Evolution Metals & Technologies (EMAT) risk factors, FY2025 10-K

Risks Related to EM&T’s Financial Condition and Results of Operations

1. 01EM&T has a limited operating history as a consolidated company following the Business Combination, which makes it difficult to evaluate its business, prospects, and future operating results
2. 02EM&T has incurred operating losses and may be unable to achieve sustained, long-term profitability and commercial success
3. 03If EM&T fails to execute one or more of these initiatives effectively or within expected timeframes, EM&T may be unable to achieve sustained profitability or generate sufficient cash flows to support its operations
4. 04EM&T’s future success depends on its ability to execute its growth and go-to-market strategies effectively
5. 05EM&T’s failure to execute its strategic plans would have a material adverse effect on its operating results and business, harm its reputation and could result in substantial liabilities that exceed its resources
6. 06In addition, EM&T’s ability to secure sufficient volumes of feedstock — including lithium-ion batteries and e-scrap — will be critical to supporting its planned operations. Volatility or disruptions in the availability, pricing, or quality of these inputs could materially impact its commercial execution
7. 07As a result, any investment in EM&T carries significant risk, and there is a possibility that investors could lose the entirety of their investment
8. 08EM&T’s ability to secure reliable and cost-effective supplies of e-scrap is critical to its recycling strategy, and failure to do so could materially impair its operations, profitability, and customer relationships
9. 09Development and future operation of EM&T’s planned lithium-ion battery recycling facility may expose the Company to significant safety, environmental, and regulatory risks, including but not limited to thermal events, fire hazards, explosions, chemical exposure, and electrical accidents
10. 10Any material incident at the future recycling facility — whether during development, construction, or operations — could delay the facility’s timeline, increase costs, trigger regulatory scrutiny, or adversely affect EM&T’s ability to deliver downstream products or meet customer commitments
11. 11These factors could cause EM&T to not fully realize the anticipated financial and/or strategic benefits of the acquisitions of the Operating Companies, which could have a material adverse effect on its business, financial condition and/or results of operations
12. 12EM&T is expected to need to raise additional funds in order to pursue its growth strategy, and these funds may not be available on terms favorable to EM&T or its stockholders, or at all, when needed
13. 13EM&T is expected to operate in a dynamic and evolving industry, and its operating results may experience significant fluctuations, especially on a quarterly basis. EM&T’s quarterly net sales and operating results may vary significantly due to a variety of factors, many of which are beyond EM&T’s control
14. 14The expectations for future operating and financial results and market growth of EM&T rely in large part upon assumptions and analyses developed by it. If these assumptions or analyses prove to be incorrect, EM&T’s actual operating results may be materially different from its anticipated results
15. 15EM&T may be adversely affected by fluctuations in demand for and prices of battery metals, rare earth elements and its related products
16. 16The success of EM&T’s business will depend, in part, on the growth of existing and emerging uses for battery metals, magnets and rare earth elements, and related products
17. 17Industry consolidation may result in increased competition, which could reduce our revenue
18. 18EM&T’s profitability could be adversely affected if we fail to maintain satisfactory labor relations; work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues, and materially affect our results of operations
19. 19A shortage of skilled technicians and engineers may increase operating costs, adversely affecting our results of operations
20. 20EM&T will depend on key personnel for the success of our business
21. 21Increasing costs or limited access to raw materials may adversely affect our profitability
22. 22Fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport could decrease our competitiveness or impair our ability to supply products to our customers, which could adversely affect our results of operations
23. 23EM&T’s facilities or operations could be adversely affected by events outside of our control, such as natural disasters, wars, or health epidemics or pandemics
24. 24EM&T’s ability to generate revenue may be diminished if substitutes for EM&T’s concentrates, oxides, metals, carbonates, sulfates, precursor cathode active material (pCAM), magnets, and their related products become available or if technological advancements reduce their demand
25. 25If EM&T is deemed to be an investment company under the Investment Company Act, it may be required to institute burdensome compliance requirements and its activities may be restricted, which may make it difficult to operate or to execute its growth plans

Risks Related to EM&T’s Intellectual Property

1. 26EM&T is expected to rely heavily on its intellectual property portfolio. If EM&T is unable to protect its intellectual property rights, its business and competitive position would be harmed
2. 27EM&T’s inability to protect its existing and future intellectual property rights could have a material adverse effect on its operations and success
3. 28EM&T may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause EM&T to incur substantial costs
4. 29EM&T’s patent applications may not result in issued patents or its patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on EM&T’s ability to prevent others from interfering with its commercialization of its products
5. 30There is uncertainty regarding the ability of each of the subsidiaries to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about each subsidiary’s ability to continue as a going concern
6. 31The price of the EM&T Common Stock may be volatile
7. 32Our failure to meet the continued listing requirements of The Nasdaq Global Market could result in a delisting of our common stock
8. 33EM&T does not intend to pay cash dividends for the foreseeable future
9. 34If analysts do not publish research about EM&T’s business or if they publish inaccurate or unfavorable research, EM&T’s stock price and trading volume could decline
10. 35EM&T may be subject to securities litigation, which is expensive and could divert management attention
11. 36Future resales of the EM&T Common Stock may cause the market price of the EM&T Common Stock to drop significantly, even if EM&T’s business is doing well
12. 37Future sales or other dilution of our equity could adversely affect the market price of EM&T Common Stock
13. 38EM&T is an emerging growth company and smaller reporting company, and EM&T cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies make its shares less attractive to investors
14. 39The obligations associated with being a public company will involve significant expenses and will require significant resources and management attention, which may divert from EM&T’s business operations
15. 40An active market for our securities may not develop and the market price of our Common Stock may decline which would adversely affect the liquidity and price of our securities
16. 41Substantial future sales of shares of our Common Stock could cause the market price of our Common Stock to decline

Risks Related to EM&T’s Technology, Products and Manufacturing

1. 42EM&T’s success will depend on its ability to manufacture its products, including concentrates, oxides, metals, carbonates, sulfates, precursor cathode active materials (pCAM), magnets, and their related products, economically, at scale, with high quality, and in accordance with customer specifications
2. 43EM&T’s success depends on its ability to generate revenue and operate profitably, which relies in part on its ability to identify target customers and convert these contacts into substantial orders or expand existing customer relationships
3. 44EM&T may not be able to negotiate material agreements necessary for the operation of its business on satisfactory terms, or at all
4. 45If critical components or raw materials used to manufacture EM&T’s products become scarce or unavailable, it could lead to manufacturing delays and harm EM&T’s business
5. 46The impact of the conflict in Ukraine on the global economy, energy and commodity supplies and raw materials is uncertain and may negatively impact EM&T’s business and operations
6. 47EM&T’s profitability may depend on achieving cost reductions through scaling up manufacturing of its products, and failure to do so could materially affect its business
7. 48EM&T’s expansion plans include complex projects that will require significant capital expenditures and are subject to significant risks and uncertainties
8. 49Any acquisitions EM&T undertakes may disrupt its business, adversely affect its operations, dilute its stockholders, and expose it to significant costs and liabilities
9. 50EM&T’s foreign operations expose EM&T to additional business, financial, regulatory and geopolitical risks, and any adverse event could have a material adverse effect on its results of operations
10. 51These risks, along with other unforeseen challenges, could negatively impact the success of EM&T’s international expansion efforts, adversely affecting its results of operations and profitability
11. 52Fluctuations in exchange rates, particularly between the U.S. dollar, Korean won, and the euro, may adversely affect EM&T. EM&T’s business may be affected by fluctuations in exchange rates, which may have a significant impact on EM&T’s results of operations and cash flows from period to period
12. 53Cybersecurity breaches or information technology disruptions could impact EM&T’s business and operations
13. 54Computer malware, viruses, ransomware, hacking, phishing attacks and other network disruptions could result in security and privacy breaches, loss of proprietary information and interruption in service, which would harm EM&T’s business
14. 55Fluctuations in the price of certain feedstock and raw materials, and EM&T’s inability to obtain raw materials and products, could have an adverse effect on the margins of its products, its business, and its operating results
15. 56EM&T expects that the success of its business could be highly correlated to general economic conditions
16. 57EM&T is expected to compete with companies that have significantly more resources for their research and development efforts than EM&T or have received government contracts for the development of new products
17. 58EM&T’s business and financial results may be adversely affected by the demands of operating in multiple jurisdictions and the need to comply with a myriad of foreign and domestic laws and regulations, including various environmental, health and safety, employment and taxation laws and regulations
18. 59Potential litigation, regulatory actions or government investigations may significantly harm EM&T’s financial position, reputation and operating results
19. 60EM&T’s insurance coverage may not be adequate to protect it from all business risks