wave’s shareholders and the fiduciary responsibilities of K Wave’s directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal court of the United States.

K Wave has been advised by Maples & Calder Cayman Islands, its Cayman Islands legal counsel, that the courts of the Cayman Islands are unlikely (i) to recognize or enforce against it judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state; and (ii) in original actions brought in the Cayman Islands, to impose liabilities against it predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature. In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a corporation incorporated in the United States.

It may be difficult to enforce a U.S. judgment against K Wave or its directors and officers outside the United States, or to assert U.S. securities law claims outside of the United States.

A number of K Wave directors and executive officers are not residents of the United States, and the majority of its assets and the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for investors to effect service of process upon K Wave within the United States or other jurisdictions, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. Additionally, it may be difficult to assert U.S. securities law claims in actions originally instituted outside of the United States. Foreign courts may refuse to hear a U.S. securities law claim because foreign courts may not be the most appropriate forum in which to bring such a claim. Even if a foreign court agrees to hear a claim, it may determine that the law of the jurisdiction in which the foreign court resides, and not U.S. law, is applicable to the claim. Further, if U.S. law is found to be applicable, the content of applicable U.S. law must be proved as a fact, which can be a time-consuming and costly process, and certain matters of procedure would still be governed by the law of the jurisdiction in which the foreign court resides.

As a company incorporated in the Cayman Islands, K Wave is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if K Wave complied fully with Nasdaq corporate governance listing standards.

K Wave is a company incorporated in the Cayman Islands, and has applied for listing of the K Wave Ordinary Shares on Nasdaq. Nasdaq market rules permit a foreign private issuer like K Wave to follow the corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is K Wave’s home country, may differ significantly from Nasdaq corporate governance listing standards.

Among others, K Wave will not be required to: (i) have a majority of the board be independent; (ii) have a compensation committee consisting entirely of independent directors; (iii) have a minimum of three members on the audit committee; (iv) obtain shareholders’ approval for issuance of securities in certain situations; or (v) have regularly scheduled executive sessions with only independent directors each year.

Provisions in the K Wave’s governance documents may inhibit a takeover of K Wave, which could limit the price investors might be willing to pay in the future for K Wave Ordinary Shares and could entrench management.

K Wave’s governance documents will contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests. These provisions include that K Wave’s board of directors will be classified into three classes of directors. As a result, in most circumstances, a person can gain control of the board only by successfully engaging in a proxy contest at two or more annual general meetings. K Wave may issue additional shares without shareholder approval and such additional shares could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The ability for K Wave to issue additional shares could render more difficult or discourage an attempt to obtain control of K Wave by means of a proxy contest, tender offer, merger or otherwise that could involve the payment of a premium over prevailing market prices for K Wave Ordinary Shares.

Risks Factors Relating to an Investment in K Wave Ordinary Shares

Certain judgments obtained against K Wave by K Wave’s shareholders may not be enforceable.

K Wave is a company incorporated under the laws of the Cayman Islands. K Wave conducts most of its operations in the Republic of Korea and substantially all of its operations outside of the United States. Most of K Wave’s assets are located in the Republic of Korea, and substantially all of K Wave’s assets are located outside of the United States. In addition, after the Business Combination, most of K Wave’s senior executive officers reside within the Republic of Korea for a significant portion of the time and most are Korean nationals. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against K Wave or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the Republic of Korea may render you unable to enforce a judgment against K Wave’s assets or the assets of K Enter’s directors and officers. For more information regarding the relevant laws of the Cayman Islands and the Republic of Korea, see “Comparison of Shareholder Rights - Enforceability of Civil Liabilities under the U.S. Securities Laws.”

The Ordinary Shares of K Wave are newly-issued and there can be no assurance that an active trading market will develop or be sustained.

K Wave is a newly formed entity and prior to the Business Combination it had not issued any securities in the U.S. markets or elsewhere nor has there been extensive information about it, its businesses, or its operations publicly available. The Ordinary Shares are listed for trading on Nasdaq under the symbol “KWM”. However, the listing of shares on the Nasdaq does not ensure that a market for the Ordinary Shares of K Wave will develop or the price at which the shares will trade. No assurance can be provided as to the demand for or trading price of the Ordinary Shares of K Wave.

Even if K Wave is successful in developing a public market, there may not be enough liquidity in such market to enable shareholders to sell their Ordinary Shares. If a public market for the combined K Wave’s Ordinary Shares does not develop, investors may not be able to re-sell their Ordinary Shares, rendering their shares illiquid and possibly resulting in a complete loss of their investment. K Wave cannot predict the extent to which investor interest in K Wave will lead to the development of an active, liquid trading market. The trading price of and demand for the Ordinary Shares of K Wave and the development and continued existence of a market and favorable price for the Ordinary Shares of K Wave will depend on a number of conditions, including the development of a market following, including by analysts and other investment professionals, the businesses, operations, results and prospects of K Wave, general market and economic conditions, governmental actions, regulatory considerations, legal proceedings and developments or other factors. These and other factors may impair the development of a liquid market and the ability of investors to sell shares at an attractive price. These factors also could cause the market price and demand for the Ordinary Shares of K Wave to fluctuate substantially, which may limit or prevent investors from readily selling their shares and may otherwise affect negatively the price and liquidity of the Ordinary Shares of K Wave. Many of these factors and conditions are beyond the control of K Wave.

K Wave’s share price may be volatile and could decline substantially.

The market price of K Wave’s Ordinary Shares may be volatile, both because of actual and perceived changes in K Wave’s financial results and prospects, and because of general volatility in the stock market. The factors that could cause fluctuations in K Wave’s share price may include, among other factors discussed in this section, the following:

In addition, the stock markets have experienced significant price and trading volume fluctuations from time to time, and the market prices of the equity securities of retailers have been extremely volatile and are sometimes subject to sharp price and trading volume changes. These broad market fluctuations may materially and adversely affect the market price of K Wave’s Ordinary Shares.

The sale or availability for sale of substantial amounts of Ordinary Shares could adversely affect their market price.

Sales of substantial amounts of the Ordinary Shares in the public market, or the perception that these sales could occur, could adversely affect the market price of the K Wave Ordinary Shares and could materially impair K Wave’s ability to raise capital through equity offerings in the future. In connection with the Business Combination, K Enter and its directors, executive officers and existing shareholders exchanged the Ordinary Shares of K Enter held by them for K Wave Ordinary Shares upon the consummation of the Business Combination and have agreed, subject to certain exceptions, not to sell any K Wave Ordinary Shares for 180 days after the closing of the Business Combination without the prior written consent of K Wave. Shares of K Wave to be held by K Enter’s certain existing shareholders after the Business Combination may be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act and the applicable lockup agreements. As of August 7, 2025, there were 63,198,074 outstanding and issued Ordinary Shares. K Wave cannot predict what effect, if any, market sales of securities held by K Wave’s significant shareholders or any other holders or the availability of these securities for future sale will have on the market price of the Ordinary Shares. In addition, K Wave entering into a securities purchase agreement with Bitcoin Strategic Reserve KWM LLC on June 3, 2025 – that provides for the sale by K Wave of up to $1 billion of Ordinary Shares – could also affect the market price of K Wave Ordinary Shares.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about K Wave or its business, its Ordinary Shares price and trading volume could decline.

The trading market for K Wave’s Ordinary Shares will depend in part on the research and reports that securities or industry analysts publish about K Wave or its business. Securities and industry analysts do not currently, and may never, publish research on K Wave. If no securities or industry analysts commence coverage of K Wave, the trading price for its Ordinary Shares would likely be negatively impacted. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover K Wave downgrade its securities or publish inaccurate or unfavorable research about its business, its stock price would likely decline. If one or more of these analysts cease coverage of K Wave or fail to publish reports on K Wave, demand for its Ordinary Shares could decrease, which might cause its Ordinary Share price and trading volume to decline.

K Wave’s amended and restated memorandum and articles of association that became effective prior to the completion of the Business Combination contains anti-takeover provisions that could have a material adverse effect on the rights of holders of the Ordinary Shares of K Wave.

K Wave has adopted an amended and restated memorandum and articles of association. K Wave’s post-closing memorandum and articles of association contain provisions to limit the ability of others to acquire control of K Wave or cause K Wave to engage in change-of-control transactions. These provisions could have the effect of depriving K Wave shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of K Wave in a tender offer or similar transaction. For example, K Wave’s board of directors will have the authority, subject to any resolution of the shareholders to the contrary, to issue preference shares in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with K Wave’s Ordinary Shares. Preference shares could be issued quickly with terms calculated to delay or prevent a change in control of K Wave or make removal of management more difficult. If K Wave’s board of directors decides to issue preference shares, the price of the Ordinary Shares of K Wave may fall and the voting and other rights of the holders of the Ordinary Shares of K Wave may be materially and adversely affected.

THE SECURITIES PURCHASE AGREEMENT

On July 3, 2025, we entered into a Securities Purchase Agreement, by and among the Company, the Selling Shareholders, and Anson Investments Master Fund L.P., as collateral agent for the Selling Shareholders (the “SPA”).

Pursuant to and subject to the terms and conditions of the SPA, the Company agreed to issue and sell to the Selling Shareholders, and the Selling Shareholders agreed to purchase from the Company, severally and not jointly, (i) at the Initial Closing (as described below), for an aggregate amount of $15,000,000, Senior Secured Convertible Notes representing an aggregate principal amount of $15,789,473.68 (the “Initial Notes”) and warrants (the “Initial Warrants”) to purchase an aggregate of 4,312,180 of Ordinary Shares; and (ii) at the Second Closing (as described below), for an aggregate amount of up to $10,000,000, Senior Secured Convertible Notes representing an aggregate principal amount of $10,526,315.79 (the “Second Notes”) and warrants (the “Second Warrants”) to purchase an aggregate of 2,874,786 Ordinary Shares.

Additionally, pursuant to and subject to the terms and conditions of the SPA, the Company agreed to issue and sell to the Selling Shareholders, and the Selling Shareholders agreed to purchase from the Company, severally and not jointly, at the Additional Closing (as defined below), if any, upon the terms and subject to the conditions set forth in the SPA and upon mutual written consent of the parties thereto, for an aggregate amount of up to $475,000,000, Senior Secured Convertible Notes representing an aggregate principal amount of $500,000,000 (the “Additional Notes”) and warrants (the “Additional Warrants”) to purchase an aggregate of 136,552,327 Ordinary Shares.

The Initial Notes and Second Notes (in each case, assuming interest is payable on such notes at a rate of 12% for a period of two years), and the Initial Warrants and Second Warrants, are issuable and exercisable, respectively, into an aggregate of 14,603,234 Ordinary Shares, which are the shares which are the subject of this prospectus (and which are collectively referred to herein as the “Offered Shares”).

The SPA contains customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

Pursuant to the SPA, the Company will use at least 80% of the net proceeds from the sale of the SPA Notes and the SPA Warrants exclusively for the purchase of Bitcoin (BTC).

Conditions Precedent to the Second Closing and Additional Closing (if any) Under the SPA

On July 11, 2025, the “Initial Closing” under the SPA was consummated by the parties thereto, pursuant to which the Company sold to the Selling Shareholders, for an aggregate amount of $15,000,000, the Initial Notes and the Initial Warrants.

However, the Selling Shareholder’s obligation to consummate the Second Closing and any Additional Closing under the SPA and to purchase the Second Notes and the Second Warrants and any Additional Notes and Additional Warrants, respectively, are subject to satisfaction of the conditions precedent thereto set forth in the SPA, all of which are outside of the Selling Shareholder’s control, which conditions include the following:

The Second Closing

Pursuant to the SPA, the consummation of the “Second Closing” requires:

Pursuant to the SPA, the consummation of any “Additional Closing” requires:

The SPA Notes

All of the Senior Secured Convertible Notes issued and issuable under the SPA (collectively, the “SPA Notes”) are substantially identical and each SPA Note matures, and all principal and any accrued interest on such SPA Note will be payable, on the date that is twenty-four months following its issuance date. The SPA Notes will not bear interest unless an event of default occurs under the SPA Notes, in which event the SPA Notes will bear interest at a rate of 12% per annum (retroactively commencing the date of issuance of the applicable SPA Note), payable at maturity. Additionally, any overdue accrued and unpaid interest to be paid under the SPA Notes will incur a late fee at an interest rate equal to 12% per annum (commencing on the date the interest was payable)

The SPA Notes are all convertible into Ordinary Shares at any time by the Selling Shareholders at a conversion price of $4.40 per Ordinary Share (subject to customary adjustment provisions in the SPA Notes).

Pursuant to the SPA Notes, the Company may not effect the conversion of any SPA Note, and a Selling Shareholder holding such SPA Note will not have the right to convert such SPA Note, to the extent that after giving effect to the conversion, the Selling Shareholder and its affiliates would beneficially own in excess of 4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the conversion.

Pursuant to each SPA Note, the Company must, for so long as such SPA Note is outstanding, cause all payments due under such SPA Note to (a) rank pari passu with all other SPA Notes and (b) be senior to all other Indebtedness (as defined in the SPA) of the Company and its Subsidiaries.

No fractional shares will be issued upon any conversion of an SPA Note. If, upon conversion of an SPA Note, the applicable Selling Shareholder would be entitled to receive a fractional interest in an Ordinary Share, the Company may at its option, upon conversion, pay cash in lieu of any such factional share or round up to the nearest whole share.

The SPA Notes have customary event of default provisions. Under the SPA Notes, upon the occurrence or existence of any event of default, the outstanding principal amount, any accrued interest and any other amounts payable thereunder will be (or in certain instances, at the option of the holder thereof, may be) immediately accelerated.

Pursuant to each SPA Note, if at any time after such SPA Note is issued, the Company raises capital in any private placement financing of the Company’s securities in which the Selling Shareholders are not party, the holder of such SPA Note will have the right to cause the Company to use 30% of the aggregate gross proceeds from such financing to redeem all or any portion of the SPA Notes then outstanding. Additionally, each SPA Note provides that, if at any time after such SPA Note is issued, a Change of Control Transaction occurs, the holder of such SPA Note will have the right to cause the Company to redeem all or any portion of the SPA Notes then outstanding, plus all accrued and unpaid interest thereon. The SPA Notes define a “Change of Control Transaction” to mean (a) an acquisition of effective control of more than 50% of the voting power of the Company (other than by means of conversion of the SPA Notes or exercise of the SPA Warrants), (b) a merger or consolidation involving the Company pursuant to which the shareholders of the Company immediately prior to such transaction own less than 67% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company (and all of its subsidiaries, taken as a whole) sells or transfers all or substantially all of its assets to another person or entity, (d) a replacement at one time or within a one year period of more than one-half of the members of the Company’s Board of Directors which is not approved by a majority of the members of the Board of Directors on the issuance date of the applicable SPA Note (or nominees of such members of the Board of Directors approved by a majority of the members of the Board of Directors as of such date), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the foregoing events.

The SPA Warrants

All of the Warrants to Purchase Ordinary Shares issued and issuable under the SPA (collectively, the “SPA Warrants”) are exercisable into Ordinary Shares at any time by the Selling Shareholders at an exercise price of conversion price of $3.6616 per Ordinary Share (subject to customary adjustment provisions in the SPA Warrants).

The SPA Warrants are substantially identical. The SPA Warrants provide the Selling Shareholders the right to purchase an aggregate of 143,739,293 Ordinary Shares at an exercise price of $3.6616 (subject to customary adjustment provisions in the SPA Warrants) and will be immediately exercisable on the date of the SPA Warrants’ respective issuances. The SPA Warrants expire on the fifth anniversary of their respective issuance dates.

Pursuant to the SPA Warrants, the Company may not exercise any SPA Warrant, and a Selling Shareholder holding such SPA Warrant will not have the right to exercise such SPA Warrant, to the extent that after giving effect to the exercise, the Selling Shareholder and its affiliates would beneficially own in excess of 4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the exercise.

The SPA Warrants may be exercised by a Selling Shareholder by paying the exercise price in cash or on a cashless basis. No fractional shares will be issued upon any exercise of any SPA Warrant. If, upon exercise of an SPA Warrant, a holder would be entitled to receive a fractional interest in an Ordinary Share, the Company will round up to the nearest whole share.

The SPA Registration Rights Agreement

Pursuant to the SPA, on July 3, 2025, the Company and the Selling Shareholders entered into a Registration Rights Agreement (the “SPA Registration Rights Agreement”).

The SPA Registration Rights Agreement requires the Company to file registration statements under the Securities Act providing for the resale of all or part of the registrable securities held by the parties thereto as promptly as practicable, but in no event later than (i) the fifteenth day following (A) the Initial Closing with respect to the Initial Notes and the Second Notes and the Initial Warrants and the Second Warrants, and (B) each applicable additional closing date with respect to the Additional Notes and Additional Warrants, if issued, and (ii) with respect to any additional registration statements that may be required to be filed by the Company pursuant to the SPA Registration Rights Agreement, the date on which the Company was required to file such additional registration statement pursuant to the terms thereof.

Pursuant to the SPA Registration Rights Agreement, the Company will use reasonable best efforts to cause each registration statement to be declared effective within the timelines specified therein, and thereafter to keep such registration statement effective for the periods specified therein. The SPA Registration Rights Agreement also contains customary indemnity and contribution obligations by the Company and the other parties to the SPA Registration Rights Agreement.

The Security Agreement

Pursuant to the SPA, on July 11, 2025, the Company and Anson Investments Master Fund, LP (in such capacity, the “Secured Party”), entered into a Security Agreement (the “Security Agreement”), pursuant to which the Company granted to the Secured Party a security interest in certain of the Company’s deposit accounts and digital asset accounts (including all assets therein and proceeds therefrom, whenever held by the Company) (the “Collateral”) to secure all payment and other obligations (the “Secured Obligations”) of the Company under the SPA, the SPA Notes, the SPA Warrants and all other transaction documents entered into in connection with the SPA (collectively, the “SPA Transaction Documents”). Pursuant to the Security Agreement, if the Company defaults on any of the Secured Obligations, then the Secured Party will have the right, in addition to any rights of the Secured Party under applicable law and under the SPA and the other SPA Transaction Documents, to take exclusive control of the Collateral and sell, dispose or otherwise transfer the Collateral, and any payments, returns of capital and distributions made to the Company during such default will be paid to the Secured Party, in each case, until the Secured Obligations are paid in full. Pursuant to the Security Agreement, if the foregoing remedies are insufficient to repay the Secured Obligations, the Company will remain liable to pay such deficiency. The Security Agreement will terminate when the Secured Obligations are paid in full. As of the date of this prospectus, the Collateral includes $3,179,891.84 in cash and 88 Bitcoin (BTC).

Effect of Sales of our Securities under the SPA on our Stockholders

The Ordinary Shares that underly the Initial note, the Second Note, the Initial Warrant and the Second Warrant that are being registered under the Securities Act for resale by the Selling Shareholders in this offering are expected to be freely tradable. The resale by the Selling Shareholders of a significant amount of shares registered for resale in this offering at any given time, or the perception that these sales may occur, could cause the market price of our Ordinary Shares to decline and to be highly volatile.

The Selling Shareholders may resell all, some or none of the Offered Shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from the Selling Shareholders in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution, and in some cases substantial dilution, and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from the Selling Shareholders in this offering as a result of future sales of the Offered Shares made by us to the Selling Shareholders at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of our Securities under the SPA, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with the Selling Shareholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

As of August 7, 2025, there were 63,198,074 our Ordinary Shares outstanding. If all of the 14,603,234 Ordinary Shares offered for resale by the Selling Shareholders under this prospectus were issued and outstanding, such shares would represent approximately 18.77% of the total number of outstanding shares of Ordinary Shares and approximately 49.58% of the total number of outstanding shares of Ordinary Shares held by non-affiliates of our Company, in each case as of August 7, 2025.

The issuance of any Ordinary Shares to the Selling Shareholders underlying the Securities will not affect the rights or privileges of our existing stockholders, except that the economic and voting interests of each of our existing stockholders will be diluted. Although the number of our Ordinary Shares that our existing stockholders own will not decrease, our Ordinary Shares owned by our existing stockholders will represent a smaller percentage of our total outstanding our Ordinary Shares after any such issuance.

Our Ordinary Shares and our Warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “KWM” and “KWMWW”, respectively.

USE OF PROCEEDS

We will not receive any proceeds upon the sale of the shares of Ordinary Shares by the Selling Shareholders in this offering. See “Plan of Distribution” elsewhere in this prospectus for more information. However, we may receive up to $500 million in aggregate gross proceeds under the SPA from the sales of the Second Notes and the Additional Notes (if any), and up to $510,526,316 if the Initial Warrant, the Second Warrant and the Additional Warrant, if any, are exercised in full into Ordinary Shares. Pursuant to the SPA, the Company will use at least 80% of the net proceeds from the sale of the SPA Notes and the SPA Warrants exclusively for the purchase of Bitcoin (BTC). We currently intend to use the remaining proceeds we receive from the sale of the SPA Notes and the SPA Warrants for working capital and other general corporate purposes. Accordingly, our management will have broad discretion in the application of such net proceeds. We may use such proceeds for purposes that are not contemplated at the time of this offering.

We will pay the expenses of registration of the shares of our ordinary shares covered by this prospectus, including legal and accounting fees.

The prices at which the shares of Ordinary Shares are covered by this prospectus may actually be sold will be determined by the prevailing public market price for shares of our Ordinary Shares, by negotiations between the Selling Shareholders and buyers of our Ordinary Shares in private transactions or as otherwise described in “Plan of Distribution.”

MARKET INFORMATION FOR ORDINARY SHARES AND DIVIDEND POLICY

Market Information

Our Ordinary Shares and our Warrants are traded on The Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “KWM” and “KWMWW”, respectively. As of August 7, 2025, there were 205 holders of record of our Ordinary Shares.

Dividend Policy

We have not paid any cash dividends on our Ordinary Shares to date. The payment of cash dividends by us in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any dividends will be within the discretion of our Board.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF K Wave media ltd.

References to the “K Wave Media” refers to K Wave Media Ltd. The following discussion and analysis of K Wave Media Ltd.’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein) K Wave Media Ltd.’s audited financial statements as of December 31, 2024 and December 31, 2023 and for the period ended December 31, 2024 and the period from June 22, 2023 (inception) to December 31, 2023 (and related notes). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

K Wave Media Ltd. (“the Company”), was a wholly-owned subsidiary of Global Star Acquisition Inc. (“Global Star”), and was incorporated on June 22, 2023 and the Company’s registered office is at c/o Maples Corporate Services Limited PO Box 309, Ugland House Grand Cayman, KY1-1104 Cayman Islands. The Company was formed for the purpose of becoming the ultimate parent company following the transactions contemplated in the Merger Agreement. The Company maintained one direct wholly owned subsidiary, GLST Merger Sub Inc. (“Merger Sub”), a Delaware corporation. Merger Sub was incorporated to facilitate the consummation of the Business Combination Agreement. As of December 31, 2024, Merger Sub had no operations. As of the date of the prospectus, Merger Sub has been merged with and into K Enter in connection with the Business Combination. The Company and Merger Sub are together referred to as the “Group”.

Global Star entered into a merger agreement, dated as of June 15, 2023, and as amended on March 11, 2024, June 28, 2024, and July 25, 2024 (as it may be amended from time to time, the “Merger Agreement”), which provided for a Business Combination between Global Star and K Enter Holdings, Inc., a Delaware corporation (“K Enter”). Pursuant to the Merger Agreement, the Business Combination was effected in two steps: (i) subject to the approval and adoption of the Merger Agreement by the stockholders of Global Star, Global Star reincorporated to Cayman Islands by merging with and into the Company, with the Company remaining as the surviving publicly traded entity (the “Reincorporation Merger”); (ii) one (1) business day following the Reincorporation Merger, Merger Sub merged with and into K Enter, resulting in K Enter being a wholly owned subsidiary of the Group.

As of December 31, 2024, the Company issued 5,000,000 shares of the Company’s ordinary shares. Pursuant to the Merger Agreement, the Company cancelled all the outstanding 5,000,000 shares of the Company’s ordinary shares as of the effective date of the Business Combination. Also, the Company issued a total of 59,000,000 ordinary shares of the Company at a price of $10 per share as consideration for a total of 189,013 shares of K Enter. This consisted of 101,202 shares of outstanding K Enter’s common stock, 47,013 shares of K Enter Ordinary Shares to be issued to the owners of the Six Korean Entities pursuant to the equity purchase agreement based on an estimated 312.1:1 conversion ratio calculated with a foreign exchange rate of KRW 1,470.00 / USD $1.00, and 40,798 K Wave Ordinary Shares to be issued to the holders of K Enter’s Series A Preferred Stock and Series A-1 Preferred Stock based on the conversion of the of K Enter Series A Preferred Stock and Series A-1 Preferred Stock. The total ordinary shares of the Company to be issued to the stockholders of K Enter is 59,000,000 ordinary shares post closing of the Business Combination.

After the transactions contemplated by the Merger Agreement were consummated, the Group became the surviving publicly-traded entity.

Standby Equity Purchase Agreement

On June 3, 2025, we entered into a securities purchase agreement with Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”), providing for the sale by K Wave of up to $1 billion of Ordinary Shares for an aggregate subscription price of, up to $500 million.

Proceeds from the Bitcoin Strategic facility will be used to support our Bitcoin-centric digital asset treasury strategy as well as for working capital and M&A activities, further expanding its content and K-POP related businesses. Under this initiative, K Wave will, subject to certain limitations, allocate a significant portion of the proceeds received from the sale of any shares under the facility to the purchasing, long-term holding, and yield optimization of Bitcoin (BTC) — positioning itself among the first publicly traded media companies to integrate BTC directly into its core treasury operations. In addition, the Company plans to operate Bitcoin Lightning Network nodes and invest in Bitcoin-native infrastructure to enhance decentralization and facilitate on-chain transaction rewards. 

Securities Purchase Agreement

On July 3, 2025, we entered into a Securities Purchase Agreement, by and among the Company, the Selling Shareholders, and Anson Investments Master Fund L.P., as collateral agent for the Selling Shareholders (the “SPA”), pursuant to which we (i) issued and sold Senior Secured Convertible Notes on July 11, 2025 to the Selling Shareholders in the aggregate principal amount of $15,789,473.68 and warrants to purchase up to $15,789,478.29 of our Ordinary Shares and (ii) may issue and sell to the Selling Shareholders up to $485 million in Senior Secured Convertible Notes and Warrants to Purchase up to $510,526,316 of Ordinary Shares. Pursuant to the SPA, the Company will use at least 80% of the net proceeds from the sale of these notes and warrants exclusively for the purchase of Bitcoin (BTC), thus further supporting K Wave’s Bitcoin-centric digital asset treasury strategy.

Results of operations

Present below is a summary of K Wave Media’s operating results as follows:

Comparison of the year ended December 31, 2024 and the Period from June 22, 2023 (inception) to December 31, 2023

K Wave Media’s all expenses decreased for the year ended December 31, 2024 as compared to the period from June 22, 2023 (inception) to December 31, 2023, by $11,431 or 100%. For the period from June 22, 2023 (inception) to December 31, 2023, K Wave Media’s all expenses have been related to initial start-up costs incurred with setting up a legal entity. As of December 31, 2024, the Company had no operation and the Company expects to incur the operating expenses after becoming the ultimate parent company following the transactions contemplated in the Merger Agreement.

Liquidity and capital resources

As of December 31, 2024, we had no cash or cash equivalents.

From inception to December 31, 2024, we did not have any operating, investing, or financing cash flows.

Contractual obligations and commitments

As of December 31, 2024, we have no contractual obligations and commitments outside of our related party transaction with K Wave Media.

Off-balance sheet arrangements

As of December 31, 2024, we do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

We prepare our Financial Statements in accordance with the IFRS issued by the International Accounting Standards Board (“IASB”). Refer to “Note 3 - Material accounting policies” in the accompanying Financial Statements for discussion of the accounting policies applied by us. From inception to December 31, 2024, we did not have operating activities or become party to transactions requiring the application of significant, difficult, subjective, or complex accounting judgements.

Quantitative and qualitative disclosures about market risk

As of December 31, 2024, we had no material exposure to market risk.

Novel Treasury Strategy

We have adopted a digital asset treasury strategy centered on holding Bitcoin as a reserve asset. While we believe this strategy may enhance our financial flexibility and long-term value preservation, it also exposes us to numerous risks. Bitcoin and other digital assets are highly volatile and have experienced extreme fluctuations in value. The market price of Bitcoin may decline for a variety of reasons, including changes in investor sentiment, technological developments, regulatory developments, macroeconomic factors, and other events. Significant volatility could have a material adverse effect on the value of our Bitcoin holdings and, as a result, our financial condition.

Moreover, Bitcoin is not legal tender in any jurisdiction, and regulatory frameworks governing digital assets remain uncertain and subject to rapid change. Governmental authorities may restrict or prohibit the use or possession of Bitcoin or impose new taxes or regulations that could adversely affect our ability to hold, transfer, or use Bitcoin. There are also substantial risks related to cybersecurity and the safekeeping of digital assets. Any failure to safeguard our private keys or digital wallets, including through a third-party custodian, could result in the loss of all or a portion of our Bitcoin holdings. Additionally, Bitcoin is relatively illiquid compared to traditional fiat currencies. If we are unable to liquidate our holdings at favorable prices or within a desired timeframe, our liquidity and ability to meet capital needs or operational expenses could be negatively impacted.

Given the novelty and evolving nature of Bitcoin, we may be unable to accurately assess or manage the risks associated with our treasury strategy, which could lead to material adverse effects on our business, financial performance, and investor confidence.

Subsequent Event

In January 2025, K Wave Media entered into agreements with five investors issuing a Convertible Senior Unsecured Note (PIPE), which is entitled to convert to common shares of K Wave Media immediately after the completion of the business combination. The agreement includes various conditions, including the issuance of free trading bonus shares by K Wave Media and 3-year maturity with 3% annual coupon rate. The total amount of principal is $4.41 million and was paid upon the completion of business combination, with $0.5 million of the total principal being paid to K Enter Holdings Inc as a working capital loan.

Standby Equity Purchase Agreement

On June 3, 2025, we entered into a securities purchase agreement with Bitcoin Strategic Reserve KWM LLC (“Bitcoin Strategic”), providing for the sale by K Wave of up to $1 billion of Ordinary Shares for an aggregate subscription price of, up to $500 million.

Proceeds from the Bitcoin Strategic facility will be used to support the our Bitcoin-centric digital asset treasury strategy as well as for working capital and M&A activities, further expanding its content and K-POP related businesses. Under this initiative, K Wave will, subject to certain limitations, allocate a significant portion of the proceeds received from the sale of any shares under the facility to the purchasing, long-term holding, and yield optimization of Bitcoin (BTC) — positioning itself among the first publicly traded media companies to integrate BTC directly into its core treasury operations. In addition, the Company plans to operate Bitcoin Lightning Network nodes and invest in Bitcoin-native infrastructure to enhance decentralization and facilitate on-chain transaction rewards.

Copies of the press release and the securities purchase agreement are attached as Exhibits 99.1 and 99.2 to the current report on Form 6-K filed with the SEC on June 4, 2025.

Securities Purchase Agreement

On July 3, 2025, we entered into a Securities Purchase Agreement, by and among the Company, the Selling Shareholders, and Anson Investments Master Fund L.P., as collateral agent for the Selling Shareholders (the “SPA”), pursuant to which we (i) issued and sold Senior Secured Convertible Notes on July 11, 2025 to the Selling Shareholders in the aggregate principal amount of $15,789,473.68 and warrants to purchase up to $15,789,478.29 of our Ordinary Shares and (ii) may issue and sell to the Selling Shareholders up to $485 million in Senior Secured Convertible Notes and Warrants to Purchase up to $510,526,316 of Ordinary Shares. Pursuant to the SPA, the Company will use at least 80% of the net proceeds from the sale of these notes and warrants exclusively for the purchase of Bitcoin (BTC), thus further supporting K Wave’s Bitcoin-centric digital asset treasury strategy.

The SPA is attached as Exhibit 99.2 to the Report on 6-K filed by the Company with the SEC on July 30, 2025.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF K ENTER

The following discussion and analysis should be read in conjunction with “Selected Financial Information of K Enter” and the audited financial statements and related notes that are included elsewhere in this prospectus. The discussion and analysis should also be read together with K Enter’s pro forma financial information for the period ended December 31, 2024 and as of December 31, 2024 (in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information”). In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause K Enter’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this prospectus. Factors which could cause such differences are discussed herein. Unless otherwise specifically noted or the context otherwise requires, all references in this section to “K Enter” refers to K Enter Holdings Inc. prior to the consummation of the Business Combination, which became the business of K Wave following the consummation of the Business Combination.

Business Overview

K Enter was formed on January 4, 2023, under the laws of the State of Delaware, to become a leading tech and intellectual property (“IP”) based diversified entertainment company. To fulfill this vision, the Company established and internal Korean drama production team and entered into equity purchase agreements to acquire a controlling equity interest in six separate Korean entertainment companies (collectively, the “Six Korean Entities”) in order to combine initial capabilities believed to serve as the foundation for the Company’s growth – content production, content merchandising, and content investment. The Six Korean Entities include one Korean content-specialized private equity firm, one Korean drama production company, three Korean movie production companies, and one IP merchandising company. On January 3, 2025, K Enter completed the acquisitions of the controlling interests of each of the Six Korean Entities through the share exchange.

Business Combinations and Public Company Costs

Merger Agreement with Global Star

On June 15, 2023, K Enter announced that K Enter entered into a Merger Agreement with Global Star, a publicly traded special purpose acquisition company and certain of its subsidiaries.

March 11, 2024, Global Star, K Enter, PubCo and Merger Sub executed the First Amendment to Merger Agreement to, among other things, reduce the base value of the merger consideration to be received by Company shareholders from $610 million to $590 million.

On June 28, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Second Amendment to Merger Agreement, which extended the outside date for the parties to consummate the closing of the Business Combination from June 22, 2024 to December 22, 2024.

On July 25, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Third Amendment to Merger Agreement, which conditioned the closing of the Business Combination on K Enter’s prior consummation of the acquisition of the controlling equity interests in the Six Korean Entities.

On December 11, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Fourth Amendment to Merger Agreement, which extended the outside date for the parties to consummate the closing of the Business Combination from December 22, 2024 to June 22, 2025.

On May 13, 2025, the transactions contemplated under the Merger Agreement were consummated. The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

In connection with the closing of the Business Combination, the aggregate consideration for the Acquisition Merger was $590,000,000, payable in the form of 59,000,000 newly issued PubCo’s Ordinary Shares valued at $10.00 per share.

As a consequence of the Business Combination, we became the successor to an SEC-registered and NASDAQ-listed company, which will require us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

K Enter expects its capital and operating expenditures will increase significantly in connection with K Enter’s ongoing activities as we:

Acquisitions of Six Korean Entities

K Enter’s acquisition of Play Company Co., Ltd. (“Play Company”), Solaire Partners LLC (“Solaire”), Apeitda Co., Ltd. (“Apeitda”), The LAMP Co., Ltd. (“Lamp”), Bidangil Pictures Co., Ltd. (“Bidangil”), and Studio Anseilen Co., Ltd. (“Studio,” and collectively, the “Six Korean Entities”) was a closing condition to the Business Combination.

On January 3rd, 2025 K Enter closed the equity purchase for Play Company first and the acquisitions of each of the Six Korean Entities other than Play Company closing subsequently.

The acquisition of each of the Six Korean Entities by K Enter was accounted for in accordance with the acquisition method of accounting under IFRS 3, with Play Company considered to be the acquirer of K Enter. As Play Company’s basis of accounting is IFRS, the combined K Enter – Play Company entity basis of accounting was IFRS.

The acquisitions of each of the Six Korean Entities other than Play Company by K Enter post the acquisition of Play Company was accounted for in accordance with the acquisition method of accounting under IFRS 3, with K Enter post the acquisition of Play Company considered to be the acquirer of each of the Six Korean Entities other than Play Company. As K Enter post the acquisition of Play Company basis of accounting was IFRS, New K Enter’s basis of accounting was IFRS.

Under the acquisition method of accounting, the preliminary purchase price was allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their respective fair market values, with the excess purchase price, if any, allocated to goodwill. Costs related to the transaction were expensed as incurred.

The Business Combination was accounted for as a capital reorganization in accordance with IFRS 2 as Global Star does not meet the criteria to be determined a business under IFRS 3. Under this method of accounting, Global Star was treated as the acquired company for financial reporting purposes, and New K Enter was treated as the acquirer for financial statement reporting purposes.

Recent Developments

During October 2023, K Enter entered into an agreement to issue 615 shares of Series A-1 for gross proceeds of $369,000. If any founding member shareholder(s) owning together more than 20% of the Company decide to sell its shares, the investor was provided the right, but not an obligation, to participate in the relevant sale along with the founding member shareholder(s) with the identical terms and conditions given to the lead seller. As of the date these unaudited financial statements were issued, the investor has not yet transferred consideration for this agreement to the Company.

During January 2024, we entered into an agreement with a six-month term to engage an exclusive US-based financial advisor and placement agent (the “Advisor”) in connection with a pre-PIPE financing transaction in exchange for 7.0% of the gross proceeds from an equity investment and 5.0% of the gross proceeds from a debt investment. The Advisor may elect to receive up to 50.0% of the compensation owed in common equity of K Enter or the entity that survives the transaction. Additionally, the Advisor will earn a fee of $500,000 in the form of K Enter Ordinary Shares at the closing of the business combination if a minimum of $5,000,000 of investment (debt or equity) is secured by the Advisor. No investment commitments have been secured to date.

On January 31, 2024, K Enter entered into the Stock Purchase Agreement with Solaire Partners LLC, which the company acquired 1,000 shares of Play Company Co., Ltd totaling 1,741,000,000 Korean Won ($1,178,055 at December 31, 2024).

On January 31, 2024, an amendment was made to the share purchase agreement, originally entered into on April 12, 2023, with the CEO of First Virtual, and the share purchase agreement with the shareholder of First Virtual was renewed due to the spin-off of the First Virtual, which was executed in October 2023. As a result of this amendment, the value of shares to be exchanged has been decreased to 10,199,577,468 Korean won.

On March 5, 2024, K Enter entered into the Termination and Re-Purchase Option Agreement with the owners of First Virtual, which terminated all agreements entered into in connection with the original equity purchase agreement. The major conditions in the agreement are followings.

Based on the termination of the New FVL Agreements, Global Star and K Enter agreed to decrease the base merger consideration Global Star issued to the stockholders of K Enter in connection with the Business Combination. On March 11, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the First Amendment to Merger Agreement, which among other things decreased the base merger consideration from $610 million to $590 million that Global Star will issue to the stockholders of K Enter. Accordingly, pursuant to the First Amendment to Merger Agreement, PubCo issued 59,000,000 ordinary shares of PubCo to the stockholders of K Enter in exchange for all of the Ordinary Shares of K Enter.

While no definitive action has been taken to terminate the FVL Termination and Option Agreement, K Enter currently views the acquisition of a controlling interest in First Virtual pursuant to the FVL Termination and Option Agreement as uncertain due to the uncertainty as to the outcome of the Prototype Lawsuits and there can be no assurance that K Enter will acquire a controlling interest in First Virtual pursuant to the FVL Termination and Option Agreement.

In June 2024, K Enter issued two convertible senior unsecured notes (the “Notes”) in the aggregate amount of $4,500,000. The Notes have a maturity date of 3 years and will pay an annual coupon rate of 3% to be paid semi-annually until the maturity date of the Notes.

Under one Note (the “$1.5MM Note”), which is in the principal amount of $1,500,000, the proceeds shall be wired to K Enter as follows:

Under the other Note (the “$3MM Note”), which is in the principal amount of $3,000,000, the proceeds shall be wired to K Enter as follows:

From the time K Enter issued the Notes and until the closing of the Business Combination, the Notes were convertible, at the option of the holders, at a conversion price per share of $1,200 per share. The Post-Merger Conversion Price for the Notes will be the greater of the following:

Upon execution of the $1.5MM Note, K Enter received $375,000 pursuant to the $1.5MM Note. Upon execution of the $3MM Note, K Enter received $750,000 pursuant to the $3MM Note. On October 3, 2024, K Enter received $300,000 pursuant to the $3MM Note and on October 18, 2024, K Enter received $1,200,000 pursuant to the $3MM Note. On January 8 2025, K Enter received $375,000 pursuant to the 1.5MM Note. However, the investor committed to invest $3MM Note declined to invest the remaining $750,000. Accordingly, K Enter is not due any payment under the $3MM Note and 1.5 MM Note.

On, August 9, 2024, K Enter entered into an extension agreement on the convertible bond with Prototype Groupe Inc to extend the maturity date to August 9, 2025. The Loan bears interest at the rate of 5.96% per annum. If there are any overdue payments, Prototype shall bear a late payment interest rate of the Applicable Federal Rate plus 10% additional interest.

On August 19. 2024, Global Star Acquisition I LLC loaned K Enter $120,000. The loan is for a term of three months or within five business days after K Enter’s Form F-4 registration statement becomes effective, whichever is earlier and bears no interest. The proceeds of the loan will be used to fund the operations of K Enter. On October 18. 2024, K Enter repaid $120,000 of Global Star Acquisition I LLC loan, leaving a balance of $0.00 on the loan.

On December 31, 2024, K Enter entered into a loan agreement with Nikhil Suresh Nanda, pursuant to which the Nikhil Suresh Nanda will provide working capital loans to K Enter. The total loan amount will not exceed 50% of the total committed PIPE financing totalling $1,000,000 for the SPAC. The loan were paid by converting the subject loan to a Convertible Senior Unsecured Note (PIPE) immediately prior to the completion of the business combination.

Comparability of Financial Information

Our results of operations and statement of assets and liabilities may not be comparable between prospective periods as a result of the Business Combination.

Key factors Affecting Operating Results

We believe that K Enter’s performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors—Risks related to K Enter’s Business and Industry.

Limited Operating History

While we do not have significant past operating history, K Enter’s management is aware that the future operating results and K Enter’s future financial condition may be different than K Enter’s past operating results and financial condition. Major factors that will have a material impact on future financial results and condition include whether investments in the development of new motion pictures or new IP content achieve significant commercial success. Even if significant commercial success is achieved, K Enter’s business plan is complex and there are many factors which could impact K Enter’s operating results and financial conditions including delays in projects, opportunity cost of divesting management and financial resources away from other IP content and volatility in the demand for K Enter’s products and services. For more information, please see the section of the Prospectus entitled “Risk Factors — Risks Related to K Enter Holdings Inc.’s Business and Industry”.

Government Regulation

We plan to have significant international sales and operations that are subject to government regulation and compliance requirements (such as regulation of K Enter’s IP content and service offerings, competition, censorship of content, data privacy), restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership. Compliance with international and U.S. laws and regulations that apply to K Enter’s international operations may increase K Enter’s cost of doing business. For more information, please see the section of this prospectus entitled “Risk Factors — Risks Related to K Enter Holdings Inc.’s Business and Industry”.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with GAAP, expressed in U.S. dollars. References to GAAP issued by the FASB in these accompanying notes to the financial statements are to the FASB Accounting Standards Codification (“ASC”).

Key Components of Statement of Operations

Revenue

K Enter’s operating income was driven by videography services for television programs.

General and Administrative Expense

General and administrative expenses consist of personnel-related expenses for K Enter’s administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, depreciation, and travel costs. Personnel-related expenses consist of salaries, benefits, and share-based compensation.

We expect K Enter’s general and administrative expenses to increase for the foreseeable future as we complete the acquisition of the controlling equity interests in the Six Korean Entities, scale headcount with the growth of K Enter’s business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expense, investor relations activities and other administrative and professional services.

Other Income (Expense)

Other income (expense) consists primarily of the realized gain on transactions that are denominated in a currency other than K Enter’s reporting currency.

Results of Operations

Presented below is a summary of K Enter’s results of operations:

For the year ended December 31, 2024 and the period from January 4, 2023 (inception) to December 31, 2023, K Enter’s operating income was driven by its media production segment, which realized revenues totaling $0.49 million and $0. 21 million, respectively.

K Enter’s revenue has increased for the year ended December 31, 2024, as compared to the period from January 4, 2023 (inception) to December 31, 2023 by $0.28 million, or 132.5%. This is attributable to the agreements entered into in 2024 for the production design services including set construction, props, and overall visual concept development.

For the year ended December 31, 2024, K Enter’s operating expenses are primarily driven by payroll related costs to run its internal Korean drama production and operating team and advisory fees paid to auditor, financial and legal experts.

K Enter’s operating expenses increased for the year ended December 31, 2024 as compared to the period from January 4, 2023 (inception) to December 31, 2023 by $3.16 million, or 34.5%. This is attributable to an increase in payroll and payroll related expenses of $0.89 million associated with an increased employee headcount in 2024 compared to 2023 and an increase in advisory fees paid of $1.27 million. Also, the share-based compensation expenses increased for the year ended December 31, 2024 as compared to the period from January 4, 2024 (inception) to December 31, 2023 by $0.47 million due to the additional grant of treasury shares to employees and others.

For the year ended December 31, 2024, K Enter’s other expense is comprised of impairment loss on convertible debt security of $959,459 and interest expenses of $47,608.

Cash Flow

Presented below is a summary of K Enter’s operating, investing and financing cash flows:

The cash flow used in K Enter’s operating activities for the year ended December 31, 2024 primarily related to K Enter’s net loss of $12.9 million, adjusted for changes in K Enter’s working capital accounts.

K Enter’s cash flows used in operating activities decreased for the year ended December 31, 2024 as compared to the period from January 4, 2023 (inception) to December 31, 2023 by $2.2 million due to an increase in share-based compensation expenses of $0.5 million, an increase in impairment loss on convertible debt security of $1.0 million, a decrease in cash outflows from other non-current assets of $1.4 million, an increase in cash outflows from account payables of $0.4 million and an increase in cash inflows from accrued expenses and other current liabilities of $2.4 million for the year ended December 31, 2024, partially offset by an increase in net loss of $3.9 million.

The cash flow used in K Enter’s investing activities for the year ended December 31, 2024 primarily relates to K Enter’s payments for short-term loans of $0.01 million.

K Enter’s cash flow used in investing activities decreased for the year ended December 31, 2024 as compared to the period from January 4, 2023 (inception) to December 31, 2023 by $2.6 million due to the purchase of convertible debt security of $1.0 million, and purchase of investment in equity securities of $1.6 million for the period from January 4, 2023 (inception) to December 31, 2023, that did not recur for the year ended December 31, 2024.

The cash flow generated in K Enter’s financing activities for the year ended December 31, 2024 primarily relates to the issuance of preferred shares of $0.7 million and the issuance of convertible note of $2.6 million.

The cash flow provided by financing activities decreased for the year ended December 31, 2024 as compared to the period from January 4, 2023 (inception) to December 31, 2023 by $9.3 million and primarily relates to the proceeds from the issuance of preferred shares of $10.6 million for period from January 4, 2023 (inception) to December 31, 2023, that did not recur for the year ended December 31, 2024.

Liquidity and Capital Resources

K Enter has incurred significant losses and negative cash flows from operations, net loss was $12,870,234 for the year ended December 31, 2024. During the year ended December 31, 2024, K Enter had negative cash flows from operations of $5,800,647. As of December 31, 2024, K Enter’s accumulated deficit was $21,801,180. K Enter has funded its operations to date through equity and debt financing and has cash equivalents of $333,069 as of December 31, 2024. K Enter monitors its cash flow projections on a current basis and takes active measures to obtain the funding it requires to continue its operations. However, these cash flow projections are subject to various uncertainties concerning their fulfilment such as the ability to increase revenues by attracting and expanding its customer base and completing additional financing. K Enter expects to fund operations using cash on hand and raising additional proceeds. There are no assurances, however, that K Enter will be able to generate the revenue necessary to support its cost structure or that it will be successful in obtaining the level of financing necessary for its operations. These conditions raise substantial doubt as to K Enter’s ability to continue as a going concern.

Historically, K Enter’s primary sources of liquidity have been cash flows from contributions from founders, the issuance of Series A convertible preferred stock, and the issuance of Series A-1 convertible preferred stock. As of December 31, 2024, we had an aggregate cash balance of $333,069 and net working capital deficit of $3.0 million.

We intend to operate with its current cash on hand. In the future, we may borrow money and sell equity to finance K Enter’s operations. As we have a limited operating history, K Enter’s liquidity and capital resources may change substantially from past results.

Our future capital requirements will depend on many factors, including K Enter’s revenue growth rate, the timing and extent of spending to support future sales and marketing and research and development efforts. In order to finance these opportunities, we may need to raise additional financing. While there can be no assurances, if additional capital is required, we intend to raise such capital through operations, additional issuances of convertible preferred stock, and through the Business Combination. If additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, K Enter’s business, results of operations and financial condition would be materially and adversely affected.

Contractual Obligations and Commitments

We manage K Enter’s use of cash in the operation of K Enter’s business to support the execution of K Enter’s primary strategic goals of launching K Enter’s internal Korean drama production team and acquiring the controlling interests in the Six Korean Entities. We primarily use cash for capital investments, purchases of equity shares in related parties, loans, including purchases of bonds, to companies that will assist us in achieving K Enter’s strategic goals, acquisitions of businesses and general and administrative costs.

Our cash requirements beyond twelve months are for operating leases – Refer to Note 12 of the notes to the financial statement for further information of K Enter’s obligations and the timing of expected payments.

Related Parties

Two of K Enter’s directors, one of whom is the Chairman of K Enter’s board of directors, are also senior officers of Solaire Partners, which is one of the Six Korean Entities. A director of K Enter is also a managing member of Global Star Acquisition 1, LLC, the entity K Enter purchased its shares of Global Star Class B Ordinary Shares from.

K Enter entered into a two-year operating lease for one of its office spaces commencing in June 2023 with Solaire Partners as the landlord. At inception, total gross rental payments due under this operating lease approximated $92,938 and a security deposit due approximated $67,699. For the year ended December 31, 2024, K Enter made $46,469 of rental payments associated with this operating lease. As of December 31, 2024, $19,189 associated with the present value of lease payments is included as components of lease liabilities, current – related party on the accompanying balance sheet, $67,699 associated with the security deposit is included as a component of prepaid expenses and other current assets - related party on the accompanying balance sheet.

During January 2024, K Enter purchased 1,000 shares of Play Company Co., Ltd. Ordinary Shares for an aggregate purchase price of $1,178,055 from Solaire Partners LLC.

On April 22, 2024, Young Jae Lee, K Enter’s director and former Chief Executive Officer, loaned K Enter $121,798 (the “1st Lee Loan”). On May 3, 2024, K Enter repaid $67,665 of the 1st Lee Loan, leaving a balance of $54,132 on the 1st Lee Loan. The 1st Lee Loan is for a term of six months and bears interest at the rate of 4.6% per annum. On October 23, 2024, K Enter entered into an extension agreement on the 1st Lee Loan to amend the maturity date to June 30, 2025 or within five days after the K Wave Media Ltd registration statement on Form F-4 is declared effective by the U.S. Securities and Exchange Commission. The Loan bears interest at the rate of 4.6% per annum. On February 10, 2025, K Enter fully repaid the 1^st Lee Loan, leaving a balance of $0.00.

On April 23, 2024, Young Jae Lee, K Enter’s director and former Chief Executive Officer, loaned K Enter $169,164 (the “2nd Lee Loan”). On May 3, 2024, K Enter repaid $169,164 of the 2nd Lee Loan, leaving a balance of $0.00 on the 2nd Lee Loan. The 2nd Lee Loan is for a term of three months and bears interest at the rate of 4.6% per annum.

On April 26, 2024, Bidangil Pictures Co., Ltd., loaned K Enter $91,348. The Loan is for a term of three months and bears interest at the rate of 3% per annum. On July 26, 2024, K Enter entered into the extension agreement with Bidangil in order to differ the maturity to October 23, 2024. On October 25, 2024, K Enter entered into an extension agreement on the loan with Bidangil Pictures Co.,Ltd. to amend the maturity date to June 30, 2025 or within five business days after K Wave Media Ltd F-4 registration statement becomes effective. The Loan is for a term of three months and bears interest at the rate of 3% per annum.

On May 3, 2024, Young Jae Lee, K Enter’s director and former Chief Executive Officer, loaned K Enter $236,829 (the “3rd Lee Loan”). The 3rd Lee Loan is for a term of nine months and bears interest at the rate of 4.6% per annum. On November 3, 2024, K Enter entered into an extension agreement on the 3rd Lee Loan to amend the maturity date to April 30, 2025 or within five days after the K Wave Media Ltd registration statement on Form F-4 is declared effective by the U.S. Securities and Exchange Commission. On April 30, 2025, K Enter entered into an extension agreement on the 3rd Lee Loan to extend the maturity date to April 30, 2026. The Loan bears interest at the rate of 4.6% per annum. On February 10, 2025, K Enter repaid $25,046, leaving a balance of $222,091. On June 30, 2025, K Enter repaid $23,152, leaving a balance of $209,302.

On June 4, 2024, K Enter issued a convertible senior unsecured note in the principal amount of $3,000,000 to Innocus Global Group Pte Ltd., an entity owned by Jaekeun (Jason) Kim, a director PubCo (the “Jason Note”). The Jason Note has a maturity date of 3 years and will pay an annual coupon rate of 3% to be paid semi-annually until the maturity date of the Jason Notes. Under the Jason Note, the proceeds shall be wired to the company as follows: (i) 25% of the committed amount at the time of signing this definitive agreement, (ii) 50% at the time SEC declares effectiveness on the F-4, and (iii) the remaining 25% at the time of shareholder approval and going public. From the time the company issued the Jason Note and until the closing of the Business Combination, the Jason Note was be convertible, at the option of the holder, at a conversion price per share of $1,200 per share. The Post-Merger Conversion Price for the Notes is the greater of (a) a 60% discount to the 5-day average of the volume-weighted average prices of ordinary shares over 5 consecutive trading days following the conversion notice date, and (b) a Floor price of $4 per share. On October 3, 2024, K Enter received $300,000 pursuant to the $3MM Note and on October 18, 2024, K Enter received $1,200,000 pursuant to the $3MM Note. However, the holder declined to invest the remaining $750,000. Accordingly, K Enter is not due any payment under the $3MM Note at the time SEC declares effectiveness on the F-4.

On August 19. 2024, Global Star Acquisition I LLC loaned K Enter $120,000. The loan is for a term of three months or within five business days after K Wave Media Ltd F-4 registration statement becomes effective, whichever is earlier and bears no interest. On October 18. 2024, K Enter repaid $120,000 of Global Star Acquisition I LLC loan, leaving a balance of $0.00 on the loan.

On August 31, 2024, K Enter issued 1,932 shares ($1,075,622, $556.74 per share) of K Enter’s Ordinary Shares to an employee of K Enter, in consideration for services rendered.

On August 31, 2024, a total of 1,376 shares of treasury stock were returned as a settlement for no consideration to K Enter under the employment agreements, which were initially given to two employees.

On September 12, 2024, one founder of K Enter transferred a total of 688 shares ($383,037, $556.74 per share) of the founder to an employee at par value. K Enter recognized the transaction as a share-based compensation at fair value (See Note 8), which is included within general and administrative expenses on the accompanying statement of operations and comprehensive loss.

On September 24, 2024, K Enter entered into a share subscription agreement with GF Korea Inc. (the “GF Agreement”) pursuant to which the Company issued 4,997 shares ($2,782,030, $556.74 per share) of K Enter’s Ordinary Shares to GF Korea Inc. in consideration for GF Korea Inc. assuming certain payment obligations of the Company in the aggregate $8.52 million owed to its service providers of K Enter. The GF Agreement closed on September 25, 2024 and K Enter issued the 4,997 shares of its Ordinary Shares to GF Korea Inc., which will be converted to 1,559,805 shares of Pubco based on an estimated 312.1:1 conversion ratio calculated with a foreign exchange rate of KRW 1,470.00 / USD $1.00 in the Business Combination. Pursuant to the GF Agreement, GF Korea Inc. shall sell the shares within sixty(60) days following the listing date on the NASDAQ Stock Market.; However, if any lock-up period is imposed under applicable laws, GF Korea shall sell those ordinary shares within sixty (60) days after the expiration of such lock-up period.

On September 29, 2024, K Enter entered into an agreement with Lodestar USA, Inc. (the “Lodestar Agreement”) pursuant to which K Enter issued 1,202 shares ($669,201, $556.74 per share) of K Enter’s Ordinary Shares to Lodestar USA, Inc. in consideration for services rendered to K Enter by Ted Kim, a co-founder and a director of K Enter and the owner of Lodestar USA Inc. K Enter’s Ordinary Shares will be converted to 375,202 shares of Pubco based on an estimated 312.1:1 conversion ratio calculated with a foreign exchange rate of KRW 1, 470.00 / USD $1.00.

On September 30, 2024, K Enter issued Tan Chin Hwee, a director, Executive Chairman and Interim CEO of K Enter, 168 shares ($93,532, $556.74 per share) of K Enter’s Ordinary Shares in consideration for services rendered.

Off-Balance Sheet Arrangements

During the period presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

Critical Accounting Estimates

Our financial statements have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, as well as the reported expenses incurred during the reporting period. Management bases its estimates on historical experience and in various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to K Enter’s financial statements.

We believe the accounting policies discussed below are critical to understanding K Enter’s historical and future performance, as these policies relate to more significant areas involving management’s judgments and estimates.

While K Enter’s significant accounting policies are described in the notes to K Enter’s financial statements, we believe that the following accounting policies require a greater degree of judgment and complexity. Accordingly, these are the policies we believe are most critical to aid in fully understanding and evaluating K Enter’s financial condition and results of operations.

See Summary of Significant Accounting Policies under Note 2 in the notes to the financial statements for the year ended December 31, 2024 for more information about K Enter’s significant accounting policies.

Estimating Fair Value of Convertible Debt Security

We do not have a history of market price for the obligor on K Enter’s convertible debt security because the obligor is not publicly traded. As such, the fair value of the convertible debt security was determined using the Tsiveriotis-Fernandes model (the “T-F Model”).

The T-F Model separates convertible hybrid instruments into equity value and debt value. The risk-neutral probability is applied to the equity value, discounted at the risk-free interest rate, while the debt value is discounted at the risk interest rate reflecting the credit risk of the obligor. The model calculates each value separately and measures the value of the hybrid financial product through the summation of these two values, known as the blended discount model. The T-F Model distinguishes discount rates that align with the expected future cash flows inherent in the option structure within complex financial instruments, which aligns with the characteristics of cash flows.

The following assumptions were used in determining the fair value of the convertible debt security as of December 31, 2024:

Estimating Fair Value of Convertible Notes

The fair value of the convertible notes was determined using the Probability Weighted Return Model. The convertible notes issued contain a right to convert the notes into the Ordinary Shares. The Probability Weighted Return Model separates the embedded conversion features associated with the convertible notes separately from the host contract as the economic characteristics and risks of the embedded conversion feature are not closely related to the economic characteristics and risks of the host contract. The carrying amount of the convertible notes was determined for the difference between the fair value of the embedded conversion features and the principal amount of the convertible notes. The difference between the carrying value and principal amount of the convertible notes represents the discount on notes that was amortized to interest expense over the terms of the convertible notes using the effective interest rate method.

Leveraged adjusted guideline volatility for public companies was utilized in determining the fair value of the convertible notes because we do not have a history of market price on convertible notes as we are not publicly traded.

The following assumptions were used in determining the fair value of the convertible bond as of December 31, 2024:

Estimating Fair Value of Common Stock

We do not have a history of market price for K Enter’s Ordinary Shares because it is not publicly traded. As such, the fair value of K Enter’s Ordinary Shares was determined by K Enter’s board of directors as of the date Ordinary Shares were issued from treasury shares, by considering a number of objective and subjective factors, including:

In connection with estimating the fair value of K Enter’s Ordinary Shares at the time Ordinary Shares were issued from K Enter’s treasury shares, we obtained a third-party valuation from an independent valuation firm. The valuation dated as of December 31, 2024 was conducted in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held-Company Equity Securities Issued as Compensation utilizing an option pricing model (the “OPM”)

The OPM estimated K Enter’s enterprise value by asserting the September 2024 Series A-1 issuances to third parties was transacted at a fair value of $600.00 per share. The OPM utilizes the recent sale of the Preferred Series A-1 shares to a third-party as the best indicator of fair value in order to estimate the fair value of the respective classes of equity. We used a market approach, whereby we applied the recent transaction method for each outcome, or management estimations to estimate the implied equity value.

The OPM utilizes K Enter’s best estimates of the timing and likelihood of two scenarios, (a) merger with a special purpose acquisition company (“SPAC”) and (b) sale, in order to estimate the fair value of the respective classes of equity. For each scenario, we used either a market approach, whereby we applied the precedent transaction method for each outcome, or management estimations to estimate the implied equity value.

The equity value was allocated until the Series A-1 Preferred was equal to the sale price and allocated to each of the equity–linked instruments using an OPM. Based on the structure of the Company’s equity linked instruments, we developed breakpoints based on the conversion prices and exercise prices of the various preferred stock, and outstanding options and warrants. These breakpoints were used to allocate value as each instrument would be exercised/converted as it was in the money. We calculated allocation percentages for each equity–linked instrument. The value of each tranche was determined by subtracting the value of the previous tranche, which is multiplied by the applicable allocation percentages, and summed to yield the total value of each equity–linked instrument. The total value for each class of equity was then divided by the respective shares outstanding for that class to determine the per share value. The resulting value per share was the indicated present value, on a non-marketable basis.

For the valuation used to establish the fair value of K Enter’s Ordinary Shares as of December 31, 2024, the following assumptions were used:

There is inherent uncertainty in K Enter’s forecasts and projections, and if we had made different assumptions and estimates than those described previously, the amount of K Enter’s share-based compensation expense, net loss, and net loss per share amounts could have been materially different.

The per-share fair value of K Enter’s Ordinary Shares were newly issued or issued from K Enter’s treasury shares during the period from January 1, 2024 to December, 2024, were $556.74 with six months restriction and 598.01 with no restriction. The difference in fair value per share of Ordinary Shares newly issued or issued from treasury shares is driven by the length of the restricted period for which the underlying share of Ordinary Shares cannot be sold by the individual.

We were formed on January 4, 2023 for the purpose of acquiring the Six Korean Entities. We entered into equity purchase agreements with the Six Korean Entities between March 2023 and April 2023, all of which closed in December 2024 immediately prior to the PubCo’s proxy statement/prospectus on Form F-4 being declared effective by the SEC. The SEC declared the F-4 effective on December 30, 2024. We entered into conversations with Global Star, a special purpose acquisition company in February 2023, and we executed a term sheet with Global Star in April 2023 to consummate a business combination. On June 15, 2023, we executed a Merger Agreement with Global Star to consummate the Business Combination. The completion of the equity purchase agreements with the Six Korean Entities prior to the consummation of the Business Combination was the primary driver of the increase in the estimated fair value of the Ordinary Shares from the date of the Ordinary Shares issuances from K Enter’s treasury shares to the estimated merger price of approximately $3,121 per share on an as converted basis.

We believe that it is reasonable to expect that the completion of the equity purchase agreements with the Six Korean Entities will add value to the shares of K Enter’s Ordinary Shares as the entities are operational and revenue generating entities with balance sheets that will be combined with ours subsequent to the transaction consummation. We believe that it is reasonable to expect that the completion of the Business Combination will add value to the shares of K Enter’s Ordinary Shares because they will have increased liquidity and marketability. We believe that the preceding estimates are a reasonable description of the value that market participants would place on K Enter’s Ordinary Shares as of the valuation date.

Income Taxes

We recognize deferred taxes for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. As a pre-revenue company we generate net operating losses that would be available to carryforward to future years and applied against future taxable income.

Under Section 382 of the Code, substantial changes in K Enter’s ownership may limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset K Enter’s taxable income. Specifically, the limitation may arise in the event of a cumulative change in K Enter’s ownership of more than 50% within a three-year period. Any such limitation may significantly reduce the utilization of K Enter’s net operating loss carry forwards before they expire. We have not completed a study to assess whether an ownership change has occurred, or whether there have been multiple ownership changes since K Enter’s inception, due to the significant costs and complexities associated with the study. However, we believe it is likely that transaction that have occurred in the past, alone or together with the closing of the Business Combination and other transactions that may occur in the future, would trigger an ownership change pursuant to Section 382, which could limit the amount of net operating loss carryforwards that could be utilized annually in the future to offset out taxable income, if any.

For additional information on K Enter’s accounting policy on income taxes, see Note 2 – Summary of significant accounting policies – Income Taxes and Note 17 – Income Taxes in the accompanying audited financial statements.

Emerging Growth Company Status

We intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we intend to rely on such exemptions, we are not required to, among other things: (a) provide an auditor’s attestation report on K Enter’s system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (b) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance comparison of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an emerging growth company under the JOBS Act until the earliest of (a) the day of K Enter’s first fiscal year following the fifth anniversary of the Closing, (b) the last date of K Enter’s fiscal year in which we have total annual gross revenue of at least $1.235 billion, (c) the date on which we are deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (d) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to a variety of market and other risks, including the effects of interest rate changes, foreign currency fluctuations, inflation, and the availability of funding sources.

Interest Rate Risk

We hold cash and cash equivalents for working capital purposes. We do not have material exposure with respect to investments, as any investments that we enter into are primarily highly liquid investments. As of December 31, 2024, we had a cash balance of $333,069, consisting of operating accounts which are not affected by changes in the general level of U.S. interest rates.

Foreign Currency Risk

We conduct K Enter’s operations through two branches, one located in the United States and one in Korea. The transactions of each branch are primarily denominated in the U.S. dollar and the Korean Won, respectively, the functional currency. We have elected to use a reporting currency of the U.S. dollar. As foreign exchange rates change, the U.S. dollar equivalent of K Enter’s existing foreign currency assets, liabilities, commitments and forecasted foreign currency revenues and expenses will change. We are evaluating the best method to manage K Enter’s exposure to foreign currency fluctuations to reduce volatility of earnings and cash flow in order to allow management to focus on core business issues and challenges.

The economic and political conditions in the countries we are currently in and plan to operate in could impact K Enter’s ability to manage K Enter’s exposure to foreign currency fluctuations in those countries or repatriate cash from those countries.

Inflation Risk

We do not believe that inflation currently has a material effect on K Enter’s business. Inflation may become a greater risk in the event of changes in current economic and governmental fiscal policy.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by use as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on K Enter’s financial position or results of operations under adoption.

See Recent Accounting Pronouncements issued, not yet adopted under Note 2 – Summary of significant accounting policies in the notes to the financial statement for the year ended December 31, 2024 for more information about recent accounting pronouncements, the timing of their adoption and K Enter’s assessment, to the extent we have made one, of their potential impact on K Enter’s financial condition and results of operations.

Subsequent Event

On January 2, 2025, upon the closing of equity purchase agreement, K Enter completed the acquisition of the controlling interest of Six Korean Entities by share exchange. However, the purchase price allocation to assets acquired and liabilities assumed allocation to assets and liabilities is based on estimates, assumptions, valuations, and other studies that have not progressed to a stage where there is sufficient information to make a definitive calculation.

On February 3, 2025, shareholders of Global Star and K Wave Media approved the proposals regarding Merger Agreement on the shareholders’ meeting.

On February 10, 2025, the company fully repaid the “1st Lee Loan” and partially paid the 3rd Lee Loan by $25,046, leaving a balance of $222,091.

On February 27, 2025, Play company Co.,Ltd. loaned K Enter $744,319. The Loan is for a term of one year and bears interest at the rate of 4.6% per annum.

Management’s Discussion and Analysis of
Financial Condition and Results of Operations of GLOBAL STAR ACQUISITION INC.

References to the “Company,” “us,” “our” or “we” refer to Global Star Acquisition Inc. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and related notes included herein. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our unaudited financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We were formed as a blank check company incorporated in the State of Delaware on July 24, 2019, whose business purpose was to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses, which we refer to as our initial business combination (the “Business Combination”).

Our sponsor was Global Star Acquisition 1 LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s Initial Public Offering was declared effective on September 19, 2022. On September 22, 2022, we consummated our IPO of 8,000,000 units, at $10.00 per unit, with each unit consisting of one share of Class A common stock, par value $0.0001 per share (“Class A Common Stock”), one redeemable warrant (“Warrant”), each whole Warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price of $11.50 per share, and one Right, with each Right entitling the holder to receive one-tenth of one share of Class A Common Stock (“Right”), generating gross proceeds of $80,000,000. On September 22, 2022, simultaneously with the consummation of the closing of the IPO, we consummated the private placement of an aggregate of 456,225 units (the “Private Placement Unit”) to the Sponsor, at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $4,562,250 (the “Private Placement”).

At the time of the IPO, the underwriters were granted a 45-day over-allotment option to purchase up to 1,200,000 additional Units to cover overallotments (the “Over-Allotment Units”). On September 30, 2022, the underwriters exercised their over-allotment option to purchase 1,200,000 Over-Allotment Units. On October 4, 2022, we closed on the over-allotment through the sale of 1,200,000 at Over-Allotment Units a purchase of $10.00 per share for gross proceeds of approximately $12,000,000.

Simultaneously with the sale of the Over-Allotment Units, the Company consummated the private placement of an aggregate of 42,000 units (the “Over- Allotment Private Placement Units” and together with the IPO Private Placement Units, the “Private Placement Units”) to the Sponsor, at a price of $10.00 per Over-Allotment Private Placement Units, generating total gross proceeds of $420,000.

A total of $94,300,000 comprised of the proceeds from the IPO and the proceeds of the Private Placement, net of the underwriting commissions, discounts, and offering expenses, was deposited in a trust account established for the benefit of the Company’s public stockholders (the “Trust Account”). The proceeds held in the Trust Account are invested in United States “government securities” within the meaning of Section 2(a)(16) of the Investment Company Act with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S. government treasury obligations. Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our income or other tax obligations as described in the initial public offering, the proceeds will not be released from the trust account until the earlier of the completion of a business combination or the redemption of all or a portion of the outstanding public shares if we have not completed a business combination within the time required time period.

On May 13, 2025, the transactions contemplated under the Merger Agreement were consummated. The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

In connection with the closing of the Business Combination, the aggregate consideration for the Acquisition Merger was $590,000,000, payable in the form of 59,000,000 newly issued PubCo’s Ordinary Shares valued at $10.00 per share.

Special Meetings

On August 22, 2023, the Company held a Special Meeting of Stockholders (the “August 2023 Meeting”). At the August 2023 Meeting, the Company’s stockholders approved the Charter Amendment, which extended the date by which the Company must consummate its initial business combination from September 22, 2023 to June 22, 2024, subject to the approval of the Board of Directors of the Company (the “Board”), provided the sponsor or its designees deposited into the trust account a monthly amount equal to $125,000, prior to the commencement of each extension period (the “Extension”). The Company filed the Charter Amendment with the Office of the Secretary of State of Delaware on August 28, 2023, a copy of which is attached as Exhibit 3.1 in the Form 8-K filed with the SEC on August 28, 2023 and is incorporated by reference herein. At the Meeting, Stockholders holding 4,052,066 shares of common stock exercised their right to redeem their shares for cash at a price of approximately $10.53 per share of the funds in the Trust Account. As a result, an aggregate of $42,680,726 was removed from the Trust Account to pay such holders. Following the redemption, the Company’s remaining shares of Class A common stock outstanding were 5,147,934. The Company made 9 monthly payments of $125,000 to extend the period of time it had to consummate its initial business combination to June 22, 2024.

On June 11, 2024, the Company held a Special Meeting of Stockholders (the “June 2024 Meeting”). At the Meeting, the Company’s stockholders approved the Charter Amendment, which further extended the date by which the Company must consummate its initial business combination by an additional six-months pursuant to nine one-month extensions, from June 22, 2023 to December 22, 2024 (the “Second New Termination Date”), provided that the sponsor or its designees deposited into the trust account the lesser of: (i) $60,000 and (ii) 0.02 per share for each public share that is not redeemed in connection with the June 2024 Meeting. At the June 2024 Meeting, Stockholders holding 4,010,928 shares of common stock exercised their right to redeem their shares for cash at an approximate price of $11.12 per share of the funds in the Trust Account. As a result, $44,605,448 was removed from the Trust Account to pay such holders. The Company made five monthly extension payments in the Trust Account to extend the period of time it had to consummate its initial business combination to November 22, 2024.

On November 27, 2024, the Company held a Special Meeting of Stockholders (the “November 2024 Meeting”). As approved by its stockholders at the November 2024 Meeting, the Company entered into an amendment to the Investment Management Trust Agreement, dated as of September 22, 2022, as amended (the “Trust Agreement”), with Continental Stock Transfer & Trust Company (“Continental”). The Trust Amendment extended the date on which Continental must commence liquidation of the Trust Account to up to June 22, 2025 (the “Third New Termination Date”), provided that the sponsor or its designees deposited into the trust account the lesser of: (i) $60,000 and (ii) 0.02 per share for each public share that is not redeemed in connection with the November 2024 Meeting. At the November 2024 Meeting, Stockholders holding 756,131 shares of common stock exercised their right to redeem their shares for cash at an approximate price of $11.40 per share of the funds in the Trust Account. As a result, $8,620,940 was removed from the Trust Account to pay such holders. The Company has made five monthly extension payments in the Trust Account to extend the period of time by which it had to consummate its initial business combination to May 22, 2025.

On February 3, 2025, the Company held a special meeting of its stockholders (the “Merger Meeting”) for the purposes of considering and voting upon the proposals (the “Proposals”). In connection with the vote to approve the Proposals, the holders of 340,832 Class A ordinary shares of Global Star properly exercised their right to redeem their shares for cash at a redemption price of approximately $11.55 per share, for an aggregate redemption amount of approximately $3,936,142. As a result, following satisfaction of such redemptions upon the closing of the business combination, the Company had 40,043 Class A ordinary shares outstanding and the balance in the Trust Account is approximately $475,094.

Merger Agreement

On June 15, 2023, K Enter announced that K Enter entered into a Merger Agreement with Global Star, a publicly traded special purpose acquisition company and certain of its subsidiaries.

On March 11, 2024, Global Star, K Enter, PubCo and Merger Sub executed the First Amendment to Merger Agreement to, among other things, reduce the base value of the merger consideration to be received by Company shareholders from $610 million to $590 million.

On June 28, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Second Amendment to Merger Agreement, which extended the outside date for the parties to consummate the closing of the Business Combination from June 22, 2024 to December 22, 2024.

On July 25, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Third Amendment to Merger Agreement, which conditioned the closing of the Business Combination on K Enter’s prior consummation of the acquisition of the controlling equity interests in the Six Korean Entities.

On December 11, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Fourth Amendment to Merger Agreement, which extended the outside date for the parties to consummate the closing of the Business Combination from December 22, 2024 to June 22, 2025.

Purchase Agreement

In connection with this Merger Agreement, on July 12, 2023, the Company entered into a Purchase Agreement (the “Purchase Agreement”) by and between the Company, K Enter, and Global Star Acquisition I LLC, a Delaware limited liability company (the “Sponsor”). Pursuant to the Purchase Agreement, K Enter purchased from the Sponsor 160,000 shares of Class B common stock (“the SPAC Securities”) for an aggregate purchase price of $1,600,000 (the “Purchase Price”), which was payable within 10 days from the effective date of the Purchase Agreement.

In addition to the payment of the Purchase Price, K Enter acknowledged that (x) it is an accredited investor as defined by Rule 501 of the Securities Act, (y) and has knowledge and experience in financial and business matters and in investments of this type and is capable of evaluating the merits and risks of the SPAC Securities and of making an informed investment decision. K Enter further acknowledged and agreed that the SPAC Securities: (a) are subject to limitations on transfer, (b) are being acquired pursuant to an exemption from registration under the Securities Act with no present intention to distribute them to any person in violation of the Securities Act or any applicable U.S. state, (c) will not be sold except in compliance with the Securities Act and any applicable U.S. state securities laws, and in accordance with any limitations set forth in any applicable lock-up agreements applicable to the SPAC Securities.

The foregoing description of the Purchase Agreement is a summary only and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as Exhibit 10.2 in the Form 8-K filed with the SEC on July 17, 2023.

First Amendment

On March 11, 2024, the Company, K Enter, Purchaser, and Merger Sub entered into a First Amendment to the Merger Agreement (the “First Amendment”) to amend certain of the terms of the Merger Agreement. The First Amendment (i) reduces the base value of the merger consideration to be received by Company shareholders from $610 million to $590 million, and (ii) removes in its entirety respective references to the “Share Purchase Agreement” dated April 12, 2023 with certain sellers of First Virtual Lab Inc. from its disclosure schedules and includes the “Termination Agreement and Re-Purchase Option Agreement, dated March 5, 2024, by and among Sungkwon Kim, King Bear Film LLC and K Enter Holdings Inc” to the disclosure schedule. Pursuant to Section 141(f) of the General Corporation Law of the State of Delaware and Section 4.5 of the Company’s bylaws, the board approved and authorized the First Amendment on March 11, 2024. The board obtained an updated fairness opinion with respect to the First Amendment. The modification in the purchase consideration was made in connection with the cessation of the planned acquisition of a majority equity stake in First Virtual Lab Inc.

The foregoing description of the First Amendment is a summary only and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2.2 in the Form 8-K filed with the SEC on March 14, 2024.

Second, Third and Fourth Amendment

On June 28, 2024, the Company entered into a Second Amendment to the Business Combination Agreement (the “Second BCA Amendment”), by and among K Enter, K Wave Media Ltd., a Cayman Islands exempted company (the “K Wave Media Ltd.”), and GLST Merger Sub Inc., a Delaware corporation (the “GLST Merger Sub Inc.”) to extend the outside date by which the parties’ must consummate the business combination. Other than the extension of the date to December 22, 2024, by which we must consummate a business combination, all of the terms, covenants, agreements, and conditions of the BCA remain in full force and effect in accordance with its original terms. On July 25, 2024, the Company entered into a Third Amendment to the Business Combination Agreement (the “Third BCA Amendment”), by and among K Enter, K Wave Media Ltd., and GLST Merger Sub Inc. to amend the conditions to the parties’ obligations to consummate the business combination. Other than the amendment to the condition to the obligations of the parties whereby K Enter must complete its acquisition of the controlling equity interests of (1) Play Company Co. Ltd., (2) Solaire Partners LLC, (3) Apeitda Co., Ltd., (4) The LAMP Co., Ltd., (5) Bidangil Pictures Co., Ltd., and (6) Studio Anseilen Co., Ltd., all of the terms, covenants, agreements, and conditions of the BCA remain in full force and effect in accordance with its original terms. On December 11, 2024, Global Star, K Enter, PubCo and Merger Sub entered into the Fourth Amendment to Merger Agreement (the “Fourth BCA Amendment”), which extended the outside date for the parties to consummate the closing of the Business Combination from December 22, 2024 to June 22, 2025.

The foregoing description of the Second BCA Amendment, Third BCA Amendment, and Fourth BCA Amendment (the “BCA Amendments”) do not purport to be complete and is qualified in its entirety by the terms and conditions of the BCA Amendments, copies of which, are filed as Exhibits 2.3, 2.4, and 2.5 to the Form 8-K filed with the SEC on July 31, 2024, and as Annex A to the DEFM14A filed with the SEC on January 8, 2025.

Consummation of Business Combination

On May 13, 2025, the transactions contemplated under the Merger Agreement were consummated. The following transactions occurred pursuant to the terms of the Merger Agreement (collectively, the “Business Combination”):

In connection with the closing of the Business Combination, the aggregate consideration for the Acquisition Merger was $590,000,000, payable in the form of 59,000,000 newly issued PubCo’s Ordinary Shares valued at $10.00 per share.

As a consequence of the Business Combination, we became the successor to an SEC-registered and NASDAQ-listed company, which will require us to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. We expect to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Results of Operations

As of March 31, 2025, the Company had not commenced any operations. All activity for the period from July 24, 2019 (inception) through March 31, 2025, relates to organizational activities and identifying a target company for a business combination. We did not generate any operating revenues until after the completion of our initial Business Combination. We will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO. The Company has selected December 31 as its fiscal year end.

For the three months ended March 31, 2025, we had net loss of $608,775, which consists of operating costs of $716,167, which primarily consist of legal, professional and advisory fees as well as insurance expense, provision for income taxes of $3,017, interest expense of $22,630 and amortization of deferred finance cost of $129,194, offset by change in fair value of liability to be settled in shares of $244,611, interest income on marketable securities held in the Trust Account of $13,839 and interest income – bank of $3,783.

For the three months ended March 31, 2024, we had net loss of $212,370, which consists of operating costs of $805,858, which primarily consist of legal, professional and advisory fees as well as insurance expense, and a provision for income taxes of $144,472 offset by interest income on marketable securities held in the Trust Account of $728,910 and interest income – bank of $9,050.

Franchise and Income Tax Withdrawals from Trust Account

Since completion of its IPO on September 22, 2022, and through March 31, 2025, the Company did not with from the Trust Account to pay its liabilities related to income and Delaware franchise taxes. Through March 31, 2025, the Company remitted $1,421,796 to the respective tax authorities, with the difference of $373,142 to be remitted as Company’s tax obligations become due. As of March 31, 2025, the Company had accrued but unpaid income tax liability of $327,960 and accrued but unpaid Delaware franchise tax liability of $2,199.

Liquidity, Capital Resources and Going Concern

On September 22, 2022, we consummated our Initial Public Offering of 8,000,000 Units at $10.00 per Unit, generating gross proceeds of $80,000,000. Simultaneously with the closing of our Initial Public Offering, we consummated the private placement of an aggregate of 456,225 Private Placement Units to our Sponsor at a price of $10.00 per Private Placement Unit, generating total gross proceeds of $4,562,250. On October 4, 2022, we closed on the over-allotment through the sale of 1,200,000 Units at a purchase of $10.00 per share for gross proceeds of approximately $12.0 million, and simultaneously with the exercise of the overallotment, we consummated the Private Placement of an additional 42,000 Private Placement Units to the Sponsor, generating gross proceeds of $420,000. A total of $96,982,250 was generated from our IPO.

Transaction costs amounted to $4,788,510 consisting of $920,000 of underwriting fees (net of underwriter reimbursements), $3,220,000 of deferred underwriting fees payable, which are held in a trust account with Continental Stock Transfer & Trust Company acting as trustee (the “Trust Account”) and $648,510 of other offering costs related to the Initial Public Offering. The underwriters were also issued 115,000 shares of Class A common stock as representative shares, in connection with the IPO. Upon close of the Initial Public Offering, the Company recorded additional issuance costs of $79,338, the grant date fair value of the shares, with an offset to additional paid-in capital. As described in Note 6 — Commitments and Contingencies, of the Notes to the condensed consolidated Financial Statements contained in this report, the $3,220,000 deferred underwriting fees are contingent upon the consummation of the Business Combination within 12 months (or up to 27 months from the closing of the IPO at the election of the company in fifteen one-month extensions) from the closing of the Initial Public Offering.

As of March 31, 2025, we had $97,355 of cash on our balance sheet, which is restricted for payment of Company’s taxes and a working capital deficit of $12,589,315. We intend to use the funds held outside of the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. The interest income earned on the investments in the Trust Account are unavailable to fund operating expenses.

As previously disclosed on July 31, 2023, we issued a promissory note (the “Sponsor Working Capital Loan”) in the principal amount of $1,600,000 to our Sponsor. The Note was issued in connection with a $1,600,000 loan the Sponsor has made to us for working capital expenses. In connection with the consummation of the Business Combination, the Company issued 150,000 Ordinary Shares to the Sponsor as repayment of $1,500,000 of the Sponsor Working Capital Loan. As of the date of this prospectus, approximately $100,000 remains payable by the Company to the Sponsor pursuant to the Sponsor Working Capital Loan.

On April 15, 2024, the Company issued a promissory note to the Sponsor in an amount of up to $1,000,000 for working capital needs. The note bears no interest and shall be payable by the Maker on the earlier of: (i) March 31, 2025, or (ii) the date on which Maker consummates an initial public offering of its securities. The principal balance may be prepaid at any time. On November 20, 2024, the Company amended the terms of the promissory note to allow conversion of up to $1,000,000 into Class B Common Stock of the Company at a price of $10.00 per unit in lieu of cash repayment, effective immediately prior to the Business Combination. The issuance of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended. As of March 31, 2025, $982,000 was drawn and outstanding under the promissory note and book value of the note recorded in the Company’s financials was $862,855.

Special Meetings, Extension and Trust Withdrawal from Trust Account

On August 22, 2023, we held a Special Meeting of Stockholders (the “August 2023 Meeting”). At the Meeting, our stockholders approved the Charter Amendment, which extended the date by which the Company must consummate its initial business combination by an additional nine-months pursuant to nine one-month extensions, from September 22, 2023 to June 22, 2024 (the “First New Termination Date”), subject to the approval of the Board of Directors of the Company (the “Board”), provided the sponsor or its designees deposited into the trust account a monthly amount equal to $125,000, prior to the commencement of each extension period (the “Extension”). We filed the Charter Amendment with the Office of the Secretary of State of Delaware on August 28, 2023, a copy of which is attached as Exhibit 3.1 in the Form 8-K filed with the SEC on August 28, 2023 and is incorporated by reference herein. At the Meeting, Stockholders holding 4,052,066 shares of common stock exercised their right to redeem their shares for cash at an approximate price of $10.53 per share of the funds in the Trust Account. As a result, an aggregate of $42,680,726 was withdrawn from the Trust Account to pay such holders. Following the redemption, our remaining shares of Class A common stock outstanding were 5,147,934.

On June 11, 2024, we held a Special Meeting of Stockholders (the “June 2024 Meeting”). At the Meeting, our stockholders approved the Charter Amendment, which further extended the date by which the Company must consummate its initial business combination by an additional six-months pursuant to six one-month extensions, from June 22, 2024 to December 22, 2024 (the “Second New Termination Date”), provided that the sponsor or its designees deposited into the trust account approximately $22,740 prior to the commencement of each extension period. At the June 2024 Meeting, Stockholders holding 4,010,928 shares of common stock exercised their right to redeem their shares for cash at an approximate price of $11.12 per share of the funds in the Trust Account. As a result, $44,605,448 was removed from the Trust Account to pay such holders.

On November 27, 2024, we held a Special Meeting of Stockholders (the “November 2024 Meeting”). As approved by its stockholders at the November 2024 Meeting, we entered into an amendment to the Investment Management Trust Agreement, dated as of September 22, 2022, as amended (the “Trust Agreement”), with Continental Stock Transfer & Trust Company (“Continental”). The Trust Amendment extended the date on which Continental must commence liquidation of the Trust Account to up to June 22, 2025 (the “Third New Termination Date”), provided that our sponsor or its designees deposit into the trust account the lesser of: (i) $60,000 and (ii) 0.02 per share for each public share that is not redeemed in connection with the November 2024 Meeting. At the November 2024 Meeting, Stockholders holding 756,131 shares of common stock exercised their right to redeem their shares for cash at an approximate price of $11.40 per share of the funds in the Trust Account. As a result, $8,620,940 was removed from the Trust Account to pay such holders. We have made five monthly extension payments in the Trust Account to extend the period of time by which it has to consummate its initial business combination to May 22, 2025.

As of March 31, 2025, we had cash of $97,355 in our operating bank accounts, $4,411,236 of cash held in the Trust Account to be used for an initial Business Combination or to repurchase or redeem stock in connection therewith and a working capital deficit of $12,589,315.

As of July 21, 2025, the Company held 88 Bitcoin and $3,179,891 in a custodian account which is jointly managed by the Company and the Selling Shareholders. Additionally, the Company has approximately $320,010 in its operating bank account.

We may raise additional capital through loans or additional investments from the Sponsor or our stockholders, officers, directors, or third parties. Our officers and directors, the Sponsor or their affiliates may but are not obligated to loan us funds, from time to time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets, or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Sponsor a monthly fee up to $10,000 for office space, utilities, and secretarial and administrative support services. We began incurring these fees on September 22, 2022 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of $3,220,000 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

In order to finance transaction costs in connection with the Business Combination, our Sponsor extended to us a line of credit of up to $1,600,000 pursuant to a Promissory Note dated July 31, 2023 (“Sponsor Working Capital Loan”). In connection with the consummation of the Business Combination, the Company issued 150,000 Ordinary Shares to the Sponsor as repayment of $1,500,000 of the Sponsor Working Capital Loan. As of the date of this prospectus, approximately $100,000 remains payable by the Company to the Sponsor pursuant to the Sponsor Working Capital Loan.

Agreements with Service Providers

On September 24, 2023, the Company engaged EF Hutton (now known as D. Boral Capital LLC), division of Benchmark Investments, LLC (“EF Hutton”) to act as the exclusive placement agent (“Placement Agent”) for the Company, in connection with the proposed offering by private placement of equity or equity-linked securities in the form of a PIPE, forward purchase arrangement or similar type of equity line financing (the “Placement”) to “qualified institutional buyers” as such term is defined in Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and to the institutional accredited investors as such term is defined in Regulation D promulgated under the Securities Act of the Company’s equity or equity-linked securities, including warrants, options or other rights to purchase such securities (collectively, the “Securities”). In case of successful Placements, a non-refundable cash placement fee (the “Placement Fee”), payable at each closing of a Placement, in an amount equal to seven percent (7.0%), as well as foreign placement fee of 1%, and reduced placement fee of 1% of the aggregate gross proceeds from the sale of all Securities in the Placement would be due and payable to EF Hutton.

On November 27, 2023, the Company engaged MZHCI, LLC, a MZ Group Company (“MZHCI”) as its public relations consultant starting from January 1, 2024 (the “MZHCI Agreement”). According to terms of the MZHCI Agreement, MZHCI was to be paid a monthly fee of $10,000 through May 2024, which was to be updated to $5,000 starting from June 2024 for its services for the period of the Proposed Business Combination. Subsequent to the closing of the Proposed Business Combination monthly fee was expected to increase to $14,000 (subject to 5% cost of living adjustment) upon closing of the Proposed Business Combination. In addition, upon successful closing of the Proposed Business Combination, the Company was to issue to MZHCI $150,000 worth of the Company’s restricted stock as valued on the first day of trading post-closing. MZHCI did not perform its obligations under the MZHCI Agreement, and the Company is in discussions to settle its termination of such agreement.

Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted principles, which require management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses for the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable taking into account our circumstances and future expectations based on the available information. We evaluate these estimates on an ongoing basis.

We consider an accounting estimate to be critical if (i) the accounting estimate requires to make assumptions about matters that were highly uncertain at the time when the accounting estimate was made; and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material amount on our financial condition or results of operations. In the preparation of the financials statements for the period ended 2025 we had critical estimates related to the valuation of fair value of the amended promissory note entered into in 2025.

There are other items in our financial statements that require estimation but are not deemed to be critical, as defined above.

For a detailed discussion of our significant accounting policies and related judgements, see Note 2– Summary of Significant Accounting Policies Basis of Presentation in the Notes to the condensed consolidated Financial Statements included in this report.

Warrant Classification

The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the IPO. Company account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to our of common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance. The fair value of the warrants are remeasured at each balance sheet date with the change in the estimated fair value of the warrants recognized as a non-cash gain or loss on the statements of operations. We have analyzed the Public Warrants and Private Placement Warrants and determined they are considered to be freestanding instruments and do not exhibit any of the characteristics in ASC 480 and therefore are not classified as liabilities under ASC 480.

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable shares of Class A common stock (including Class A common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) are classified as temporary equity. At all other times, shares of Class A common stock are classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ deficit section of our condensed consolidated balance sheets.

Share-Based Payment Arrangements

We measure and recognize compensation expense for all share-based payments on their estimated fair values measured as of the grant date. These costs are recognized as an expense in the statements of operations upon vesting, once the applicable performance conditions are met, with an offsetting increase to additional paid-in capital. Forfeitures are recognized as they occur.

Net Loss per Common Share

Net loss per common share of common stock is computed by dividing net loss by the weighted average number of common shares issued and outstanding during the period. Subsequent measurement of the redeemable shares of Class A common stock is excluded from loss per ordinary share as the redemption value approximates fair value. We calculate our earnings per share to allocate net loss pro rata to shares of Class A and Class B common stock. This presentation contemplates a Business Combination as the most likely outcome, in which case, both classes of common stock share pro rata in the loss of our Company.

Income Taxes

We account for income taxes under ASC 740, “Income Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the condensed consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. We also recognized accrued interest and penalties related to unrecognized tax benefits as income tax expense. We have identified the United States as our only “major” tax jurisdiction. We are subject to income taxation by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. We do not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Recent Accounting Standards

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company’s management does not believe the adoption of ASU 2023-09 will have a material impact on its condensed consolidated financial statements and disclosures.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF solaire

References to the “Solaire” refer to Solaire Partners, LLC. The following discussion and analysis of Solaire’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) Solaire’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (and related notes). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

Solaire Partners, LLC (“Solaire”) is a content-specialized private equity firm based in Korea that invests in movies, dramas, and content companies since 2017. It is led by their CEO, Pyeungho Choi and Solaire’s team of content and finance experts with extensive experience in the entertainment industry. Solaire follows a disciplined project selection process, followed by a thorough hands-on, value add approach to investments. It monitors, reviews and shapes marketing and distribution strategy (teaser, poster, setting release date, distribution), scenario development, and participates in the casting of a project. Solaire has invested in some of the highest-grossing films out of Korea. It has also invested in entertainment tech companies that digitize.

Among its distinctions, it has created Korea’s first and only movie investment fund based on proprietary movie data. The fund invests to capture the returns of the broad segment of Korean commercial movies. Solaire has invested over $138 million in over 200 content projects in the last five years. Solaire has received distinctions from the Korean government as one of the leading venture capitalist firms in the cultural content sector and has secured the investments from some of the largest financial institutions in Korea such as Samsung Securities, Industrial Bank of Korea that have started to invest in the movie industry.

The revenues of Solaire would account for approximately 1.8% of New K Enter’s total revenues in 2023 on a pro forma basis. Solaire derives revenues through a management fee (around 1%) on the amount invested. Solaire expect its share of total New K Enter revenues to remain at these levels.

Solaire’s priority includes helping K Enter extend the investment scope from films to TV series and other formats of content including webtoons and animation and expanding K Enter’s business globally.

Solaire’s distinctiveness stems from the fact that its all members have a various experience in contents investment and also possess finance capabilities. This combination allows Solaire to approach investments in the content industry with a deeper understanding of the creative and artistic aspects, rather than solely focusing on the financial aspects of a project. In addition, due to their extensive experience and expertise in the content industry, Solaire has built a strong network in this industry. Strong relationships with influential producers and directors have allowed it to become the anchor investor in acclaimed movies such as “Parasite” and “Decision to Leave.” This showcases their ability to identify and support promising projects and talent.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), expressed in Korean Won.

Key Components of Statement of Operations

Solaire’s reporting currency is the Korean Won and its operating results and cash flows have been translated to U.S. dollar using the following exchange rates that represent the average daily rate in place for the respective period:

Key factors Affecting Operating Results

The Korea Venture Investment Corporation (KVIC) informed Solaire that at a general meeting held on September 13, 2024, it passed a resolution to suspend the asset management activities of three Solaire-managed funds in which KVIC had invested. As a result of this suspension, these three funds are no longer permitted to accept new capital, and Solaire is no longer authorized to charge management fees on them. KVIC took these actions in response to allegations of conflicts of interest involving Solaire’s management of the funds. While Solaire is actively working to resolve the matter, no management fees can be recognized as revenue from the affected funds during this period. These funds represent approximately 90% of Solaire’s total assets under management (AUM) as of December 31, 2024. As a result, Solaire’s revenues could decline by as much as 90% in 2025. However, the impact on K Wave Media is expected to be minimal, as Solaire represented only 1.8% of the company’s total revenue in its 2024 pro forma financial statements. Solaire’s remaining fund remains unaffected. Solaire is committed to resolving this dispute to the satisfaction of all parties involved.

Results of Operations

A summary of Solaire’s operating results is as follows:

Comparison of Six Months Ended December 31, 2024 and 2023

For the year ended December 31, 2024 and 2023, Solaire’s operating income was driven by its content investment segment, which realized revenues totaling Korean Won 1,424 million ($1,044,534) and Korean Won 1,716 million ($1,313,450), respectively.

Solaire’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 229 million ($218,025), or 14.6% corresponding to a decrease in revenue of Korean Won 292 million ($268,916), or 17.0%. This is attributable to a decrease in investment management revenue resulting from investment funds that were liquidated in September 2024. For the year ended December 31, 2024 and 2023, four of Solaire’s customers account for 100% and 100% of total Solaire revenue, respectively.

For the year ended December 31, 2024 and 2023, Solaire’s operating expenses are primarily driven by payroll and payroll related costs, commissions expenses, share-based payments for both periods presented.

Solaire’s operating expenses decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 223 million ($219,584), or 12.7%. This is primarily attributable to an increase in payroll and payroll related costs of Korean Won 263 million ($169,754) associated with an increased average salary of the management, a decrease in commission expenses of Korean Won 20 million ($17,082) associated with the development of software, and a decrease in share-based payments of Korean Won 421 million ($322,365) associated with the shares transferred to the employees that was held by Solaire Partners’ largest shareholder during the year ended December 31, 2023.

Cash Flow:

A summary of Solaire’ operating, investing, and financing cash flows is as follows:

Comparison of Year Ended December 31, 2024 and 2023 

Solaire’s net cash flows used in operating activities for the year ended December 31, 2024 was Korean Won 511 million ($374,580), compared to Korean Won 417 million ($319,212) of net cash flows provided by operating activities for the year ended December 31, 2023. This is primarily attributable to an increase in Solaire’s income tax paid by Korean Won 18 million ($13,240), a decrease in share-based payments of Korean Won 421 million ($322,365), a decrease in project investment assets of Korean Won 220 million ($162,143), and a decrease in contract assets of Korean Won 149 million ($105,564) during the year ended December 31, 2024. 

Solaire’s net cash flows provided by investing activities for the year ended December 31, 2024 was Korean Won 101 million ($74,052), compared to Korean Won 116 million ($88,447) of net cash flows used in investing activities for the year ended December 31, 2023. This is primarily attributable to a decrease in leasehold deposit of Korean Won 65 million ($47,674) and a decrease in payment made for leasehold deposit of Korean Won 150 million ($114,788). 

Solaire’s net cash flows provided by financing activities for the year ended December 31, 2024 was Korean Won 67 million ($49,294), compared to Korean Won 31 million ($23,435) of net cash flows used in financing activities for the year ended December 31, 2023. This is primarily attributable to an increase in short-term borrowings of Korean Won 207 million ($152,069), partially offset by security deposits received during the year ended December 31, 2023, which did not recur in the year ended December 31, 2024. 

Liquidity and Capital Resources:

Historically, Solaire’s sources of liquidity have been cash flows from fundraising and the generation of net income. As of December 31, 2024, Solaire had an aggregate cash balance of Korean Won 0.4 million ($240) and net working capital of Korean Won 314 million ($212,382).

Solaire intends to operate with its current cash on hand and the profits it anticipates earning in the future. Solaire intends to expand it current business operations through oversea fund raising and exploit investment opportunities to scale up its profit. Solaire may need to borrow money or sell equity to finance its operations and planned growth.

Solaire’s future capital requirements will depend on many factors, including its revenue growth rate, potential acquisitions, the timing and extent of spending to support future sales and marketing efforts. In order to finance these opportunities, Solaire may need to raise additional financing. While there can be no assurances, if additional capital is required, Solaire intends to raise such capital through operations or additional issuances of equity. If additional financing is required from outside sources, Solaire may not be able to raise it on terms acceptable to it or at all. If Solaire is unable to raise additional capital when desired, Solaire’s business, results of operations and financial condition would be materially and adversely affected. 

Related Parties

The related parties of Solaire comprise individuals, entities with significant influence over the Company, and associates. Solaire entered into multiple investment management agreements with said associates, pursuant to which Solaire will deliver investment management services.

See Related Parties under Note 28 in the notes to the financial statement for the year ended December 31, 2024 and 2023 for more information about transactions entered into with related parties.

Off-Balance Sheet Arrangements

During the periods presented, Solaire did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off balance sheet arrangements.

Critical Accounting Estimates

Solaire’s financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires Solaire to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the reporting dates, as well as the reported income and expenses incurred during the reporting period. Management bases its estimates on historical experience and in various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to Solaire’s financial statements.

Solaire believes the accounting policies discussed in the notes to Solaire’s financial statements are critical to understanding Solaire’s historical and future performance, as these policies relate to more significant areas involving management’s judgments and estimates. 

See Summary of Material Accounting Policies in Note 5 to the financial statements as of and for the years ended December 31, 2024 and 2023 for more information about Solaire’s material accounting policies.

Equity-accounted investees

In determining whether Solaire has significant influence, Solaire takes into account whether Solaire directly or indirectly holds 20% or more of the voting rights over the investee, whether Solaire participates in the board or other decision-making body equivalent thereto of the investees, or whether Solaire’s potential voting rights will affect these rights.

Although Solaire holds less than 20% of equity interests in investment fund, investments in such investees were classified as investments in associates as Solaire can exercise significant influence over financial and operating policy decisions as a general partner.

Financial Instruments – Fair Values and risk management

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. Solaire uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing at the end of each reporting period.

These valuation techniques use as much market observable information as possible and use the least amount of Solaire-specific information. At this time, if all the significant input variables required to measure the fair value are observable, the financial instruments are classified as Level 2. If more than one significant input variable is not based on observable market information, the item is included in Level 3. 

The valuation techniques used to measure the fair value of a financial instrument include:

Quantitative and Qualitative Disclosures about Market Risk

Solaire’s operating activities expose itself to a variety of financial risks: credit risk and liquidity risk from which Solaire’s risk management program focuses on minimizing any adverse effects on its financial performance. Solaire operates financial risk management policies and programs that closely monitor and respond to each risk factor.

See Summary of Solaire’s financial risk management under Note 24 in the notes to the financial statements for the years ended December 31, 2024 and 2023 for more information.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the IASB or other standard setting bodies that are adopted by use as of the specified effective date. Unless otherwise discussed, Solaire believes that the impact of recently issued standards that are not yet effective will not have a material impact on Solaire’s financial statements upon adoption.

See Recent Accounting Pronouncements issued, not yet adopted in Note 5 Material accounting policies in the notes to the financial statement for the years ended December 31, 2024 and 2023 for more information about recent accounting pronouncements, the timing of their adoption and Solaire’s assessment, to the extent Solaire has made one, of their potential impact on Solaire’s financial condition and results of operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF Play Company

References to the “Play Company” refer to Play Company Co., Ltd. The following discussion and analysis of Play Company’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): Play Company’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 (and related notes). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

Play Company Co., Ltd. (“Play Company”) sells its entertainment content and services and food and beverage products, as well as licenses its intellectual property in the food and beverage business. Play Company offers made-to-order services to plan projects, design merchandise and deliver customized products to its customers who are primarily music talent agencies that work with K-Pop artists, and operates a retail bakery-café business and franchising business under the concept names “Our Bakery”. As of December 31, 2024, retail operations consist of 13 Company-owned bakery-cafes and 19 franchise-operated bakery-cafes located in South Korea and China. Accordingly, Play Company has identified two operating segments for which Play Company’s management reviews discrete financial information as it makes decisions about its business – Content and Food and Beverage.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), expressed in Korean Won.

Key Components of Statement of Operations

Play Company’s reporting currency is the Korean Won and its operating results and cash flows have been translated to U.S. dollar using the following exchange rates that represent the average daily rate in place for the respective period:

Results of Operations

A summary of Play Company’s operating results as translated to the U.S. dollar prepared under IFRS is as follows:

Comparison of Years Ended December 31, 2024 and 2023

For the year ended December 31, 2024 and 2023, Play Company’s operating income was driven by its content segment, which realized revenues totaling Korean Won 28,380 million ($20.8 million) and Korean Won 49,772 million ($38.1 million), respectively, and its food and beverage segment, which realized revenues of Korean Won 14,630 million ($10.7 million) and Korean Won 17,709 million ($13.6 million), respectively.

The operating result for the year ended December 31, 2024 represents only 33.8% of Play Company’s forecasted revenue of Korean Won 127.4 billion for the financial year of 2024 and also marks a 36.3% decline year-over-year compared to Korean Won 67.5 billion of revenues for the year ended December 31, 2023. This relatively low performance is largely attributable to (i) unexpected delays in some of the merchandising projects previously planned for the year and (ii) slower-than-expected progress in developing new business opportunities, among other factors.

The operating result for the year ended December 31, 2024 represents only 33.8% of Play Company’s forecasted revenue of Korean Won 127.4 billion for the financial year of 2024 and also marks a 36.3% decline year-over-year compared to Korean Won 67.5 billion of revenues for the year ended December 31, 2023. This relatively low performance is largely attributable to (i) unexpected delays in some of the merchandising projects previously planned for the year and (ii) slower-than-expected progress in developing new business opportunities, among other factors.

Play Company is implementing strategies to address and overcome the current challenges, as mentioned above. Play Company, however, runs the risk of generating annual results that fall well short of targeted revenue if it (i) encounters further delays or cancellations of its merchandising projects rescheduled due to internal decisions made by artist agencies, (ii) fails to distribute and sell the expected quantities of its merchandises, or (iii) experiences further delays or setbacks in the development of its new business opportunities. Acknowledging this risk, we have been closely cooperating with and supporting the executive management of Play Company in implementing measures aimed at restoring sales performance in 2025.

Play Company’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 5,546 million ($4.3 million), or 83.5%, corresponding to a decrease in revenue of Korean Won 24,471 million ($20.1 million), or 36.3%. This is primarily attributable to a group of projects associated with a K-pop boybands, which generated Korean Won 595 million ($0.4 million) and Korean Won 16,040 million ($12.3 million) for the years ended December 31, 2024 and 2023, respectively, as these projects were completed early in 2024. For the year ended December 31, 2024 and 2023, three of Play Company’s customers account for 27.4% and 60.0%, respectively, of total content segment revenue and 41.5% and 81.4%, respectively, of total Play Company revenue.

For the year ended December 31, 2024 and 2023, Play Company’s operating expenses are primarily driven by payroll and payroll related costs of Korean Won 2,006 million ($1.5 million) and Korean Won 2,118 million ($1.6 million), respectively. Additional components of operating expenses consisted of bad debt expenses of Korean Won 297 million ($0.2 million) and Korean Won 172 million ($0.1 million), respectively, depreciation expense of Korean Won 679 million ($0.5 million) and Korean Won 649 million ($0.4 million), respectively, losses on disposal of property, plant and equipment of Korean Won 324 million ($0.2 million) and Korean Won 31 million (less than $0.1 million), respectively, impairment losses on property, plant and equipment of Korean Won 965 million ($0.7 million) and Korean Won 2 million (less than $0.1 million), respectively, and other administrative costs of Korean Won 335 million ($0.2 million) and Korean Won 175 million ($0.2 million) respectively, for the years ended December 31, 2024 and 2023.

Play Company’s operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 1,458 million ($1.0 million), or 46.3%.This is primarily attributable to an increase in bad debt expenses of Korean Won 126 million ($0.1 million), losses on the disposal of property, plant and equipment of Korean Won 293 million ($0.2 million) and an increase in impairment loss on property, plant and equipment of Korean Won 962 million ($0.7 million).

For the year ended December 31, 2024, Play Company has executed only a partial number of targeted projects in 2024 due to unexpected delays in launching the projects as decided by some customers, although Play Company had more than enough production capacity.

Play Company’s cost of sales is closely related to the revenues generated because Play Company’s cost of sales primarily consist of costs incurred in connection with the manufacturing of the video merchandises. Therefore, the related manufacturing costs correlatedly decrease if the revenue declines.

For the years ended December 31, 2024 and 2023, Play Company’s other income (expense) is comprised of

Cash Flow:

A summary of Play Company’s operating, investing, and financing cash flows prepared under IFRS is as follows:

Comparison of Years Ended December 31, 2024 and 2023

Play Company’s cash flows used in operating activities decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 5,521 million ($4 million). This is primarily attributable to a decrease in payments for trade payables of Korean Won 21,788 million ($16.7 million) and in prepaid expenses of Korean Won 2,733 million ($2.1 million), offset by a decrease in net income of Korean Won 6,351 million ($4.7 million) and a decrease in collections of trade receivables of Korean Won 10,616 million ($8.0 million) for the year ended December 31, 2024.

Operational cash flow reflects the similar trend of fluctuation of revenue and operating expenses.

Play Company’s cash flows used in investing activities decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 1,429 million ($1.1 million). This is primarily attributable to an increase in proceeds from loans of Korean Won 4,221 million ($3.2 million) and a decrease in cash outflows from payments made for the acquisition of property, plant and equipment of Korean Won 676 million ($0.5 million), partially offset by a decrease in cash inflows from the disposal of other financial assets of Korean Won 3,801 million ($2.9 million).

Play Company’s cash flows used in financing activities decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 10,903 million ($8.4 million) and primarily relates to the acquisition of treasury shares for the year ended December 31, 2023.

Liquidity and Capital Resources:

Historically, Play Company’s sources of liquidity have been cash flows from the issuance of common stock and the generation of net income. As of December 31, 2024, Play Company had an aggregate cash balance of Korean Won 4,151 million ($2,808,501) and net working capital deficit of Korean Won 6,809 million ($4,607,395).

Play Company intends to operate with its current cash on hand and the profits it anticipates earning in the future. Play Company intends to expand its current business operations, including providing additional offerings such as obtaining intellectual property rights and expand its international footprint. Play Company may need to borrow money or sell equity to finance its operations and planned growth.

Play Company’s future capital requirements will depend on many factors, including its revenue growth rate, potential acquisitions, the timing and extent of spending to support future sales and marketing efforts. In order to finance these opportunities, Play Company may need to raise additional financing. While there can be no assurances, if additional capital is required, Play Company intends to raise such capital through operations or additional issuances of equity. If additional financing is required from outside sources, Play Company may not be able to raise it on terms acceptable to it or at all. If Play Company is unable to raise additional capital when desired, Play Company’s business, results of operations and financial condition would be materially and adversely affected.

Related Parties

The related parties of Play Company’s comprise key management personnel and entities controlled by or affiliated with key management personnel. As of December 31, 2024, Play Company entered into revenue and purchase agreement with related parties. Under the agreements, total gross revenue of approximately Korean Won 8,856 million ($6.5 million).

As of December 31, 2024, Korean Won 1,116 million ($0.8 million) of accounts payable and Korean Won 2,790 million ($1.9 million) of borrowings are outstanding as Play Company entered into the agreements for acquisition of treasury stock and borrowing with Chief Executive Officer for the year ended As of December 31, 2024. Play Company is provided guarantees for the borrowings obtained from financial institutions by Chief Executive Officer.

See Related Parties under Note 32 in the notes to the consolidated financial statement for the year ended December 31, 2024, 2023 and 2022 for more information about transactions entered into with related parties.

Off-Balance Sheet Arrangements

During the period presented, Play Company did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

Critical Accounting Estimates

Play Company’s consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires Play Company to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the balance sheet date, as well as the reported expenses incurred during the reporting period. Management bases its estimates on historical experience and in various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to Play Company’s consolidated financial statements.

Play Company believes the accounting policies discussed in the notes to Play Company’s consolidated financial statements are critical to understanding Play Company’s historical and future performance, as these policies relate to more significant areas involving management’s judgments and estimates.

See Summary of Material Accounting Policies under Note 5 in the notes to the consolidated financial statements for the years ended December 31, 2024, 2023 and 2022 for more information about Play Company’s material accounting policies.

Impairment assessment on CGU

Play Company estimates the recoverable amount of an individual asset, and if it is impossible to measure the individual recoverable amount of an asset, Play Company estimates the recoverable amount of cash-generating unit (“CGU”). The value in use is estimated by applying a weighted average cost of capital that reflects current market assessments of the time value of money and the risks specific to the asset or CGU for which estimated future cash flows have not been adjusted, to the estimated future cash flows expected to be generated by the asset or CGU.

As of December 31, 2024 and 2023, Play Company performed impairment test for Food and Beverages operating segment. Play Company identifies each of bakery-cafés as CGU. As the individual CGUs are tested for impairment at the same time as the group of CGUs containing the goodwill, Play Company tested the individual CGUs for impairment before the group of CGUs is tested.

The recoverable amount of each CGU is determined based on its value in use. Value in use is calculated using the estimated cash flow based on 5-year business plan approved by management. The estimated revenue and operating expenditures on Play Company’s products used in the forecast was determined considering external sources and Play Company’s experience. Management estimated the future cash flows based on its past performance and forecasts on consumer inflation rate. The key assumptions used in the estimation of value in use for Food and Beverages CGU include revenue and operating expenditures for the forecast period, growth rates for subsequent years (“terminal growth rate”), and discount rate. Terminal growth rate and the discount rate used in the estimation of value in use are as follows

The discount rate was calculated using the weighted average cost of equity capital and debt and the beta of equity capital was calculated as the average of four Korean listed companies in the same industry and Play Company. Cost of debt was calculated using the yield rate of non-guaranteed corporate bond considering Play Company’s credit rating and debt ratio was determined using the average of the debt ratios of the four Korean listed companies in the same industry and Play Company. Play Company calculates the value in use of Food and Beverages CGU using post-tax cash flows and a post-tax discount rate.

As a result of the impairment test for goodwill for groups of Food and Beverages CGUs, the recoverable amount exceeded its carrying amount by Korean Won 2,524 million in 2024. Korean Won 4,779 million in 2023 and 6,576 million in 2022 ($4.4 million in 2024, $3.2 million in 2023 and $1.7 million in 2022). The recoverable amount exceeded its carrying amount accounts 13.3% of the amount of value in use (2023: 18.9%, 2022: 24.9%). The value in use determined for this CGU is sensitive to the discount rate and terminal growth rate used in the discounted cash flow model.

Quantitative and Qualitative Disclosures about Market Risk

Play Company’s operating activities expose itself to a variety of financial risks: market risk, credit risk and liquidity risk from which Play Company’s risk management program focuses on minimizing any adverse effects on its financial performance. Play Company operates financial risk management policies and programs that closely monitor and respond to each risk factor.

See Summary of Play Company’s financial risk management under Note 27 in the notes to the consolidated financial statements for the years ended December 31, 2024, 2023 and 2022 for more information.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the IASB or other standard setting bodies that are adopted by use as of the specified effective date. Unless otherwise discussed, Play Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on Play Company’s consolidated financial position or results of operations under adoption.

See Recent Accounting Pronouncements issued, not yet adopted under Note 5 Material accounting policies in the notes to the consolidated financial statement for the years ended December 31, 2024, 2023 and 2022 for more information about recent accounting pronouncements, the timing of their adoption and Play Company’s assessment, to the extent Play Company has made one, of their potential impact on Play Company’s consolidated financial condition and results of operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF APEITDA

References to the “Apeitda” refer to Apeitda Co., Ltd. The following discussion and analysis of Apeitda’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) Apeitda’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (and related notes). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

Established in 2013, Apeitda Co., Ltd. (“Apeitda”)’s main business is a film production studio and is led by Jung Byung-gil and his brother Jung Byung-sik. Apeitda’s focus has been on action and thriller movies such as The Villainess and Carter which received recognition from Hollywood for its unique camerawork to create a sense of realism in action films.

Apeitda is actively involved in the film production business, producing both domestic and foreign movies. As a forward-thinking production company with a commitment to original ideas, Apeitda creates content that remains true to the fundamental values of entertainment and visual enjoyment. Apeitda’s portfolio includes films spanning various genres, from commercial blockbusters to independent features. Notably, Apeitda’s recent success in the box office was marked by the global streaming of the action film “Carter” on Netflix, solidifying its position as a production company capable of delivering world-class films.

Looking ahead, Apeitda has ambitious plans for numerous upcoming projects set to be streamed on global OTT channels like Amazon and Netflix. This strategic move reflects its dedication to further expanding its capabilities as a global film production studio.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), expressed in Korean Won.

Key Components of Statement of Operations

Apeitda’s reporting currency is the Korean Won and its operating results and cash flows have been translated to U.S. dollar using the following exchange rates that represent the average daily rate in place for the respective period:

Results of Operations

A summary of Apeitda’s operating results is as follows:

Comparison of Years Ended December 31, 2024 and 2023

For the years ended December 31, 2024 and 2023, Apeitda’s operating income was driven by its content production segment, which realized revenues totalling Korean Won 18 million ($12,984) and Korean Won 90 million ($68,873) from settlement proceeds related to the secondary distribution rights of previously released films, respectively.

Apeitda’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 46 million ($35,630), or 71.9% corresponding to a decrease in revenue of Korean Won 72 million ($55,889), or 80.0%.

For the years ended December 31, 2024 and 2023, Apeitda’s operating expenses are primarily driven by payroll and payroll related costs, depreciation expenses, commissions expenses and other bad debt expenses for both periods presented.

Apeitda’s operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 25 million ($7,858), or 7.8%. This is primarily attributable to a decrease in commission expenses of Korean Won 18 million ($13,654) associated with professional consulting fees, an increase in advertising expenses of Korean Won 20 million ($14,669) due to Apeitda’s marketing efforts, a decrease in entertainment expenses of Korean Won 13 million ($10,084), and an increase in impairment of prepayment of Korean Won 30 million ($22,003) which incurred due to the delay in completing the projects.

Apeitda typically takes approximately three years to complete a content project. Apeitda currently has no content projects in the production stage, but Apeitda may generate revenue from agreements Apeitda has entered into, or may enter into, with respect to Apeitda’s content project candidates, as well as content projects in production stage in the future. Apeitda’s ability to generate content revenues will depend on the successful development of its content project candidates.

Cash Flows

A summary of Apeitda’s operating, investing and financing cash flows prepared under IFRS is as follows:

Comparison of Years Ended December 31, 2024 and 2023

Net cash flows used in operating activities increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 58 million ($37,420). This is primarily attributable to an increase in Apeitda’s net loss by Korean Won 151 million ($105,672) and a decrease in accounts receivable due to a decline in revenue of Korean Won 232 million ($176,851) for the year ended December 31, 2024. These effects were partially offset by an increase in cash inflows from an income tax refund by Korean Won 302 million ($230,616) and an increase in other bad debt expenses of Korean Won 30 million ($22,003).

Net cash flows provided by investing activities decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 427 million ($326,332). This was primarily attributable to a decrease in cash inflows from the disposal of short-term financial instruments by Korean Won 500 million ($382,626) and an acquisition of property, plant, and equipment of Korean Won 70 million ($53,874) for the year ended December 31, 2023, which did not recur in the year ended December 31, 2024.

Net cash flows used in financing activities increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 17 million ($9,905). This is attributable to the repayment of long-term borrowings of Korean Won 17 million ($9,905).

Liquidity and Capital Resources

Historically, Apeitda’s sources of liquidity have been cash flows from the generation of net income. As of December 31, 2024, Apeitda had an aggregate cash balance of Korean Won 345 million ($233,132) and net working capital of Korean Won 223 million ($151,094).

Related Parties

The related parties of Apeitda comprise two of Apeitda’s Chief Executive Officers, who are also the shareholders of Apeitda, and other related parties. Apeitda entered into multiple agreements for leasing the office space and loans with related parties.

See Related Parties under Note 24 in the notes to the financial statement for the year ended December 31, 2024 and 2023 for more information about transactions entered into with related parties.

Off-Balance Sheet Arrangements

During the periods presented, Apeitda did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.

Critical Accounting Estimates

Apeitda’s financial statements have been prepared in accordance with IFRS as issued by the IASB. The preparation of these financial statements requires Apeitda to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the reporting dates, as well as the reported income and expenses incurred during the reporting period. Management bases its estimates on historical experience and in various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to Apeitda’s financial statements.

Apeitda believes the accounting policies discussed in the notes to Apeitda’s financial statements are critical to understanding Apeitda’s historical and future performance, as these policies relate to more significant areas involving management’s judgments and estimates.

See Summary of Material Accounting Policies in Note 5 to the financial statements as of and for the years ended December 31, 2024 and 2023 for more information about Apeitda’s material accounting policies.

Measurement of defined benefit obligations: key actuarial assumptions

Apeitda’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for Apeitda, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Uncertain tax treatments

Apeitda establishes additional current tax liabilities for income taxes when, despite the belief that tax positions are fully supportable, there remain positions that do not meet the minimum probability threshold, which is a tax position that is more likely than not to be sustained upon examination by the applicable taxation authority. The impact of current tax liabilities for uncertain tax positions, as well as the related net interest and penalties, is included in income taxes in the statements of operations.

Quantitative and Qualitative Disclosures about Market Risk

Apeitda’s operating activities expose itself to a variety of financial risks: market risk, credit risk and liquidity risk from which Apeitda’s risk management program focuses on minimizing any adverse effects on its financial performance. Apeitda operates financial risk management policies and programs that closely monitor and respond to each risk factor.

See Summary of Apeitda’s financial risk management under Note 21 in the notes to the financial statements for the years ended December 31, 2024 and 2023 for more information.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the IASB or other standard setting bodies that are adopted by use as of the specified effective date. Unless otherwise discussed, Apeitda believes that the impact of recently issued standards that are not yet effective will not have a material impact on Apeitda’s financial position or results of operations adoption.

See Recent Accounting Pronouncements issued, not yet adopted in Note 5 Material accounting policies in the notes to the financial statement for the years ended December 31, 2024 and 2023 for more information about recent accounting pronouncements, the timing of their adoption and Apeitda’s assessment, to the extent Apeitda has made one, of their potential impact on Apeitda’s financial statements upon operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE LAMP

References to the “The Lamp” refer to The LAMP Co., Ltd. The following discussion and analysis of The Lamp’s financial condition and results of operations should be read in conjunction with (in each case, included elsewhere herein): (i) The Lamp’s audited financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024 and 2023 (and related notes). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Business Overview

The Lamp Co., Ltd. is actively involved in the production of video content, encompassing both domestic and international films and dramas. The Lamp’s commitment to the video content industry is evident in its ongoing contributions through content planning, development, and production. Boasting top-tier hits in the history of the Korean box office, The Lamp has also garnered numerous awards for The Lamp work in both domestic and international realms.

Recent endeavors include a strategic focus on attracting investments and producing content for OTT streaming platforms such as Netflix and Wavve. Through these initiatives, The Lamp is consistently broadening the global reach of its content. Adapting to the dynamic landscape of the rapidly growing content industry, The Lamp currently possesses a diverse portfolio of intellectual properties (IPs), including musicals and novels. The Lamp’s dedication to enhancing content competitiveness is unwavering, as The Lamp continually expands its repertoire of IPs to meet the evolving demands of the market.

Established in 2003. Led by Park Un-kyoung, The Lamp is a film and TV series production studio specializing in thought-provoking yet commercially successful movies including ‘A Taxi Driver’, ‘Mal-Mo-E’ and ‘Samjin Company English Class’. A Taxi Driver, for example, achieved commercial success attracting 12.2 million viewers at the box office. The Lamp has received awards at various film festivals and awards for content quality, including Blue Dragon Awards, Baeksang Art Awards and Houston International Film Festival. One of her current projects includes Aema, a Netflix original series that is scheduled for release in 2025. In Netflix’s press release of September 11, 2023, it confirmed the production of its upcoming series Aema, a fictional comedy.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), expressed in Korean Won.

Key Components of Statement of Operations

The Lamp’s reporting currency is the Korean Won and its operating results and cash flows have been translated to U.S. dollar using the following exchange rates that represent the average daily rate in place for the respective period:

Results of Operations

A summary of The Lamp’s operating results is as follows:

Comparison of Year Ended December 31, 2024 and 2023

For the year ended December 31, 2024 and 2023, The Lamp’s operating income was driven by its content production segment, which realized revenues totaling Korean Won 16,336 million ($11,981,495) and Korean Won 20,837 million ($15,945,434), respectively.

The Lamp’s gross profit has decreased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 15 million ($53,245), or 1.1%, corresponding to a decrease in revenue of Korean Won 4,501 million ($3,963,939), or 21.6%. This is attributable to a content project reached post-production stage during the year ended December 31, 2024, which was in the production stage during the year ended December 31, 2023, despite the initiation of a new project in May 2024. For the year ended December 31, 2024 and 2023, three of The Lamp’s customers account for 93.1% and 92.2%, respectively, of total revenue.

For the year ended December 31, 2024 and 2023, The Lamp’s operating expenses are primarily driven by payroll and payroll related costs, depreciation expenses, supplies expenses, commission expenses, and other bad debt expenses for both periods presented.

The Lamp’s operating expenses increased for the year ended December 31, 2024 as compared to the year ended December 31, 2023 by Korean Won 289 million ($188,085), or 38.5%. This is primarily attributable to other bad debt expense of Korean Won 242 million ($177,492) and losses on the disposal of property and equipment of Korean Won 40 million ($29,055) which did not occur for the year ended December 31, 2023.

Cash Flows