v3.25.2
Proposed Business Combination
 6 Months Ended
Jun. 30, 2025
Proposed Business Combination [Abstract]  
Proposed Business Combination

Note 4 — Proposed Business Combination

 

Merger Agreement with Welsbach Technology Metals Acquisition Corp

 

Key terms of the Amended Merger Agreement include, but are not limited to, the following:

 

  ● Each issued and outstanding share of the Company’s voting common member units, nonvoting common member units, and convertible preferred units on an as-converted basis will automatically be cancelled and converted into the right to receive the number of shares of New EM common stock in accordance with the Amended Merger Agreement.

 

  ● Total consideration is estimated to consist of (i) 416,436,066 New EM common stock in exchange for the Company’s voting common member units issued and outstanding immediately prior to the Merger, (ii) 67,413,224 shares of New EM common stock in exchange for the Company’s nonvoting common member units issued and outstanding immediately prior to the Merger, (iii) 109,436,178 shares of New EM common stock in exchange for the Company’s convertible preferred units issued and outstanding immediately prior to the Merger and (iii) cash of $25,000,000.

 

  ● The New EM board of directors after the Closing will consist of six directors, which shall initially include six director nominees designated by the Company and reasonably acceptable to WTMA.
  ● The obligations of the Company to consummate the Merger are conditioned on, among other things, that as of the Closing, New EM would have available to it a positive amount of cash after giving effect to (x) the amount in the WTMA trust account as of the Closing, after deducting the amount required to satisfy WTMA’s obligations to its stockholders (if any) that exercise their rights to redeem all or a portion of their shares of WTMA common stock pursuant to the WTMA charter and certain WTMA and EM LLC transaction expenses, plus (y) the amount of funding actually received by WTMA from its private investment in public equity offering prior to or substantially concurrently with the Closing, plus (z) the aggregate gross proceeds received or to be received by WTMA or EM LLC pursuant to any agreement or arrangement entered into prior to or substantially concurrently with the Closing in connection with the issuance or other grant of any interests of WTMA or EM LLC or any of WTMA’s subsidiaries, if any (the “Minimum Available Cash Condition”). The Minimum Available Cash Condition is for the sole benefit of EM LLC.

 

  ● The Closing is subject to certain conditions, including, but not limited to, the approval of the Company’s voting common member and the approval of the stockholders of WTMA. Holders of WTMA’s public shares will have the opportunity to redeem all or a portion of their public shares for cash in connection with the Business Combination.

 

In certain circumstances, including if the Business Combination has not been consummated by September 30, 2025, either party may elect to terminate the Amended Merger Agreements.

 

On August 1, 2024, in support of the Business Combination, WTMA and the Company entered into a Term Sheet (the “Term Sheet”) with Broughton Capital Group (“BCG”) for BCG to provide an equity investment of $500.0 million through a private investment in public equity (“PIPE Anchor Equity Investment”) to be consummated concurrently with the closing of the Business Combination. Additionally, the Term Sheet provides that BCG will provide a debt facility (the “Debt Facility”) to New EM, or to a subsidiary of New EM guaranteed by New EM, to be consummated after the closing of the Business Combination. BCG’s commitments under the Term Sheet are subject to further due diligence and the execution of definitive documentation.

 

In connection with the Amended Merger Agreement, the Company entered into a Sponsor Support and Lock-Up Agreement with WTMA, Welsbach Acquisition Holdings LLC, a Delaware limited liability company (the “Sponsor”), and certain officers and directors of WTMA (“Sponsor Persons”) on November 6, 2024 and amended on February 10, 2025 WTMA (collectively, the “Amended Sponsor Support and Lock-Up Agreement”). Pursuant to the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to, among other things, vote at least 2,237,876 shares of WTMA common stock (as defined within the Amended Sponsor Support and Lock-Up Agreement), or approximately 67.8% of the issued and outstanding shares of WTMA common stock, in favor of the Amended Merger Agreement and the Business Combination. Also pursuant to the Amended Sponsor Support and Lock-Up Agreement, the Sponsor and Sponsor Persons agreed to certain customary lock-up restrictions on their ability to transfer their WTMA common stock and the shares of New EM common stock they will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

 

In connection with the Amended Merger Agreement, the Company also entered into an EM Equityholder Support and Lock-Up Agreement with WTMA and the sole member of the Company on November 6, 2024 and amended on February 10, 2025 (collectively and as further supplemented, the “Amended EM Equityholder Lock-Up Agreement”). Pursuant to the Amended EM Equityholder Lock-Up Agreement, the sole voting member of the Company agreed to execute and deliver written consents with respect to the Company’s outstanding voting common member units to adopt the Amended Merger Agreement and related transactions, approving the Business Combination. Also pursuant to the Amended EM Equityholder Lock-up Agreement, the holders of the common member units of EM LLC agreed to certain customary lock-up restrictions on their ability to transfer their EM LLC common units and the shares of New EM common stock they will receive at closing of the Business Combination until the third anniversary of the close of the Business Combination.

During the period from February 8, 2024 (inception) to December 31, 2024, the Company entered into seven agreements to acquire controlling interests in seven different entities in connection with the Business Combination. Two of these agreements were terminated as of December 31, 2024, one of these agreements was terminated as of July 3, 2025, and the remaining agreements with four entities were terminated and replaced with share exchange agreements between each of the four Korean companies and a subsidiary of the Company (“EMT Sub”). Each share exchange agreement is conditional upon the closing of the Business Combination. Under the share exchange agreements with the Four Entities, EMT Sub would acquire the following shares of each target’s common stock in exchange for the following number of non-voting EM LLC common member units to be contributed to EMT Sub by EM LLC:

 

Target  Shares of Target’s common stock   Exchange Ratio   EM Units   Value 
NS World, Co., Ltd. (“NSW”)   289,055    0.0092006    2,659   $12,970,000 
Handa Lab Co., Ltd. (“Handa”)   380,800    0.0040385    1,538   $7,500,000 
KCM Industry Co., Ltd. (“KCM”)   21,666    0.1362832    2,953   $14,400,000 
KMMI, Inc.(“KMMI”)   22,080    0.4086131    9,022   $44,000,000 

 

The share exchange agreements were approved by the shareholders of the four Korean domiciled companies on June 2, 2025, with no dissenting shareholders. The EM Units subject to the share exchange agreements (and corresponding shares of New EM common stock) are subject to the terms of shareholder lock-up agreements that end on the third anniversary of the close of the Business Combination.

 

For the three months ended June 30, 2025 and 2024, the Company has incurred and paid $62,100 and $0, respectively, in connection with the audit, accounting and legal fees of the seven entities for which agreements were entered into. The Company has incurred and paid $594,193 and $0 in connection with the audit, accounting and legal fees of the seven entities for which agreements were entered into for the six months ended June 30, 2025 and the period from February 8, 2024 (inception) to June 30, 2024, respectively.

 

Terminated Acquisitions during 2025

 

In March 2025, the Company entered into an amended and restated agreement and plan of merger with WTMA, the Company Critical Mineral Recovery, Inc. (“CMR”), and the other parties thereto (the “March 2025 Merger Agreement”) providing for the acquisition of CMR. The March 2025 Merger Agreement amended and restated the Agreement and Plan of Merger, dated February 10, 2025, in its entirety. The March 2025 Merger Agreement was terminated on July 3, 2025.

 

In September 2024, the Company entered into a Transactional Advance Agreement (“CMR Advance Agreement”) with CMR. Under the CMR Advance Agreement, the Company agreed to advance CMR $12,000,000 in three installments in connection with the contemplated acquisition of CMR. During the year ended December 31, 2024, a total of $9,000,000 was advanced to CMR under the terms of the CMR Advance Agreement. Prior to the termination of the March 2025 Merger Agreement, the Company recorded an allowance for credit losses on this amount of $4,500,000. In light of the termination of the March 2025 Merger Agreement effective July 3, 2025, the Company fully reserved for the monies advanced under the CMR Advance Agreement, recording an additional allowance for credit losses of $4,500,000 for the three and six months ended June 30, 2025.