Welsbach Technology Metals Acquisition Corp.(WTMAU) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements of Welsbach Technology Metals Acquisition Corp. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in stockholders' deficit, cash flows, and comprehensive notes detailing the company's operations, accounting policies, and significant events Condensed Consolidated Balance Sheets The condensed consolidated balance sheets provide a snapshot of the company's financial position as of June 30, 2025, and December 31, 2024, highlighting changes in assets, liabilities, and stockholders' deficit Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--------------------------------------- | :-------------------------- | :------------------ | | Assets | | | | Cash | $711 | $1,185 | | Prepaid taxes | $144,502 | $14,077 | | Total current assets | $145,213 | $15,262 | | Restricted cash held in trust account | $12,249,440 | $12,257,933 | | TOTAL ASSETS | $12,394,653 | $12,273,195 | | Liabilities | | | | Accounts payable and accrued expenses | $3,174,499 | $2,929,443 | | Due to affiliates | $473,663 | $413,663 | | Income taxes payable | $163,839 | $125,950 | | Excise tax payable and interest and penalties | $890,702 | $719,090 | | Due to stockholders for redemption of Common Stock | $11,242,981 | — | | Convertible promissory notes – related party | $2,296,371 | $2,296,371 | | Working capital loans – related party | $2,501,714 | $1,740,966 | | Total current liabilities | $20,743,769 | $8,225,483 | | Deferred underwriting fee payable | $2,704,690 | $2,704,690 | | TOTAL LIABILITIES | $23,448,459 | $10,930,173 | | Stockholders' Deficit | | | | Accumulated deficit | $(12,040,383) | $(10,802,493) | | TOTAL STOCKHOLDERS' DEFICIT | $(12,040,155) | $(10,802,265) | Condensed Consolidated Statements of Operations The condensed consolidated statements of operations detail the company's financial performance, showing a significant increase in net loss for the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to higher operating expenses and reduced interest income from the trust account Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating expenses | $570,186 | $277,662 | $1,137,909 | $549,654 | | Franchise tax | $36,027 | $50,000 | $73,227 | $100,000 | | Loss from operations | $(606,213) | $(327,662) | $(1,211,136) | $(649,654) | | Interest income from restricted cash | $98,318 | $258,639 | $195,369 | $519,320 | | Loss before provision for income taxes | $(507,895) | $(69,023) | $(1,015,767) | $(130,334) | | Provision for income taxes | $(13,081) | $(26,249) | $(25,650) | $(35,098) | | Net loss | $(520,976) | $(95,272) | $(1,041,417) | $(165,432) | | Basic and diluted net loss per share (redemption feature) | $(0.16) | $(0.02) | $(0.31) | $(0.04) | | Basic and diluted net loss per share (no redemption feature) | $(0.16) | $(0.02) | $(0.31) | $(0.04) | Condensed Consolidated Statements of Changes in Stockholders' Deficit The statements of changes in stockholders' deficit show a growing accumulated deficit, primarily driven by net losses, accretion of redeemable common stock, and excise tax on redemptions, reflecting the company's pre-Business Combination operational phase Accumulated Deficit Changes | Metric | January 1, 2025 | June 30, 2025 | | :--------------------------------------- | :-------------- | :------------ | | Balance, January 1, 2025 | $(10,802,493) | | | Accretion of redeemable common stock | $(38,999) | $(45,044) | | Excise tax on redemption of Class A common stock | — | $(112,430) | | Net loss | $(520,441) | $(520,976) | | Balance, June 30, 2025 | | $(12,040,383) | | Metric | January 1, 2024 | June 30, 2024 | | :--------------------------------------- | :-------------- | :------------ | | Balance, January 1, 2024 | $(9,266,105) | | | Accretion of redeemable common stock | $(189,223) | $(175,577) | | Excise tax on redemption of Class A common stock | — | $(122,198) | | Net loss | $(70,160) | $(95,272) | | Balance, June 30, 2024 | | $(9,918,535) | Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows show that the company primarily used cash in operating activities, partially offset by cash provided by investing activities (from the Trust Account for taxes) and financing activities (from related party loans) Condensed Consolidated Statements of Cash Flows Highlights | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(1,041,417) | $(165,432) | | Interest income on restricted cash | $(195,369) | $(519,320) | | Interest and penalties on excise tax payable | $59,182 | — | | NET CASH USED IN OPERATING ACTIVITIES | $(965,084) | $(568,316) | | Cash withdrawn from Trust Account to pay taxes | $203,862 | $19,173 | | NET CASH PROVIDED BY INVESTING ACTIVITIES | $203,862 | $19,173 | | Proceeds from working capital loans - related party | $760,748 | — | | Proceeds from convertible promissory note - related party | — | $551,510 | | NET CASH PROVIDED BY FINANCING ACTIVITIES | $760,748 | $551,510 | | NET CHANGE IN CASH AND RESTRICTED CASH | $(474) | $2,367 | | CASH AND RESTRICTED CASH, END OF PERIOD | $711 | $170,576 | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and additional information supporting the condensed consolidated financial statements, covering the company's business operations, significant accounting policies, related party transactions, commitments, contingencies, and recent developments Note 1 — Description of Organization and Business Operations and Liquidity Welsbach Technology Metals Acquisition Corp. (WTMA) is a blank check company formed in May 2021 to pursue a business combination. It has not commenced operations and generates non-operating income from interest on its Trust Account. The company has faced multiple extensions for its business combination deadline, significant share redemptions, and was delisted from Nasdaq, now trading on OTCQB. Substantial doubt exists about its ability to continue as a going concern due to liquidity issues and the impending liquidation date if a business combination is not completed by September 30, 2025 - The Company is a blank check company (SPAC) incorporated in Delaware on May 27, 2021, formed for the purpose of entering into a Business Combination[20] - The Company has not commenced any operations and will not generate operating revenues until after the completion of its initial Business Combination[23] - The Company was delisted from Nasdaq on January 7, 2025, for failing to complete a Business Combination within 36 months of its IPO, and is now quoted on OTCQB[65][66] - As of June 30, 2025, the Company had operating cash of $711 and a working capital deficit of $9,355,575, raising substantial doubt about its ability to continue as a going concern through September 30, 2025, the scheduled liquidation date[84][87] Summary of Share Redemptions | Redemption Event | Date | Shares Redeemed | Aggregate Redemption Amount | | :--------------------------------------- | :---------------- | :-------------- | :-------------------------- | | March Extensions | March 24, 2023 | 4,097,964 | ~$42.6 million | | September Extensions | September 29, 2023 | 1,456,871 | ~$15.7 million | | June Extensions | June 28, 2024 | 1,090,062 | ~$12.22 million | | Business Combination & Extension Special Meetings | June 26, 2025 | 993,736 | ~$11.24 million | - The Company entered into a binding letter of intent with Evolution Metals LLC (EM) for a potential business combination on March 22, 2024, and subsequently amended the Merger Agreement multiple times, extending the Agreement End Date to September 30, 2025[55][56][165] - The Inflation Reduction Act of 2022 (IR Act) imposes a 1% excise tax on certain stock repurchases, which may apply to redemptions, potentially reducing cash available for a Business Combination. The Company recognized $890,702 in excise tax liability (including penalties and interest) as of June 30, 2025[78][79][83] Note 2 — Summary of Significant Accounting Policies This note outlines the key accounting principles and policies applied in preparing the unaudited condensed consolidated financial statements, including the basis of presentation, consolidation, status as an emerging growth company, use of estimates, and specific accounting treatments for cash, restricted cash, offering costs, income taxes, and common stock subject to redemption - The Company is an emerging growth company and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[91][92] - Common stock subject to possible redemption is classified as temporary equity, and changes in redemption value are recognized immediately, adjusting the carrying amount to equal the redemption value at each reporting period end[106][111] Redeemable Common Stock | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Redeemable ordinary shares subject to possible redemption | $986,349 | $12,145,287 | | Shares subject to possible redemption | 89,053 | 1,082,789 | - The effective tax rate was (2.58)% for the three months ended June 30, 2025, and (2.53)% for the six months ended June 30, 2025, differing from the statutory rate primarily due to a full valuation allowance on deferred tax assets and merger and acquisition costs[102] - ASU 2023-07, Segment Reporting, became effective as of December 31, 2024, and the Company adopted it, requiring disclosures of significant segment expenses and CODM information[120] Note 3 — Initial Public Offering and Over-Allotment This note details the initial public offering (IPO) of 7,500,000 units at $10.00 each, generating $75,000,000, and the partial exercise of the over-allotment option for an additional 227,686 units, generating $2,276,860 - The Company sold 7,500,000 Units at $10.00 per Unit in its IPO, generating gross proceeds of $75,000,000[23][122] - Underwriters partially exercised their over-allotment option, purchasing an additional 227,686 Units for $2,276,860[25][123] Note 4 — Private Placement This note describes the private placement of 347,500 units to the Sponsor for $3,475,000, and an additional 4,554 units for $45,540, with proceeds placed in the Trust Account to fund a Business Combination - The Company consummated the sale of 347,500 Private Placement Units to the Sponsor at $10.00 per unit, generating $3,475,000[24][124] - An additional 4,554 Private Placement Units were sold for $45,540[26][125] - Proceeds from Private Placement Units are held in the Trust Account and will be used to fund the redemption of Public Shares if a Business Combination is not completed[126] Note 5 — Related Party Transactions This note details transactions with related parties, including the Sponsor's Founder Shares, amounts due to affiliates for support services, and various non-interest bearing promissory notes (Working Capital Notes and Convertible Promissory Notes) issued to the Sponsor to finance transaction costs and extensions for the Business Combination - The Sponsor initially purchased 1,437,500 Class B common shares, which were exchanged for 2,156,250 Founder Shares, with 224,328 forfeited due to partial over-allotment exercise[128] - The Company expensed $60,000 for support services from the Sponsor for both the three and six months ended June 30, 2025, with $473,663 due to affiliates as of June 30, 2025[131][132][145] - The Company has outstanding Working Capital Notes totaling $2,501,714 as of June 30, 2025, and Convertible Promissory Notes totaling $2,296,371, both non-interest bearing and convertible into private units upon Business Combination[139][143] Note 6 — Commitments and Contingencies This note outlines the company's various commitments and contingencies, including registration rights, deferred underwriting fees, the Merger Agreement with Evolution Metals LLC (EM) and its subsequent amendments, the terminated CMR Merger Agreement, and ancillary agreements such as support and lock-up agreements, non-redemption agreements, and an advisory agreement with J.V.B. Financial Group, LLC, as well as a PIPE Anchor Equity Investment term sheet - A deferred underwriting fee of $2,704,690 is payable to underwriters upon completion of a Business Combination[148] - The Company entered into a Merger Agreement with Evolution Metals LLC (EM) on April 1, 2024, which has been amended multiple times, including extending the Agreement End Date to September 30, 2025[149][150][165] - The CMR Merger Agreement, which contemplated the acquisition of Critical Mineral Recovery, Inc., was terminated on July 3, 2025[158][195] - Non-Redemption Agreements were entered into with investors, committing them not to redeem shares in exchange for additional MergeCo shares upon Business Combination, with the latest agreement for 704,097 shares resulting in 35,205 MergeCo shares[174] - The Company engaged J.V.B. Financial Group, LLC (CCM) for advisory services, with CCM entitled to 15,000 Post-Closing Company Fee Shares upon the closing of the initial business combination, as conditions were met after the June 26, 2025 Extension Special Meeting[180][181] - A Term Sheet was signed with Broughton Capital Group (BCG) for a $500 million PIPE Anchor Equity Investment and a debt facility of up to $6.2 billion for EM&T, contingent on due diligence and closing conditions[182] Note 7 — Stockholders' Deficit This note details the components of stockholders' deficit, including the recapitalization of Founder Shares and the number of common stock shares authorized and outstanding, distinguishing between shares subject to and not subject to possible redemption - The Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.0001 per share[184] Common Stock Outstanding | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Common stock outstanding (excluding redeemable) | 2,283,976 | 2,283,976 | | Common stock subject to possible redemption | 89,053 | 1,082,789 | Note 8 — Fair Value Measurements This note explains the company's approach to fair value measurements, classifying assets and liabilities based on observable inputs, and states that as of June 30, 2025, and December 31, 2024, assets in the Trust Account were held in cash, with no other assets or liabilities measured at fair value on a recurring basis - The fair value of the Company's financial assets and liabilities approximates their carrying amounts due to their short-term nature[99] - As of June 30, 2025, and December 31, 2024, substantially all assets held in the Trust Account were in cash, and there were no investments held in the Trust Account[96][187] - The Company withdrew $70,775,640 from the Trust Account for common stock redemptions, including $2,267,561 of interest distributed to stockholders and $1,045,248 for franchise and income taxes, from inception through June 30, 2025[187] Note 9 — Segment Information This note identifies the Chief Operating Officer as the Chief Operating Decision Maker (CODM) and confirms that the company operates as a single operating segment. The CODM reviews interest income from restricted cash in the Trust Account and general and administrative expenses to assess performance and allocate resources - The Company's Chief Operating Officer is identified as the Chief Operating Decision Maker (CODM)[190] - The Company has only one operating segment[190] - Key metrics reviewed by the CODM include interest income from restricted cash held in the Trust Account and general and administrative expenses[193] Note 10 — Subsequent Events This note discloses subsequent events after the balance sheet date of June 30, 2025, specifically the termination of the CMR Merger Agreement on July 3, 2025, and Amendment No. 5 to the Merger Agreement on July 21, 2025, which acknowledged this termination and removed related references - The CMR Merger Agreement was terminated on July 3, 2025, as the business combination did not close by June 30, 2025[195] - Amendment No. 5 to the Amended and Restated Agreement and Plan of Merger was entered into on July 21, 2025, acknowledging the termination of the CMR Merger Agreement and removing related precedent step transactions[196] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, including an overview of its blank check nature, recent developments such as Nasdaq delisting and ongoing merger activities, detailed financial results, liquidity challenges, related party transactions, and critical accounting policies. It emphasizes the substantial doubt about the company's ability to continue as a going concern without completing a business combination - The Company is a blank check company with no operating revenues, focused on completing an initial Business Combination[201][222] - The Company was delisted from Nasdaq on January 7, 2025, for failing to complete its Business Combination within 36 months of its IPO, and its securities are now quoted on OTCQB[203][205] - The Merger Agreement with Evolution Metals LLC (EM) has undergone multiple amendments, with the latest extending the Agreement End Date to September 30, 2025[207][212] Results of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(520,976) | $(95,272) | $(1,041,417) | $(165,432) | | Operating expenses | $570,186 | $277,662 | $1,137,909 | $549,654 | | Interest income from Trust Account | $98,318 | $258,639 | $195,369 | $519,320 | - As of June 30, 2025, the Company had operating cash of $711 and a working capital deficit of $9,355,575, leading to substantial doubt about its ability to continue as a going concern through September 30, 2025, without additional financing or a Business Combination[235][238][240] - The Company has various non-interest bearing promissory notes (Working Capital Notes and Convertible Promissory Notes) outstanding to the Sponsor, totaling $2,501,714 and $2,296,371 respectively as of June 30, 2025, to finance transaction costs and extensions[248] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Welsbach Technology Metals Acquisition Corp. is exempt from providing quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[267] Item 4. Controls and Procedures Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. There have been no material changes in internal control over financial reporting during the last fiscal quarter - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[268] - No material changes in internal control over financial reporting occurred during the last fiscal quarter[270] PART II – OTHER INFORMATION Item 1. Legal Proceedings There are no legal proceedings to report for the company - The Company has no legal proceedings to disclose[273] Item 1A. Risk Factors This section outlines a partial list of material risks, including the company's nature as a blank check company, challenges in completing a business combination within the prescribed timeframe, potential conflicts of interest, liquidity issues, and the impact of economic uncertainty and regulatory changes. The independent auditor's report also expresses substantial doubt about the company's ability to continue as a going concern - The Company is a blank check company with no revenue or basis to evaluate its ability to select a suitable business target[274] - There is a risk that the Company may not be able to complete its initial business combination within the prescribed timeframe, leading to liquidation[274] - Conflicts of interest may arise due to the potential for initial stockholders to profit substantially even if public stockholders experience losses, given their investment loss if a business combination is not completed[281] - The independent registered public accounting firm's report contains an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern[281] - The Company's ability to identify a target and consummate a business combination may be adversely affected by economic uncertainty and volatility in financial markets[281] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report - The Company has no unregistered sales of equity securities and use of proceeds to report[276] Item 3. Defaults upon Senior Securities There were no defaults upon senior securities to report for the company - The Company has no defaults upon senior securities to report[277] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable to the Company[278] Item 5. Other Information This section confirms that none of the company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the six months ended June 30, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the six months ended June 30, 2025[280] Item 6. Exhibits This section lists all documents filed as exhibits to the Quarterly Report on Form 10-Q, including various amendments to the Merger Agreement, related party agreements, share exchange agreements, certifications, and XBRL documents - Exhibits include Amendment No. 2, 3, 4, and 5 to the Amended and Restated Plan of Merger, various Share Exchange Agreements, and certifications[284][285][287] SIGNATURES This section contains the official signatures of the registrant's Chief Executive Officer and Chief Financial Officer, certifying the filing of the report - The report is signed by Daniel Mamadou, Chief Executive Officer, and John Stanfield, Chief Financial Officer, on August 14, 2025[291]