EMAT

Business Context and Reporting Period

Company: Welsbach Technology Metals Acquisition Corp. (WTMA), a Special Purpose Acquisition Company (SPAC) formed to merge with Evolution Metals LLC (EM). Upon closing, the entity will be renamed Evolution Metals & Technologies Corp.

Reporting Period: Quarterly period ended September 30, 2024.

Status: The Company is an emerging growth company and a shell company. It has not commenced operations and generates no operating revenue. Its primary activity is the search for and execution of a business combination. The Company has extended its deadline to complete a business combination to June 30, 2025.

Key Financial Metrics

Debt and Related Party Obligations:

• Convertible Promissory Notes (Related Party): $2,296,371 outstanding.
• Working Capital Loans (Related Party): $1,292,679 outstanding.
• Deferred Underwriting Fee: $2,704,690 payable upon successful business combination.
• Excise Tax Payable: $705,718 (1% tax on stock redemptions).

Material Changes vs. Prior Period

• Trust Account Reduction: The Trust Account balance decreased significantly from $23.77 million (Dec 31, 2023) to $12.23 million (Sep 30, 2024). This reduction is primarily due to the redemption of 1,090,062 shares for approximately $12.22 million in connection with the June 2024 extension vote.
• Operating Expenses: Operating expenses for the nine months ended Sep 30, 2024 ($875,162) were substantially lower than the same period in 2023 ($1.89 million), reflecting reduced activity costs compared to the prior year.
• Interest Income: Interest income from the Trust Account dropped from $1.86 million (YTD 2023) to $0.70 million (YTD 2024), driven by the lower principal balance in the Trust Account following redemptions.
• Liquidity: Operating cash outside the Trust Account is critically low at $1,185, compared to $94,579 in the prior year period.

Outlook, Risks, and Contingencies

Merger Agreement: On November 6, 2024 (subsequent to the period end), the Company entered into an Amended and Restated Merger Agreement with Evolution Metals LLC. The transaction includes a proposed $500 million PIPE investment and a $6.2 billion debt facility from Broughton Capital Group, subject to closing conditions.

Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. The Company has a working capital deficit and minimal operating cash. It relies on related party loans and the successful completion of a business combination by June 30, 2025, to avoid liquidation.

Excise Tax Liability: The Company has recorded a liability of $705,718 for the 1% excise tax on stock repurchases (redemptions) under the Inflation Reduction Act. As of the filing date, this amount has not been paid.

Risks:

• Failure to complete a business combination by the extended deadline (June 30, 2025) will result in mandatory liquidation.
• Insufficient funds outside the Trust Account to operate until the combination is consummated.
• Uncertainty regarding the closing of the proposed PIPE investment and debt facility.

Investor Verification Checklist

• Merger Closing Conditions: Verify the status of the $500 million PIPE and $6.2 billion debt facility commitments from Broughton Capital Group, as these are critical to the transaction's viability.
• Excise Tax Payment: Confirm if the $705,718 excise tax liability has been settled or if a payment plan is in place to avoid penalties.
• Related Party Financing: Assess the sustainability of operations given the reliance on related party working capital loans ($1.29M) and the Sponsor's willingness to fund further extensions if needed.
• Redemption Rights: Review the terms of the Non-Redemption Agreements with investors to understand the potential dilution or share count changes post-merger.
• Trust Account Sufficiency: Ensure the remaining $12.23 million in the Trust Account is sufficient to cover the redemption value of remaining public shares and transaction costs.